Is Etsy Right For You? What's Allowed, The Pros and Cons, and How Much it Costs

Hello, welcome to Etsypedia! If you missed my {Introduction} post take a peek and catch up. :o]

Long story short... Etsypedia is my new brainchild. As the name suggests it'll be an encyclopedia all about opening and running your own Etsy shop.

So, I thought it would be appropriate to just start at the beginning... determining if Etsy is right for you!

I know many of you already have an Etsy shop and I'll have plenty of posts that will be more useful to you in the very near future! In the meantime, I hope you'll still enjoy this post... maybe you'll learn something you didn't already know as a shop owner!

A little bit about Etsy:  Founded in 2005, in an apartment in Brooklyn, New York, Etsy began as an online community where people could sell their handmade items, vintage finds, and craft supplies. As of June 2015 Etsy has 1.5 million active sellers, 21.7 million active buyers and annual gross merchandise sales for 2014 of $1.93 billion! (source).

From a small apartment in Brooklyn to $1.93 billion in sales... That's proof enough for me that dreams can come true!

I love selling on Etsy, there are some guidelines and rules and as with anything there are also pros and cons. I'll go over some of those here so you can decide for yourself if Etsy is right for you.

Part I - What's Allowed

The Rules and Guidelines

There are limits to what kinds of items you can sell on Etsy. You can only sell handmade, vintage, and supplies.

Handmade – This means made by you. You can collaborate with other artists and you can hire help if you need to or partner with an outside business but you'll need to be honest and disclose those other people or companies on your About page. If you choose to work with a manufacturer for part of your process then you should apply with Etsy to do that first.

Image source: The Graphics Fairy

Vintage – As far as Etsy is concerned vintage is 20 years or older. I know that makes some of us feel so old! If the things we enjoyed as children and teenagers are now considered vintage then we must be antique!

Supplies – These can be handmade or commercial, but they need to be supplies that you would use to create another item… beads and jewelry making supplies, scrap-booking and paper crafts, etc.

Image Source: Supply box from Nikatous on Instagram

Anything that doesn't fit these three criteria isn't allowed. 

For example, handmade goods created by someone else… some knitting your great aunt Martha did? Nope, that's not allowed unless it was created before 1995 (that magical 20 years or older date that makes it vintage). New, mass produced home décor items? Nope, not allowed, and no, those lovely new curtains do not qualify as a supply to decorate your home… nice try though!

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Ok! So now that you know what you are allowed to sell let's take a look at the pros and cons!

Part II - The Pros And The Cons Of Selling On Etsy

The Pros

All the work of layout, design, and coding is already done! I don't know about you but I'm happy about that! There is also a handy-dandy, built-in payment processing system, statistics tracking so you can see what people are looking at in your shop, and a shipping center where you can calculate and print your shipping labels.

• Etsy is an established and increasingly well-known brand which gives you instant customer trust. They work hard on branding, marketing, and business development to bring new customers to the site. In a nutshell they bring a lot of customer's right to your virtual doorstep!

Think about this for a minute... if you shop online at all you may have found yourself on an unknown website or two wondering if it is legit. I know I have and I usually won't buy for fear of the unknown. You can use Etsy as a starting point with your business, growing your customer base and gaining their trust. Start connecting with your customers (new and potential) via social media and later on, down the road, you can set up your own e-commerce site if you desire.

• There is an engaged community of like-minded people right at your fingertips.
• The community boards (or forums) are always available to you for help, venting, and just chit-chat.
• You can join a team, there are hundreds to choose from and they range from teams who are local in your area, to teams who share your interests (recycling, knitting, environmental, etc.)

The Cons

(Oh Simon...  you're such a buzz-kill!)

• You don't have a lot of control as far as policy changes that Etsy may choose to make or changes in the appearance of your shop. They tinker with things in a continual quest for improvement which can be annoying if you don't keep up on what's going on with Etsy as a business itself. There have also been instances of shops being shut down for both legitimate policy violations as well as misunderstandings. (This can be a pro as well... if you embrace change and don't fight everything Etsy does... keeping up with the times you know?!)

