The Pros & Cons of Selling on Etsy
Are you a small business owner (or aspiring business owner!) considering selling on Etsy? Or perhaps you are already on Etsy and wondering when is the best time to leave? Here are a few pros & cons from our experience of selling on Etsy, but be sure to check out our Big Plans Podcast Episode 6 for our (maybe unpopular?) thoughts & opinions on Etsy.
The Pros & Cons of Selling on Etsy
1. It’s easy to use and build your shop page
An Etsy shop is really easy to set up because there’s a set layout you have to follow. You don’t need to know coding and you can customize it to your brand for a small fee with Etsy Plus.
2. Customer Trust
Since most customers are already familiar with Etsy they have established trust with the platform. Etsy has a built-in audience/customer base. Customers feel more comfortable shopping there.
Etsy gives you a lot of analytics for each product such as stats on where your traffic is coming from (i.e. from the search engine or offsite ads), what keywords people are searching, and more – without having to set up a complex analytics tool.
4. Etsy Search Engine
Perhaps Etsy's best feature is their search engine which provides free marketing, lots of organic traffic, and no need to drive your own traffic.
5. Customer Communication
It’s easy to communicate with your customers directly through the Etsy platform.
1. Lots of Fees
- $0.20 / listing
- 6% transaction fee (includes the order total + shipping total)
- 3% of the order + $0.25 payment processing fee
- 12%-15% offsite ads (which you can’t opt out of) if your shop has made over $10K in 365 days
We offset these fees by charging more on Etsy vs. on Shopify, and as a result this actually encourages people to shop from our Shopify instead. With all of the Etsy charges and fees, your profit margin is very little and that doesn’t even include your time and materials.
2. Market Saturation
Because Etsy is so highly saturated, it can be harder to stand out amongst your competition. You need to have really strategic keywords, good SEO, and high quality photos.
3. Star Seller Program
We don’t know of any shops who actually like it. The Star Seller status is based on unfair/unrealistic qualifications, and at the end of the day it doesn’t actually do anything for the seller. We did not see the benefit of it when we qualified for it.
4. You can be banned from Etsy
You can be banned at any point by Etsy – in which case you will lose all of your customers if you don’t have your own website, social media, or newsletters with your customer info.
5. You can’t collect your customer’s email address
Although it’s easy to communication with your customers through Etsy, you are limited to that form of communication only, and you are not allowed to collect your customer’s email addresses nor contact your customer via email.
QUESTIONS FROM THE AUDIENCE
Is Etsy Plus worth it?
For $10/month, you get 15 listings (worth $3) plus $5 in ad credit, which equals $8 total value. It also comes with discounts for custom domains, shipping boxes, and business cards. The main benefits of Etsy Plus are Advanced Shop Customization (ASC) and Restock Requests. ASC has multiple banner options. It also includes a new layout option for featuring listings and the ability to feature specific listings or shop sections. However, we feel this option isn’t really necessary. Restock Requests features the ability for shoppers to view your sold out listings to sign up to receive alerts when your items are back in stock. Sold out listings appear in several places including your Sold Items page or via direct links to your sold out listing pages. Overall, we don’t subscribe but it seems like it really ends up being $2/mo (which you can decide if it’s worth it or not).
Are Etsy ads worth it?
We say yes, it is worth it. It certainly doesn’t hurt to try it out. The budget minimum for an ad is $1/day, so you’re not losing much if you decide to test it out. However, you don’t get a say in anything besides budget and what products to list (so you can’t set limit to cost per click, targeting a specific audience, etc.). Personally, we use it on our most popular listings, and we’ve seen an average Return on Investment of 2x, but recently we’ve seen almost 5x.
How do I decide if I’m ready to leave Etsy?
One of the first things to consider is the size of your customer base if you leave Etsy. Do you have a social media presence, a newsletter, and a loyal customer base that you know would follow you to your new website? If that's the case, you are ready!
If your main traffic/money is coming from Etsy’s search engine (like first time customers), then you should work on building your loyal customer base (repeat customers) first before leaving. Additionally, you can also keep your Etsy shop open after you start your new website.
A common mistake shops make is that their new website is not user-friendly, it’s hard to find certain items, or the website has a lot of problems (MOST common problem is that it loads too slowly. Most people will click away from a website after waiting 2 seconds for the page to load). Make sure that your image size is compressed/small to help your page load faster.
Finally, remember to consider costs - the price of Shopify basic is $29/month, so calculate how much you are saving on Etsy fees vs. the price of Shopify’s subscription + fees.
There are many things to consider when evaluating an online platform for your shop. Hopefully these insights we’ve shared based on our years of experience selling on Etsy are helpful to you as you decide which platform is best for you.
Be sure to listen to the full podcast episode for all the details!
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xo, Lisa & Lucy