The world has changed so much in 2020. The pandemic has changed business and online shopping dramatically. Is it worth it to sell on Etsy in a world where Amazon now controls nearly 50% of all online sales (February 2019 statistic) in North America?
There are a lot of ways that we can look at this. Whether it is worth selling on Etsy or not really depends on a lot of very important factors that you need to consider.
If Amazon has 50% of online sales then it makes better sense to sell on Amazon, right? That may be a valid argument but for a start, Etsy is a completely different marketplace.
Etsy is not and probably will never be a direct competitor to Amazon. It is true that Amazon has launched Amazon Handmade as a direct competitor to Etsy but that has largely been a failure and makes up less than 1% of Amazon’s sales.
I am a glass-half-full kind of guy.
I see Amazon as taking 50% of all online sales as them leaving another 50% on the table.
The remaining 50% of online sales is where it gets really interesting. The next 3 biggest competitors to Amazon is eBay at 6.5%, Apple at 4% and Walmart at 3.7%.
This means that a massive chunk of online sales is still available to anyone and Etsy is certainly very strongly positioned as a very unique marketplace.
Etsy’s main focus is handmade and unique products that can not be found anywhere else.
This makes it a destination for online shoppers.
People actively come to Etsy looking for unique and handmade products. With more than 350 million visitors to Etsy per month, this is one seriously big marketplace to sell in.
That alone for me makes it worth selling on Etsy. That 350 million visitors per month is also unique in the fact that these are people actively looking to buy stuff. Etsy’s traffic has buyer intent and that is a big distinction.
If I can just get a fraction of that traffic I can sustain a very decent online shop.
How much money do Etsy sellers make?
Before you even consider starting an Etsy shop you need to manage your expectations. Can you make a million a year on Etsy?
Yes, you can but you probably won’t. Not in your first, second or third year. It will take a lot of time, a lot of great products and a lot of hard work.
The sad truth is that the vast majority of Etsy stores fail within the first 6 months. They fail not because Etsy “does not work” but because the shop owners run out of steam.
The first question you need to ask yourself is this:
How long am I prepared to work on my Etsy shop without making any profit?
If your answer is anything less than 6 months then you will be disappointed.
The vast majority of successful Etsy stores are older than 3 years.
These are shop owners who have a passion for what they do, they stick with it and ride it out no matter what.
The question then is, what is considered a “successful” Etsy store?
For me, a successful Etsy store is one that can replace a full-time income. That will enable you to run your Etsy store full time and by pouring in ore time you can grow the Etsy store much faster and much bigger.
The median household income in the USA is about $60,000 per year.
To make $60,000 per year from Etsy, this is what it will take:
Suppose you sell a $30 product with a $15 margin.
To make $60k you will need to sell at least 4000 products. That sounds like a lot but that is only about 11 sales per day.
If you put in the work then making 11 sales per day on Etsy is not that hard.
There are of course fees and other factors to take into account. There is also a lot of seasonality and over the Xmas period, your sales can easily double while other times of the year you will see big dips.
Etsy shop owners tend to keep their financials a secret and it is impossible to really know how much a shop really makes. There are certainly Etsy shops that do well over a $1 mil in sales annually.
Setting yourself a goal of selling 10 (or whatever works for your products) products a day is a great way to focus your mind. It breaks down the big goal into a very small one that you can easily focus on.
7 Reasons Why It Is Worth It To Sell On Etsy
Since 2017, every year people start warning you that the sky is falling and that Etsy is “dead”. It doesn’t take long to find some articles online about how Etsy is oversaturated or how it is becoming harder and harder to make money on Etsy.
They often have valid points but there will always be competition on Etsy. If you are a glass-half-empty kind of person then selling online is probably not for you.
There is more competition than ever before but Etsy is still growing year-over-year. I believe that there is ALWAYS room for anyone who is willing to put in the work and who brings their own personality and creativity to Etsy.
Here are my 7 reasons why I think it is worth selling on Etsy – especially in the post-pandemic world.
1. Massive Marketplace
Etsy is a massive marketplace with more than 350 million visitors a month. For any website to get that kind of traffic is impressive and it places Etsy within the top 30 websites in the USA in terms of traffic.
What is particularly significant about this is the fact that Etsy shares this traffic with you.
The biggest problem for any online store is getting traffic. Most of the time you will need to buy advertising through Google Ads or Facebook Ads and that is definitely not cheap.
