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Blog / Ecommerce platform guide / How to Make Money on Etsy: A Beginner Guide

Ecommerce platform guide

How to Make Money on Etsy: A Beginner-Friendly Guide

How to Make Money on Etsy: A Beginner-Friendly Guide
Madara Zalcmane

By Madara Zalcmane

17 min read

Etsy is an online marketplace that’s full of potential buyers (nearly 90 million of them if we’re talking numbers) and a ready-made audience looking for exactly the type of products you make. 

For experienced small business owners and those of you who are selling your creations for the very first time, starting an Etsy store is an exciting step in turning your hobby or creative passion into a money-making endeavor. 

In this guide, we’ll teach you everything you need to know about how to make money on Etsy—whether you’re looking for a side hustle to your day job or trying to turn your craft into a full-time career.

Why sell on Etsy?

Etsy's homepage

Source: Etsy

Etsy isn’t a platform for you to host your own website. Instead, it’s an online marketplace focused on handmade, vintage, and craft items. For artists and craft connoisseurs, the creation of Etsy in 2005 was an opportunity to bring their products to a wider audience. 

If you’re wondering whether Etsy is a marketplace you should invest your time in, just take a look at the stats. In 2023, close to 90 million active buyers visited the Etsy marketplace, and previous years have shown that around 40% of the buyers are returning customers.

These numbers prove that Etsy has a huge audience you can tap into. So if you have something original you want to share with people all over the world, Etsy is definitely THE place to be.

Do you actually have to make something to sell on Etsy? 

The focus of Etsy has always been on an artist-centered community where creators can sell their products that customers can’t find in brand-name retail stores. But it’s no longer the case that you must sell only vintage items and handmade jewelry to have an Etsy shop. Things have changed over time, and creative entrepreneurs can now become successful Etsy shop owners using only their designs, entrusting the manufacturing process to someone else. So, if you’re wondering how to make money on Etsy without any handmade goods, this is your answer.

You’re allowed to use a third-party manufacturer, like Printful, to craft the final product, but as the seller, you must show your involvement in the creative process. Creating designs for products that you get from an outside manufacturer is acceptable under Etsy’s guidelines.

Why should you start an Etsy shop? 

If you’re a beginner, working with a well-trusted marketplace means it’s easier to get your first sales and reviews than just starting with a standalone website. Here’s why:

1. You can get in front of an existing audience

Selling on Etsy would mean displaying your online store for a huge market of potential buyers. Etsy is trusted by millions of users, so there’s a whole audience ready and waiting for the type of products you sell, which means that you can spend less time marketing and more time creating.

For example, if you’re thinking about how to make money on Etsy as a graphic designer, you can be certain that the site’s algorithms are helping users find products made by designers like you.

2. You can skip the payment headaches

While you’ll need to get your shop up and running, selling directly through a marketplace means you can skip the hassle of figuring out secure payments for your customers.

Etsy marketplace customers have a secure member login, and there are a number of safe ways for them to pay directly through the website. When you’re eager to learn how to sell on Etsy and make money, the less time you need to spend on setup, the better.

3. You don’t have to invest a ton of money

There’s also the cost to consider. Running your own website isn’t cheap—there’s hosting, domain, and management fees to think about, and those can become pricey when you’re just starting to build a business. Etsy takes care of this for you. You’ll still need to pay some fees to use Etsy and sell your products, like:

But becoming an Etsy shop owner often works out to be cheaper than self-hosting. That means more of your budget can be used for marketing or product development.

4. You can use it as a supplement to your other sales channels

If you already have a website of your own, you can develop a multichannel selling strategy that allows potential customers to find you and buy your products across the internet. With this strategy, you’d increase customer reach and offer your target audience a convenient shopping experience. 

One of the best parts about this is that you get multiple streams of income and you’re diversifying your risk across separate channels. 

Many of us have experienced the frustration of being unable to access a site during a large sale. If your site goes down, having an Etsy store can be the ideal backup. You’ll also get credit for having an established brand that your audience can find in more than one place.

Working across different channels improves conversion rates and increases customer retention by meeting potential customers wherever they are. This way, a brand can target certain segments of a customer base uniquely on each platform, further increasing the chances of a sale and building customer loyalty. Whether you’re looking for how to make extra money on Etsy or simply trying to cast a wider net, operating on a multichannel basis is an excellent approach. 

What types of products can you sell on Etsy? 

No matter what type of products you make, you can find a home for them on Etsy. From handmade furniture, custom t-shirts, and hats to engraved jewelry, personalized calendars, and even digital downloads, your options are limitless.

