How to Start an Etsy Shop: Your Complete Guide for 2020

If you build it, will they come? There’s only one way to find out. Here’s how to start your own Etsy shop.
Last updated Mar 27, 2020 | By Matt Miczulski
How to Start an Etsy Shop: Your Complete Guide

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Whether it’s personalized drumsticks, customized folded book art, or handmade jewelry, Etsy is a solid platform to earn some extra cash by selling your unique and creative goods. There’s no cost to get started and there are tons of active buyers interested in what you have for sale, so what do you have to lose?

Starting an Etsy shop is a simple process, and within just a few minutes you can be on your way to making extra money by flexing your creative muscles. Not sure where to start? You’re in the right place. We’ll walk you through the whole process, answer your questions, and give you some tips for success.

Jump To

How to start an Etsy shop in 6 steps

The following steps will walk you through the account registration process so you can start selling on Etsy. It should only take a few minutes, and then you can be on your way to sharing your crafty creations.

1. Create an Etsy seller account.

From the Etsy homepage, scroll to the bottom and click Sell on Etsy. This will open a new landing page. On that page (pictured below), click Open your Etsy shop. You’ll be asked to enter your email address and then click Continue. Or you can sign up with your Google or Facebook account. After that, you’ll enter your first name and a password and click Register. This will take you to another Etsy seller landing page, on which you’ll click Open your Etsy Shop to navigate to the Shop Manager.

How to Start an Etsy Shop


2. Set your shop preferences.

Once you’re inside the Shop Manager section of your account, you’ll need to set up your Shop preferences. Enter your preferred language, country, and currency before choosing what kind of selling you’ll be doing on Etsy — whether you plan to sell full time or part time and what your aspirations are (this won’t affect your shop; it’s just for Etsy). Click Save and continue on the right side at the bottom of the page.

Etsy Shop


3. Enter a unique Etsy shop name.

On the next screen, you’ll be asked to enter your preferred shop name and click Check availability. You have 20 characters allotted for your store name and it can’t include spaces, numbers, or accented letters. If the exact name you enter is already taken, Etsy will offer a number of variations you can choose from or you can try a new name entirely. Once you find a name that’s available, click Save and continue at the bottom of the page.

Etsy Shop


4. Stock your shop.

With your store named, the next step is to add items to your shop. Etsy recommends entering at least 10 to start. When you click Add a listing, you’ll be taken to a new page to enter the information. Choose your photos and enter your product details. This includes a title, item category, description, price, available quantity, and shipping costs to name a few. Once finished, click Preview to see a preview of your listing or click Save and continue to move on.

Etsy Shop


5. Choose your payment preferences.

In this section, you’ll need to set up how you’ll get paid when you make a sale. You can choose between a checking or savings account. Enter your bank account information and your contact information. When you’re finished, click Save and Continue at the bottom.

Etsy Shop


6. Set up billing.

Your Etsy shop is almost ready. Lastly, you’ll need to set up billing in order to pay any charges you accrue through Etsy, such as paying for advertising or shipping labels, for example. Click Open your shop at the bottom of the page when you’re finished.

Etsy Shop


Congratulations! You’ve opened your first Etsy shop. With your shop now open, you can customize it even further. Add a profile photo and bio; set your policies; and add your shop’s about section. Then, start selling, my friend.

How much does it cost to start an Etsy shop?

When you sign up for Etsy, you automatically gain access to Etsy Standard. This is a free suite of tools that allows you to open your store and start selling right away. If you need additional services, you can pay for certain features and tools as you need them, such as Etsy Ads, Pattern (a platform for building your own website outside of Etsy), and Etsy shipping labels, without having to sign up for a monthly subscription. Alternatively, you can sign up for Etsy Plus.

Etsy Plus subscription plan

Etsy Plus is the only paid subscription plan offered by Etsy. It costs $10 a month and comes with tools that allow you to take your Etsy store to a higher level. As an Etsy Plus subscriber, you get access to the following features and perks:

  • 15 credits for listings and a $5 credit for Etsy Ads each month
  • Discounts on custom web domains for your Etsy shop through Hover
  • Shoppers interested in your sold-out items can receive alerts when the items are back in stock
  • Access to advanced shop customization options, including multiple banner options and a new layout option
  • Access to discounted shipping boxes, business cards, signage, and other promotional material

Etsy listing fees

For each item you list for sale, you’ll be charged a fee of 20 cents. The same goes for any listing you renew. If you have a Pattern site in addition to your Etsy shop, there are neither additional listing fees to list your items on your own website, nor a listing fee for items available only on your Pattern site.

Etsy listings expire after four months, at which time you’ll have to pay 20 cents to relist your item. To streamline this process, you can opt to have Etsy automatically renew your listings at the end of the four-month period. Listings posted only on Pattern do not expire.

Etsy transaction fees

For each sale you make through Etsy, you’ll be charged a transaction fee of 5% of each listing’s display price plus 5% of the total shipping charges if you choose to charge buyers a separate shipping fee. For example, if you list a custom necklace for $39.99 and charge $5 for shipping. You’ll pay 5% of the necklace price ($39.99 x .05 = $2) and 5% of the shipping cost ($5 x .05 = 25 cents) for a total of $2.25.

