How to Start an Etsy Shop

Written by Dave Lavinsky

how to start etsy business
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Opening an Etsy shop is a great way to turn your creative passions into a profitable venture. With over 4 million sellers, Etsy provides the perfect platform to reach a worldwide audience of buyers looking for unique and handmade items. By taking advantage of Etsy’s features, you can create a cohesive online presence that showcases all your hard work and attracts new customers.

In this article, we will provide the steps to take to start your Etsy business, and some tips to help you succeed.

Importantly, a critical step in starting an etsy shop is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.

Steps to Starting an Etsy Shop

1. Create an attractive shop name and branding 

The business name that you choose can have a big impact on the success of your online store. Etsy recommends that you choose a name that is short, memorable, and reflects your personality or product offerings.

In addition to a unique Etsy shop name, it’s important to think about the logo and branding of your business. You should design an identity for your business that sets it apart from other shops while still being recognizable as part of the Etsy marketplace. In order to see how well your Etsy product names fit with your overall brand, consider searching for them on Google, Flickr and Pinterest before you start an Etsy shop.

2. Choose your product category 

Before you start an Etsy shop, take some time to think about the products you want to sell. Etsy offers a wide range of categories, including clothing and accessories, home and living, art and craft supplies, and digital downloads. Choose the category that most closely aligns with your product offerings.

3. Write compelling product descriptions

In addition to quality photos, Etsy shoppers also look for well-written product descriptions. Your Etsy product descriptions should be concise and interesting, explaining the unique features of your products. Be sure to use strong keywords throughout your product descriptions in order to increase your Etsy shop’s visibility in search engine results.

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4. Create a cohesive brand 

Your Etsy shop should be consistent with your personal brand or the brands of your business partners, if applicable. Use the same colors, fonts, and branding across all of your Etsy listings to create a unified look. This will help customers recognize your shop and increase the chances that they’ll return in the future.

5. Upload quality photos of your products  

High-quality Etsy photos are the key to selling your Etsy products. Etsy recommends uploading images of items that can be zoomed and cropped, as this will increase sales for your Etsy shop.  When taking product photos, be sure to use natural light and avoid harsh shadows. If you don’t have good photography skills, consider hiring a professional photographer to take your shop photos.

6. Market your shop and products online and offline

Finally, Etsy recommends that you actively market your shop to increase its visibility. Online marketing efforts include creating a website for your business and promoting your Etsy products on social media sites like Facebook, Pinterest, and Instagram. Offline marketing refers to networking in person at craft shows, flea markets, or other events.

7. Optimize your shop for search engines

Like any other business, it’s important to take steps to optimize your Etsy shop for search engines. This will help you increase the visibility of your shop in online search results. Etsy provides a number of tips for optimizing your shop, including using keywords throughout your shop name, title, and description.

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How Big is the Etsy Industry?

Etsy is the largest creative marketplace in the world. Etsy has seen a significant increase in revenue and usage since it went public in 2010. However, this business growth was accelerated significantly in recent years. As a result, Etsy doubled its revenue to 1.72 billion in the last year.

What are the Key Sectors of the Etsy Market?

Etsy is a very unique and diverse site, with users selling an extremely wide range of products.

However, Etsy reports that the top five most popular categories for Etsy sellers are:

  1. Craft supplies and tools
  2. Jewelry
  3. Home and living
  4. Personalized items
  5. Clothing and textiles

What External Factors Affect the Etsy Market?

Etsy is very dependent on the global market, as it is a worldwide site. Etsy has seen significant growth globally since its inception in 2005. The coronavirus pandemic had a particularly large effect on the industry and drove many users towards online shopping sites like Etsy.

There are a number of external changes that could affect Etsy’s market share. The growing strength of Amazon, for example, could drive buyers to Amazon rather than Etsy. Another major shift would be if Facebook continues to grow its online shopping presence – this could make it more appealing to buy established brands on Facebook rather than the Etsy platform.


Who are the Key Competitors in the Etsy Market?

The Etsy market is composed of a variety of competitors. This can range from small businesses to large businesses. The key competitors in the Etsy market can be identified by their size, the products that they offer, and the services that they provide. Some of the key competitors in the Etsy market include:


Etsy’s biggest competitor is Amazon. Amazon is a behemoth of a company and offers a variety of services and products. Etsy is more focused on handmade products, while Amazon has many different types of goods for sale. Etsy cannot compete with the size and scale that Amazon offers. However, Etsy does offer unique products that Amazon does not have.


eBay and Etsy are both similar in that they both allow users to sell products and goods. However, it is important to note that while Etsy does focus on handmade items, eBay has a much wider scope of products available. The sheer number of different types of products sold on eBay is too great for Etsy to compete with.