Learn more: What to Sell on Etsy: 27 Bestselling Products

We aren’t here to give you an exhaustive list of what you can sell on Etsy. But when you’re thinking about what kind of products are most popular, they typically fall into the following categories:

  • Clothing and textiles

  • Jewelry

  • Personalized items

  • Homeware

  • Art & collectibles

  • Handmade cosmetics and spa products

  • Wedding items

  • Craft supplies

Let’s take a closer look at some of the most popular items to sell on the platform.

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Art and digital art

Etsy's product catalog of wall art

Source: Etsy

If you’re an artist or a designer, the first decision that you’ll want to make is about the type of artwork you want to sell.

If you spend hours creating single pieces, you can charge more as they’re one-of-a-kind. But if multiple buyers are interested in that single piece, you’ll ultimately only be able to sell it to one of them. And if there’s nothing else they’re interested in, they could walk away without spending any money at all.

When you’re trying to find ways to create a consistent income from your art, learning how to make money selling digital art on Etsy is useful. With digital art, you can sell the same design or product as often as you’d like. 

Learn more: How to Sell Art on Etsy: Tips and Tricks for Success

Also, keep in mind that taking high-quality product photos carries a lot of weight on Etsy. For repeated designs (where you’re selling the same design over and over again), spending the time to craft an excellent product page will help you sell that same artwork to multiple customers. Well-considered product listings will stand out in the Etsy search results, encourage sales, and help you make more money.

Prints and photos

Etsy custom canvas product example

Source: CreateYourOwnGift

Prints and photos can be sold repeatedly, so you’ll need to decide whether to sell your work framed or unframed (if you opt for a physical product) or if digital downloads are the best way to go.

If you’re not a photographer, you can still learn how to make money with public domain images on Etsy. These images are no longer under copyright restrictions, meaning anyone can use them. But remember, while this is an advantage in helping you to cut down on product creation time, anyone else can also use the same image as you, which makes standing out in the crowd more difficult.

You can make your designs more unique by turning these images into something else. Think about putting text around or over the top of the image, or editing them with different colors or design elements. That way, you’re still adding your own artistic flair to make it original. If you’re creating artwork with Printful, you can use Printful’s Design Maker to create or edit your designs.

a screenshot of the printful design maker with a green design on a white t-shirt

Source: Printful

The Design Maker includes:

  • 50+ clipart collections

  • Customizable ready-made designs

  • Text Tool with 250+ fonts

  • 230+ background colors and graphics

  • Pattern Tool that creates a pattern from any design element

Explore these features and experiment with your photos to create something that fits your brand niche.

 

Etsy jewelry whispering winds shop

Source: Whispering Winds Shop

One of the most competitive categories for Etsy sellers is jewelry. When thinking about how to make money on Etsy by selling jewelry, the best approach is to make yourself as distinct as possible. Whether that’s in the design you use or the materials your products are made from, find a way for your store to shine.

Don’t offer too much variety in your jewelry style, though. Customers gravitate toward particular stores because they’re drawn to a specific style. People want to express their personalities and lifestyles with the way they dress and accessorize. If you offer jewelry that clicks with their aesthetic choices, they’re more likely to become repeat customers. You can offer customization or personalization options (which are incredibly popular with buyers), but try to stick to only one or two variations for each product.

Stickers

Etsy custom stickers category

Source: Etsy

Interested in knowing how to make money selling stickers on Etsy? Designing stickers on Canva or Procreate for iPad is straightforward and simple (perfect for those still working on their artistic skills), and can help you turn around new products quickly.

Logos, bumper stickers, and kiss cut stickers are the most popular types that Etsy customers tend to buy. Offering stickers is one of the fastest ways to sell lots of products with low manufacturing and shipping costs, and, just like artwork, the designs can be resold. 

Using a print-on-demand (POD) service like Printful is a great solution if you want to avoid having to create and stock hundreds of stickers at home. Instead, whenever your customer places an order, the stickers will be automatically printed and prepped for shipping by Printful.

T-shirts

Etsy personalized t-shirts

Source: GloryTribeUS

When you’re trying to find out how to make money selling custom clothing on Etsy, there are a number of different avenues that you could take. Vintage or upcycled clothes have become very popular on the site, but making and selling your own handmade creations is also a great business model.

If you learn how to make money on Etsy with t-shirts, you’ll be well on your way to starting a clothing brand, which you can easily expand later with custom hoodies and other apparel. The best designs usually feature funny sayings and memes or are customizable for bridal and baby showers.

