How to start an Etsy shop: Steps, fees, and how to be successful

While there are many online marketplaces, Etsy corners the market when it comes to selling handmade goods, vintage items, and arts and crafts. It’s also a top contender for millions of sellers because Etsy makes it easy to create and manage an account. The site handles all of the ordering, notifications, and payment processing, making it easy for crafty entrepreneurs to focus on production.

If you’re looking for a platform to get your products online quickly, Etsy is a great place to start. In this guide, we’ll show you how to start an Etsy shop, selling fees to keep in mind, plus some tips for selling items once your store is up and running.

• Steps for setting up an Etsy shop
• Understanding Etsy fees
• Tips for succeeding on Etsy

9 steps to setting up an Etsy shop

Setting up an Etsy shop is easy and pretty straightforward, but you’ll need to make some decisions in the planning stages. Your Etsy shop is essentially a small business, so you need to put the same amount of thought and planning into it. To get started, follow these steps and learn how to start an Etsy shop in no time.

1. Create your account 

Creating an Etsy account is the first step toward launching your storefront. To open a shop online, you must first become a registered site member. Once you have an Etsy account, you can open a shop. 

Etsy starts everyone out as a buyer, so you will need to click on the "Sell" tab at the top of the screen to switch to a seller account. This is also where you’ll set up your store name, which we’ll talk more about below. 

2. Choose your store name 

Next, you will need to choose a name for your Etsy store. Etsy requires each shop owner to use a unique name, so it’s common for sellers to find that their first choice is unavailable. In some cases, you can add a word like “store” or “boutique” to the end of your preferred shop name. 

The goal is to choose a business name that’s interesting, memorable to buyers, and represents the style of goods you’re selling. If possible, make sure the name you choose matches your social media handles and business website so customers can easily find you on other platforms.

3. Choose your products

You can sell almost anything in your Etsy shop, but it’s best to start by focusing on a few complementary products so customers will understand what your shop is all about. For example, if your store is a homemade soap shop, you may offer a dozen soaps, bath fizzes, and lotions, but you should avoid confusing people by trying to sell your crocheted blankets and handmade jewelry too. Find your niche and run with it.

Once you’ve built up your customer base, you can expand your product offerings. 

4. Create your shop 

When opening an Etsy shop, the site will direct you through the process of creating your online storefront and choosing your language and currency preferences. Etsy features buyers and sellers from all over the world. Specifying your language and location increases the chances of your listings reaching potential customers in your target market.

5. Decide on pricing 

A common question for first-time sellers is how to price items on Etsy. Correctly pricing your products ensures you get the best return on investment (ROI), but it will take some time and analysis. 

There are two ways to go about it: 

• Set prices based on your time and material costs (internal pricing) 
• Set prices based on how much your competition sells similar products for (external pricing)

However, a combination of the two tends to generate the most profit. As you think about setting your price, you’ll also want to consider Etsy’s seller fees. Etsy takes listing, transaction, and payment processing fees, among others, which we’ll cover in more detail down below. 

It’s important to know just how big of a cut Etsy will take from the sale of your goods. Price your products strategically so that you can sell each one at its true value.

6. Build your inventory 

Before opening your Etsy shop to customers, make sure you have enough products to sell. You don’t want to run out after your first few sales and have to scramble to produce more. You also don’t want to overstock any one item. 

Managing your inventory can be simple:

• Start with about 10 of each product you aim to sell
• Keep a record of your sales
• Once you have a track record of sales, determine which items sell quickly and which do not
• From there, plan your inventory accordingly 

Inventory tracking software like QuickBooks Online can help you stay up to date with your inventory and orders to lead to quick deliveries and happy customers.

7. List your items  

After Etsy approves your shop name and you have all of your inventory ready, you can start listing on Etsy. The key to solid Etsy sales is good product photos and a killer description that uses industry keywords.