When you sell on Etsy’s marketplace you instantly tap into vast amounts of traffic – and it won’t cost you a cent.
It is like opening a shop in one of the busiest malls in the world – but you don’t have to pay any rent. You just pay a fee when you make sales.
That is a pretty sweet deal, don’t you think?
2. Etsy Traffic Has Buyer Intent
Getting 350 million visitors to any website is really impressive and takes some doing. To put this in perspective, Etsy’s traffic levels is on par with news websites like CNN and Fox News.
The big difference however is the value of Etsy’s traffic. Etsy’s traffic has buyer intent. People come to Etsy because they are looking to buy something.
If you advertise on Facebook Ads you are trying to interrupt users from what they are doing. Nobody is on Facebook looking to buy something.
It takes a lot of marketing to convince someone on Facebook to drop everything they are doing and go to your store and buy something.
Etsy is completely different. There is nothing else to do on Etsy other than buy stuff. You do not need much marketing skills or experience since the traffic is already qualified.
This fact alone enables anyone to sell on Etsy. You do not need any marketing skills or experience to become a super successful Etsy seller.
All you really have to focus on is your products.
3. Super Simple To Start Selling
Perhaps the biggest reason for most people to start selling on Etsy is the fact that it is so super simple. You need zero technical skills to run even a big Etsy store.
They take care of all the technical stuff and even the marketing and traffic – which allows you to only focus on your products.
Consider the alternative. Suppose you want to start your own Shopify store. While Shopify is one of the simplest eCommerce platforms it can still be very intimidating to many people.
At some stage you will be confronted with Shopify’s technicalities and you will need to add and edit parts of code or dig into Shopify’s backend.
This can be both costly and draining. Even after all that, your Shopify store still has no traffic. You will then be forced to learn Facebook Ads or Google Ads – both of them require serious skill to master.
I will dig into Etsy’s fees a bit later because I think it is important to understand how much it will cost you to sell on Etsy.
There will always be fees to deal with when selling stuff online. Not all the fees go toward Etsy though. Online transactions involve a lot of technology and payment processors and credit card companies all take their cut.
Out of all the online platforms, Etsy is definitely amongst the cheapest. Above all, Etsy is free to start with. Apart from their small listing fee, you do not need to invest in domains, themes, and monthly subscriptions to start.
5. Not Having To Compete With Major Brands
One of the biggest challenges, when you are selling online, is that you will almost always have to compete with major brands.
Unless you have a truly unique product with very little competition there will always be big brands with big marketing budgets.
Competing with them is often a race to the bottom.
Eve on Amazon there is a lot of competition – mostly between brands that all sell the same product. This is one of the dumbest things there is an Amazon is largely to blame for it.
On Etsy, you have none of this. Etsy does not allow commercial products that exclude almost all major brands from selling on Etsy.
This is huge and is mostly what makes Etsy still a viable marketplace for everyday people like me and you to sell our own products.
Does this mean there’s no competition on Etsy? No! Absolutely not. Etsy is very competitive but the competition is different.
You never have to compete with major brands and you never have to compete with someone who sells exactly the same product as you (in theory at least – there certainly are copycats around on Etsy).
6. No R&D Required
If you have an idea for a product and you want to take that idea to market then you better have a deep pocket. The R&D (research and development) of commercial products will set you back a few hundred thousand dollars.
Just look at start-up funding sites like Kickstarter. You will rarely see a great idea needing less than $50k to bring the idea to life.
Apart from figuring out production and distribution, there are all sorts of licenses etc. that will really test your resilience.
On Etsy, my grandmother can knit a jumper today and sell it on Etsy tomorrow. No R&D costs. No licenses. No stress about investors who want to get their money back.
7. Limited Capital
On Etsy you really can start very small. If you made 1 product you can sell that one product and make another.
Amazon sellers and most online stores need to invest thousands in buying inventory upfront. If it does not sell, then you could lose your life savings.
With Etsy you really risk almost nothing – especially if you make your own products. You quite literally can make just 1 product, put it up on Etsy and see if it sells.
Why Etsy Will Thrive in The Post Pandemic World
While we never know what the future might hold, it is good to step back every now and again and think about the long term potential of starting an Etsy business.
Back in 2016 everyone thought that Etsy was just a FAD that won’t last. Look at it now!