What are the Key Customer Segments in the Etsy Market?

Etsy is an eCommerce platform that allows entrepreneurs and other small businesses to sell their handmade and vintage goods. The most common customer segments shopping on the Etsy platform include:

Craft Enthusiasts

These Etsy buyers are looking for unique or handmade items that they cannot find in traditional retail. Etsy is a more niche market, and the majority of Etsy product sales come from their core group of craft enthusiasts. This customer segment is loyal to Etsy and continues to shop on the platform because it provides them with a variety of unique items.

Culture Enthusiasts

These Etsy customers are interested in learning about and experiencing new cultures. As a result, they seek out products on Etsy that allow them to do this. They will largely frequent the site as there is such a wide variety of regions represented with different types of jewelry, clothing, or other goods for sale.

Other Consumers

While there are other customer segments shopping for specific items to purchase, consumers are typically window shopping on Etsy. Consumers may use Etsy as a resource to find inspiration about craftsmanship, trends, and other information. While these users may not be fully committed to purchasing something immediately, Etsy is a good platform for them to come across new ideas in the future.


What are the Typical Startup Costs for a New Etsy Store?

When you start an Etsy shop, there are a few initial costs that you should keep in mind.

Purchasing Inventory

The first cost that you will have to cover is purchasing inventory for your Etsy store. If you are selling items that you already own, this step may not apply to you. However, if you are looking to purchase new supplies or materials to start producing more goods, these costs can be very high. It is important to remember that you should not invest more money into your Etsy store than you can afford to lose.

Offering Shipping Worldwide

Another cost that will be part of your startup is the cost of shipping items around the world. This step is extremely important when it comes to international sales, which has become significantly more popular in recent years. However, offering international shipping can also increase the costs of your products.

Creating Your Shop Logo and Brand Identity

The final cost that you will likely deal with when starting an Etsy shop is the creation of a logo and brand identity for your business. This step may not be necessary if you are selling new or unique items that already have an established brand image. However, if you are selling a new type of product or a product that does not have a well-known brand identity, it is likely that your business will need to invest in creating your own brand image.

Packing and Supplies

Another cost to consider before you open your Etsy store is packing and supplies. Depending on the type of product that you are selling, you may need specific supplies or boxes for shipping. If your products are fragile or breakable, then you will also have to factor in tape and other materials that can help protect your items as they travel.


Paid advertising is another key cost when you are starting an Etsy. This includes spending money on things like Google AdWords campaigns, Facebook ads, and other paid forms of promotion that will help drive traffic to your Etsy store.

Etsy Fees

Etsy charges a listing fee and a commission on each sale. The commission varies depending on the type of product sold, so be sure to check the Etsy Fee Schedule before listing your items.

Other Operating Costs

Other costs that you will have to consider when starting your Etsy store are things like utilities, business taxes, and even insurance. While these costs may be minimal, they are still an additional cost associated with startup.

Overall, the average startup costs for a new business range from $5,000 to $10,000. However, depending on your specific business needs, your costs may be higher or lower. For example, if you need to hire a designer to create a custom website, your marketing expenses will be higher than someone who is able to create their own site.

Keep in mind that these are just estimates; your actual costs may vary depending on the products you choose to sell and the marketing strategies you employ, but this gives you a general idea of what to expect.

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Is an Etsy business profitable?

Etsy shop owners can make a lot of money if their business is successful. However, there are many costs that come with opening an Etsy shop, so it’s important to do your research before you launch.

In general, most Etsy shop owners make a couple of thousand dollars per year. However, this number varies significantly depending on the type of products you sell, the time you are committed to marketing and growing your business, and how successful your shop is.


What are the Keys to Launching a Successful Etsy Store?

Hands-on Approach

In addition to selling your products on Etsy, it’s a good idea to be proactive about growing your business. That means you should engage with other Etsy sellers and join relevant Facebook groups. You can also purchase advertisements through Etsy – though this is not advisable until you have built up a following and have some sales under your belt.

Marketing Plan

As mentioned earlier, having an effective marketing plan is key to getting customers as soon as you launch your shop. This includes developing a strategic social media presence – which could include paid ads on Instagram or Twitter – as well as partnering with local or national brands that would be interested in buying from small businesses like yours.

Branding & Logos

Oftentimes, the foundation of a good marketing plan is good branding. You can establish an effective brand presence by picking a memorable store name, creating a logo that’s versatile and relatable to your customer base, and developing clear messaging about your story, products, and services.

