How to Make Money on Etsy: A Step-by-Step Guide

A woman poses with a laptop while her husband prints t-shirts
Coryn and Adam Enfinger operate Dark Cycle Clothing out of their home. The business now makes hundreds of thousands of dollars a year, but they got their start selling on Etsy. Chris Zuppa/The Penny Hoarder
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You’ve no doubt heard of Etsy, the beloved e-commerce site that allows hobbyists to monetize their crafts and consumers to buy unique products that aren’t mass produced. Since its 2005 founding, the online marketplace now hosts more than 2 million sellers and 39 million buyers.

You’ve also no doubt heard of the Etsy millionaires who turned their passions into thriving businesses, but that’s not why you’re here.

You don’t need anymore success stories, just the nuts and bolts of how to make money on Etsy yourself.

How to Sell on Etsy

Let’s get one thing out of the way: Etsy is not a set-it-and-forget-it type of website. For that, there are plenty of other places to sell stuff online. It also isn’t the greatest choice to list your tchotchkes after binge-watching Marie Kondo’s Netflix special.

Compared to other online marketplaces, Etsy takes some work. But that hard work can pay off as a profitable side business. So from the start, it’s important to think of it like that: a side business. And what does every side business need? Proper planning.

Step 1: Make a Plan

Before charging in full force, it’s best to make a plan. Figuring out the logistics beforehand can help determine if the website is worth your time.

When making your game plan for how to sell on Etsy, you’ll need to consider a few things:

  • What’s allowed on Etsy (and what isn’t)
  • Market research
  • Seller fees

You can’t sell any ol’ thing you want on Etsy. There are strict rules. The two biggest restrictions are that the products must be vintage or handmade. Vintage products must be at least 20 years old, and handmade products must be crafted or designed by you or your business. That means you can’t simply buy cheap products from overseas and resell them.

There are a host of other prohibited items, which include:

  • Certain animal products and human remains
  • Drugs (tobacco, medicine, illegal drugs, etc.)
  • Hate or violent items that “promote, support or glorify” hatred and violence
  • Illegal or highly regulated items

Once you know your product is safe to sell, do some market research. Popular items on Etsy include accessories, art, clothing, collectibles, craft supplies, home decor, toys, vintage and wedding supplies.

After Coryn Enfinger co-founded her screenprinting business, Dark Cycle Clothing, with her husband Adam, they wanted to create an Etsy store to reach a wider audience. For weeks, she studied successful shops.

When Dark Cycle Clothing’s Etsy store launched, her research paid off. Buyers came flooding in, and what started as a hobby flourished into a $350,000-a-year screen printing business — and one of Etsy’s top-five handmade stores.

“People don’t realize how much work it takes,” Enfinger said. “They just see the product and they see it selling.”

As you’re conducting market research, it’s best to factor in all of Etsy’s fees and incorporate them into your plan as well. While signing up for an Etsy seller account is free, the website charges three main types of seller fees.

  1. Listing fee: For each listing on Etsy’s website or the mobile app, you’ll be charged 20 cents. For multiple quantities of the same item, a 20 cent fee will be charged per sale.

  2. Transaction fee: Etsy charges 5% of the listing price per sale, plus any additional costs for shipping or gift wrapping.

  3. Subscription fee: A basic Etsy shop membership is free. Shops in good standing can choose to upgrade to Etsy Plus, a subscription for sellers that includes bonus promotional features, for $10 a month.

Considering these fees early on will save you many headaches in the long run, and you’ll be better able to set prices that are profitable from the start.

“We started pricing way too low. We started at what made sense to us as broke 21-year-olds,” Enfinger said. “Make sure your pricing is at a point where you can really grow your business.”

Step 2: Create Your Etsy Shop

How to sell on Etsy - A woman holds up a cookie cutter in the shape of a manatee.
Lena Gosik-Wolfe started her craft business selling custom 3D-printed cookie cutters. Now she helps others understand how to sell on Etsy. Aileen Perilla/ The Penny Hoarder

A good product is only part of the equation.

Creating an online Etsy shop takes mere minutes, but you’ll want to spend much more time customizing your page. (Or, if you don’t want to do all the page designing yourself, Etsy offers a customization tool called Pattern for $15 a month.)