I think Etsy is perfectly poised to grow even bigger in the post-pandemic world – especially a post-pandemic America where 65% of all Etsy sales come from.
The pandemic has exposed the massive logistics problems with products coming from China. With border and port closures, many online businesses that relied on products from China had nothing to sell.
This includes many Amazon sellers as the vast majority of them are sourcing their products directly from China.
While the initial fear of COVID-19 “infected products” from China subsided, there is definitely still an anti-China sentiment as far as some products are concerned.
Under President Trump there has also been a lot of anti-China rhetoric that has definitely contributed to many people deliberately avoiding Chinese products.
This actually goes back even further with Trump’s trade war with China. One thing is for certain, the old world order with cheap products from China is gone for good.
Selling products on Etsy that is Made in the USA and shipped locally has become a huge advantage.
As the economy will start recovering in the next 3 to 5 years there will be a big push to support locally made products and this can play into your hands as an Etsy seller.
Another big positive that has come out of the Pandemic is that a lot of sales finally shifted online and many brick and mortar stores have now closed for good.
Various lockdowns have forced people who would never have shopped online to start doing so.
How much does it cost to sell on Etsy?
Selling on Etsy is not free and certainly something you need to take into account to determine if it will be worth selling on.
One thing I really love about Etsy is that there is no subscription fee like almost every other eCommerce platform like Shopify.
The two main charges on Etsy is their listing fee and their transaction fees. Etsy charges a $0.20 listing fee for every product you list on Etsy.
This will keep your product active on the Etsy marketplace for 4 months. You then have to either re-list it for $0.20 or keep it inactive if you don’t renew.
Etsy charges 2 fees when you sell an item. The first is a 5% transaction fee and the second is a 3% PLUS $0.25 processing fee.
That means you can pay up to 8% in fees. Is that a lot?
Not really. If you compare this to Shopify you can pay as much as 4.9% PLUS $0.30 in Shopify fees. That is on top of your monthly Shopify subscription which is at least $29 and usually, you will need a number of additional apps that can quickly push your Shopify subscription to $50+ per month.
These fees are important to keep in mind – especially if you plan on selling low ticket items that sell for less than $10.
If you need a lot of listings and make a lot of low-value sales then the $0.20 listing fee and $0.25 processing fee can really eat into your profits.
Given the fact that you will have to offer up almost 10% of your sales to Etsy, is it still worth selling on Etsy?
Absolutely! That 8% is peanuts compared to what you will pay to sell your products on other platforms.
Is It Better To Sell On Etsy Or Your Own Website?
Is it better to sell on Etsy or your own website? Why not have your own online store with your own branding and where you control absolutely;ly everything?
Why be at the mercy of Etsy?
While it certainly does have many advantages to have your own store on your own domain with your own branding you will most likely need a lot more money to get started.
With Shopify you will need a monthly subscription plan on top of any technical help you may need to hire. Woocommerce has no subscription fee but you will need themes and hosting plus all the technical help that you may need.
The biggest issue however is traffic.
It is much harder to get traffic to your store than most people think. SEO can take 12 months plus to start seeing decent results. Facebook and Google Ads can take $1k plus just to learn the basics.
While I think Etsy is the best place to start, it is certainly not the way to grow a million-dollar brand. For this, you will need your own branded store.
Which begs the question, why not do both?
There is nothing stopping you from having your Etsy store as well as your own store.
Is It Worth It To Sell On Etsy – Conclusion
Despite all the doom and gloom and the numerous changes on Etsy over the last 6 years, I think it is still worth selling on Etsy.
There will always be those who see doom and gloom around every corner. The fact remains that Etsy sellers are still successful. Etsy as a platform is still growing.
There is always room for one more.
This is a very valuable lesson that I learned in business early on. If you can bring something unique and creative to any market then you too can be successful.
Etsy is not a place for quick riches. It can take months or even years to start seeing any real results. There is a big learning curve in understanding what makes an Etsy shop successful.
Some will never get it. That is why roughly 60% of Etsy stores never make more than $100.
If your goal is to make millions then Etsy is probably not for you either. There are a lot of limitations when you sell handmade products on Etsy.
There is a limit to what you can produce and there is also a limit to how many sales you can sustain within the Etsy eco system.
If you are looking for a way to create a decent full-time income from Etsy then it is certainly possible.