If you’re a U.S.- or Canada-based seller, the transaction fee will not apply to sales tax, Goods and Services Tax (GST), or Harmonized Sales Tax (HST), unless you’ve included those charges in your listing price.

If you offer optional personalization for an additional fee, this fee will be added to the displayed listing price. The total display price will be subject to the 5% transaction fee.

As each sale occurs, your transaction fees are deducted from your available balance and are reflected in your payment account.

Etsy payment processing fees

Etsy Payments is Etsy’s platform that enables sellers to accept various forms of payment. This includes credit cards, debit cards, PayPal, Apple Pay, Google Pay, and Etsy gift cards and credits.

Etsy charges a payment processing fee for each transaction made through Etsy Payments. This fee varies based on the location of your bank account (by country) and is assessed on the total amount of the sale, including tax and shipping. This payment processing fee will be automatically deducted from your total sale amount.

For example, if your bank is located within the U.S., the payment processing fee is 3% (of the total sale price) plus a 25 cent flat fee per order. If your gross sale amount for an item is $45 including shipping and tax, the payment processing fee will total $1.60 ($45 x .03 = $1.35 + 25 cents = $1.60).

Additional potential fees

Aside from the fees mentioned above, you may be charged fees for additional services you choose. These include:

  • Advertising and promotional fees: Fees charged for optional advertising services, amounts vary based on the type of promotion
  • Shipping fees: Variable fees for the cost of shipping labels purchased through Etsy
  • Pattern fees: Monthly subscription fee for use of Pattern by Etsy to create a personalized website ($15 per month after a 30-day free trial)
  • Subscription fees: Fee for subscribing to Etsy Plus ($10 per month)
  • In-person selling fees: You can sync the Square reader to process in-person sales (subject to Square’s payment processing fees)

5 ideas for shops for you to start on Etsy

Etsy hosts shops that range from handcrafted jewelry and personalized items to toys, antiques, and clothing, so your options for the focus of your shop are virtually limitless. Here are some ideas to get you started:

1. The custom wedding gift shop

Whether it’s an engraved pocket knife or personalized shaving kits for groomsmen, personalized wine glasses or robes for bridesmaids, the perfect wedding party gift is a must-have for couples and wedding-goers.

2. Help adorn people’s naked walls

Macrame, signs, art prints, original paintings, shelves — you name it — people are always looking for new, unique wall décor to spruce up their homes or offices.

3. Take something old, and make something new

If you’re a frequent yard-saler who’s already able to take something someone wants to get rid of and turn old stuff into extra cash, why not build an Etsy store around your hobby? This can mean you do anything from repainting and refurbishing old furniture to collecting and reselling vintage postcards.

4. The helpful organizer

Always on the prowl for finding better ways to stay organized and be more efficient? If you’re able to craft something that will help someone tidy up their desk, kitchen drawers, or bathroom cabinets, you may have a good idea for a store.

5. The fashionable toddler shop

The market for kid’s clothing and toys might be competitive, but if you can find a way to set yourself apart with handmade items or clothing embossed with witty sayings, this type of shop might be for you.

4 tips for making your Etsy shop successful

Just as a dirty, unkempt storefront might turn away a new visitor, so will a boring and/or unwelcoming Etsy shop. The window into your Etsy shop is what people see when they land on your page — professional-looking photos, catchy item descriptions, and good reviews are what you want to feature. You might make amazing pottery, but if you can’t convey this to the buyer in a few seconds, then it won’t do you much good.

To help you get a leg up as soon as you launch your store, consider these tips for making your Etsy shop successful:

1. Take great photos.

You want to do your items justice, and the best way to do this is by providing quality photos of what you’re selling. If your photos are poorly lit, out of focus, or generally unappealing, and the next shop owner selling similar items nails their photos, guess who the buyer will purchase from? In your mind, what brand or company blows their visuals out of the water? Mimic it.

2. Write creative and detailed descriptions.

Your photos are the first thing buyers see, but once they click through to your store, you need to close the sale with a pitch too good to turn down. Be creative, bold, catchy — set yourself apart from competitors. Most importantly, make sure your descriptions aren’t filled with typos and spelling errors. Think about how your favorite brand advertises its products. It wouldn’t allow mistakes to get published when promoting its items, so neither should you.

3. Study up on SEO.

How do you go about attracting customers to your store in the first place, especially if you’re just getting started? Search engine optimization, or SEO, will help increase the quality and quantity of traffic to your website. Having the right keywords — that correlate to phrases or words people search for — in your listing will help more customers find your store. If you aren’t including the right keywords and other sellers are, you will be fighting to appear in the results. Study Etsy’s Keyword 101 article so your shop has the best chance at connecting with customers.

4. Figure out your why and build your brand.

Chelsea Gardner, owner of Knots and Naps, a successful Etsy store featuring handmade macrame creations, says the greatest value you bring to your brand is your personal story. A good place to start? Figure out your why. In other words, why did you decide to start making in the first place? Then, use that to tell your story on your Etsy page.

