inStarting Etsy Shop
With increasing competition, more and more sellers are saying that it’s difficult to find success on Etsy.
So is it still worth it to sell on Etsy despite the challenges? (Spoiler: for me, it’s a yes)
In this guide, I’ll walk you through some reasons why you should or shouldn’t sell on Etsy, some Etsy alternatives, why I still sell on Etsy and tips to start a successful shop.
Let’s get into it:
The number of sellers on Etsy is skyrocketing. The number jumped from about 4.4 million in 2020 to over 7.5 million in 2021, and it’s likely to be even higher for 2022 when the figure becomes available. That can make it difficult for your products to stand out from others.
Many popular niches are quite saturated, and there’s only limited space on the Etsy search result page, which means if you don’t target the right keywords, your target customers may not see your products.
Another drawback of selling on Etsy is about the constant changes. Although some of those changes are beneficial to the sellers, many of them require sellers to react to stay on top of the changes.
For example, the Etsy search algorithm, which controls the ranking of different products on the Etsy search page, has changed a lot over the years. In 2020, Etsy introduced personalised results to Etsy search. In 2021, the search update gave priority to products that offer free shipping to the US. And in 2022, Etsy search scans keywords in product description which it previously didn’t.
Other than Etsy search changes, there are other changes that can affect how sellers should respond, including Star Seller program, offsite ads, etc.
It's important to keep in mind that building a successful Etsy shop takes time and effort. It's not a get-rich-quick scheme, contrary to what some Etsy gurus may claim.
To increase your chances of success on Etsy, you'll need to put in the time and effort to learn different aspects of running an Etsy business, including photography, branding, SEO, marketing, etc. If you are looking for a side hustle that generates money without you lifting a finger, then unfortunately Etsy is not for you.
In April 2022, Etsy increased the transaction fee from 5% to 6.5%. Together with other fees from the platform like offsite ads fee, payment processing fee, the cost of selling on Etsy can add up pretty quickly. This leads to thinner profit margin for Etsy sellers.
Another reason that selling on Etsy is difficult is the steeper learning curve.
Previously, you may only need to know how to make a good handmade product to get decent sales. But in recent years, because of the information online, more and more new sellers know the basics of how to market and brand their products. This makes standing out on Etsy more difficult than before.
Also, with the increasing competition, top Etsy sellers are becoming even more experienced. They fight for the same search page placement than you, and it could be hard to compete with them if you are new to the platform.
But with the right knowledge and motivation, it’s still possible to find success on Etsy as you will see later in this article.
One of the biggest pros of selling on Etsy is the growing number of customers that shop on the platform. With over 96.3 million active buyers according to Statista, there is a lot of money to be made on Etsy. The number has been growing every year and doesn’t seem to be slowing down.
Etsy has been investing more and more in promotion to bring in more buyers to the platform, especially in 2022. This includes TV ads, social media ads, and other marketing campaigns.
As an Etsy seller, you can benefit from this increased marketing because of the increased traffic to Etsy and potentially more customers to your shop.
There has not been so much help in starting an Etsy business. There are many tools and resources available online to help you get your shop up and running in no time. Here are a few examples:
There are a number of Etsy courses online that can help you sell better on Etsy, including the Etsy learning platform that I offer. These courses help you avoid wasting time on mistakes and focus on what actually works, so you can make informed decisions about how to grow your Etsy shop. Not only do these courses provide valuable insights, but the ones like GYC Etsy Academy also offer direct support to help you overcome challenges of running an Etsy business.
Other than courses, useful tools that gives you insights are also getting more readily available. For example, SEO tools like Alura and eRank help you do market research, reveal opportunities and optimise your Etsy listings.
Another benefit of selling on Etsy is that you can get started with a pretty tight budget. For example, digital product shops that sell digital downloads don't require any physical inventory and can be started with very little investment. Print on demand shops, where you design products and have them printed and shipped by an external supplier, also don't require a big investment to start. Often it can cost as little as $50 to start a new shop on Etsy, making it an affordable and accessible platform for anyone looking to build a new source of income.
Other than the pros mentioned above, there are a few more reasons why I still sell on Etsy:
Despite the increased competition on the platform, I am still able to make consistent sales and grow my business on Etsy. There are still a lot of opportunities for me to reach new customers and showcase my products to a wide audience.
Even with the recent increase in Etsy fees as mentioned above, selling on Etsy is still lower compared to other platforms:
With the growing number of customers on Etsy, I can quickly test out new product ideas and see if they are successful. This allows me to try out different products and see what resonates with my audience in a shorter period of time, and scale up the successful products with marketing tools like Etsy ads.
Building and maintaining your own website to sell products require a lot of effort and knowledge. And most importantly, I would need to build my own traffic from scratch. On Etsy, I have access to a large customer base and necessary tools to quickly set up and start selling my products. Overall, it’s hard to beat the convenience and ease of selling on Etsy.
Choosing what to sell is one of the most important decisions you’ll make as an Etsy seller. Finding a balance between good demand, low competition and your own skillset and interest is crucial. Here are a few popular product ideas to get you thinking:
Read this article to see 53 beginner-friendly Etsy shop ideas for inspiration.
There are alternatives to selling on Etsy, but each option comes with their own potential drawback:
The main drawback of these marketplaces is that the traffic is way less than Etsy’s. As you can imagine, less traffic to the site likely means less traffic to your shop if you start on these marketplaces, which can lead to lower sales. I’ve used similarweb.com to estimate the traffic of these options compared to Etsy’s estimated traffic of 525 million/month (November 2022):
Building your own website to sell your product is another popular option. But as I mentioned above, it takes skills and knowledge to design a professional looking store website. Also, you’d need to bring traffic to the website yourself, which could be quite difficult in the beginning. Here are a few popular website builder for handmade sellers:
Now that you can see that I still think Etsy is a great place to sell, why not head over to this guide to see my top tips of starting a successful Etsy shop.