Here are some things to keep in mind when listing your products: 

• Use a quality camera and take multiple pictures in ample lighting: Etsy allows you to post five photos with each product, so be sure to show off different angles and uses. 
• Provide detailed and intriguing descriptions of your products. This is your opportunity to catch a shopper’s attention and show them what’s unique about your offering. 
• Add in-depth product details and specs in the description that list the size of the item, the materials used, and any exciting features it includes. 
• Tag items with keywords that make them easier to find in Etsy’s search function. 

8. Set up payment methods 

Next, you’ll need to choose the type(s) of payments you’ll accept. Etsy Payments is the most popular route on Etsy as it allows you to accept credit cards, debit cards, Apple Pay, PayPal, Etsy gift cards, and some bank transfer services. 

Multiple payment methods will make it easy for your customers to find their preferred payment method, leading to a sale and a happy customer. 

9. Finalize your shipping process 

Learning to package your products safely and securely and ship them quickly helps build your reputation on Etsy. Buy proper shipping supplies, and use bubble wrap for delicate items. 

On Etsy, you can use calculated shipping so the shipping is automatically calculated for you. Calculated shipping looks at your location, the buyer's location, and the size and weight of the listing item to determine the shipping cost.  

Understanding Etsy fees 

Etsy is a great place to get your products in the eyes of your target market, however, there are many fees when selling on Etsy that you should keep in mind. 

Listing fees 

To post your products on the site, Etsy charges a 20 cent listing fee per item. The product listing fee allows you to have your product on the site for four months. You can auto-renew the listing for another 20 cents if your item doesn’t sell in that time.

Transaction fees 

Essentially, these are commission payments made to Etsy for the use of their online marketplace. Currently, Etsy charges 6.5% of the total item price, including any wrapping or shipping costs to the customer.

Payment processing fees

Etsy charges a fee if a customer pays using Etsy Payments. Etsy Payments allows sellers to accept many different payment methods—like major debit and credit cards, Etsy gift cards, Etsy coupons, PayPal, Apple Pay, and some bank transfer services. This fee is 3% of the item’s total price, plus 25 cents.

Shipping fees

Etsy offers sellers the option to purchase shipping labels to make it easy to fulfill orders—charging a shipping label fee for USPS, FedEx, and Canada Post shipping labels. The shipping label fees depend on each package’s origin, destination, weight, and dimensions.

Shipping fees are important to keep in mind when setting prices and shipping policies. You’ll want to outline your payment and shipping policies on your shop’s homepage and include:

• Accepted payment forms
• Shipping times and costs
• Refund and exchange policies 
• Customer and duty fees for international purchases 

In-person selling fees 

Sellers have the option to use Square reader to process transactions when doing in-person sales by syncing their Etsy listings with Square. If you sell in-person using Square and your listings are not synced, you’ll be charged a 20 cent fee per transaction. 

Square also charges additional processing fees depending on the type of transaction. Any transactions made through the Square reader are not subject to Etsy’s 6.5% transaction fee and payment processing fees but are subject to Square’s processing fees. 

Advertising and promotion fees 

If you’d like to increase your visibility, Etsy offers services that can help you advertise and promote your storefront—Etsy Ads and Offsite Ads. 

• Etsy Ads: Etsy Ads get your products prominently featured in certain search results on Etsy. Fees vary depending on the maximum daily budget you set to be spent on ads. 
• Offsite Ads: Offsite Ads will advertise your listings offsite, like on social media. If a buyer places an order from the ad within 30 days, you will be charged an advertising fee for any sales made. If you made less than $10,000 in a year, you’ll be charged a 15% fee. If you made at least $10,000 in a year, you’ll be charged a 12% fee.

Subscription fees

Etsy Plus is available to sellers whose shops are in good standing. This subscription plan is $10 per month and offers sellers more tools for growing their storefronts. 

Pattern fees 

Etsy’s pattern tool allows sellers to create and personalize a standalone website and charges a $15 monthly subscription fee. A 30-day free trial is available to sellers who want to test out this tool. If you choose to purchase a domain name, you will be charged an additional fee to register the name. 

