business plan etsy

How To Start An Etsy Shop: Ready To Sell In 9 Easy Steps

Updated: Apr 3, 2024, 9:56am

Table of Contents

Before getting started, 9 steps to set up an etsy shop, how to sell on etsy, bottom line, frequently asked questions (faqs).

If you’ve ever made artisan or handmade goods, you’ve probably heard “You should sell these on Etsy” a time or two. Learning how to set up an Etsy store is easy. Here are nine simple steps for you to have your shop ready to go in a single day. We’ll also delve into how to manage your store once it is up and running, so you can get the best results possible.

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Before even creating your Etsy account, be sure you have a unique design, high-quality photos to showcase your product, a business bank account and plenty of packing materials.

We’re going to assume you already have a viable product, but it’s worth mentioning that branding is everything when getting your first Etsy sale. If this isn’t your strong suit, hire a graphic designer to create your product labels or purchase a template from Etsy. You can then print these labels at home using a laser printer or order labels online.

You’ve worked so hard to create and label your product—make sure the photos showcase the effort you’ve put into it. You don’t necessarily need to hire a professional photographer to take product images. Instead, find a sunny window and use portrait mode on your phone to take images of your products on a white background (poster board works great for this). Alternatively, order a simple light box from Amazon.

To make it easier to file your business taxes, set up a separate bank account to handle all of your Etsy expenses and transactions. This way, you have every business-related expense in one place and not mingled with your personal money.

Packing Materials

Etsy buyers expect their packages to ship quickly, so be sure to have all of your packing material ahead of time. This includes boxes, biodegradable packing peanuts, packing tape and shipping labels. Once you’re regularly making sales, you may want to consider branded boxes and a thermal label printer.

Below are nine steps to get your Etsy shop up and running.

1. Create Your Etsy Account

To create a seller account, you must first have a consumer Etsy account. Navigate to “Sign In” in the top right corner and a dialogue box for credentials will open. Click on “Register” if you don’t already have an account. You will receive an email asking to confirm your account.

After signing in, next to the shopping cart in the top right corner is a gray circle with a silhouette on it. When you click on the circle, a drop-down menu gives you an option to click on “Sell on Etsy.”

After landing on the “Sell on Etsy” page, there’s a black “Open Your Etsy Shop” button below the banner.

2. Enter Your Shop Preferences

Here, enter your shop preferences, which include language, shop country, shop currency and whether your shop is your full-time income or not. When finished, click “Save and continue” in the bottom right corner.

3. Name Your Shop

You can name your shop in 20 characters or less, and it must be unique from other shops. Your name may only have numbers and unaccented Roman letters without spaces. Enter the proposed name you want and click “check availability.” If you’re not sure what to name your shop, Etsy has tips for choosing a shop name . Once set, you can only change your shop name once, so choose carefully. After deciding on a name, click “Save and continue.”

4. Create Your Listings

Now you will create your listings. Etsy recommends having a minimum of 10 different listings for a greater chance of visibility.

Your listing includes:

• Photos: At least one photo is required, and you can add up to 10 photos. In addition to product images, upload a picture of the product next to a ruler or a dollar bill (or similar) to help customers gauge the size of an item. Even though you will list measurements in the listing details, a visual of the size helps.
• Videos:  While not required, a video can set your product apart from your competition. Show the product in use and at all angles.
• Listing details: List the title of the product, who made it, when it was made, whether it’s a physical or digital product, a detailed description, materials used and tags. Here, you can also add a section to group similar products together.
• Inventory and pricing:  What is the price of your item? Make sure to factor in the cost of materials, labor, shipping cost (if offering free shipping, build it into your product price) and shipping materials. If you follow best manufacturing processes, this is where you also include a stock keeping unit (SKU).
• Product variations:  Does your product have multiple sizes or colors? List them here.
• Personalization: If you offer personalization on your products, select “on.” Otherwise, keep it “off.”
• Shipping: You can have Etsy calculate your shipping costs for you based on your origin ZIP code. Input your processing time, where you are willing to ship, shipping services offered, whether you include free domestic or international shipping and whether you want to build a handling fee into the shipping price. Item weight and size go here too.

You can preview each listing before you save it. Once you’ve added all of your listings, select “save and continue.”

5. Input Your Payment Settings

Etsy needs to know your tax filing status, so the first question it asks under the payment settings is whether you’re an individual or sole proprietorship or a registered legal entity. If you select “individual or sole proprietorship,” provide your country, full name, date of birth, address, phone number and last four digits of your Social Security number.

Incorporated businesses will enter the name of the legal entity, legal business address, state, business registration number and employer identification number (EIN). Additionally, Etsy needs a primary contact for the business, so it asks who the shop owner is. You’ll provide the full name, address, date of birth and the last four digits of their Social Security number.

After completing this section, your next section is the country where your bank is located. From there, input your routing number and checking or savings account number that you want your Etsy sales to go into.

6. Enter Your Credit Card Details

You need a credit card to pay for your Etsy fees. Input your credit card number, card code verification (CCV), expiration date and full name on the card. For peace of mind, sign up for auto-billing and Etsy will automatically bill your card on the first of the month or when you pass your fee threshold. Otherwise, you can pay any time from the first to the 15th of the month.

There are three main fees you’ll encounter as an Etsy seller:

• Listing fees
• Transaction fees
• Payment processing fees (if using Etsy Payments)

7. Open Your Shop

After you’ve entered your credit card details, the “open your shop” button will turn black and you can click on it. Congratulations—your shop is open. Now you can share your shop with your friends, family and followers.

Your shop URL comes in two different formats:

• https://www.etsy.com/shop/nameofyourshop
• https://nameofyourshop.etsy.com

8. Update Your Bio

By adding a brief bio and photo, you can show potential customers the artisan behind the shop. This is a place where sellers prefer to share their inspiration for what they do. For example, if you start your shop because you are raising money for a cause or to help finance a journey, such as In vitro fertilization (IVF) or adoption, say so.

9. Set Up Your Shop Policies

This is one of the most critical steps in becoming an Etsy seller. You want to anticipate any questions a buyer might have to help eliminate any back-and-forth questions via chat. A policy section will also help in the event of any disputes.

Essential elements of your shop policies include:

• Processing time
• Shipping policies, such as if you only ship via United States Postal Service (USPS) Priority to take advantage of free insurance
• Payment options
• Returns and exchanges policy

Once you have established your Etsy store, you’ll want to home in on solid business practices that help you sell more products. As with any business, selling on Etsy is difficult and requires a game plan that you execute.

Set Realistic Goals

When you are starting out on Etsy, understand that you need to establish yourself. You won’t have a lot of traffic to start with, and consumers will be weary of buying from someone who doesn’t have a lot of sales recorded. Your initial goals should be tied to making the first sales and expanding.

Announce Your Store

Go on your social media and announce your store. Drive all the traffic that you can to the store. This may start with friends and family, and you may take sales you would otherwise have done in person, but this helps to get you the much-needed metrics of sales under your belt, showing other consumers that you are a good Etsy seller.

Deliver Excellent Products and Services

You want your buyers to leave you good feedback. This means that you should be prompt in responding to messages. Send items out as quickly as possible. Do everything that you can to make the transaction simple. When other consumers see positive feedback, they’ll be more likely to trust your shop and buy from you—even if you don’t have a lot of sales. Make each sale count.

Make Sure Keywords and Tags Are Optimized

You want consumers to find you, not just from your social media posts. You can do this by making sure that your listings have optimized descriptions and tags. Use keywords that describe your items so that people can find you on Google or in the Etsy search bar.

Upgrade Photos Where You Can

Make sure all photos are clear and show the product from various angles. You want high-quality photos that are optimized for the website. Take images farther from the product than you think you need to, and then crop the photo with the Etsy tool. Don’t use square crops; instead, make rectangular crops that are more visually appealing and use an aspect ratio of 4:3.

Add More Products Regularly

Consumers like choices, and they appreciate seeing new products on sale in your store. Think about incorporating seasonal items into your store that fit your theme. Share new products on social media to start the buzz about the new items.

You’ve heard it before—Etsy is the perfect place for makers to sell handmade goods. It’s where people go to find unique, one-of-a-kind items that they can’t find in other places. Luckily, it takes very little time to set up an Etsy shop, and it has a low barrier to entry. However, opening the shop is only half of the story; you want to make sure to manage it properly to ensure its success. While it’s free to create an account, you just pay a small fee for listing your item and a fee when it sells.

Forbes Advisor small business expert Kimberlee Leonard contributed to this article.

Does Etsy report my shop income to the IRS?

Yes, Etsy is required by law to report your income to the IRS if you have more than $20,000 in sales and more than 200 transactions. You will receive a 1099-K to file your taxes.

How much are the seller fees on Etsy?

There are three types of seller fees that you will encounter when using Etsy to sell your products: listing fees, transaction fees and payment processing fees (if you are using Etsy Payments to process your payments). Listing fees are low at 20 cents per listing and transaction fees are 6.5% of each sale, which is both the item’s price and the cost to ship it. The Etsy Payments processing fee is 3% of each sale plus 25 cents.

Can I buy shipping labels through Etsy?

By purchasing your shipping labels through Etsy, you can save up to 30% compared to USPS retail rates. You can also use a provider, such as Pirate Ship or Shippo.

How do I choose a product to sell?

Even if you’re not a designer, there are tons of ways to make and sell products online. You can hire your own designer, install a dropshipping application or take up a new crafting skill.

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Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes.

How to start an Etsy business: Your complete guide

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Key takeaways

• To start an Etsy shop, you'll need to create an account, set up your storefront, add items to your shop and set up payments
• You don't need a business license to sell on Etsy but you do need to be aware of local rules and regulations
• To attract buyers to your shop, make sure you have accurate and engaging product descriptions and well-lit, clear product photography

Not so long ago, if you wanted to sell your handmade or vintage item, you needed to find a way to do so in person. But thanks to the rise of e-commerce, your options have exploded. While you can list products on sites like Amazon and eBay, you might have the most luck getting in front of more than 96 million buyers actively looking for vintage and handmade goods.

Enter: Etsy.

Over 9 million people have leveraged Etsy to sell handmade and vintage goods to people all across the globe. And if you’re considering joining them, you’ll need to figure out how to start an Etsy business. Fortunately, we’ve gathered all the steps you need to take here.

1. Create an Etsy account

You’ll first need to set up an Etsy account. The platform makes this relatively easy: Just head to Etsy and click “Sign In” in the top-left corner (This is the easiest way to get started).

In the sign-in popup that opens, choose “Register” from the top-left corner. You can fill out the form to establish your account or use Google, Facebook or Apple logins.

You’ll get an email from Etsy to confirm your contact info. Follow the steps to get your account set up.

• There are over 9 million active sellers on Etsy ( Etsy key figures )
• There are over 96 million active buyers on Etsy (Etsy key figures)
• Annual gross merchandise sales in 2023 were $13.16 billion (Etsy key figures)
• 86% of Etsy sellers are female entrepreneurs ( Etsy study ) The majority of Etsy shops are sole proprietorships ( Etsy Seller Handbook )
• 7.72 million people are estimated to be repeat buyers, averaging six purchases in 2023 ( Capital One )

2. Set up your storefront

Creating your account is the first step as you learn how to start a small business on Etsy, but you can’t stop there. You also need to establish yourself as an Etsy seller. That means heading to the Seller page while you’re logged into your account and clicking “Get Started.”

You’ll need to answer a few questions to set up your Etsy shop, like where your business is located and which language and currency you want to use. As part of that process, you can also get resources from the company, like selling internationally and branding your shop.

Note that you don’t technically need a business license to sell on Etsy, but local rules still govern you. Check whatever legislation applies in your jurisdiction to find out if you need to get licensed before you can start selling.

While you don’t always need a license, you do need to be ready to choose your shop name. It has to be between 4 and 20 characters with no spaces, special characters or accented letters. (Don’t stress too much here — you can change your shop name later.)

3. Add items to your shop

You’ll need to stock your shop as you continue through the Etsy seller setup process. This can be one of the biggest hurdles as you figure out how to start an Etsy business because you can’t establish your shop without this piece. In other words, if you’re not ready to upload pictures of your products, write descriptions, and decide on pricing, you won’t be able to set up your Etsy shop.

In addition to listing the products themselves, you also need to make some shipping decisions. Fortunately, this is one of the areas where it can be easier to start a business on Etsy than on other sites. Etsy can calculate shipping costs for you and allows you to buy your shipping labels directly through the platform.

For help listing an item, Etsy has a guide .

4. Set up payment and billing details

After you click “Save and Continue” on the “Stock your shop” page, you’ll get taken to a page focused on getting you paid — and paying Etsy.

Here, you’ll need to connect a business bank account so Etsy can pay you, and you’ll need to add a credit or debit card to pay the company.

If you have a U.S.-based bank account, connect it to your Etsy shop through Plaid , which has several tools to keep your data safe. Etsy requires sellers to set up two-factor authentication to further safeguard your info. Once you do that, you’ll be able to get your shop established.

5. Open your Etsy shop

Congrats! Once you reach this step, you’ve officially figured out how to start a small business on Etsy.

At this point, you’ll have the link to your shop to share with friends, family, your social media network and anyone else you want. You can officially start advertising too, whether buying an ad on Facebook or a spot in a local paper.

How to personalize your Etsy shop

While your shop is technically open, meaning you’ve mastered how to start a small business on Etsy, there’s a lot more to explore when it comes to actually running it.

You’ll want to personalize your shop to stand apart from your competition. You can do that through your:

• Shop icon (essentially, your logo on Etsy)
• Welcome message

You can customize those through your Shop Manager . Ideally, you want your icon and banner to accurately reflect your shop and flow well with the imagery you’ve chosen for your product listings.

Apply that personal touch as you interact with customers, too. Stay responsive as people buy your products or message you through your shop. If you consistently provide good customer service, you could be eligible to become an Etsy star seller .

How much does it cost to sell on Etsy?

Before you start a business on Etsy, you want to make sure it’s going to be profitable. As you’re crunching the numbers — from totaling up the cost of materials to budgeting for shipping costs — don’t forget to factor in Etsy’s fees.

The platform charges sellers in three different ways:

• Listing fees. Etsy charges a flat rate of $0.20 per listing. That fee applies whether or not the item sells. This cost can go up if you decide to add options like auto-renewal, which means the item gets automatically relisted on your page after it sells.
• Transaction fees. When one of your products sells, Etsy collects 6.5 percent of the order total (including shipping, gift wrap costs, etc.).
• Payment processing fees. These vary by location , but in the U.S., sellers pay 3 percent plus a $0.25 flat rate per payment that is processed through Etsy.

How to finance your Etsy business

Starting an Etsy shop may include costs like buying materials to make your products and keeping inventory on hand. While some Etsy owners might take these costs out of pocket, you can also finance your Etsy business in a number of ways, including:

Small business loans

Small business loans can be a great way to finance your Etsy business if you have some market experience under your belt. Lenders often want to see that you’ve been in business for a few years and generate a steady flow of income when approving you. You’ll need to provide business bank and financial statements to show that you can pay for the loan. That said, you can find lenders that offer startup financing , lowering the barrier to eligibility.

Crowdfunding

Crowdfunding allows you to raise money for financing your business, usually through an online platform like Kickstarter or Kiva . You can gather financing from a large group of people interested in investing in your business. Depending on the type of crowdfunding you use, you may not pay interest or may not even need to pay the investors back. Types of crowdfunding include:

• Donation crowdfunding raises money through donations that you do not have to repay
• Reward crowdfunding offers individuals a reward like swag or the product you’re creating in exchange for funding
• Debt crowdfunding allows you to borrow money that you will repay with interest, like a business loan offered through a large group of individuals
• Equity crowdfunding gives investors ownership of your business in exchange for financing

Small business grants

Small business grants are a form of funding that your business will not have to repay. You can find small business grants from federal, state or local governments, and some corporations fund their own private grants. The amount of funding varies with the grant, but even a low grant, like $5,000, might be enough to get your Etsy business started.

Because grants provide free access to money, they tend to be competitive. You will need to meet the qualifications outlined for the grant application. You’ll also need to be patient about hearing back from the grant organization since they can take weeks or months to announce the winners.

Small business credit cards

Small business credit cards are an ideal way to finance short-term costs, and many come with rewards like cash back or travel points. They may require strong personal credit like a personal credit score of 670 or higher, though you can find business credit cards for bad credit . Otherwise, credit card companies don’t look as closely at your business’s time in business or financial statements the way a business loan does.

To avoid paying interest, you’ll want to pay the balance in full each month. Doing so will mean that you’ll receive a grace period of at least 21 days from your next statement to the time the credit card payment is due.

Whether or not you make payments in full, your business credit card can help you build positive business credit as long as you make payments on time.

Bottom line

Now you know the steps you need to follow to figure out how to start an Etsy business. Fortunately, the platform makes it relatively easy. Really, the hardest part is getting your product pricing and photos set up so you can load them in as you establish your shop. As you figure out that pricing, make sure you account for the fees Etsy charges its sellers.

Frequently asked questions

How do i attract buyers on etsy, do you need an llc to sell on etsy, does etsy report my shop income to the irs, article sources.

We use primary sources to support our work. Bankrate’s authors, reporters and editors are subject-matter experts who thoroughly fact-check editorial content to ensure the information you’re reading is accurate, timely and relevant.

Key figures . Etsy. Accessed on October 25, 2023.

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Etsy Business Plan Template: Prepare For Selling On Etsy

Are you considering turning your hobby into a business using the Etsy marketplace?

Well, you’ll be joining a platform that gets around 81.9 million buyers these days looking for handmade goods just like yours.

Before you dive in though, we invite you to lower the tools for a moment and funnel that creative flow into a top-notch Etsy business plan. It’s crucial to understand exactly what your business does, its identity and how it’s going to function so that when it comes to making costly decisions, you have a road map to guide you.

If you put some groundwork and goals in place from the beginning, then making decisions later on can be based on a bigger picture.

If knowing what to include doesn’t come naturally that’s ok, we’re here to help outline what goes into great business plans, why they’re so important and how to get cracking.

In this guide on preparing to sell on Etsy:

Table of Contents

Are you ready to take the guesswork out of your etsy accounting.

Etsy is a great place to sell unique products, and it’s perfect for creative entrepreneurs who aren’t necessarily excited about accounting. Discover the easy way of looking after your Etsy finances so that you can spend more time doing what matters most to you.

Let’s get started.

Why You Need An Etsy Business Plan

A good business plan for Etsy shops should answer questions around who, what, why, how and when for your business, so that as the inevitable bumps in the road arise, you can fly over them.

A plan will start your business off in the right direction, it will give you measurable goals and a feel for your progress.

What you can do with a business plan

• Understand your competition and target market.
• Plan for cash flow and price your products accordingly.
• Create and track a marketing strategy.
• Develop goals and objectives and measure successes.
• Pitch your business to investors or business partners.

The content in a business plan will vary depending on the type of business, so we’ve prepared a guide specially curated for Etsy.

Before Starting Your Etsy Business Plan

Competition is rife online, including on Etsy .

You need to research before anything else to understand who and what your business will be, and where it fits into the bigger picture.

See what your competitors are doing, where you slot in and what niche you could fill.

Only by finding your point of difference will you be able to forge your own path and following.

Creating An Etsy Business Plan

Exciting! You’re at the first step in your Etsy career, congratulations.

This step is all about your brand identity. Creating this will give you the inspiration and roots you need on which to plan everything else.

Giving your store a personality will help customers connect with it, remember it and hopefully, keep returning to and talking about it!

Once you have a good idea of who you are, you can start figuring out what you want to do and how.

What to include in your plan

Executive summary.

Sum up your business goals and strategy in one or two lines. A sort of introduction to your store and your business plan.

Business description

Answer questions like:

• What is the purpose of your business?
• Why did it start, what problems does it solve?
• What makes it different from others?

Product description

Next up, talk about your product or product line. Think about including these areas:

• What is it and how is it sourced or made?
• How many items will be available for sale at any one time? Think about the time it takes to make the product yourself or to source.
• Are there any products you’d like to sell in the future or variations you’d like to add?

Your business takes more than just you to run it. Here, explore what you might need and want to do with regards to:

• Storing inventory.
• Fulfilment options.
• Packaging materials.
• Studio or facilities for making your products.

Bear in mind whether these solutions are scalable too, if you wish to grow.

Hopefully you’ve had a little dig into what your competitors are doing by this point. This should inspire marketing ideas and things to try out with your target audience.

To plan your marketing activity, think about the following questions:

• How does your brand interact with customers?
• Where do your customers spend time?
• How can you reach your customers in those spaces?
• What are your customers most interested in or concerned about?
• Can you play to those interests in your marketing?

Remember the basics too. Etsy will have its own SEO algorithms so learn what it looks for and leverage this free advantage.

It might be 6th on this list but it should be a top priority: Managing your money. Just some of the things that you’ll need to account for as an Etsy seller are:

• Listing and subscription fees.
• Fulfilment, shipping and packaging.
• Sales tax and VAT or GST if selling outside of the US.
• Returns and reimbursements.
• Costs of goods sold and profit margins.
• Costs of materials, studio facilities and equipment.

Be realistic about your time and production volumes. Can you produce enough product to sell and make a profit? If not, what can you automate or take away from your tasks to give you more time?

Crunch some numbers to find out whether your business idea is viable from the start. We highly recommend turning to a specialized ecommerce accountant for this step, if not for the long-term. Find one from our trusted directory here .

They can also help advise you about loans if you think you might need one to get started.

Finally, set some goals!

The best way to measure progress and most importantly, to feel like your business is succeeding and going somewhere is to set yourself some milestones.

These can be short-term or long-term and be simple or complex.

The key is to make them SMART : S pecific, M easurable, A ttainable, R elevant and T ime-based.

Don’t worry if you don’t meet them because each time, you’ll learn what worked and didn’t work, and adjust your goals more accurately as you go.

You’re off to a good start, but keep it going!

There we have it, you’ve now become a knowledgeable Etsy business planner and should be about ready to open your Etsy shop.

And don’t let all that hard work planning go to waste! With the right automation, you can free up your time to keep making and growing your business.

The place to start? Your accounts, the lifeblood of your business.

Including Accounting In Your Plan And How A2X Can Help

As you’ve probably gathered by now, a sole business owner has rather a lot on their plate. And one who makes their own products? They have even more.

Accounting is something that could get pushed to the side, but this can’t happen for a business to survive and thrive.

Fortunately, automation exists designed to take these tasks off your to-do list, ensuring that they still meet industry standards and provide you with accurate, reliable numbers.

Use A2X to integrate your Etsy store with QuickBooks Online or Xero today!

Do I need an Etsy business plan?

You don’t need a business plan to set up an Etsy shop, but it’s a great first step in your Etsy seller career. It enables you to make sound decisions based on long-term goals, track your progress and centralize your strategy.

How much does it cost to set up an Etsy shop?

It’s free to set up a shop on Etsy. Fees are charged when you list an item and when the item is sold.

Before you sell, Etsy does require a credit or debit card number and your checking account info (account and routing number).

How much does it cost to have a business on Etsy?

There is a fee of $0.20 for each item you list on Etsy, and when your item sells, a transaction fee of 5% is charged based on the sale price.

Also on the blog

• The Etsy Accounting Hub
• Etsy Integration Guide: Simplify Your Business
• Ecommerce Accounting and What Makes It So Different
• Ecommerce Accounting Principles
• Find an Ecommerce Accountant

Read similar posts

• Etsy Sage Integration: How to Set it Up
• eBay Business Plan Template [Highly Actionable]
• eBay Selling Guide: Strategies For Success
• eBay Growth Guide: How To Increase eBay Sales
• How To Save Time With eBay Automation [Sellers Guide]

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You’re in the right place to learn. Find out how with our free Etsy accounting guide.

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Are you looking to take control of your Etsy accounting, to ensure that your business is running like a well-oiled machine?

How to Start an Etsy Shop (and Make $60K/Month)

Cash is not king. Creativity is. Have you ever wanted to start your own Etsy shop? Vlad Kuksenko started TagPup and in 18 months became the top pet product seller. You can do it, too!

We sat down with Vlad and learned how he loved art but earning a living as an artist wasn’t an option until graphic design became a major field. Today, he creates personalized dog collars, leashes, and bandanas that fill the number one pet products shop on Etsy.

What is Etsy?

What to do before opening an etsy shop, how to start an etsy shop, selling on etsy faq, learn more about etsy businesses, start your own etsy shop.

Get ready to become your own Etsy shop manager.

Etsy is an online marketplace where shop owners can sell products to Etsy’s 82 million buyers looking for handmade and vintage products. Etsy listings fall into eight major categories:

• Jewelry & Accessories
• Clothing & Shoes
• Home & Living
• Wedding & Party
• Toys & Entertainment
• Art & Collectibles
• Craft Supplies
• Seasonal Offerings (think Valentine’s Day, Veterans, Memorial, and Labor Days, 4th of July, Halloween, Thanksgiving, and Christmas)

Keep reading for things to sell on Etsy.

Before you sell items on Etsy, there are a few things you should do, including answering:

What to sell on Etsy?

What is the industry outlook.

• Who are the major players on Etsy?
• What will my Etsy business plan be?

If you’re wondering what sells best on Etsy, check out the Etsy best sellers list . The best-performing segments according to Etsy’s 3rd Quarter 2021 Earnings Presentation are:

1. Homewares & Home Furnishings: $4.2 billion 2. Jewelry and Personal Accessories: $2.1 billion 3. Craft Supplies: $1.4 billion 4. Apparel: $1.4 billion 5. Paper & Party Supplies: $600 million 6. Beauty & Personal Care : $300 million

Many of these are vintage items, handmade goods, or personalized items that do particularly well with Etsy shoppers. Vintage items are classified as over 20 years old, while handmade means that each is unique.

Vlad spent a lot of time talking about the decision-making process of what to sell in an Etsy shop. He explained:

Etsy is a want-based business. If you can personalize it, you can sell it.

He went on to explain:

You need a keyword to be able to sell it. If there is no keyword people are searching, you can’t sell it.

He suggests using eRank to help with your search engine optimization (SEO). eRank has various tools to help small business owners come up with product ideas, optimize their listings, and track their shop page against the best Etsy shops.

Vlad described his product development process as:

• Research what has a high search volume using eRank.
• Input the term you are targeting into the Etsy search bar.
• Look for products with at least one review per day because that means they are selling at least 5 to 10 per day.
• What is frequently favorited?
• What do the favorited items have in common?
• Design your offerings based on this search.

Vlad gave two additional pieces of advice that small business owners should follow when wondering how to start an Etsy shop:

• “You need multiple products that work well together. Carrying a single product doesn’t do as well.”
• Be aware of seasonality. For instance, items like planners, weight loss tools, and wall hangings tend to do better at the beginning of the year.

Now that you understand how to decide what to sell on Etsy, you’ll want to know the differences between Etsy and other major players in the industry. Let’s take a look.

According to eMarketer , U.S. eCommerce sales are expected to grow by 10 to 15% per year and total over $1.6 trillion by 2025. Most of the earnings will be from top players like Amazon and Walmart.

Etsy had an industry-leading 107% increase in Gross Merchandise Sales, which means if you meet the requirements to start an Etsy shop, it is the place to be.

Now that you know where the industry is going, keep reading to learn how to start an Etsy shop.

Who are the major Etsy sellers?

Etsy doesn’t share each company’s revenue, but they share the number of transactions for each Etsy shop and the number of followers. Some of the most prominent players are:

• Planner Kate : An organization shop with 1.8 million transactions and 60K followers
• Bead Boat : Craft supply shop with 1.4 million transactions and 57K followers
• ModParty : A bridal shop with over 1.22 million transactions and 113K followers
• Peggy Sue Leather : Leather supply shop with almost 790K transactions and 25K followers

Pro Tip: See more top sellers on Practical eCommerce’s blog 20 Top Selling Shops on Etsy.

Etsy offers plenty of opportunities for shop owners to make a great living. Here are a few business owners that we’ve interviewed who run businesses similar to Etsy sellers:

• Urbanity : $102K per month in revenue selling clothes
• Check out our interview with Marcus .
• Blk Sunflower : $180K per year selling homemade candles.
• TagPup : The Etsy seller we’re featuring in this article. Check out our first of two videos with him below.

Write an Etsy business plan

You don’t need a business plan for an Etsy shop, but it will be much easier to start an Etsy shop if you start by writing a business plan. A business plan is something we recommend for every new business.

Your Etsy business plan should include:

• Your business name, idea, and goals
• Market research
• Size of market
• Gaps in market
• Whether Etsy is the best place to reach your market
• Are there gaps between the money you have and the money you need? How will you solve them?
• Marketing goals and processes.
• The path to achieving your set goals

Check out our interview with Mike Andes on how to write a business plan.

We’ve gathered some templates and resources for you to make creating a business plan for an Etsy shop easier. Check them out below.

Etsy Business Plan Templates

We’ve gathered templates to help you develop your business plan. Here are some of the best:

• UpFlip business plan template
• One-page business plan
• U.S. Small Business Administration (SBA) Business Guide
• Get help writing a business plan.

EXCITING ANNOUNCEMENT: Stop wasting countless hours and dollars trying to figure out how to succeed on Etsy. Unlock the proven strategies of Vlad, who built a $3.2M Etsy business from scratch. Learn his secrets and start transforming your Etsy shop today with UpFlip Academy .

Starting an Etsy shop can be a great way to sell handmade, vintage, or unique items. Here are step-by-step instructions on how to get started:

Sign up or log in to Etsy

Open your shop, choose your shop preferences, name your shop, stock your shop, add clear photos, set your prices, choose your payment methods, establish shop policies, calculate shipping costs, promote your shop, fulfill orders promptly, provide excellent customer service, monitor your shop.

• Consider Etsy advertising

Stay compliant with Etsy policies

Reinvest in your business.

Let’s start by opening getting an Etsy account.

If you don’t already have an Etsy account, you’ll need to create one. If you do, log in.

Click on “Sell on Etsy” in the top right corner of the Etsy homepage.

To create an Etsy shop, you’ll need to go to the Etsy official site and create an account. You can use Etsy sign-in through Google or Facebook to make it easy. After you have created an Etsy account, you’ll want to go to etsy.com/sell . Review everything and click “Open your Etsy Shop.”

It will take you to a “shop preferences” page that asks for your shop language, shop country, and shop currency. You can change these with the drop-down menu.

It also asks, “Which of these best describes you?” and gives the following options:

• Selling is my full-time job.
• I sell part-time but hope to sell full-time.
• I sell part-time, and that’s how I like it.

All the answers on the shop preferences page have default answers already added. If you wish to change the answers, do so, then click “Save and Continue.”

In this step, you’ll choose a unique shop name for your new Etsy shop. The shop name needs to meet the following guidelines:

• Shop Name Length: Include a maximum of 20 characters, only Roman letters and numbers, no spaces or punctuation.
• Shop Name Availability: Push “Check availability” to verify whether the name is available.
• Descriptive: Does it describe what you sell?
• Memorable: Is it easy to remember?
• Use our business name generator to verify the name is available as a domain.
• Search “[your location] business license search” to check availability in your location.
• Use uspto.gov to check trademark availability.

Once you’ve settled on a great name, enter it then click “Save and continue” to proceed to the next page, where you will create listings.

Want to hear more about Vlad’s TagPup success? Listen to his podcast episode below.

On this page, you’ll want to add all your listings. You’ll click the blue box that says “+ Add Listing,” which will take you to the “Add a new listing” page. This page is relatively long, so we’ve broken it into sections to make it easier to follow.

• Listing Details
• Inventory and Pricing
• Personalizations

What should I include in my Etsy listing details?

You’ll want to include the following information in the listing details:

• Example from one of my hoodies: “Unisex Shaded Hands Heart Hoodie- Artwork by Daisy Gray”
• Who made it? Me, member of my shop, or another company or person
• What is it? Finished product or supplies and tools
• When was it made? Made to order (use this for print-on-demand), Recent (choose dates between 2003 and today), Vintage (Pre-2003)
• Category: Search for and select your product type
• Sizes and Colors: Select the option that describes it best, or select “multiple” to create variations.
• There are a lot of attributes, and they change based on the category. Review them and select whatever fits best as they can help with search results.
• Optional for clothing: Sleeve length, closure, and clothing style
• Renewal: Auto or manual
• Type of Product: Physical or digital
• Read Etsy’s tips on product descriptions .
• Preview the description on Google straight from the listing page.

Vlad told us:

Read your competitors’ descriptions. Use graphics as opposed to descriptions when possible. For instance, take the dog collars and a ruler to show the different sizes.

• Partner name
• Additional information
• Why you work with them, your role, and their role
• Tags: Keywords you want your product to show up for, maximum of 13 tags
• Materials: Type of raw materials. For instance, cotton and polyester.

The tags are the key to getting your shop name in front of your target audience. Don’t forget to use eRank to help with the tag selection.

We asked Vlad, “What Etsy tags should I use?”

When creating tags, think about ‘Where should I show this product?’

If you’re creating t-shirts, you don’t need the word ‘t-shirt’ in each one. Just include it in the first three, and use other tags that will put it in front of other people.

To do this section right, expect to spend an hour per product or more.

Example of tags

Given Vlad’s suggestion, you may want to use the following tags if you have a Taylor Swift shirt (which is one of the trending topics for t-shirts this year):

• Taylor Swift tour shirt
• Taylor Swift Eras shirt
• Eras tour shirt
• Taylor Swift tour
• Taylor Swift Eras
• Taylor Swift outfit
• Taylor Swift merch
• Red Taylor Swift
• Lover shirt
• 1989 Taylor Swift

How to set up an Etsy shop video

Etsy recommends creating a product video. They give you instructions on how to take listing videos in the Etsy Seller Handbook. If you add product videos, they should meet the following qualifications:

• 1080p or higher resolution
• 5-15 seconds long
• Less than 100 MB file size
• 30 frames per second
• Don’t edit the video before loading it into Etsy. (If you edit the video from standard video sizing to a 1:1 height-to-width ratio, you may have issues uploading from an iPhone.)

You can make a video with a 1:1 ratio after adding the video to Etsy by using the editing tools on their site.

Now that you know how to add a video to your Etsy listing page, let’s look at the other information covered in Etsy listing details.

High-quality images are crucial to start selling. Take well-lit, clear photos that accurately represent your items.

Etsy allows you to add up to ten photos on the website. Want some tips on how to create great product images? Check out the list below.

• Use natural light and no flash. Late afternoon is the best time to photograph.
• Include a common object for scale, or use a ruler if needed.
• Show the item being held, worn, or used.
• Shoot against a clean, simple background. Most platforms require white backgrounds for the primary photo, so it’s best to have at least one that shows the image on a pure white background because you’ll probably sell on other platforms too.
• Add photos of your variations so buyers can see all their options.
• Set the pixels per inch to 72 and 2000 x 2000 pixels.
• Verify that the combined photo image sizing is no larger than 1 MB total. Otherwise, it slows pages on mobile devices not connected to WiFi.

After you add photos, remember to edit the meta description to help with search engines by hovering over the image and clicking on the pencil. You can also crop or delete the image in the hover menu. If you click and hold onto an image, you can change its placement.

Consider the cost of materials, time, and any fees when setting your prices. Be competitive but also make sure you’ll make a profit. The pricing should be high enough to cover the following:

• The cost of the goods
• Etsy’s $.20 listing fee
• Etsy transaction fees of 5% of the product price plus shipping price
• The Etsy payment processing fee of 3% + $.25 in the U.S. (varies by country)
• Etsy’s 15% off-site marketing fee, which is charged every time Etsy randomly places your product in an off-site ad that results in a purchase
• Cost of shipping labels ($6.99 at the time of writing; learn more about shipping labels in Etsy’s Seller Handbook)
• Any other costs associated with your Etsy shop

How to start an Etsy shop with no money

You can open an Etsy shop without money, but the Etsy platform requires a $.20 per item listing fee that you’ll have to pay when the product sells. If your items are not made-to-order, Etsy shop owners can get started for free. This is especially true if you can start selling vintage goods you already own as you won’t have to buy new materials.

Now that you know how to start an Etsy shop, let’s look at Etsy payments.

Set up your preferred payment method. Etsy Payments is a commonly used option that allows buyers to pay for a physical or digital product assuming your payment account settings allow each of the options as Etsy payments :

• Credit cards
• Debit/bank cards
• Etsy Gift Cards and Etsy Credits
• Klarna Financing (U.S. only)
• Klarna installment payments (Australia, Canada, Spain, UK, U.S.)

Define your shop policies regarding shipping, returns, and exchanges. This helps set clear expectations for your customers. You’ll have to follow Etsy’s policies, but as a shop owner, you can also define your own about subjects like returns, exchanges, and cancellations. Printify goes into more detail about Etsy store policies .

Etsy offers a free shipping option, and I highly recommend using it. While Vlad didn’t specifically mention offering free shipping, he offers it on many of his products, and considering how much we love free shipping, we assume that’s part of TagPup’s success! He made some comments that suggest including the shipping in the price of the goods:

Be very clear in what they are buying to get better reviews.

Don’t trick people.

Additional shipping charges can be tricky at times, so I (the author) suggest using the free shipping feature. It is straightforward; they’ll ask you a couple of questions, including:

• Origin zip code: Where it’s mailed from • Processing time: How long it takes from when the customer orders until when it ships • Where I’ll ship: Continents or specific countries • Shipping services: Your offerings for shipping • Free shipping: Domestic or international (I would discourage offering free international shipping unless you are well-versed in shipping and pricing costs)

Then you’ll have an option to add shipping to the price of the product. Review Etsy pricing strategies to include free shipping and learn how to include the pricing in the product cost.

In addition to specifying shipping options, remember to establish and post a very clear return policy that details:

• When you accept returns (standardized product, within 90 days, not-made-to-order, manufacturer error)
• When you will not accept returns (damaged after shipping, custom made, after 90 days)
• Time frame to return the product
• Who pays for return shipping

Marketing is the trick to growing any business. You have to get your business and products in front of people to sell them. Fortunately, Etsy makes it pretty easy for a small business to sell on its marketplace.

If you don’t have much experience with marketing, it starts with market research . Mike Andes goes into great detail about market research, including identifying potential customers, target markets, and demographics. Check out our interview with him below:

Vlad had a lot of input on how to sell on Etsy. He emphasized the importance of product design:

Art ought to communicate to [potential customers]. If it doesn’t communicate, it’s not art and won’t sell.

He also told us you should “price your products based on the middle of the pack” because Etsy customers aren’t looking for items they need but that they want. They will go for the one that meets their desires the best.

He also shared this advice:

Don’t race to the bottom and satisfy the keyword.

His strategies for becoming one of the best Etsy shops for pet products are also used by retail giants, and you can leverage them, too. As you start marketing your Etsy shop:

• Vlad told us: Underbid, rank, then raise the price.
• Use Etsy promotional pricing.
• Utilize Etsy free shipping: Everyone loves something free. With the success of Amazon Prime, online shoppers expect every online marketplace to offer free shipping.
• Gather data and improve: While underbidding, he’s able to gather data.

He told us:

I’ll take a loss to gather data and improve my knowledge about whether it performs, then introduce new keywords.

Vlad also suggested:

Use the sales and coupons. I’ll set the product to the original price, then discount it heavily. I also match products together to create packages people love. Always create sales for holidays.

He also said that he throws in a small gift for repeat customers occasionally, but he doesn’t do it all the time.

For more on TagPup’s winning formula, watch our second video with Vlad here.

Helpful marketing tools

There are some useful marketing tools that small business owners use to market their companies:

• Canva: Simplify graphic design with Canva . Get access to thousands of templates for websites and social media for as low as $4.99 per month.
• SurferSEO: Write blog content faster and rank higher on search engines with SurferSEO .
• MailChimp: Email and SMS marketing automation is one of the keys to success that many small business owners mention. Get started with Mailchimp .

Ship orders as soon as possible after they’re placed. This will help you provide excellent customer service. You can use Etsy shipping labels to save up to 30% on your shipping cost. Learn more about shipping label fees on Etsy .

You can also provide tracking information by using Etsy tracking labels or providing the tracking codes to the customer by other means. You’ll need to check Etsy and your preferred shipping provider to figure out the best way to handle shipping.

Respond to customer inquiries and concerns in a timely and friendly manner. The service you provide both before and after a purchase will impact customer satisfaction, whether they return to your shop, and whether they review and suggest your shop to other people.

According to inc.com , it takes 40 positive reviews to fix the damage done by a single negative review. When someone is upset, take the time to solve their problem politely. Vlad told us:

I work with customers on returns as long as they are less than 90 days. After that, we don’t. I just try to make them happy.

The process I (the author) have found works wonders for dealing with unsatisfied customers is:

• Apologize for the inconvenience they are experiencing.
• Ask what you can do to fix it.
• Listen to their answer.
• Gather information about whether it was your error or theirs.
• Do exactly what they asked unless it is unachievable.

This can be a challenge because it may result in a single order resulting in a loss, but it’s far less costly than a bad review.

Vlad discusses his workflow at the 35-minute mark of UpFlip podcast episode 10. If you haven’t already listened to it, check it out now.

Review your store and each item for week-over-week growth. If that section of the pie doesn’t grow, stop. If the reviews for it aren’t good, consider discontinuing the product.

Consider Etsy ads

Etsy has a built-in ad feature where you can specify your daily ad spend limit, and they promote your products accordingly. The Etsy Seller Handbook answers how Etsy Ads work in more detail, but you basically create a budget of between $1 and $1,000 a day.

I typically spend between $300 and $1,000 per day on ads. Etsy really creates a level playing field, so going higher doesn’t mean it all gets spent.

He went on to tell us the best way to use ads is to utilize keyword research.

Find the most creative way to make the ad as quick as possible to make it where the ad budget goes as far as possible.

Familiarize yourself with Etsy’s policies to ensure you’re abiding by their rules and regulations.

You’ll want to reinvest in your business to help it grow and get more customers. Vlad told us:

Margins are 50-60% if you don’t reinvest in the business, but we tend to reinvest in machinery.

In addition to adding machinery, you can create new products or increase marketing to expand your business. Once you earn more income consider opening a retail location or hiring more employees to help.

Where to buy materials and equipment for an Etsy store

You can purchase materials from a variety of places. Some of the places to buy when you first start are:

• A brick-and-mortar store: JOANN Fabric and Michaels are two that offer lots of selections for craft businesses.
• Etsy Craft Supplies : Find craft supplies you know are selling well on Etsy.
• Amazon : Craft supplies and tools can come directly to your home from the number one online retailer.
• Alibaba: Get bulk orders from overseas (allow weeks to months for shipping).

If you’re looking for equipment, Amazon and Alibaba might have it, but you can also check places like:

• Global Industry
• Northern Tool

You can spend 200 bucks at JOANN and customize mugs with vinyl. The materials and equipment costs depend on what you’re making and what machines you need.

He also told us:

Inventory is such a big issue. Sometimes I spend $5,000 on shipping to get $10,000 of product. One of the ways to fix that is to pay half up front and half on delivery.

Do I need a business license to sell on Etsy?

Etsy does not require a business license to start listing physical or digital product, but the government might if you make more than $600 from your Etsy shop. In addition, a business bank account, reseller’s license, and business credit card will all require a business license.

Each city, state, and country have different licenses, permits, and tax forms required. Refer to the SBA License and Permits page to identify what your Etsy shop needs.

Vlad suggested reading the book E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It . You can get it through our Amazon shop .

• Check out Vlad’s YouTube, TalkShop .
• Save 30% on Vlad’s course .
• Etsy Success
• Nancy Badillo , a highly successful Etsy seller, has almost as many followers as Etsy’s channels combined.

We’ve explained the market outlook for eCommerce, how to start an Etsy shop, licensing requirements in case you want to make your shop a formal business, and marketing strategies to improve your business results.

If you’d like to consider other business ideas, check out our blog about the 30 best businesses to start for under $10,000.

Etsy can be an extremely satisfying way to earn a living. What kind of products are you thinking about listing on Etsy?

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Etsy Business Plan Template & Guidebook

Are you ready to start an Etsy business and don't know where to begin? The #1 Etsy Business Plan Template & Guidebook is the perfect solution for busy entrepreneurs who need a straightforward, step-by-step plan for launching their dream business. This comprehensive guide helps users identify their business goals, define their target audience, and develop a solid monetization strategy, all while saving a tremendous amount of time in the process. With this tool in hand, getting started on your Etsy store has never been easier.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Etsy Business [11 Steps]
• 10+ Best & Profitable Etsy Business Ideas [2023]

How to Write a Etsy Business Plan in 7 Steps:

1. describe the purpose of your etsy business..

The first step to writing your business plan is to describe the purpose of your etsy business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a etsy business:

Our mission at [Etsy business name] is to provide unique and meaningful products to foster joy, connection, and creativity. We strive to create a safe and open space for customers to express themselves and increase the accessibility of handmade goods. We are dedicated to seeking out the best quality, craftsmanship, and artistry in each product we offer. We are committed to connecting artisans from around the world with accessible and meaningful products that bring joy and life into our customer's homes.

2. Products & Services Offered by Your Etsy Business.

The next step is to outline your products and services for your etsy business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your etsy business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your etsy business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your etsy business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a etsy business?

To run an Etsy business, you will need a computer or laptop, internet access, an Etsy account, a method of payment (credit card or PayPal), a printer, packaging materials (bubble wrap, tape, shipping boxes), postage or shipping labels, a digital camera (for photographing products), editing software (for cropping and resizing images), and any relevant permits or licenses required depending on your location and the type of business you are running.

5. Management & Organization of Your Etsy Business.

The second part of your etsy business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your etsy business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Etsy Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a etsy business varies based on many different variables, but below are a few different types of startup costs for a etsy business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your etsy business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your etsy business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your etsy business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Etsy Business Plans:

Why do you need a business plan for a etsy business.

A business plan for an Etsy business is important because it provides a roadmap of the business and serves as a valuable tool for decision-making. It outlines goals, strategies, and tasks to accomplish them, and should include a budget, financial projections, a marketing plan, and other key information that can help ensure the success of the business. Additionally, having a business plan can help ensure that a business is run professionally and efficiently.

Who should you ask for help with your etsy business plan?

You can ask an experienced business advisor, accountant, or ecommerce consultant for help with your Etsy business plan. Additionally, it's helpful to research and read up on Etsy success stories and best practices for creating an effective business plan so that you can apply the lessons learned from the experiences of others.

Can you write a etsy business plan yourself?

Yes! Writing your own Etsy business plan is a great way to ensure that you have a clear understanding of your goals and objectives, the resources needed to achieve them, and the necessary steps for successful implementation. A thorough business plan should include an executive summary, market analysis, financial projections, and an action plan. There are also a variety of helpful resources available online to help you develop an effective Etsy business plan.

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Etsy Shop Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Internet Based Industry

Do you want to start an Etsy shop and need to write a plan? If YES, here is a sample Etsy shop business plan template & feasibility report.

If you are into handmade or vintage items and craft supplies and you are considering taking your business to customers beyond your location, then one of your options is to open a shop in an Etsy online platform. Etsy shops just like most online businesses , thrive on creativity, branding and good business skills.

Any aspiring entrepreneur can open a shop on the Etsy platform, and as long as they are creative, they can get people to promote their brand. The starting size of this type of business doesn’t really matter as long as the business is built on the right foundation and with the right product supplies.

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If you are truly serious about starting your own Esty business , then the best place to start is to draft a good business plan. A business plan is the blue print of your business; it is a business document that can aid you to successfully set up and manage the business.

It is not enough to just write a business plan for the sake of writing one, your business plan should be able to pass reality check; you must put relevant facts, figures, and statistics into consideration when writing your business plan. Below is a sample Esty shop business plan template that can help you to successfully write your own with little or no difficulty.

A Sample Etsy Shop Business Plan Template

1. industry overview.

Etsy is an American e-commerce website that is focused on handmade or vintage items and craft supplies. These items fall under a wide range of categories, including jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools.

All vintage items must be at least 20 years old. The site follows in the tradition of open craft fairs, giving sellers personal storefronts where they list their goods for a fee of US$0.20 per item. It is important to state that creating a shop on Etsy is free; however, each listing that is posted in the shop costs $0.20. Each listing will remain on the shop’s page for a maximum of 4 months, or until someone buys the product.

The prices of products are set by the shop owner, but Etsy claims 5 percent of the final sale price of each listing. Shop owners are sent a bill at the end of every month detailing the fees Etsy has charged them, and they have until the 15th of the following month to pay the fees. Sellers can choose which payment options to offer buyers, including credit cards, debit cards, and PayPal, among others.

Available statistics shows that as of December 31, 2018, Etsy had over 60 million items in its marketplace, and the online marketplace for handmade and vintage goods connected 2.1 million sellers with 39.4 million buyers. At the end of 2018, Etsy had 874 employees.

In 2018, Etsy had total sales, or Gross Merchandise Sales (GMS), of US$3.93 billion on the platform. In 2018, Etsy garnered a revenue of US$603.7 million and registered a net income of US$41.25 million.

The platform generates revenue primarily from three streams: its Marketplace revenue includes a fee of 5 percent of final sale value, which an Etsy seller pays for each completed transaction, on top of a listing fee of 20 cents per item; Seller Services, Etsy’s fastest growing revenue stream, includes fees for services such as “Promoted Listings”, payment processing, and purchases of shipping labels through the platform; while Other revenue includes fees received from third-party payment processors.

Opening a shop on Esty platform is indeed a profitable venture and they are always improvising on how to accommodate more shop owners under their platform. Which is why in November 2016, Etsy disclosed that it paid US$32.5 million to purchase Blackbird Technologies, a startup that developed AI software used for shopping context/search applications.

2. Executive Summary

Edna Elverson® Vintage Shop, Inc. is an international ecommerce company that owns a shop under Esty platform. Our corporate head office will be located in Miramar Ranch North, San Diego – California. We have been able to secure a large warehouse in a strategic part of town that will be converted to our handmade crafts production factory.

We were able to out rightly buy over the facility with the help of our bank and support from family and friends. Edna Elverson® Vintage Shop, Inc. is focused on retailing handmade or vintage items and craft supplies from our Esty shop.

These items fall under a wide range of categories, including jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools. All our vintage items are at least 20 years old. Our clients can comfortably view our products in a 3 D rotational view.

Our business goal is to become one of the leading and highest selling shop under the Esty brand in the United States and we will make sure that every product that are listed in our Esty shop can favorably compete with the best brands in the industry.

Our workers are going to be selected from a pool of talented handmade craft makers and designers in and around San Diego – California and also from any part of the world as the business grows. We will make sure that we take all our workforce through the required training that will position them to meet the expectation of the company and to compete with leading online vintage brands in the United States.

We have put plans in place to build an interactive and user – friendly website and a state-of-the-art handmade crafts factory in San Diego – California, which is why we have plans to outsource production to third parties and to use shipping or fulfillment services. Our factory will be well equipped and we will ensure that we follow the trend in the industry.

Edna Elverson® Vintage Shop, Inc. will manufacture high quality customized handmade products and crafts for both high and low-income earners; we want to become the people’s choice. Edna Elverson® Vintage Shop, Inc. is owned by Edna Elverson and her immediate family members. She is an American vintage collector and crafts enthusiast with over two decades of experience in the arts and crafts industry.

She will occupy the position of chief executive officer (CEO)/President of the organization. Edna Elverson has a Degree in Arts and Crafts and also an MBA both from the University of California.

3. Our Products and Services

Edna Elverson® Vintage Shop, Inc. is established with the aim of retailing handmade or vintage items and craft supplies. We know that quality is a key factor that will help us sell our brand which is why we have but in place a competent quality assurance team that will ensure that all our customized products meet and even surpass our customers’ expectations.

We will work hard to ensure that Edna Elverson® Vintage Shop, Inc. is not just accepted in our location but also nationally in the United States of America, and in other parts of the world. Here are our product offerings; Jewelry, Bags, Clothing, Home Décor and Furniture, Toys, Art, as well as Craft supplies and Tools.

4. Our Mission and Vision Statement

Our vision is to establish an online vintage and crafts shop brand that will be known as the go to people when it comes to shopping on Esty platform.

Our mission is to establish a strong presence on Esty platform and the ecommerce industry with a wide range of customers buying our jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools from all across the globe.

Our Business Structure

Edna Elverson® Vintage Shop, Inc. is an online vintage and craft shop brand under Esty platform that intends to start small in San Diego – California, but looks to grow big in order to compete favorably with leading online vintage and craft shops both in the United States and on a global stage.

We are aware of the importance of building a solid business structure that can support the kind of world class online vintage and craft shop business we want to own. This is why we are committed to only hiring the best hands within our area of operations.

At Edna Elverson® Vintage Shop, Inc., we will ensure that we hire people that are qualified, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company.

In view of the above, we have decided to hire qualified and competent hands to occupy the following positions; Chief Executive Officer (Owner), Human Resources and Admin Manager, Sales and Marketing Executive, Accountant, Transport and Logistics Manager, IT Specialist, Quality Control Officer, Handmade and Craft Makers and Call Center Agent.

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e., leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for managing the daily activities in the factory
• Responsible for supervising all the employees
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Ensures that the organization operates within stipulated budget.

Human Resources and Admin Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process
• Carrying out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities.

Sales and Marketing Manager

• Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Model demographic information and analyze the volumes of transactional data generated by customer purchases
• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Document all customer contact and information
• Represent the company in strategic meetings
• Help increase sales and growth for the company

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Transport and Logistic Manager

• Manages the shipping of goods from warehouse to customers
• Negotiate deals with shipping companies
• Collaborate with the Merchandize Manager in transporting goods from the manufacturer to our warehouses

Information Technologist

• Manage the organization’s online shop in Esty and our official website
• Responsible for continuous update of our online store
• Ensure that our payment platform is secured 24 / 7
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manage logistics and supply chain software, web servers, e-commerce software and POS (point of sale) systems
• Responsible for continuous upgrade and maintenance of IT systems
• Handles any other technological and IT related duties.

Quality Control Officer

• Ensures that all the handmade or vintage items and craft supplies in our production line meets the required quality before they are delivered to our clients
• Make certain that production and manufacturing lines perform efficiently, coordinate employee efforts, and facilitate communications between management and production departments.
• Devise ways of improving the manufacturing process to ensure higher-quality and durable handmade or vintage items and craft supplies
• Ensure that manufacturing production lines run smoothly and generate a consistently suitable output for their employers
• Ensures that the organization work in line with international best practices
• Handles any other responsibility as assigned by the general manager

Handmade and Craft Makers

• Responsible for producing handmade items and craft supplies
• Handles any other duty as assigned by the general manager

Call Center Agents

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
• Handles enquiries via e-mail, chat and phone calls for the organization
• Distribute mails in the organization

6. SWOT Analysis

Edna Elverson® Vintage Shop, Inc. intends to build a world class vintage and craft shop business that will make and retail jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools. We will be based in San Diego – California, but we will not restrict the sourcing of customers to the U.S market alone, we will source for customers from other parts of the world.

In other to achieve this in a highly competitive industry like the ecommerce industry, we must ensure that we critically look through our strength, our weaknesses, the opportunities available in the industry and the threats that we will are likely going to face.

Because of the nature of the business we are involved in and the brand we want to build, we were able to hire the services of an HR and Business consultant with bias in vintage products and crafts and ecommerce to help us conduct a thorough SWOT analysis and to help us create a business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Edna Elverson® Vintage Shop, Inc.;

Perhaps one of our strongest strengths could be attributed to the quality of employees and the wide range of jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools we have listed on our online shop and of course our uniquely designed interactive and user – friendly website. Our chief executive officer, Mrs. Edna Elverson will be bringing her vast wealth of experience to the table and that is indeed a huge positive for Edna Elverson® Vintage Shop, Inc.

A major weakness that may count against us is the fact that we are operating from Esty platform and there might be restriction on what we can do on the platform; we are at the beck and call of the company’s policies.

• Opportunities:

The fact that people with means are looking for ways to buy unique handmade products, crafts and vintage products make an online vintage and craft shop business to boom. Interestingly, celebrities and public figures will give anything to have products that will help them stand out from the crowd. We are well positioned to take advantage of this trend.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the presence of big players in the industry such as Amazon and eBay, and Etsy also has a number of direct competitors.

DaWanda, based in Germany, closed in August 2018, ezebee.com based in Switzerland, is a global competitor, but also caters to freelancers and professionals Bonanza (formerly Bonanzle and 1000 Markets.

7. MARKET ANALYSIS

• Market Trends

Online vintage and craft shop business is a niche in the ecommerce industry that is experiencing upper trajectory in recent time. Vintage and craft shop involves creation of handmade products and crafts et al. With online vintage and craft shop, customers get freedom to choose everything from jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools.

For example, in September 2015, Etsy made further changes to its manufacturing policy with the launch of Etsy Manufacturing, a marketplace allowing sellers to connect with outside manufacturers to fabricate their products. Manufacturers must be reviewed and approved by Etsy to ensure they adhere to certain criteria, although Etsy will not conduct visits or in-person inspections. Sellers must apply and be approved to work with any partners listed on Etsy Manufacturing and are required to disclose their use of outside manufacturers on their pages.

Lastly, in February 2020, Etsy announced a new “risk free” product advertising program, replacing an existing system allowing sellers to purchase ads on platforms such as Google Shopping from within Etsy. The company will automatically purchase advertising for products on “high-traffic” websites, with sales generated by these leads subject to a 15% cut of revenue from the total of the order.

8. Our Target Market

When it comes to selling handmade or vintage products and crafts, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who make use of the internet and are within our shipping locations.

We are in business to sell our products the following groups of people;

• Celebrities and Public Figures
• Movie Producers
• Theater Performing Organizations
• Every adult that resides in our location that have access to the internet

Our Competitive Advantage

A close study of the ecommerce industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiff competition and we are prepared to compete favorably with other online vintage and craft brands both in the United States of America and other part of the world. Another competitive advantage for Edna Elverson® Vintage Shop, Inc. is the wealth of experience of its management team. The management team comprises of professionals who have worked with some of the leading international brands in the ecommerce industry.

Our highly interactive and easy to use website, shipping network and of course our unique handmade and crafts factory also count towards our advantage especially when it comes to competing with other online vintage and craft shop brands within the same category that we operate.

Every customized crafts and handmade products that comes out of our production line must be certified ok before they are released to the market.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups online vintage and craft shop brands) in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Edna Elverson® Vintage Shop, Inc. is in business to operate an Esty shop and sell our products to customers both in the United States and other countries of the world. We are in the ecommerce industry to maximize profits and we are going to go all the way out to ensure that we achieve or business goals and objectives.

In essence, our source of income will be the retailing of a wide range of handmade or vintage products and crafts such as jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools.

10. Sales Forecast

One thing is certain, when it comes to ecommerce shops especially online vintage and craft businesses operating under Esty shop, if you intend to sell a wide range of handmade and vintage products and crafts with good shipping network, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in and around San Diego – California and the online community and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.

We have been able to examine the ecommerce industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in San Diego – California.

Below are the sales projections for Edna Elverson® Vintage Shop, Inc., it is based on the location of our business and other factors as it relates to startups operating on Esty the platform in the United States;

• First Fiscal Year (FY1): $250,000
• Second Fiscal Year (FY2): $350,000
• Third Fiscal Year (FY3): $550,000

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing to settle for an Esty platform for Edna Elverson® Vintage Shop, Inc., we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for residents of San Diego – California.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the ecommerce industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the online community.

In summary, Edna Elverson® Vintage Shop, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our online vintage and craft shop brand by sending introductory letters to sport clubs, churches, schools, corporate organizations, political parties, groups, and other establishments that wears streetwear and casual clothes.
• Attend vintage and craft expos in the U.S and in other parts of the world
• Organize our own vintage and crafts shows in order for us to display our products
• Advertise our vintage products and crafts in newspapers, TV and radio stations
• Leverage on online forums and social media platforms, such as blogs, micro blogs, podcasts, photo, Instagram, Tumblr, WordPress, Facebook, twitter, YouTube and video sharing sites to promote our online store.
• List our business on yellow pages ads / local directories
• Leverage on the internet to promote our brand
• Engage in direct marketing
• Leverage on word of mouth marketing (referrals).

11. Publicity and Advertising Strategy

Publicity and advertising as it relates to the ecommerce industry involves being in touch with the organizations target market and being very creative and proactive. Beyond every reasonable doubt the media plays a very big role when it comes to helping a vintage and craft shop gain international significance.

The social media also plays an important role in modern day publicity and advertisement; it gives an online shop the ability to reach out to a wide range of customers in a short period of time and of course at a very cheaper price when compared to other publicity and advertising platforms.

Any player in the ecommerce industry that wants to take on the market must be deliberate when it comes to building brand awareness and credibility. Here are the platforms we intend leveraging on to promote and advertise Edna Elverson® Vintage Shop, