If you run a creative small business, chances are you’re selling on Etsy or considering doing so. It’s no wonder since the platform is enormous. In 2022 alone, Etsy had over 7.47 million active sellers.
But while millions of people are selling on Etsy casually and as a small business, the platform is starting to see a slight decline in users. In 2021, it had 7.52 million active sellers — meaning by 2022, it experienced a decline for one of the first times in its history.
Why are some sellers having second thoughts about Etsy’s online marketplace? Is selling on Etsy worth it in 2023? Whether you’re an active Etsy seller or just considering opening an Etsy store, understand how it compares to the other best option: Starting your own eCommerce website.
There are pros and cons to each. This guide will help you decide what works for you, depending on your goals as a small business owner.
Understanding Etsy in 2023
With so many opinions published about Etsy, there’s still confusion on what the platform is for. According to Etsy itself, it “connects people looking for unique goods with independent sellers around the world.”
Etsy’s seller policy allows for handmade items, craft supplies and vintage goods. This means it’s not the right place if you want to sell mass-market goods that you didn’t help assemble.
In other words, Etsy is an eCommerce platform catering to independent merchants, many of whom make their own products. Etsy isn’t meant to be a competitor to Amazon or eBay. Rather, it focuses on a niche market for handmade goods.
It’s impressive how much Etsy businesses are in demand. There were roughly 100 million listings for sale on Etsy in 2022, leading to over $2.5 billion in revenue for that year alone. While this is great for Etsy, people worry the platform is over-saturated.
As soon as a product becomes popular, dozens of new sellers pop up with clones of the item, featuring copycat product descriptions and photos. And since Etsy has enduring problems with sellers pretending to sell handmade items, you may lose buyers to unfair competitors.
Still, the platform has over 95 million buyers, so it’s a great place to connect with an established audience. If you can get the hang of the unique Etsy SEO and take advantage of Etsy ads, you’ll see that selling on Etsy is worth it.
Who is Etsy good for?
While there is a slight learning curve, Etsy is desirable as your online store if you sell vintage, craft or handmade goods. But it’s not your only option: Etsy has no restrictions on sellers listing on multiple platforms, so many merchants use Etsy and build their own websites.
You can sell on Etsy from anywhere, too. It doesn’t matter where in the world you’re located, and this is a big draw to many sellers.
There are thousands of categories you can list your items on, with some of the most popular listings in 2022 incorporating custom jewelry, printables, neon signs and wall art. In another trend, print-on-demand sellers are on the rise.
Selling on Etsy: Pros and cons
Etsy has some standout features as an eCommerce platform, but it isn’t the right place for every creative business. Let’s review some of the pros and cons of the Etsy platform for those selling online so you can decide if selling on Etsy is worth it.
Pros of using Etsy
A big reason beginners flock to Etsy is that getting started on the platform is easy. You go through a quick sign-up process, answering questions about your location, primary currency and product category. Once you’ve picked your shop name, you’re ready to create your first listing, which needs a description and photos.
Most merchants on the platform are glad they don’t have to know how to code or run complicated promotional campaigns. Etsy offers a simple solution: You sell your stuff, and Etsy takes care of the marketing.
Etsy has a lot of marketing options they offer sellers. You can opt in for the opportunity to set up coupons, reminders and outreach emails to customers at effective times.
For example, say a customer adds one of your listings to their cart but then leaves the website. Etsy will remind you to send your abandoned cart coupon, which gives the customer that extra push to complete the sale.
In addition to getting help with promotions, you can also choose to participate in Etsy’s off-site ads, which will display your listings to relevant buyers on other websites. This helps you reach even more people.
While there are some full-time Etsy success stories, selling on Etsy is generally viewed as an affordable side hustle that’s easy to start.
Etsy charges its merchants a few different fees but they’re typically linked to sales. In some cases, you can list hundreds of items and not pay fees until you actually land a sale and make money.
Cons of using Etsy
So Etsy is an easy-to-use platform with few barriers to entry — what’s the catch?
Etsy charges multiple fees per listing. For each sale you make, you will pay:
- $0.20 per listing. This fee automatically triggers after four months, so if even your listing doesn’t sell during this time, you will still be charged the $0.20.
- A 6.5% transaction fee. If you have an item listed for $10, you’ll forfeit $0.65 every time it sells.
- Advertising and promotional fees, if you opted into it. This fee is variable and depends on your budget, but could be as high as 15% of your sale price.
- Shipping fees. If you sell physical goods, by default you’re responsible for shipping them.
These fees add up quickly. Let’s say you’re selling $10 bookmarks, and it costs you $1.50 to ship them in a secure envelope. Each bookmark would accumulate $2.35 in Etsy fees before you even cover the expenses to produce them — and that’s assuming you don’t pay for any advertisements.
Despite the ever-increasing fees, competition is stiff on the platform, leading many current users to ask if selling on Etsy is worth it. A search for any product, like custom t-shirts, will reveal thousands of incredibly similar items, with hundreds of sellers trying to outdo each other.
Even in more specific niches, it’s only a matter of time before copycat sellers join in, undercutting others to get their share of an untapped market.
Is selling on Etsy worth it?
For most sellers, Etsy is still profitable — but in conjunction with other online marketplaces. Most Etsy merchants also sell on platforms like Amazon, or they create their own websites to sell on. Etsy is one of the ways they reach their buyers, but it’s no longer the one-stop shop it used to be.
Etsy has some big upsides. Its large audience is eager to buy unique products, and sellers don’t face competition from big brands, only other sellers. Etsy also takes care of the marketing for sellers, freeing them up to keep creating.
While a handful of sellers make millions of dollars with their Etsy shops, the Etsy marketplace is crowded. If you plan to start selling on the platform, it’s crucial you gain a solid understanding of its search engine algorithm and your competition.
Don’t decide before considering the best alternative to an Etsy shop: Making your own online storefront.
Selling on your own website: Pros and cons
Small business owners everywhere choose to run their websites in addition to their Etsy shops and their profiles on other platforms.
Pros of making a website
When you make a website, you can control everything about it. You can create as many listings as you want, display well-written product descriptions in your preferred way and add unlimited pictures. Visually, you have creative license, especially compared to Etsy’s templates.
You also control your marketing as a website owner. While Etsy’s hands-on approach is welcome, it has some downsides. For example, even when a user is browsing your shop, Etsy will recommend your competitors’ products. To Etsy, it doesn’t matter who the user buys from, so the platform will not promote your products loyally.
In contrast, your website can show users related and popular items from your store and no one else’s. Unlike Etsy, you can add features like frequently-bought-together recommendations when you use WordPress as your online store’s platform. Beyond product recommendations, you can install plugins that enhance your eCommerce approach in any way imaginable.
You’ll gain more control over your profit margin as well. When you run your own website, the only necessary platform expenses are the monthly costs of keeping your website online. You’ll pay a domain registrar and a web host a small amount each month to serve your website to visitors. There may also be transaction fees depending on the payment methods you accept.
If you opt for shared hosting with Bluehost, it takes as little as $2.95 per month to run your website. As for transaction fees from WooCommerce, you’ll pay 2.9% plus $0.30 per sale, provided your buyers use a credit card and are located in the U.S — that’s lower than Etsy’s fee, and you get unlimited listings for free.
Cons of making a website
While it’s typically more cost-effective to make your own website, there’s more upfront work required.
You’ll need a design for your website. To cut down on your workload, ask the pros at Bluehost for website design services; they can also set up all your listings for you.
Your storefront will need eCommerce tools like payment gateways, analytics and shopping carts. Or use Bluehost’s online store plan, which comes with each of these aspects built-in.
