18 Pros And Cons Of Selling On Etsy

With the rapid increase in online shops, you have probably come across Etsy.

Etsy is a global marketplace where millions interact to buy and sell handcrafted pieces and vintage items ranging from toys to clothing to jewelry and art, among other things.

Etsy is one of the largest online platforms in the world. In 2021, Etsy contributed a whooping $14.3 billion to the United States economy.

Etsy allows you as a seller to showcase your talents and skills and express your creativity by providing you with a platform that helps you start and manage your business with less hassle.

Selling on Etsy is quite different from other online marketplaces. To thrive, you must be artistic and creative to stand out from the millions of sellers on the platform.

Just like any business, selling on Etsy has its pros and cons.

Selling on Etsy is easy and affordable to enlist, and gets you access to a large pool of buyers, but it also has drawbacks. Customizing your store can be challenging and time-consuming, not to mention the increasing seller fees and constant changes to the platform’s policies.

To save you time and energy, I devised a list of the pros and cons of selling on Etsy. This will guide you in deciding whether to start this journey or consider Etsy alternatives.

Let’s get started!

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Pros Of Selling On Etsy

1. Easy and Affordable to Set Up

Setting up on Etsy can be described as one of the most straightforward processes. Compare this with building a website, and you’ll definitely agree with me.

You don’t need your tech-savvy neighbor for any help on this.

Of course, this does not mean there is nothing to be done.

Although you still have to take pictures of your products and add product descriptions, the setting up process is still simple.

With only $0.20, you can add a product and start selling. The listing amount, however, is renewed after every four months or after a sale, which is still quite affordable.

That’s not all.

Etsy offers you a step-by-step guide that lays down the process of opening and maintaining an online store.

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2. Large Customer Base

Etsy prides itself on a built-in audience who are highly engaged. One of the biggest advantages of selling on Etsy is its ever-growing customer base.

In 2021, Etsy had approximately 96 million active buyers, following an increase of about 18% from the 81 million buyers the previous year.

This goes to show the large pool of buyers ready to purchase your vintage and handmade products.

The high popularity of Etsy means that by listing your products on the website, you increase the possibility of acquiring customers from search traffic on Etsy’s homepage or from similar pages.

Etsy provides you with the opportunity to set up an online store and have shoppers see it immediately, thus giving it an edge over other online marketplaces.

3. Easy Access to Valuable Information

For you to make important business decisions, it is essential to have information and knowledge that will help improve your business.

Etsy does exactly that!

Etsy provides you with a business analytics platform that assists you in making sound financial decisions.

Your dashboard on Etsy displays the number of orders received, revenue collected for each item on sale, customer ratings, performance trends, and the traffic on your page.

With such crucial information, it is easy for you to understand your customer base and what you may require to improve your page to succeed.

Etsy’s analytics can also help you manage your stock, understand which items are mostly inquired about by customers, and improve your sales in the long run.

But that’s not all.

Etsy’s algorithm manages listings according to SEO. It chooses the best listing to display on your home page based on Query Matching and Ranking.

We also have to mention Etsy’s support and education. You can get support by contacting Etsy’s professionals through email or phone or getting assistance from Etsy’s teams and forums.

Moreover, through Etsy’s Seller Handbook, you can inform yourself about the best online practices and tips for success.

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4. Low Barriers of Entry

Apart from start-up costs, there are other barriers to entry into any business, such as product differentiation and government policies.

When selling on Etsy, however, the number of barriers that you may experience are fewer, if any. For someone specializing in handcrafted products, selling on Etsy is rather easy.

As a seller, you have the freedom to set your own prices, work at your own pace, and decide how you want to manage your store.

In addition, the legal requirements and government policies required to run an online store on Etsy are super favorable.

In fact, some jurisdictions do not even require you to obtain a business permit to operate an online store.

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5. Strong and Established Community Forum

In addition to the valuable information and assistance you may receive from Etsy’s professionals and handbooks, Etsy has, over the years, developed a trusted community, such as Etsy forums and Etsy coaches, where you can go for help.

Due to its popularity and acceptability among many business people, you can also access a large community of online investors outside Etsy who share ideas and input.

So selling on Etsy allows you to get a lot more content and ideas online compared to other smaller marketplaces.

6. Reliable and Secure

Etsy is a well-known eCommerce company with a large footprint in the online marketplace business. With millions of buyers and sellers accessing the platform, Etsy provides you with a vast digital backup system and dependable hosting services.

This means that many buyers and sellers are confident and can rely on Etsy to operate normally and efficiently at any given time.

Because most online businesses are susceptible to cyber attacks, Etsy customers remain confident that if such attacks may occur, they will be resolved promptly.