“I like to think of it as my opportunity to have a real connection with my audience,” Chelsea says. “You can do this in your shop owner bio and with detailed product descriptions. It helps paint a picture of who you are as a maker and will turn new customers into repeat customers.”

Once you’ve made a sale, further your personal brand with a human touch. It shows customers they’re dealing with a real person who’s grateful for their business.

“I always directly message those shoppers once they purchase a product and ask them how they found my shop and thank them for their purchase,” Chelsea says. “By doing this I have turned a small product purchase into a big custom order.”

Other things to do once you’ve started your Etsy shop

Once you’ve got your Etsy shop up and running, you might be eager to zero in and start making sales. Although this is obviously something you should focus on, there are still some things you can do to make the most out of your new small business. Consider the following:

  • Apply for a business credit card to keep expenses separate. Not only will this help keep your personal and business expenses separate, which makes record-keeping easier come tax season, but it also opens the door to a variety of additional benefits. The following business credit cards are great for side hustles and can help elevate your new small business:
    • Chase Ink Business Unlimited Credit Card: When you sign up for this card, you can earn $500 cash back after spending $3,000 in the first 3 months. Use this money to reinvest in your shop by paying for supplies or offsetting the costs accrued through selling. After that, you can earn 1.5% cash back on all spending, whether packaging and supplies, internet, or shipping costs. Plus, there’s no annual fee.
    • The Blue Business Plus Credit Card from American Express: Another no-annual-fee credit card designed for small business owners, this card gives you a 0% APR on purchases for 0%. This can be great if you have upfront costs of starting your business but want an interest-free grace period. Any additional spending will earn you 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that.
  • Get an EIN. If you’re a sole proprietor, you don’t need an EIN because you can use your Social Security number for tax filing and reporting. However, you may still opt to get an EIN. An EIN allows you to hire employees, incorporate, form an LLC, and have a solo 401(k) retirement plan, not to mention it can lend more credibility to your business.
  • Open a business bank account. Just as opening a small business credit card helps keep your personal and business expenses separate, so does a business bank account. This should be the primary bank account associated with your small business and will be used to receive payments from Etsy and for paying expenses.

Commonly asked questions about starting an Etsy shop

Do you need a license to sell on Etsy?

Business laws vary from state to state, but you can start selling on Etsy as a sole proprietorship. This is the easiest and least-expensive way to operate a business. You don’t need to file legal forms or pay any fees, but depending on what you sell and where you’re selling it from, you may need to obtain certain business licenses. You can determine whether you need a business license by checking with your state or city.

If your business takes off and you decide to form a limited liability company (LLC), you’ll need to file certain legal forms with your state. This costs more, but it reduces your exposure to personal liability.

How much money can you make selling on Etsy?

Although there’s no guarantee you’ll make money selling on Etsy, U.S. sellers generated $1.76 billion in income in 2018, according to a study commissioned by Etsy. For the same year, 2018, there were 2.1 million active sellers, which puts the average earnings per seller at $838.10 per year.

What sells on Etsy the most?

Based on the Etsy-commissioned study, Economic Impact of U.S. Etsy Sellers, the top categories of goods sold in 2018 based on gross merchandise sales across the world were homewares and home furnishings, jewelry and personal accessories, apparel, craft supplies, paper and party supplies, and beauty and personal care.

How do you get paid on Etsy?

There are several ways to get paid after making a sale on Etsy. You can choose between Etsy Payments, which allows buyers to use most payment methods to purchase from your shop (credit card payments, debit card payments, PayPal, Apple Pay, and Google Pay) or payment by mail via check or money order. If you choose to coordinate a different payment method with a buyer, you can do so. If Etsy Payments isn’t available in your country, you can have buyers pay you through PayPal.

Does Etsy report to the IRS?

If you meet certain profit and sales thresholds, you may receive a Form 1099-K from Etsy. If you receive a Form 1099-K, that means Etsy also sent a copy of the same form to the IRS and/or your state’s tax authority. So you’ll want to be sure to account for this income when you file your taxes. You have to meet the following qualifications to receive a Form 1099-K from Etsy:

Federal IRS requirements (both must be met)

  • You had $20,000 in sales through Etsy Payments during the calendar year, and
  • You received 200 or more payments through Etsy Payments over that same period

State requirements (Massachusetts and Vermont residents only)

  • You have $600 or more in sales through Etsy payments in a calendar year

Bottom line on how to start an Etsy shop

If you’ve got a creative bone or two in your body and are looking for a way to make some extra money, opening an Etsy shop is worth considering. Being an Etsy seller can be a great side hustle and can even grow into a full-time gig.

Although Etsy takes a percentage of your sales for using its platform, it’s a platform that attracts plenty of buyers from all over the world. There’s no cost to get started, so take some time to create catchy, irresistible listings so you can introduce the world to your new Etsy shop.

Unlimited Cash Back

Benefits

  • $500 cash back sign-up offer
  • Unlimited 1.5% cash back on all spending
  • 0% APR for 12 months on purchases
  • No annual fee