How to start an Etsy shop

Do you create unique, handmade items as a hobby or pastime? Whether you’re a calligrapher or a ceramicist, consider starting an Etsy shop to promote your products to the world.

With more than 33 million buyers, Etsy offers you the opportunity to sell your products on a large scale to a global audience. It focuses on unique, handmade items and aims to offer a community where creators and buyers can connect.

Best of all, selling through Etsy is a great way to mitigate the impact of lockdowns caused by the pandemic, or any other as yet unforeseen act of God. Etsy was actually one of the retail world’s big winners during Covid, as demand for bespoke masks, and other goods that consumers were suddenly struggling to find, surged in 2020, resulting in a doubling of revenue and a quadrupling of profit for the company by the end of the year.

Better still, 91% of businesses on Etsy are run by just one person working from home. If you’re thinking of joining them, read on for our full guide on what you need to know.

Who is suited to starting an Etsy shop?

• You’re an artist or creator that makes unique or custom pieces
• Your products might be a hobby that you’re now looking to make money from
• You’re interested in connecting with your customers on an individual basis

In terms of skills, you’ll need to be…

• Organised – running your own Etsy shop means keeping track of your product catalogue, including creating, processing and shipping your stock
• Patient – if you’re looking to turn your hobby into a professional venture or full-time business, realising that it’ll take some time and effort is essential
• Passionate – creating one-of-a-kind items requires dedication and inspiration. Consider carefully what you choose to sell on Etsy as you’ll need to be able to make it to the same standard, repeatedly

What are the different types of Etsy shops?

On Etsy, products are split into the following categories:

• Jewellery & Accessories
• Clothing & Shoes
• Home & Living
• Wedding & Party
• Toys & Entertainment
• Art & Collectibles
• Craft Supplies & Tools
• Vintage

Think about your products – which category would they fit into? Perhaps it’s clearly one category for some, while for others they could fit multiple categories. If you’ve not yet decided on what you want to sell, read on to get some inspiration.

When you upload a product to list on Etsy, you can choose which category it goes into, and also which sub-categories. You can only choose one category for each item, so really focus on your niche and how you want customers to find your shop and products.

What to sell on Etsy

While the focus on Etsy is all about quirky, individual items, there are a variety of products you could choose to sell. To get you thinking, here are some potential ideas:

• Homewares – such as illustrated prints and travel maps
• Clothing – such as denim and patterned items
• Jewellery – such as personalised name items; birthday or wedding date pieces
• Children’s – such as wooden toys and fabric storage bags; clothes
• Vintage – such as clothes, furniture and home accessories
• Craft supplies – such as stamps, fabrics and paints
• Wedding items – such as hats, paper flowers and table settings
• Design – such as decorative cushions or plant holders
• Furniture – such as natural or reclaimed wood pieces

How to find your Etsy niche

With so many independent sellers and unique items available, how do you find your Etsy niche and stand out? There are several ways you can approach this, including:

• Consider your customers – curate your online shop just like you would in real life. Which items would you place together? Consider the type of experience you want your customers to have
• Review your talents – what can you make or do that no one else on Etsy can? Offering something not currently available is a surefire way to differentiate yourself from the competition
• Tell your story – with Etsy’s focus on authenticity and community, a key point of difference is how buyers and sellers can connect. Let potential customers know the story behind your products. Whether it’s a skill handed down through generations, or a talent you’ve harnessed over the years, knowing what motivates and inspires you can help bring your products to life and encourage people to purchase

At this stage, it’s essential to draw your ideas together and turn them into a strategy for setting up an Etsy business. This means thinking about your business plan – for example:

• What are your goals for the next one, three, and five years?
• How much revenue do you expect to make?

Consolidate these ideas into a concise plan that you can return to when needed to ensure your business is going in the direction you want it to.

You can download a free business plan template here.

Naming your Etsy shop: what do you need to know?

Now, for one of the most interesting yet vital steps. Choosing a name is a key decision and a big part of setting up an Etsy shop. Use this as an opportunity to think about your products, your brand and how you want them to be portrayed.

It’s a chance to be creative and utilise your self-expression – it’s how you and your products will be remembered by customers so choose wisely.

Use the pre-launch time to experiment and try several variations of your name. If your chosen shop name is not available (it may already be taken), Etsy recommends adding ‘workshop’ or ‘co’ to it.

You should also think about keywords. Imagine you’re the customer – what would you type in to a search bar to find your shop/products?

You can also use keywords in your product descriptions. If you go to ‘Your Shop’ and then ‘Stats’, you can check your Shop Stats to see which words customers are using most, and least, frequently.

What are Etsy’s brand guidelines?

If your products don’t fit these criteria but you’re interested in selling online, check out our guides to starting an eBay business and starting an Amazon Marketplace business to find the right online shop for your start-up.

As Etsy focuses on small businesses and independent sellers, there’s a big emphasis on honesty and trust – that the products you sell are really made by you. When it comes to photos, you can either take them yourself or hire a professional photographer – that’s up to you.

If you’re taking photos yourself, use the best camera possible. Think about the location, the angle, and the time of day (natural light is generally preferable) to help you create photos that best, and most accurately, represent your products.

How do you start taking payments?

One of the key aspects you’ll need in order to run an Etsy shop successfully is being able to take payments.