Hire a Professional Photographer

Photography is an important aspect of your new Etsy shop – customers can’t buy what they can’t see. It’s critical that you have high-quality pictures of the items in your shop, and this isn’t something you should try to DIY. You should hire a professional photographer or use a photo studio for all product photos.

Creating a Plan & Budget Ahead of Time

Before launching an Etsy shop, it’s crucial to create a solid Etsy business plan and budget. This means coming up with financial goals, as well as crafting a marketing strategy, designing your brand identity, and developing strong relationships with suppliers or manufacturers if appropriate. Before opening an Etsy shop, take some time to consider these questions: “What do I want for my hobby or side business?

If you want to open a side business on Etsy, it’s a good idea to use an alias so that your main job isn’t jeopardized. You should also develop a separate brand identity for your side business.


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How to Start an Etsy Shop FAQs

The best Etsy business to start is a business that is based on your skills and interests. For example, if you're good at making crafts, then you may want to start an Etsy shop that sells handmade goods.

You'll need to create a business plan and do some research to see what kind of products are in demand on Etsy. You'll also need to invest some time and money into setting up your shop and promoting your products. If Etsy is successful, then your business could be as well.

You can set up an Etsy shop even if you don't have any products made yet. Etsy has a section where you can sell digital downloads. For example, if you're good at making patterns for cross-stitch or knitting, then you may want to upload the designs that you've created and sell them on Etsy. Making digital items is quick and easy and it won't cost much to get started selling on Etsy.

There are many ways to promote your business. Etsy offers some free marketing. Etsy has a blog with free marketing advice for new Etsy sellers, including Etsy 101 articles. Etsy also offers live help during the normal workweek.

You can also purchase Etsy's Marketing Package to promote your Etsy shop. The Marketing Package includes email marketing, advertising, and special discounts for Etsy purchases.  Etsy also offers Promoted Listings for Etsy sellers who want to promote their products on the platform.

To determine the best marketing campaigns for your business, it's important that you know your target audience. You can use Etsy Analytics to learn more about what your Etsy customers are interested in and how they behave on Etsy.

You can also make use of the free Etsy posts on tips and tutorials on their blog on topics like branding your Etsy shop, running successful promotions, increasing sales with SEO, promoting with social media channels like Facebook and Instagram.

Etsy's seller policies do not require you to have a business license to sell on their platform. However, a seller of goods on Etsy may need a license or permit from municipal, county, state, or federal agencies regulating businesses.

You can check with your local business licensing office to see what licenses or permits you need to legally operate your Etsy shop.

Setting up your Etsy shop is a simple process that only takes a few minutes.

First, you'll need to create an Etsy account. Then, you'll need to provide some information about your shop, including its name, type of products sold, and location. You'll also need to choose a payment method and shipping carrier.

Once you've created your shop, you can start adding products and customizing your shop's appearance. You'll also need to create listings for your products and write descriptions of them.

Etsy sellers are charged a variety of fees, depending on the type of Etsy shop they have and the services they use. The main Etsy fees are:

Listing Fees: Etsy charges a listing fee for each item listed in an Etsy shop. The initial charge is $0.20 and Etsy does not charge a percentage of the final sale price. Etsy also charges sellers to renew items that have been sold or expired, this too is a flat rate fee depending on the type of listing.

Transaction Fees: Etsy takes 5% from every transaction as a transaction fee, plus another 3-5 cents if you use Direct Checkout through Etsy. Direct Checkout allows buyers to pay with credit cards without leaving the Etsy website. If you accept credit cards directly on your own site (not via Etsy), then there are no additional fees deducted from any part of your sale.

Payment Processing Fees: Etsy charges sellers 2.5% of the total order value plus 25 cents whenever a buyer uses Etsy's Direct Checkout to pay for an item. If you use a different payment processing system, such as PayPal or Google Wallet, then you are responsible for all fees associated with those services.

Shipping Fees: Etsy's shipping fees depend on the shipping carrier, and the origin, destination, weight, and dimensions of the package.


Helpful Videos

OPENING AN ETSY SHOP? WATCH THIS FIRST! Tips for Starting an Etsy Shop


How To Start An Etsy Shop For Beginners | Etsy Store Setup Tutorial


How To Start an Etsy Shop – Selling on Etsy for Beginners – Etsy Side Hustle – Step by Step Tutorial


Additional Resources for Etsy Store Owners

Etsy Business Resources

Etsy – How to Open an Etsy Shop

Other Helpful Business Plan Articles & Templates