Secondary Income: How to Sell on Etsy

Point of Interest

Many people secure a secondary source of income by effectively and efficiently selling wares and crafts on Etsy.

Etsy is an online marketplace for creatives to sell all kinds of hand-made goods. Not only can this be fun, but selling on Etsy can be a secondary source of income for people looking to increase their cash flow. Recently, Etsy added more perks like free shipping for orders over $35 and better Google Ad algorithms for search results on the site itself.

How to sell on Etsy

1. Research your niche on Etsy

Before you set up an account, set pricing and start making products, you need to look around to see what else is on Etsy. Is someone already making what you make? Do you see ways you can improve what your product is? Is there a visible demand for the product? What are people charging for similar products?

While you won’t be able to see how many units of a product someone has sold, the Etsy platform is heavy on reviews. If you see a product with several thousand reviews, it’s safe to assume they’ve probably sold quite a few. If you see zero reviews, sales for that product from that seller may be lower.

Should you avoid selling on Etsy if someone else already makes what you do? No. There are plenty of unique ways to drive traffic to your Etsy store, which means there is plenty of space for more than one provider for a product. Additionally, hand-made, unique products will always differ slightly. If you can find ways to make your version of the product better, you’ve got a competitive advantage that can give you a leg up on the competition.  

2. Understand the selling process

Once you’ve determined your product is a good fit for Etsy, it’s time to understand the selling process. Sellers create accounts and then upload as many product listings as they want. You do not have to have website building knowledge or any heavy technical abilities. The program is simple, straightforward and built for people who might not be the most technically-savvy.

When someone decides to buy your product, you are notified. You’ll receive the purchase order, any special notes they’ve provided and their delivery address. From there, you create the product (or you may have some pre-made) and ship it out to them — that’s it. All payments and invoices are handled through Etsy, so you don’t have to worry about chasing someone down to get paid. 

Additionally, the company offers seller protection, including a platform dedicated to resolving disputes between buyers and sellers. In order to qualify for seller protection through the company, sellers must sell qualifying items, ship orders on time, respond to customer messages in a timely manner and overall have an account in good standing.  

3. Costs of selling on Etsy

There are a few fees Etsy uses to keep the lights on. For every listing you put up, you will pay $0.20, which is good for four months or until the item sells, whichever is sooner. When you do make a sale, Etsy takes a 5% transaction fee as a commission for facilitating the sale. Additionally, it takes a 3% plus $0.25 payment processing fee.

So, selling an item within four months would cost you $0.45 + 8% of the sale price. If the listing is up longer than four months, you can add another $0.20 to that total. This is important to remember when setting your pricing. For sellers that want to drive more attention to their products and online stores, Etsy does offer additional advertisements. 

You can also purchase a $10 per month upgraded account called Etsy Plus. This upgrade is not required to sell products, but it does give you access to tools and resources to be more successful. If you’re treating your secondary income stream as a business, it may be worth a small investment to have better success on the platform.

4. Create your account

Once you fully understand how the sales process works, it’s time to create your account. It takes just a few minutes to get signed up. There are no sign-up fees or extensive online forms to fill out. Account creation should take you no more than about five minutes.

5. Develop your creation and delivery process

Now comes the fun part. It’s time to start building your creations or at least setting up the process to do so. If it’s something that is 100% custom, you can start by sourcing the materials you need, so you are ready to go when you get your first order. If it’s partly custom, you can start building several items up until the point of customization. If nothing is custom, start building out an inventory before you start selling.

The most successful Etsy sellers have processes that don’t make their customers wait for delivery. People on Etsy do understand that customization takes time, but they don’t want to wait an irrational amount of time.

Part of minimizing this wait is having your shipping process down as well. You are responsible for mailing your finished product to the customer. Know where you are going to ship from, how you’re going to ship to protect the product, and what it is all going to cost.

The most important part of this step is determining what it’s going to cost you to build your creation and what it’s going to cost you to sell it. You want to make sure you’re charging a price that not only covers all your costs but a price that turns a profit. Remember to calculate the cost of materials, cost of shipping and Etsy’s costs. Additionally, if you’re going to spend a little on ads to promote your product, you need to factor that in as well.

“The best tip I can give you is, where possible, to absorb the shipping into your overall product cost and offer free shipping in your listing,” says Nathan Thompson, a digital marketer with online retailer, Pavilion Broadway, and an experienced Etsy seller. “Customers are now unfortunately so accustomed to receiving free shipping from Amazon and the likes that they expect this as a basic requirement now. This alone will considerably improve your conversion rate on Etsy.”

6.  Create your first listing

The final step is to create your first listing. Figure out pricing, shipping, how long it will take to make and how to describe the product best. Put all of this information and more on your purchase page for customers to see. The best advice is to under-promise and over-deliver. If it takes you five days to create something and three days to ship it, don’t tell them they will get it in eight days. Instead, tell them it will be 10-14 days. That way, if something comes up, they aren’t waiting longer than you said. If you do finish it and get it shipped on schedule, though, you’ll get raving reviews as it showed up early.

Jason Lee

Personal Finance Contributor

Jason Lee is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.