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7. Established Payment System

As a seller, especially an online seller, one of the most crucial services that need to be efficient and reliable is the payment system.

Customers and sellers alike must be confident in the payment system they use to complete transactions.

Etsy has, over the years, established itself as having a reliable payment system.

This makes it easy for you to set up payment processing systems and process credit card payments from buyers.

8. Established and Trusted Platform

Starting an eCommerce business, or any business, is difficult, especially when it comes to gaining the trust of your customers.

No one would know whether you are a shrewd business person or just another con in the game, so you would have to take some time and prove yourself.

Etsy has been around since 2005, making it a well-established online store where millions of customers flock to interact with potential sellers.

This means you can take advantage of the trust and confidence that Etsy has built with its customers to create your account and sell your products without any friction.

9. Good Testing Ground

Etsy can be a great way to test the market before investing more money and time to start your own website.

When it comes to starting and operating an online business, there is so much to learn and experience.

With Etsy, you can take creating and operating a website off that list.

From creating your brand to designing your storefront, selling on Etsy can help you understand what it takes to deal with customers before launching your own website.

Also Read: Easy Passive Income Ideas For Artists

Cons Of Selling On Etsy

10. Increased Competition

Like the increase in the number of buyers on Etsy, the number of sellers joining the platform is also skyrocketing every year.

In 2021, the number of sellers doing business on Etsy’s platform averaged 7.5 million, an increase from 4.4 million the previous year.

As an Etsy seller, you will experience a lot of price competition from other sellers listing the same type of items.

The likelihood of this happening is high, considering the fact that Etsy’s platform is open to both small craft individuals and shops as well as mass producers.

This will eventually have an impact on prices.

When your competitors end up reducing prices to have the edge over you, you may end up doing the same to become competitive in the market.

If this continues, you may not be able to sustain your business for much longer. Plus, there’s always a chance that someone else is willing to take a lower profit margin than you would.

Considering the many new businesses and individuals joining Etsy every day, it even worsens for sellers who find themselves selling similar products.

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11. Limited Products to Sell

Etsy mainly focuses on selling handmade goods, vintage products, and craft supplies. This in itself becomes a limitation.

You can’t list rentals or services on Etsy and neither can you sell metaphysical items, such as spell casting or reiki.

In addition, Etsy’s policies only allow you to sell handmade products or goods you have made or designed yourself.

This means wholesalers and resellers can’t participate on this platform and must look for other online stores to sell their products.

Most online stores around the world are flexible enough to allow sellers to sell whatever they have in store. This diversification of products goes a long way to ensure there is always something for someone.

Etsy’s limitation to a particular niche of items may reduce the traffic flow of customers seeking to buy a number of items that can be found under one roof, as seen in their competitors like Amazon.

Also Read: Best Apps For Buying And Selling Used Stuff

12. Recurring Listing and Transactional Fees

Like many online selling platforms, Etsy charges you certain fees in order to make a profit from the platform.

Registering your business on Etsy is free.

However, when listing an item for sale, you are required to pay $0.20 for every item. The listing fee is renewed after every four months or when the product is sold – multiple quantities of similar items also incur this fee.

Besides, you are expected to pay a transaction fee of 6.5% of the item price plus an extra amount for gift wrapping and delivery, an increase from 5% in 2022.

It doesn’t end there.

If you use Etsy Payments, you also have to part with payment processing fees that are usually charged for each transaction done through Etsy Payments as described on the Etsy Payments Policy page.

Etsy allows sellers to subscribe to Etsy Plus for $10 per month. This package offers you access to more tools and features.

They also have advertising and promotional fees, both onsite and offsite, in-person selling fees, delivery fees, and Regulatory Operating fees, just to mention a few, but you get the gist.

However, the fees are reasonable since you are simply paying for the services you enjoy when selling on Etsy. Still, you are always advised to calculate the costs before developing your pricing strategy.

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13. Lack of Control and Ownership

Online stores often work using the same principles and policies – you rent a space and pay for the service.

When selling on Etsy, it is always necessary to remember you are merely renting space on its marketplace; you do not own the website, nor do you make the rules.

The terms and conditions are set for you; the layout is already designed. You do not decide on the fees, and neither do you decide on the products sold.

To gain from the website, you have to concede a lot of control and work with their terms. It is rather discouraging to know that you have to trust that the rules they set have your interests at heart.

There have been debates ongoing as to whether Etsy’s interests still benefit small sellers of handmade crafts or are adjusting to suit big retailers and sellers on the platform.

Etsy can decide to shut you down at any time if they feel you have breached the contracts in any way.

If they decide to change the rules and regulations, you have no option but to abide by them or sell elsewhere.