When you’re setting up an Etsy account, you’ll be prompted to choose your payment method (how customers will pay for the goods or services you sell on Etsy). There are four options:

• Etsy Payments – this is the main payment method on Etsy. With an Etsy UK shop, you’re eligible to be enrolled in it. This means you’ll offer customers the options to pay with credit/debit/bank cards, as well as Etsy Gift Cards and Etsy Credits. PayPal, Apple Pay and Android Pay are also offered
• PayPal – you can also offer PayPal without being enrolled in Etsy Payments, if you set up a shop in a country that’s not a part of the Etsy Payments scheme
• Cheque or money order – payment methods via post are available, in which you provide an address for the cheque or the money order to be sent to (it’s only shared with customers who purchase using this payment type)
• Other – if you have another way of accepting payment, you can offer it through this method

This is also a good time to consider pricing. Generally, prices are derived in two ways: either by calculating how much it costs you to make each item for your time and the materials involved, or you base your pricing on what your competitors’ are offering.

When you’re considering your payment options, you should also consider what your returns policy will be. For custom, personalised items it may not be possible to offer returns, whereas for other items you may be able to offer some window of time for customers to send items back.

What the requirements are for this, such as the amount of time and reasons for returning – as well as the condition the product must be in – is what you’ll have to decide, bearing in mind your customers’ statutory rights.

What are Etsy seller fees?

If you want to offer your items for sale on Etsy, you’ll need to pay Etsy seller fees. While it’s free to join the site, to use the ecommerce function you’ll be required to pay the necessary charges.

On 16 July 2018, Etsy changed its fees and packages. In addition to the fees for listings and transactions, there are charges that also now apply to the cost of shipping and fees for Etsy Payments.

Etsy also offers two packages – Standard and a Plus plan that offers additional features:

Note that pricing is based in US Dollars so may vary according to exchange rates.

You can find more information on payments and billing, and other key steps, in the open a shop guide by Etsy.

Set up your Etsy shop

Now, read on to discover each step of opening an Etsy shop.

1. Sign up by selecting the ‘sell on Etsy’ button at the top of the page
2. Choose your shop preferences (language, country, currency)
3. Select a name for your shop
4. Add your products
5. Pick your payment methods
6. Input your billing details
7. Click ‘open your shop’ to go live
8. Fill in your profile (about/bio, photos, policies, sections, shipping, social media)

Building momentum and sales

At this point, you’ve opened your Etsy shop, and you may even have had a few sales (although don’t worry if you haven’t). Now that you’ve done the legwork to get your Etsy shop up and running, it’s time to build upon the initial steps, with the aim of building momentum and sales.

Market your product

After you create an Etsy shop, you need to ensure that people know it exists. One of the best ways to do this is to use social media – it’s a free way of reaching potential customers around the world.

While there are a number of platforms you could use, think about your target audience and the platforms that best reflect your brand and products.

Instagram and Pinterest are both highly visual platforms, so using them is an ideal way to promote your stock, as well as the process behind the finished product. Similarly, Pinterest has a reputation for being a craft-focused, inspiration-seeking resource – perfect to show how it all comes together. Whereas Instagram is a great way to develop your photography skills to display your products, ideal for when everything’s completed.

Other ways to market your product include creating your own website. This is absolutely essential, as it gives your customers a place to go to find out more.

Web builders like Wix and Squarespace can give you access to tons of gorgeous, eye-catching templates so you can easily create an online face for your store, for potential and existing customers to visit.

Word-of-mouth and recommendations are still a strong way of promoting your Etsy shop. Plus, using this form of offline communication could match your brand ethos.

If you’re a small business or independent seller who offers individual, hand-crafted items, then creating a buzz through word-of-mouth could mirror the back-to-basics approach you take in your work too. This reflects the importance of community that Etsy champions too.

Go global

Another way to build upon your current offering is to think about expanding your shipping options. If your current efforts have focused solely on the UK, then consider widening your audience and targeting overseas buyers.

A ‘made in the UK’ product can be really appealing to international customers, and expanding your target audience could help to make your product more in demand.

If you choose to develop your Etsy shop in this way, just be sure to check and refine your shipping process. Be realistic about how long overseas customers will have to wait for their products.

As well as this, assess if your product is suitable to send abroad in the first place – if you work with raw or natural materials such as wood or honey, then it might not make it past customs!

Plus, inform customers of international shipping costs, as well as whose responsibility it is to pay import duty (if any).

Diversify your offering

At the beginning of this guide, we said to focus on only one product to make and sell. If this process has left you thinking you can do more, and you’ve got other products to sell, then now’s the time to consider setting up another shop – it’s possible to have multiple Etsy UK shops.

How to set up multiple shops on Etsy

• Follow the same process each time to sign up as a seller on Etsy
• Have a clear reason for the multiple shops (Etsy may ask for this)
• Ensure that you have the stock levels to maintain multiple shops
• Include the names of all your shops in your public profile
• Avoid a high number of duplicate listings

Run promotions

If it’s increasing sales you’re keen to focus on, then running promotions could be helpful. For example, to drum up interest in the beginning or to pick up purchases during a lull, consider cutting prices on certain products and running a sale.

If you’re not keen to cut prices, then think about offering ‘add-ons’. If there are particular pieces that work well together, you could organise these items together and suggest different combinations to customers.

Next steps