7 tips for succeeding on Etsy 

Having an Etsy store up and running is one thing but finding success is another. Whether you want to run an Etsy small business full time or on the side, these tips will help you get started on the right foot and stand out in this competitive online marketplace.

1. Have a unique shop name 

Think long and hard about your name, as this is your brand and will become what people know you for—aside from your products, of course.

Think of a name that captures who you are, what you make, and what kind of feeling you want people to get when they shop at your store. Do you sell handmade items? Or are you selling photography that’s been digitally altered to reflect something? A name can tell people a ton about your store, so pick one that truly showcases what you do.

2. Incorporate SEO 

Search engine optimization or SEO on Etsy can help improve your shop's visibility within Etsy and on search engines like Google. Here are some best practices to keep in mind when thinking about how to best optimize your Etsy shop for search engines: 

• Select relevant keywords: These words should describe your shop and items. Think about what your customers would search to help you uncover the best keywords. When posting your listings, make sure to use tags to help your items get seen on Etsy search. 
• Optimize your shop title and shop sections: Your shop title appears under your shop name and is a small blurb of text used to describe your shop. When you have multiple shop sections, you’ll also have page titles for each. This is just another place you can utilize those keywords to help describe the page and your shop while increasing your chances of being seen on the search results. 
• Be specific on your listing pages: Your product titles and descriptions are two important elements on your listing pages that you’ll want to optimize for SEO. The first 160 characters of your item description will be used as your meta description on search engines—the short text that shows up under the page title—so make sure it’s as descriptive as possible. 
• Utilize inbound links: Links pointing back to your shop are important signals to search engines like Google, so link to your Etsy store on other sites whenever possible—like your personal blog. This will send a signal to search engines that people are interested in your content and listings. 

3. Feature high-quality product photos 

In the world of e-commerce and retail, presentation is huge, and one of the keys to selling items on Etsy is attractive product photography. Professional-level product photography can play a big role in whether or not someone buys your products. 

For best results, experiment with different lighting options, camera angles, and backgrounds for each item. This will help you come up with the ideal photography style for your brand. Once you have a style nailed down, you’ll want to keep it consistent so it’s unique and recognizable to your brand. 

4. Keep up with your competitors 

Keep a close eye on the competition to ensure you’re staying competitive with pricing and not losing out on potential customers. Checking other Etsy listings can also prevent competitors from blatantly stealing your work or ideas. Etsy doesn’t permit product theft and will take down flagged listings after review. If you see another shop owner that’s obviously imitating your work, report them as soon as you can.

5. Network with similar sellers

Just because they may be your competition doesn’t mean you can’t engage with them. The Etsy Community serves as a gathering place for sellers with shared interests and allows you to find answers to questions while collaborating with like-minded folks. The result is a more successful Etsy shop and a better, more enjoyable selling experience.

6. Focus on your customers 

It’s no secret that today’s online shoppers have a lot of options—Etsy alone features millions of sellers. To encourage customers to choose you over the competition, strive to be available to buyers, and answer their questions and inquiries quickly. You should also be as honest as possible about materials and how much time it will take you to ship items. 

7. Use social media strategically 

To get the word out about your products beyond the marketplace, use social media to your advantage. By sharing information about your goods and your brand on Instagram, Facebook, Pinterest, and Twitter, you can get potential buyers to discover your products. Pinterest, for example, is similar to a search engine. Use your product photos to create customized pins for each of your listings to increase your chances of being seen. 

Start your Etsy business today 

Starting an Etsy shop—and being successful as a new business owner—can be chaotic, stressful, and sometimes defeating. But, with the right information and tips as we’ve outlined above, the payoff can be so much more rewarding. 

QuickBooks Self-Employed makes it easy for self-starters and small business owners to keep track of income, expenses, mileage, and tax information all in one place, so you’ll have one less thing you need to worry about.