Etsy is a marketplace for artists and creators to sell their handmade items. Etsy was founded in 2005.
Since then it has grown to be one of the most well-known platforms for selling handmade crafts and designs.
New Etsy shops are being opened daily, and some people have managed to make millions of dollars on Etsy.
However, it’s not all sunshine and roses so today, we’ll look at the pros and cons of selling on Etsy.
Table of Contents
Pros Of Selling On Etsy
Here are some pros of selling on Etsy to consider.
# 1: Etsy brings the customers to you
Etsy is a platform where customers actively search for products to purchase. If you use a platform such as Gumroad, you have to find a way to bring customers to your store. No one will magically show up at the shop.
It’s kind of like owning a store in a busy mall versus a dessert that no one ever visits.
Occasionally, you get someone who stumbles upon your shop in the middle of the desert if they are lost but otherwise, your traffic is nil.
If you are just starting out, Etsy is a great place to start because there are already people looking to purchase what you have to offer on the platform so you can focus on creating better products and focus less on generating footfalls to your store.
# 2: Etsy is trusted by people
People may be more hesitant to complete a transaction on a random website than they would on Etsy.
Over the years Etsy has built a reputable brand. Customers know that the transaction would be safe and secure.
Etsy also guarantees that if the item never arrive or if it arrived damaged, Etsy will personally reimburse the customers.
#3: It’s relatively easy to make money on Etsy
I personally have been selling on Etsy for a while now and since I tried so many different ways of making money online, Etsy is by far one of the easiest places to make money online and one of the fastest ways to start generating another income stream.
If you want to know what you can sell on Etsy click here.
Here’s a step-by-step guide to selling digital products on Etsy.
Here are all the Etsy articles on HelloMoneyTree that you can binge read.
#4: Etsy charges relatively low fees
Compare to other platforms such as Amazon, CreativeFabrica, and Gumraod, Etsy charges a relatively low fee of 6.5% for every item sold and a charge of $0.20 for every listing every 4 months.
#5: Etsy has a fast payout
You can request a payout every day from Etsy as long as your payout is more than $100.
If your payout is less than $100, Etsy will deliver the money to your bank account or Paypal every Monday.
This is for sure faster than Amazon KDP where it’ll take you 2 months to get your money.
If you want to learn how to make money selling on Amazon KDP, click here.
Cons Of Selling On Etsy
Here are some cons of selling on Etsy to consider.
# 1: It’s relatively harder to start on Etsy
It’s relatively harder to start on Etsy. The setup process can be a bit complicated and does require you to share pictures of your government-issued ID and you do need to submit your pictures to start.
The process of opening a shop on Etsy is similar to the process of opening up your crypto trading account on Binance or Newton or Coinbase where you need to have your driver’s license or other identifying personal information handy.
Etsy needs to know it’s a real person behind it and they need to know who is selling it on Etsy.
Then, you’ll have to wait a few days for Etsy to either approve you or not.
If you want to open another store, you’ll have to start the process all over again. You can’t create multiple stores on Etsy using the same account.
# 2: Etsy is not really a source of passive income
Don’t listen to what other people tell you about Etsy. No, Etsy does not provide you with passive income.
If you sell physical products, more sales on Etsy means more work.
You have to continue putting up new items on Etsy for the algorithm to recommend your products to people.
At the start, when you have very little traffic, you may have to promote the products off Etsy.
You can’t just publish a few listings and wait for sales to come in. In most cases, publishing new listings can help you gain more visitors. The algorithm pushes you up the ranking faster the more listings you have published recently.
So in essence, to do well on Etsy continually is to push out new listings consistently which can be hard if you are selling physical items.
Even if you are selling digital items, it’d still be difficult. You’re never a few days away from Etsy if you want to continue doing well on Etsy.
# 3: It’s not free to sell on Etsy
It cost you money to list every item on Etsy so if you don’t make any sales you are actually losing money to sell on Etsy.
It’ll cost you $0.20 USD to list an item on Etsy and for Canadians, it’ll cost you $0.26 CAD per listing.
Etsy takes 6.5% of every sale you make so the revenue you get from Etsy is not the total amount that will be paid to you.
Etsy has been raising the fees as well so it’s likely the fees will increase down the road.
# 4: Etsy is known to shut down shops for no reason
There are A LOT of stories of people’s shops being deactivated and shut down for no reason.
Etsy never provided them a reason and it often takes them months to get a hold of Etsy.
Amy from the YouTube channel “AmyMakesThat” talked about how she was on Etsy from 2017 to 2020 for 3 years roughly in total and her account was suspended without a warning.
She called and after hours of waiting, got a hold of Etsy who told her that they don’t know why and will look into it and she should expect an email from them but she never got an email.
She called 3 times in total and eventually moved on.
4 months later, her account was restored and Etsy never gave her an official reason why her account was suspended. She paid all her bills on time and didn’t violate any copyright laws.
At the time, Amy was making money from YouTube and elsewhere but wasn’t making enough to quit her Etsy shop. She was relying on Etsy for a significant part of her income.