“It’s all about perception,” Lena Gosik-Wolf, an Etsy shop designer and consultant, told The Penny Hoarder. “It’s about how people are seeing you because they can’t have that in-person experience.

Pro Tip

Establish a strong brand and backstory. Connecting with customers makes them more likely to spend time on your shop.

The best place to make a connection with customers is with your Etsy shop name and logo, and on your shop-owner-bio page. Use that space to show off your personality, and be sure to link out to your website or social media so people can find out more about your business.

Besides branding, how you list your product is key to driving sales. Enfinger and Gosik-Wolf agree that product descriptions and high-quality photos are the two biggest factors.

A well-lit, high-quality photo (or five) sets you apart from the competition. Good photos make your listing appear much more legitimate and trustworthy, too.

In terms of product descriptions, it’s best to think of Etsy’s search function like Google. Not only is a well-written description going to help the buyer make a decision once they find your listing, but item descriptions also help them get to your listing in the first place.

For example, if you’re trying to sell hand-knit afghans, you’ll want to include those details. Product descriptions also are a place to tie in your brand story. Get creative. Don’t just say “blue blanket” and call it a day.

“People pick up on that kind of thing,” Gosik-Wolf said. “They can tell if you don’t care about your shop.”

Step 3: Market Yourself

You made it this far. You crunched the numbers, scoped out the competition and crafted the perfect product descriptions. You’re not done yet, though.

Even if you executed all the other steps flawlessly, people will have a hard time finding your Etsy shop early on. Networking, both online and in-person, is a key part of how to sell on Esty successfully.

Social media sites such as Facebook, Instagram and Pinterest are great places to extend your reach and drive traffic to your Etsy shop. They’re also excellent outlets to connect with your customers.

And in case it wasn’t clear the first time: Your branding is everything. So it’s important to create accounts across all platforms with the same business name. This makes it easier for customers to find you.

People don’t realize how much work it takes. They just see the product, and they see it selling.

You should curate your content on social media. In general, announcements and longer-form posts are best on Facebook. Instagram and Pinterest are excellent places to tell your story visually, whether that’s through lifestyle photos or actual photos of your products. Each outlet serves as an opportunity to link back to your Etsy store, too.

An Etsy Plus membership can also help you get noticed. Perks include promotional listings, customizable shipping boxes, business cards, additional shop customizations and more.

Rarely do Etsy shop owners only sell online. Another way to increase your new side business’s profile is by joining indie flea markets in your area.

Etsy encourages its vendors to sell their products through the Etsy app while at in-person markets. There’s also Etsy Local, a feature that allows Etsy vendors to team up and create markets, which Etsy lists on its website.

Local markets are where Dark Cycle Clothing got its start.

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how to make money on etsy - An Etsy page showing t-shirts for sale are displayed
A page shows Dark Cycle T-shirts available on Etsy. Chris Zuppa/The Penny Hoarder

The benefits of markets are twofold. Besides providing an additional revenue stream, Enfinger said that events are a way to meet your customers in person — and gain new ones. Most of the time, local markets cost money to join. Enfinger estimates that the ones Dark Cycle attend cost between $150 and $1,000. Over the years, markets have grown to make up about one-third of its business revenue.

So for Enfinger, market fees are worth the investment.

“I know people are going to show up.”

You’re Up and Running on Etsy. Now What?

Congrats! You’ve figured out how to sell on Etsy, but that’s just the beginning. It takes time to see success.

While the top Etsy sellers may rake in hundreds of thousands of dollars, as you may expect, average Etsy-store earnings vary greatly, and the company doesn’t release those numbers. The ultimate answer depends on how many customers your store attracts and how many vintage or handmade products you can produce.

To establish a loyal customer base, remember to leverage social media and local markets.  Another method to keep in contact with customers is through an email list or newsletter. Whether in person or online, encourage your customers to keep up-to-date with your store by signing up with their email address. And give them incentive to do so through discounts or exclusive access to products.

The more you interact with your customers off of Etsy, the better. For many successful businesses, a solid Etsy shop is only part of the equation because there’s only so much you can do to optimize your shop: Great products. Well-written product descriptions with keywords. Killer photos.

It’s one thing to launch an Etsy store that gets customers in the metaphorical door to make a purchase, but it’s another thing to build a relationship with customers that keeps them coming back.

Adam Hardy is a former staff writer at The Penny Hoarder.