Read also: POD Expert Tips on Creating Viral T-Shirt Designs

What is a print-on-demand (POD) service?

Once you’ve decided what you want to sell on Etsy, you’ll need to nail down how you’ll stock your shop and build up your merchandise. If you’re just starting out, working with a POD company like Printful solves both of these problems. 

Printful integrates directly with your Etsy shop, taking care of all of your customer fulfillment and shipping needs. Once you’ve created your Etsy account and published your first few products, Printful’s system takes over so that you can spend your time managing your online store and marketing your products.

Printful doesn’t have any monthly fees, so you’ll only be charged when an order is fulfilled (unless you subscribe to the Printful Growth membership to access its perks, like lower product prices). Printful products are all white-label, which means no Printful logos are placed on your products. It’s all your own designs and branding, just like it would be if you had created and shipped the product yourself.

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Your guide to setting up your Etsy shop

You now know why you should start an Etsy shop, what types of products to sell, and how a POD service can help.

But, there’s one last big thing you need to sort out: how to actually get your Etsy store up and running. Fortunately, Etsy’s incredibly user-friendly for sellers and they’ve made launching a store as easy as possible.

Head to the “Sell on Etsy” page, then log into your existing account or create one. Etsy will walk you through all the steps you need to take to become a seller on the marketplace. 

Here’s a video guide on how to set up an Etsy store when you’re using Printful.

preview play-button

Beyond creating your own Etsy shop (and eventually your products), there are a few other nuts and bolts you’ll need to take care of. This isn’t exactly the most fun part of creative entrepreneurship, but it is important.

Business licenses

You might be asking yourself, “How much money can I make on Etsy before I have to buy a business license?” That depends on exactly where you’re located. Some cities in the US have rules that override state regulation.

Etsy itself doesn’t require you to have a business license but keep in mind that you may need to register for sales tax in your state or city.

Do your research and see what rules apply to where you live specifically. If you ship your products to people abroad, check whether or not sales tax should be charged to customers outside of your own country too.

Taxes and fees

If you’re serious about turning your Etsy shop into an established business, you may be wondering, “How much money can I make on Etsy before I have to pay taxes?”

Again, this is all going to depend on where you live. For US-based sellers, any income that you earn from Etsy will be considered business income and will need to be reported on your annual Schedule C tax form. Etsy will report your gross (or pre-tax) income via a 1099-K form to the IRS and it’s important that you check that this matches your own income records when you receive it.

Read also: How to Start a Business in the US: Taxes and Legal Requirements Handbook

Since every country and state has different tax regulations, how much money you need to make on Etsy to have to do taxes will vary based on the country you’re selling from. However, earning more usually means paying more taxes. The good news is that you’ll be able to deduct expenses to lower your overall taxable income. This can be anything from the cost of materials used to make your products, any advertising that you’ve paid for, and even shipping charges. 

Learn more: Etsy Calculator—predict your Etsy fees and profit

You’ll also need to be aware of the payment processing fees that a credit card processor will charge, along with the fees that Etsy charges for using their service. While there’s no seller membership cost on Etsy (unless you opt for the Etsy Plus plan), you’ll be charged 20 cents for each item you list and a transaction fee of 6.5% for each product you sell. While Etsy’s fees can be written off as expenses, that’s something you’ll need to factor into your business budgeting.

If you’ve never had to deal with self-employment tax before, here’s a quick example for you to work from:

  • During one year, you made $30,000 by selling your products on Etsy. This is your total before factoring in any expenses or taxes.

  • The cost of materials that you used to make your products was $10,000.

  • Your Etsy fees (listing and payment processing) were $1,400.

  • This means that your total business expenses came to $11,400.

  • To calculate your taxable income, use the formula:

    • Sales Total - Expenses = Taxable Income

  • Your taxable income for this tax year would be $18,600. This means that you’ll only be paying taxes on this amount, not the whole $30,000 that you earned.

Shipping

Finding out how to offer free shipping and still make money on Etsy is an important part of becoming a seller. Customers love free shipping (in fact, 66% of them expect it on all online orders), and many Etsy sellers use it as one of their selling points. But free shipping can significantly cut into your profits if you’re not careful.

ecommerce meme

Source: loveforquotes.com

One way to handle free shipping is to include the shipping fees in the product price. You’ll need to work out an average cost for shipping each product to long-distance locations compared to local customers to find a middle ground and fairly charge everyone for those products. Even if you’re using Printful to ship your products, building this into your product cost means that you’ll be able to keep more of your profit for every product you sell.

