How to start an Etsy shop: The definitive guide

Although there are many online marketplaces, Etsy corners the market when it comes to selling handmade goods, vintage items, and craft supplies. 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 orders, customer 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.

• 9 steps to open an Etsy shop
• Understanding Etsy fees
• 7 tips for succeeding on Etsy
• How QuickBooks can keep your Etsy shop organized

9 steps to open an Etsy shop

Setting up an Etsy shop is fairly easy and straightforward, but you 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 into it as you would starting a business. Follow these steps to learn how to start an Etsy shop that's backed with business best practices.

1. Log in to (or set up) your user account

Creating an Etsy account is the first step toward launching your storefront. To open a shop online, you must first be a registered site user. 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 need to choose a name for your Etsy store. Etsy requires each shop owner to use a unique name. It’s common for sellers to find that their first choice is unavailable, but you can often add a word like “store” or “boutique” to the end of your preferred shop name to get around this naming issue. 

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

3. Curate your product offering

When learning how to sell on Etsy, it’s best to start by focusing on a few complementary products so customers understand what your shop is all about. For example, if you're setting up a shop to sell homemade bath products, you might offer a dozen soaps, bath fizzes, and lotions—but don't list your crocheted blankets and handmade jewelry there, too, so you don't confuse customers. Find your niche and run with it.

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

4. Complete the guided setup 

When opening an Etsy shop, the site will direct you through the process of creating your online storefront.

Part of the process includes choosing your language and currency preferences. Etsy features buyers and sellers from all over the world. Specifying your language and location increases the chance of your listings reaching potential customers in your target market.

5. Establish your pricing

A common question for first-time sellers is how to price items on Etsy. Pricing your products well ensures that you get the best return on investment (ROI), but it takes some time and analysis to do. 

There are two ways to go about pricing items in your Etsy shop: 

• Internal pricing: Set prices based on your time and material costs. 
• External pricing: Set prices based on how much your competition sells similar products for.

A combination of the two pricing methods tends to generate the most profit. Use these methods to price your products strategically—considering your time investment, business costs, and your competitors' prices—so you can sell each one at its true value.

As you think about setting your prices, you also want to consider Etsy’s seller fees. Etsy takes listing, transaction, and payment processing fees, among others, which we cover in more detail below. It’s important to know just how much Etsy takes from the sale of your goods.

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 for a set period of time.
• Determine which items sell quickly compared to others.
• Plan your inventory according to the results of your experiment. 

Inventory tracking software like QuickBooks Online can help you stay up to date with your inventory so you can keep your products stocked appropriately to maximize revenue.

7. List your items  

After Etsy approves your shop name and you have your inventory ready, you can start listing on Etsy. The keys to solid Etsy sales are high-quality product photos and an engaging product description that uses industry keywords.

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

• Post high-quality photos. Use a quality camera to take multiple pictures in bright natural lighting. Etsy allows you to post five photos with each product, so be sure to show off different angles and uses. 
• Provide intriguing product descriptions. 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. Include relevant product specifications for your items, such as the size of the item, the materials used, and any exciting features it includes. 
• Tag items with keywords. Keywords—the words that Etsy shoppers might use to search for products like yours—make your items 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 want to accept. Etsy Payments is the most popular route on Etsy as it allows you to accept credit and debit cards, Apple Pay, Google Pay, PayPal, Etsy gift cards, and other popular payment options. 

Having multiple payment methods lets your customers find their preferred payment method, lowering the final barrier to making an online sale. 

9. Finalize your shipping process 

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

On Etsy, you can use the automated calculated shipping feature. Calculated shipping considers your location, the buyer's location, and the size and weight of the listing item to determine the shipping cost.  

Understanding Etsy fees

Customers looking for handmade or vintage goods know to shop on Etsy, and the platform provides services that make it easier to start selling quickly. The platform comes with fees for Etsy sellers that you should keep in mind as you set up shop. Here's where Etsy's fees stand as of December 2023:

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, Google Pay, and some bank transfer services. In the U.S., 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. It charges 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. Outline your payment and shipping policies on your shop’s homepage to 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 making in-person sales by syncing their Etsy listings with Square. If you sell in-person using Square and your listings are not synced, you are 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 are charged an advertising fee for any sales made. If you make less than $10,000 in a year, you’ll be charged a 15% fee. If you make 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 (standalone website) fees

Etsy’s Pattern tool allows sellers to create and personalize a standalone website. It 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're charged an additional fee to register the name.

Successful Etsy sales: 7 tips

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. Create a unique shop name

Give due consideration to your name, as this is your brand and will become what people know you for—aside from your products, of course. Create a business 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 into your Etsy store

Search engine optimization (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. Use these as tags when posting your listings. 
• Optimize your shop title and shop sections. Your shop title appears under your shop name and is an opportunity to succinctly describe your shop. When you have multiple shop sections, each one has a page title that can contain relevant keywords. 
• Be specific on your listing pages. Your product titles and descriptions are two important elements to optimize for searches. The first 160 characters of your item description is used as your meta description—the short text that shows up under a page's title in search results—so make sure it’s descriptive. 
• Use inbound links. Links outside of Etsy that direct to your shop are important signals to search engines like Google that people are interested in your shop. Link to your Etsy store on other websites, like your personal blog. 

3. Feature high-quality product photos

In the world of e-commerce and retail, presentation is huge. One of the keys to selling items on Etsy is attractive product photography. Professional-level product photography can play a big role in whether someone buys your products. 

If you're taking photos yourself, experiment with different lighting options, camera angles, and backgrounds for each item. This helps you come up with the ideal photography style for your brand. Once you have a style nailed down, keep it consistent so it’s 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 takes down flagged listings after review. If you see another shop 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 other shop owners! 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 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 inquiries quickly. You should also be as honest as possible about materials you use and how much time it takes 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. Potential buyers can discover your products when you share about your goods and brand on platforms like Instagram, Facebook, Pinterest, and TikTok. For example, Pinterest is similar to a search engine. Use your product photos to create customized pins for your listings to increase your chances of being seen.

How QuickBooks can keep your Etsy shop organized

Starting an Etsy shop—and being successful as a new business owner—can be stressful. But with the right information and tips, 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 have one less thing to worry about. Keep all of your spending and earnings in one place so you can stay organized and compliant.