• You are limited to their design for your store which can make it more difficult to brand yourself. Your shop is going to look a whole lot like everyone else's shop with the exception of your banner (which you can purchase or make yourself, more on that later) and your photography skills and backdrops.

• The competition can be fierce unless you have such a unique product that no one on earth (or Etsy at least) has anything like it. There are a lot of shops on Etsy! Remember... 1.5 million active sellers and growing every day!!

Even with the cons, I still think Etsy is a wonderful way to start!

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Part III - How Much Does It Cost?

Source: CaityAshBadashery on Etsy of course!

So now that you know the pros and cons, we'll delve into cost... just how much does it cost to sell on Etsy!

So How Much Does it Cost?

Here is a handy table for quick reference; I'll go into each item from the table in more detail below.

Now let’s go over each of these in a little more detail.

Having a Shop - Opening and maintaining an Etsy shop is free, there are no monthly membership fees. All it will cost is some of your time and effort.

Listing an Item in Your Shop – When you list an item in your shop you are charged .20 cents for each item and the listing will remain active for four months. After four months the items will expire and you can choose to renew when you are ready. You can also set items to renew automatically.

If you have multiples of the same item you can put them in one listing and the buyer can choose how many to purchase. If two items sell during a single transaction you will be charged .40 cents, if four items sell you will be charged .80 cents, and so on.

Selling an Item - When you sell an item from your shop Etsy charges 3.5 percent of the selling price. The selling price is the actual amount that your customer paid for the item; it does not include any taxes or shipping fees that the buyer may pay. So, if you sold an item for $20, Etsy will take .70 cents.

Direct Checkout – This payment option offers your buyers multiple payment options including credit card, debit card, Etsy Gift Cards, and most recently... integrated Paypal (I'll touch on Direct Checkout in more depth later).

If your customer uses Direct Checkout, you will be charged 3 percent of the total order plus an additional .25 cents per item. (This is in the United States only; if you are outside the US, check {here} to see what you will be charged) Unlike the fee to sell an item, this fee does include any applicable sales tax and shipping fees.

So, let's say that your $20 item you just sold cost $9.50 to ship, that's $29.50 total sale price and Etsy will take 3 percent which is .89 cents plus .25 cents, so $1.14. Add that to the 3.5 percent selling fee and you are now up to $1.84. Then if you factor in the .20 cent listing fee you’re now up to $2.04.

Paypal – (NOTE: If you choose to accept Paypal as part of Direct Checkout then this section is not valid, there will be no separate Paypal fees, only the Direct Checkout fees). This payment option is pretty comparable to Direct Checkout, you will be charged 2.9 percent of the total order plus an additional .30 cents per order. So, for the $20 (plus $9.50 for shipping) item that sold, if your customer chooses to pay with Paypal you will be charged $1.15 total. Add that to the selling fee of .70 cents and you are now up to $1.85. That's only a penny more than Direct Checkout!

Shipping Labels – Sellers can choose to print shipping labels right from Etsy for both domestic and international shipments. There is a discount for using this service and you'll pay less than you would if you take your item to the post office and pay at the counter. Etsy does not charge anything to use this service and they will automatically send the buyer a notification that their item has shipped with the tracking number if applicable.

All fees associated with your shop are added to your bill except for Direct Checkout and Paypal fees. The fees for Direct Checkout are automatically subtracted before disbursement and fees for Paypal are deducted from your Paypal account.

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Source: SodaHead

Whew!! There you have it... what you are allowed to sell, the pros and cons of selling on Etsy, and the fee structure. Now I'll give you some time to read this, let it all sink in (it's long... I know... you may need to read it in spurts if you have a short attention span like me!), and decide if Etsy is right for you!

The next post on Etsypedia will be all about opening up your new Etsy shop! From choosing a shop name to listing your first items! Yippee!

I hope you enjoyed this first post! I would love it if you'd leave a comment and let me know what you think!