We wouldn’t recommend providing free shipping to international customers, as those costs can add up very quickly. As you’ll be charging the shipping cost to the customer, offering them a small discount when they order multiple products to acknowledge the higher shipping fee can be a great way to encourage overseas shoppers to buy from your store.

An important point to note: only stores with free US shipping receive priority in the Etsy search algorithm, so it’s really only worth it to offer it to US-based customers. 

Starting to make money on Etsy with thoughtful marketing

With the basics out of the way, you’re ready to launch your Etsy business and start earning some income from your creative endeavor. How long it takes to make money on Etsy really depends on your effort, your brand niche, and a little bit of luck, but here are a couple of tips and strategies that you can try. 

Marketing and followers

There isn’t a set formula when it comes to how many followers you need on Etsy to make money. It all comes down to good marketing and having a product that your target audience wants.

Make sure that you’re tagging your products and writing keyword-rich descriptions. Like with Google search, relevant keywords in descriptions and product titles will help the Etsy search algorithm highlight your items to potential customers looking for something similar. 

Tagging a product on Etsy means adding a word or short phrase that describes your item. Etsy matches tags with shoppers’ searches to find relevant results. 

If you have the budget for it, you can try out Etsy Ads. Your promoted listings will be more prominent in buyers’ search results, and your Etsy Ads will automatically be shown to shoppers in the countries you ship to.

a screenshot of mugs sold on etsy

Source: Etsy

You can also make use of broad hashtags on your social media accounts to drive people to your Etsy store. Cross-promoting your products and store as a whole on your social media platforms can help draw your audience in from different places around the web.

Collaborating with other sellers is also a good way to cross-promote your products to new audiences. You’ll increase your store’s visibility by getting your products in front of a new and possibly well-established audience. You’ll also be seen as a trusted seller by that audience and other sellers, which is a great way to boost your name within the Etsy community.

If you do in-person events, make sure that you have business cards with a URL for your Etsy store printed on them. Alternatively, you can add packaging inserts for your online buyers. Leaving a memorable impression on your customers can turn them into repeat shoppers. In other words, this can help you build a customer base.

Get creative when it comes to your marketing and try different approaches until you find what works for you. Check out the Etsy Seller Handbook to get inspiration for your marketing materials and analyze other successful shops to see how you can improve your own Etsy store.

Read also: Etsy SEO: 5 Must-Do Steps to Help You Get Found on Etsy

Read also: 9 Successful Print-on-Demand Store Examples and What You Can Learn From Them

Products and stock

How many listings do you need to make money on Etsy? Well, that’s also not an exact science. Etsy recommends having at least 20 listings when you start your shop so that customers have a few different options to choose from and for you to gain some attention. But having hundreds of items isn’t necessary and can even give your customers choice paralysis (where they’re overwhelmed by the number of options).

So it’s not just about the number of products you have in your shop but how you make them different from each other and the products of other Etsy sellers. 

Make sure that all of your descriptions are unique for each product, even if they’re somewhat similar items. Think about what makes the product special. Is it made from a specific material or can it be customized in a particular way? Think about how different audiences might be searching for these types of products and add those keywords and phrases into the descriptions.

Pricing

To become a successful Etsy seller, you need to figure out how to price your product listings so that your item is affordable, but you’re also making money. When setting up your prices, it’s important to do proper market research and know your niche, including how much your target audience is ready to pay for your products.

While there’s no single method to calculate the prices you should set, you must remember to include the payment processing fee, transaction fee, listing fee, or other Etsy fees in your price before you start selling. Otherwise, you may wind up losing money.

Embrace your creativity (and make some money too)

Selling your products on Etsy is the perfect way to build a business, regardless of whether you’re trying to become a full-time creator or make some extra cash on the side. 

preview play-button

Learn more:

As with anything, there’s a little bit of trial and error involved (and that’s half the fun of trying something new anyway). Keep testing different strategies until you find the ones that work for you, and you’ll soon start to see your Etsy shop pulling a profit.

Read next: How to Sell Printful Products on Etsy

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By Madara Zalcmane on Jan 18, 2024

Madara Zalcmane

Madara is a content marketer for the Printful Blog. Her background in linguistics and belief in the power of SEO come in handy when she’s creating content that inspires ecommerce store owners and helps them grow their business.

Madara is a content marketer for the Printful Blog. Her background in linguistics and belief in the power of SEO come in handy when she’s creating content that inspires ecommerce store owners and helps them grow their business.