Amy did eventually start her own blog and continued pushing through with YouTube and is doing really well now.
She ultimately decided not to get back on Etsy and I don’t blame her.
Here’s another girl, Jana with a similar story.
Jana had been with Etsy since the very start of Etsy and has been through every change on Etsy.
She sold polymer clay earnings and when she moved, the glue to hold the polymer clay pieces together went bad due to temperature changes so, within a week, three customers messaged and complained about the bad quality of the earrings.
The order kept coming in and she wasn’t feeling well. She had to place her shop on vacation mode and issue refunds. At the same time, Jana had to get surgery for her health and missed a payment to Etsy.
Etsy suspended her shop and when Jana tried to return to Etsy, they wanted her to write a paper issuing how she’ll avoid the same incident in the future.
She told them that it was a one-time health incident and most likely wouldn’t happen again. They thought her response wasn’t good enough and banned her for life.
They didn’t care that she brought Etsy lots of money over the years and had been loyal since the start.
Amy and Jana aren’t alone in this.
Take a look at the following screenshots of different people talking about Etsy shutting down their shops. Most of them weren’t given a reason at all and did not miss any payment.
When Etsy shuts down your store, you are banned for life. Any account that’s tied to your IP address, all your other shops, and even your roommates’ shops (since it’s tied to the same IP address) would be shut down as well.
Don’t even access your Etsy account at your friend’s house or any other place that isn’t your home because if someone’s shop gets shut down, your account that is tied to their IP address will get shut down too.
And if you move, and the IP address changes, you also risk your shop being shut down. It’ll take you months to get a hold of Etsy for them to restore your account.
It’s also stated in Etsy’s policy that they can shut down your store without warning and without justifying anything.
I also don’t like how they have pictures of you, know what you look like, where you live, and more personal details about you such as your birthday, from when you open up your shop.
If someone holds a grudge against you due to prejudice, and they have a bad day, they really can just shut your shop down and hang up on you and refuse to tell you why.
Note, I’m not saying Etsy workers are prejudiced or racist and they may shut your store down because they don’t like you but I’m saying Etsy really holds all the power in whether they want to let you sell on their platform and they don’t have to be reasonable.
# 5: You don’t own your contacts on Etsy
You don’t have the email addresses of customers that purchased from you. There are ways to find it on Etsy but it’s complicated and it’s illegal to reach out to those customers unless they subscribed to your mailing list.
Etsy owns those contacts, you don’t. Your customers aren’t really yours. It’s Etsy’s. You’re just a tool that helps Etsy makes money.
# 6: Etsy treats its sellers terribly
By now I’m sure you get a clearer sense of who Etsy is. Etsy doesn’t care about the sellers. What they care about is making money and keeping their customers happy.
They don’t care if you were there with Etsy since the start, they don’t care if you brought in millions for Etsy, they don’t care if they stop making their share of money from having you on their platform, they don’t care if you got legitimate reasons for not performing up to standards, they don’t care if you got a really good sob story.
And if they shut down your store, they’ll shut it down for days or months at a time or just ban you forever. Sometimes they’ll say it’s a glitch when you finally get a hold of them.
That is if you can get a hold of them.
You could be waiting on hold for hours just for them to tell you they’ll look into it or for them to read you a generic chart of what you should not do on Etsy before hanging up on you.
They’ll never tell you why they shut your store down or what you did wrong so at any moment, everything you worked so hard for could be gone.
Alternatives to Etsy
Read this article on where else you can sell your digital products aside from Etsy but here are some alternatives to Etsy.
- Amazon Handmade
- Creative Fabrica
- CreativeMarket
- Shopify
I highly recommend Creative Fabrica if you are selling digital products. It’s free to list items on Creative Fabrica, there’s less competition, and they even pay you for your approved listings.
There isn’t as big of a market on CreativeFabrica compared to Etsy but it’s still worth a try.
Point is. Do not put all your eggs in one basket. Don’t rely on just one platform to sell your products and build your brand around.
The best thing you can do is to sell on your own platform. I would highly recommend you to get people on your mailing list and sell on Shopify.
That way, you can send people weekly or monthly emails about your newest products and sell them through your own platform.
You keep all the profits, you don’t have to compete with other sellers directly, You own your contacts, and you never have to worry about algorithm changes or someone shutting down your store for no reason.
Click here to read how one woman managed to make almost $ 7 million per year selling printables on her own website.
Final Verdicts
If you are just starting out, Etsy is a great place to start but you must build your brand and not rely on Etsy to bring customers to you.
You want to open up stores on other platforms, you want to be active on social media, you want to start a youtube channel about your brand, you want to get people on your mailing list, and you want them to buy from your own platform, not from Etsy.
Note, you can’t redirect customers from Etsy to your own store. Because Etsy brought the customers to you and they want their fair share. You have to find customers elsewhere and direct them to your store.
For every serious seller, you want to stop relying on Etsy completely. That should be your goal. Sell on your own platform. Build your own brand.
