How to Make Money on Etsy

It will take a good idea, some competitive research and a solid promotion strategy to make money on Etsy.
Tommy Tindall
Devon Delfino
By Devon Delfino and  Tommy Tindall 
Updated
Edited by Courtney Neidel

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Looking to sell handmade goods or sought-after vintage items? It’d be hard to ignore Etsy as a starting place for your creative side hustle.

What is Etsy?

Etsy has grown into a vast online marketplace for artisan goods made by regular people.

Etsy says it has millions of shoppers, which means there’s potential to find customers for your unique creations or vintage wares.

But like with most side hustles, it takes a plan to prosper. Creativity and talent will help too. Here are a few factors to consider if you’re trying to make money on Etsy.

Conceptualize and research your Etsy idea

A good business starts with a good idea (or product in this case), and selling things online is competitive. Ask these questions as you ponder the right product.

What should I sell?

With Etsy, the product might be something you make or design yourself. The company is keen on its uniqueness, specifying that items sold must be handmade, vintage (at least 20 years old) or craft supplies. You’ll want to find your product niche. Is it pottery? Handmade jewelry? Industrial-style mailboxes? (Yes, they’re a thing.) The options are endless, but it’d be good if you’re passionate about what you sell. Do some soul-searching on side hustles if you're a beginner.

What are the market trends?

Do people want what you have to offer? You can do your market research right on Etsy. Try searching for keywords that are common to your product. Thinking about selling shirts with humorous messages, for example? Search the words, “shirts with sayings.” Click into shop pages with similar items to see the number of sales made since opening. Pay attention to listing details, how product photos look and pricing. Do a Google search for “best sellers on Etsy” for more inspiration. Popular categories at the time of this writing included:

  • Custom cutting boards.

  • T-shirts with specialized designs.

  • Rustic wooden boxes and centerpieces.

  • Digital guides for how to sell stuff online. 

If you think there’s enough interest in your idea, move on to the next step: making sure the product will make you money.

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Will I make money?

Side hustles require accounting, especially if you’ll be making what you sell. Run the numbers upfront.

Figure out the cost to make (or acquire) each item. What costs, such as materials or labor, are involved in production? If you want to sell handmade jewelry, for example, look up prices for the gems and earring hooks you’d use to make each piece. Then calculate the cost to make a single item. Factor in how long it takes you to craft each piece because time is money.

Research the competition to get a feel for the going rate. Scope out prices for similar items on Etsy. Setting a lower price than the competition could give you a leg up. It’s also a good idea to consider prices on other marketplaces, such as Amazon or local stores, to increase your chances of selling.

Factor in Etsy’s fees. Selling on a slick marketplace like Etsy isn’t free. The site charges $0.20 to list an item. When you make a sale, there’s a transaction fee of 6.5% of the price you display for each listing, plus the amount you charge for shipping and gift wrapping. Read up on all of Etsy’s fees before you start selling.

If you expect to owe more than $1,000 in taxes on your earnings, you should probably set aside money for estimated quarterly tax payments. There might be state, local or other taxes. Estimate your tax liability to determine an accurate figure to save.

Evaluate the numbers. Take the price-per-item you’ve picked and deduct the associated costs — including fees, taxes and production expenses — then see what’s left over. If you can’t turn a profit while maintaining a competitive price, you might want to try another place to sell stuff online or a different product.

Open your Etsy shop

Once you have a solid idea, it’s time to open your Etsy shop. It’s a simple process. Visit Etsy.com/sell and click the “Open your Etsy shop” button. Fill in the details, such as your shop name, billing information and how you’ll get paid.

If making money is your priority, spend less time thinking about your shop name and brand and more on listing products. You’ll be able to tweak your store name and customize your shop appearance down the road. For your listings, be sure to upload clear photos of the products you’re selling and include concise and clear item descriptions to make it easy for customers to decide.

Once your shop is online, check out Etsy’s seller handbook for a comprehensive collection of tips and insight on how to list items effectively and grow as a seller.

Market your Esty shop and products

It’s competitive out there, so you’ll need a strategy to promote your offerings. Plan to test and learn with various marketing methods over time. One of the first things you can do to increase the chances your product shows up in an Etsy search is experiment with brief listing titles that use relevant keywords.

Other free methods include email and social media marketing. Start a monthly newsletter with insights and anecdotes about your creations, and add contacts as you grow. Create a Facebook page or Instagram account for your shop too. Check out similar accounts to find relevant hashtags and ideas for posts that can broaden your reach.

You could also start a blog about a topic that’s relevant to your buyers. If you have a vintage clothing shop, for instance, you could write about how to style clothes or repair older pieces.

If you can afford to invest some money, consider Etsy’s paid ad service to promote your products in Etsy’s search results.

As your business grows, set sales goals and take advantage of Etsy’s web analytics tool. That way, you can gauge if your marketing tactics are working or it’s time to try something new.