Advertising is one of the biggest benefits Etsy brings to the game. When you run your own website, you’re responsible for getting the word out on social media, building your own customer base and executing your own campaigns. Or, you can spring for digital marketing on-demand to lean on experts who dedicate time to promoting your products in particular.
When is it better to sell on your own website vs. Etsy?
Selling on Etsy is worth it for those trying to offload a few items at higher prices; this is because Etsy has fees per listing. If you have dozens of different handmade products to sell, create your own website.
And if you plan on expanding, selling on your own website will be more affordable since you bypass listing fees and Etsy’s high transaction fee. There’s also the opportunity to showcase your products in any way you want, which gives you a better chance of convincing potential customers.
What about digital products? These items have a one-time setup, and since the item is a digital download, you never have to worry about running out of stock, shipping or having too much inventory. Well, if you sell these on Etsy, you still pay a higher transaction fee than with an online store.
If you’re looking for a quick side hustle with a built-in online marketplace, Etsy is a great choice. But if you’re becoming serious about your creative business, grow your eCommerce brand by building a website for it. A website will give you freedom and features to upsell products and connect with customers.
Luckily, you don’t have to choose one or the other. You can always sell on Etsy and run your eCommerce website. If you do so, track which platform brings in more sales — and optimize for that one.
Final thoughts: Is selling on Etsy worth it?
While selling on Etsy is worth it for some, you won’t be able to build your business the way you can with your own online storefront. If setting up your own website sounds intimidating, you’ll appreciate the website setup wizard from Bluehost, which walks you through building a beautiful online store quickly in a few steps.
We recommend using WooCommerce, one of the most popular eCommerce platforms worldwide — it even integrates with online marketplaces like Etsy, Amazon and eBay, so you can keep selling as usual yet plan for the growth of your brand.
Look forward to customizing your website to match your unique aesthetic, and creating a thoughtfully designed store that encourages potential customers to purchase.
Selling on Etsy: FAQs
In general, yes. Etsy has its own unique SEO used to connect buyers to what they’re looking for. Sellers are limited to 13 tags per listing.
In addition to the unique algorithm, Etsy is a competitive platform. There are millions of sellers, so you’ll have to find creative ways to stand out from the crowd. High-quality photographs and memorable product descriptions can help.
Starting an online business used to be a lot harder, but intuitive website builders and managed hosting have relieved some of the difficulty. Now, you can build an eCommerce store by dragging and dropping the desired parts of your website, and then setting up your prices, descriptions and pictures.
It’s even possible for small business owners to have recommended items, shopping carts, wishlists and cross-promotions on their websites without splurging on a professional website designer. Bluehost and WooCommerce provide access to each of these features.
You don’t have to pay a monthly fee to sell on Etsy. Instead, sellers have to pay:
● $0.20 per listing.
● A 6.5% transaction fee.
● Advertising fees. If you opt in, this could be as high as 15% of your sale price.
● Shipping fees. If you sell physical goods, by default, you’re responsible for shipping.
To sell on your own website, you pay a monthly hosting fee — as low as $2.95, with Bluehost. Using WooCommerce as your payment platform, you’ll pay transaction fees of only 2.9% + $0.30 per sale.
Selling on Etsy is competitive, but standing out from the crowd is not impossible. To make your listings stand out:
● Pick your keywords carefully. You only get 13 keywords, so use all of them. Try a combination of generic terms, like “silver jewelry,” and specific terms, such as “handmade silver drop earrings.”
● Take well-lit, staged product photos. Add pictures from several angles so customers can be confident they’ll be satisfied with your product.
● For guidance on pricing your items, look at your competition. While you don’t want to sell yourself short, customers will probably look elsewhere if you’re charging significantly higher prices than other listings with similar materials.
● Write a shop description. Many sellers leave this blank, so it’s a great way to get noticed. Take the opportunity to connect with shoppers, share your work process or personality, and invite them to support your small business.