Even worse, one day, they can decide to completely shut down the whole company.

But the fact remains that selling on Etsy makes you lack a certain level of control and ownership even though you are the business owner.

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14. Inadequate Branding Options

As if lack of control is not enough, you will also experience limited options when branding and advertising your online store.

Personalizing your store to suit your tastes is limited only to a banner and an ‘about page’ – that will depend on whether the buyer decides to find it.

For example, in comparison to your own website, where you can change the layout, fonts, and colors, Etsy only gives you control over a few touchpoints.

When creating your shop’s listing, Etsy only lets you fill out details such as the listing’s title, when it was made, who made it, and what it is. The other minor details required include category, renewal options (manual or automatic), and type (digital or physical).

These details are generic and don’t give you much control over the listing’s branding.

You can only advertise and promote your store through the images of products you upload, the language you use, and the name of your store.

If you are a high-quality seller who would like to advertise yourself as such, it may be difficult for buyers to differentiate you from other competitors due to the limited scope of options available.

15. Brand Building and Customization Are Time-Consuming

Yes, we have mentioned that branding options for your shop are quite limited on Etsy. However, this does not mean it’s not possible.

If you are willing to take their business to another level, subscribe to Etsy Plus at an extra monthly cost.

Etsy Plus offers you advanced customization features, including additional banner options, layout options, and the ability to feature specific listings on your page.

However, making these customizations can be cumbersome, since you are required to make numerous adjustments to make your brand stand out from other sellers.

For Etsy Plus subscribers, this becomes too difficult a task. You may be willing to set up your storefront to make it attractive but then get discouraged by the numerous and complicated additional features.

Moreover, managing your own store is not as easy as it sounds, especially if you also own other virtual stores on other online platforms.

You must complete the details of each aspect of an item to be sold while creating listings and working on photography, marketing, and SEO simultaneously.

This will be extremely difficult and tiresome, especially for large sellers with hundreds of products.

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16. Limited Email Marketing

Email listing is an essential marketing component of any business. It is not only a direct way of communicating with clients, but it’s also a crucial instrument to upsell to existing customers or nurture leads.

Unfortunately, Etsy doesn’t allow you to send mass emails to your buyers. Etsy’s shop manager doesn’t have a tool to accomplish this.

Also, Etsy’s seller policy forbids sellers from adding customers to email lists; you can only do this with the buyer’s consent.

That said, the only way to use email is to communicate with buyers about their orders on Etsy. You won’t be able to send them any message about an upcoming sale or a new product.

Besides, you can’t automatically add shoppers to your email list.

Therefore, Etsy cuts the possibility of collecting revenue or increasing profits usually associated with email marketing.

17. Presence of Copycats

Creating your brand and growing it to become a successful store on Etsy takes a lot of time and patience.

But what happens when you scroll through Etsy and find your item just as it is being sold by another person?

Dealing with copycats is never easy. I’ve found myself having to handle copycats throughout my entrepreneurial career.

Due to the increased popularity that Etsy has gained over the years, it has become relatively easy for copycats to access the online store and do what they know best.

It also becomes difficult for an unsuspecting buyer to distinguish an original store from a copycat, increasing the chances of you losing out on potential customers.

Even though the law on copyright protects your original works, including musical creations and artistic works, not everything is copyrightable.

Etsy provides different steps to be followed in their Seller Handbook on how to deal with copycats, but they may never solve your issues on time.

You must prove that the copied listing has a word-for-word and image-for-image similarity to your post.

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18. Reduced Customer Loyalty

When shoppers visit your website or follow your social media accounts, it is because they love what you are doing and are interested to know more.

However, when buyers go to Etsy’s website to look for handcrafted products, it is more because they are fans of Etsy and less because they love your specific products.

Buyers are more likely to remember buying something from Etsy rather than your store name or brand.

As already mentioned, there are limited chances to connect with customers over email and give them value. This can mean fewer referrals, fewer repeat customers, and little or no customer loyalty for you.

You may counteract that by developing your brand image and improving your packaging, but that may not be enough to sway customers to become loyal to your brand.

Also Read: How Much Money Do I Need To Start Selling On Amazon?

In Summary

There are a lot of things to look at when deciding whether to start your business on a platform like Etsy.

Etsy is a well-established online store that has been in operation for many years.

While it is an easy platform to start and operate your business, it is essential that you assess the list of pros and cons carefully before making a decision.

About Author

Tom loves to write on technology, e-commerce & internet marketing. I started my first e-commerce company in college, designing and selling t-shirts for my campus bar crawl using print-on-demand. Having successfully established multiple 6 & 7-figure e-commerce businesses (in women’s fashion and hiking gear), I think I can share a tip or 2 to help you succeed.