How to Make Money Selling on Etsy

Etsy is a marketplace that allows artisans, thrifters, and graphic designers to sell their creations — and often at a premium. With the hand-crafted movement thriving, it’s an excellent time to become an Etsy seller, no matter what your skillset may be. Forget the stereotype of the starving artist and instead turn your talent into a money-making business.

Here’s a step-by-step guide to not only become a seller on Etsy, but to become successful and profitable one as well.

Choose Your Product to Sell

Etsy categorizes its products into three main buckets:

  • Handmade items
  • Craft supplies
  • Vintage goods

As you can see, you don’t even need to actually make anything to sell on Etsy. You can focus on sourcing unique supplies for other crafters or hard-to-find vintage items. Let’s take a look at each category to see what sells best on Etsy.

Handmade Items

When you think of Etsy, you probably think of products in this category. It includes items like jewelry, clothing, accessories, home decor, wedding and party supplies, and artwork. A growing vertical is also printable products, which lets you sell PDFs for customers to download and use at home.

If you don’t already have an idea of what to sell on Etsy, take a look at your own life for inspiration. Did you design awesome invitations for you daughter’s mermaid-themed birthday party last month? Are you a master candle maker with a knack for blending unique scents? Do you love to crochet scarves for your family and friends?

Selling handmade items on Etsy allows you to tap into your creative core. Pick something you love to do so you enjoy the process as you build your business. If you like what you make, chances are someone else will, too. 

Craft Supplies

Another way to make money on Etsy is by selling craft supplies to other makers out there. It could be something as simple as batches of pine cones collected from your yard or dried orange slices for people to use in wreaths and garlands. Ribbon, fabric scraps, felt, leaves, and even live plants are sold in this category. 

Your presentation is just as important as your product and so is your ability to source things for your target customer. It might seem easy to go outside and collect acorns, but not everyone has the time or inclination to do it on their own. But they still want a festive vase filler like the pictures they saw on Pinterest. 

Vintage Goods

Similar to craft supplies, successfully selling in this category is all about your ability to source vintage items that are in demand. From rare books to vintage Ball jars, people are willing to pay a premium to find what they’re looking for online rather than having to rummage through yard sales and thrift stores.

If that’s something you like to do, then selling vintage goods on Etsy could be a fun way to make money off a hobby you already enjoy.

How to Create Your Etsy Shop

Once you’ve nailed down the product you want to sell on Etsy, it’s time to open up your shop. There are currently two membership levels you can choose from: Standard and Plus (a third Premium level is scheduled to launch in the near future).

The Standard plan comes with no monthly fee and is best for beginning sellers. It has everything you need to get started on Etsy without adding to your startup costs.

The Plus plan costs $10 a month and includes a few extra perks you won’t get with the Standard option. These include:

  • Additional customizable options within your shop, like bonus banner templates and product spotlights
  • Discounts on external web addresses 
  • Customer notifications when you relist an out of stock item
  • 15 listing credits and $5 Etsy ad credits each month

If you’re just starting to sell on Etsy, you can always start with the Standard plan and then upgrade to the Plus plan after you’ve gotten your feet wet.

Opening an Etsy Shop

When opening your Etsy shop, start with making an account. You can use your email address or log in through Facebook or Google. Next, create a shop name. Pick something creative that reflects your personal brand. Also, do a quick search to make sure your name isn’t too close to an existing shop.

Upload a picture and fill out your profile information. Every detail on your Etsy shop should tell a story about who you are and what makes your product special. People love to shop on Etsy for the unique experience and process behind the items they’re buying. Make all of your shop descriptions engaging to draw in customers right from the start.

The Listing Process Explained

Before you officially launch your Etsy shop, you need to add product listings. The first step is to upload photos, which are extremely important in standing out against other products. Upload multiple photos of your craft, then choose one to serve as the thumbnail image. 

Next, add listing details and describe your item. This is also a great time to think about keywords customers may type in so you can show up in their search results. Add the materials used and the occasion your product is appropriate for, like bridesmaids gifts or holiday decor.

After that, include your inventory amount and pricing details. If you’re selling digital items, you’ll also upload the files at this point. Then set up your shipping and you’re ready to publish your very first Etsy listing.

Etsy Listing Fees

As an Etsy seller, you must pay certain fees to use the platform. Each listing costs $0.20, which must be paid whether or not the product sells. Once you sell an item, Etsy also charges transaction fees. You’ll pay 5% of your listed shipping costs, as well as a general transaction fee of 5% of each sale. This is taken from the total item costs, including shipping and gift wrap. 

You may incur additional fees based on the details of your shop. For instance, you might be charged for accepting Etsy Payments, using currency conversion, and posting Etsy ads. 

Setting Your Prices

It’s important to understand the fees charged by Etsy to help you price your products. In addition to transaction fees, think about shipping costs — not just the postage, but the actual supplies as well. Boxes, bubble wrap, and packing tape can add up and should absolutely be incorporated into your price point. Also, don’t forget to pay yourself for the time you spend managing your business. 

This includes:

  • Sourcing materials
  • Making your product
  • Listing each item
  • Messaging with buyers
  • Shipping items

As you can see, selling on Etsy can be time-intensive. Don’t sell yourself short by not charging enough for your product.

It’s smart to scope out your competition to see how other sellers price similar items. You can also get an idea of how they charge for shipping. Some people charge actual shipping while others set a price and offer discounts for shipping more than one item in a single order. This also encourages customers to add more to their shopping carts.

Managing Your Etsy Business

As you start to make money selling clothes and crafts on Etsy, remember to treat the process as a business. You’ll need to pay income tax on your profits. In addition, to pay state and federal income tax, you also must pay self-employment tax. 

Track all of your expenses, including materials, shipping fees, transaction fees, listing fees, and marketing tools. They’re all considered business expenses and can be deducted from your taxable income. 

If your business grows enough, you may receive a Form 1099-K from Etsy, which reports your gross sales for the year. The same form is sent to both your state tax agency and the IRS. Not everyone receives this and you’re still responsible for reporting your Etsy income even if you don’t receive a 1099-K. If you do get the form from Etsy, expect it to arrive by the end of January for the previous tax year. 

How Much Can You Make on Etsy?

There are a lot of different factors that go into how much you can earn on Etsy. One is your profit margin. Figure out how much you’ll make on each item sold once all of your expenses are paid for. Then you can determine how many you need to sell in order to hit your goal.

How much time you devote to your Etsy business also impacts your earnings. In addition to making or sourcing your products, spend time on your marketing strategy to grow your sales. Depending on your product, you may also find that your sales fluctuate throughout the year. Gifts and holiday decor pick up near Christmas, while wedding products become more popular in the months leading up to June.

To get an idea of what type of sales to expect over time, research your competition again. Take a look and see how long they’ve been selling on Etsy and how many sales they’ve made in that period. If you know your profit margin, you can get a general idea of annual earnings, especially if you market your Etsy shop well.

The Bottom Line

Selling crafts on Etsy can be a fun hobby that earns you some extra side money or it could eventually become your full-time gig. Before investing in materials, do some market research to see if there’s a demand for your product idea. As you start to make sales on Etsy, reinvest a portion of your profits to continue growing the business. Earning money on Etsy is entirely possible, you just need the perseverance to make it work.