When it comes to selling handmade goods online, Etsy is often the first platform that comes to mind. However, as with any marketplace, there are pros and cons to selling on Etsy that crafty ecommerce businesses should consider.
In 2014, we published a popular blog post outlining the advantages and disadvantages of selling on Etsy. A lot has changed since then! In this updated post, we’ll take a fresh look at the pros and cons of selling on Etsy in 2023.
We’ll examine how the growing competition and increasing fees on the platform can impact your business, as well as the benefits of tapping into Etsy’s large audience and established reputation. Whether you’re an established Etsy seller or considering opening a shop on the platform, this post will provide you with valuable insights to help you make an informed decision about selling on Etsy. Enjoy!
Changes to Etsy over the years
Here are some of the main changes that have occurred in the Etsy online marketplace since it first launched in 2005:
- Increased competition – Since its early days, Etsy has grown to become a massive online marketplace with millions of sellers. As a result, there is now more competition than ever before, making it harder for new sellers to stand out.
- More product categories – Etsy has expanded beyond its original focus on handmade and vintage items. Today, the platform also allows sellers to offer products in categories such as craft supplies, digital downloads, and even furniture and home decor.
- More international buyers – Etsy’s global reach has expanded significantly since its early days, with buyers from around the world now able to purchase items on the platform.
- Increased fees – Etsy’s fee structure has changed over time, with the company introducing new fees and increasing existing fees. For example, in 2021, Etsy announced a new Offsite Ads fee, which charges sellers a percentage of their sales if they make a sale from an advertisement placed by Etsy off of the platform.
- More seller tools – Over the years, Etsy has introduced new tools and resources to help sellers manage their shops more effectively. These include features such as Shop Manager, which allows sellers to view and manage their shop analytics and orders in one place, and Pattern, which lets sellers create their own standalone website using Etsy’s templates.
- Increased focus on sustainability – In recent years, Etsy has placed a greater emphasis on sustainability, encouraging sellers to use eco-friendly materials and packaging and offering tools to help them offset their carbon emissions.
Etsy Pros and Cons in 2023
- Easy to set up and maintain – Setting up an Etsy shop is relatively straightforward and can be done quickly, even for those with limited technical skills.
Setting up an Etsy shop is relatively straightforward and can be done quickly, even for those with limited technical skills. The platform also provides various tools and resources to help sellers manage their shops more effectively, including features like star seller status, affordable promoted listings, and a mobile app.
- Low risk – Many handmade businesses gravitate towards Etsy in their early stages because there is very little investment required upfront. Etsy can be a good platform for testing out new products. In contrast to starting your own e-commerce website, which requires domain registration, hosting, web design, and other related expenses, opening an Etsy shop only requires creating an account and setting up a shop profile.
- Big market – Etsy has a massive customer base, which gives sellers access to a wide audience and can help drive sales. With over 90 million active buyers, Etsy’s audience represents a significant market for sellers to tap into. Etsy’s audience also tends to be highly engaged and passionate about supporting small businesses and independent creators.
- Supportive community – The Etsy community is known for being welcoming, supportive, and collaborative. The Etsy forum is a lively and welcoming place to find resources, answers, and camaraderie! Etsy offers a variety of resources and tools to help sellers succeed, including discussion forums, seller teams, and mentorship programs. These resources allow sellers to connect with each other, share advice, and learn from more experienced members of the community.
- Seller tools – Etsy provides various tools and resources to help sellers manage their shops more effectively, including features such as shop manager, listings manager, star seller status, Etsy ads and promoted listings, sales and coupons, shipping labels, Etsy payments, and a mobile app.
- Established reputation – Etsy has been around for many years and has established a reputation as a trusted marketplace for handmade, vintage, and unique items. Etsy has been around for over 15 years and has built a reputation as a reliable platform for buying and selling handmade and unique items. As a result, many buyers turn to Etsy when they are looking for handmade or one-of-a-kind items.
- Stiff competition – Etsy is the 12th largest online marketplace. Getting found on Etsy can be a tricky thing! Members of our community have commented that having at least 100 items can help boost your visibility. If you haven’t seen this article from Etsy, it’s a good starting place. Additionally, since Etsy is a marketplace that features many sellers offering similar products, customers may not be loyal to any one seller, but instead, they may be more interested in finding the best price or the most convenient shipping options.
- Limited customizations & branding – With few options for customization, sellers often feel that it’s hard to stand out there. The prevalence of Etsy’s branding across the site doesn’t help. Customers often say “I bought it on Etsy” instead of remembering your brand name.
- Fee increases – In April 2022, frustrated Etsy sellers went on strike in protest of fee increases and other policies. Transaction fees increased from 5 percent to 6.5 percent, along with many other charges, which can all add up to as much as 20 percent of their revenue. (Source PBS)
- Reliance on Etsy’s policies – Etsy has strict policies around what can be sold on the platform, and sellers must adhere to these policies or risk having their shops suspended or shut down.
- Algorithm is complex and not fully transparent – While Etsy is transparent about some of its ranking factors, such as title and tag relevancy and listing quality, some sellers swear their shop traffic dips mysteriously from month-to-month. A couple of things that may help boost visibility are keeping your shop fresh by adding new pieces frequently and offering free shipping.
- Tarnished the term Handmade – Many sellers feel frustrated with the lackadaisical stance Etsy has taken toward mass-produced items for sale on the site. Some argue that the growth of mass-produced items on the platform has led to a dilution of what “handmade” means.
On the other hand, Etsy has implemented policies and guidelines to ensure that items listed as “handmade” are indeed made by the seller. The company has also introduced initiatives to promote sustainability and ethical production practices among its sellers.
- Support for sellers can be hit or miss – A common complaint among Etsy sellers is that it is tough to get support from the Etsy team and many people rely on the community forum for answers. Last year, 20,000 sellers petitioned Etsy to improve its customer support for sellers. In response, Etsy announced that it would invest $50 million to improve support to sellers and buyers.
- Your customers on Etsy are not really “yours” – Sellers on Etsy have limited access to customer data. Etsy does not allow sellers to collect customer email addresses or other contact information, making it difficult to build direct relationships with customers outside of the platform.
Does Aeolidia recommend Etsy for creative ecommerce businesses?
We’re glad you asked! We’ve been working with crafty ecommerce businesses for over 18 years and during that time, we’ve learned a lot about the pros and cons of selling on Etsy. In some cases, the pros heavily outweigh the cons, such as a new business that is just starting out. Etsy provides a low barrier to entry and it can be a good place to start. Many successful creative businesses we’ve worked with have gotten their start on Etsy. Successful shop owners often choose to keep Etsy as an income stream, but not the only one!
Over the years, we have written at length about Etsy. If you are still on the fence about where to set up shop, here is some further reading:
- Outgrowing Etsy? How to Move On and Save Money
- Moving from Etsy to Shopify
- How to Diversify Beyond Selling on Etsy
- Has Your Handmade Business Outgrown Etsy?
- 5 Methods to Get More Sales on Shopify
Use our Etsy vs. Shopify fee calculator
If you’d like to set up your own shop outside of Etsy, we wholeheartedly recommend Shopify, Etsy will let you export your items into a CSV file, which can then be imported into Shopify. Use our Fee Calculator to compare your Etsy fees with your potential Shopify fees. If you’d like help migrating your site, migration from Etsy to Shopify is a solution we offer.
If you have any Etsy pros and cons to add, please share in the comments!
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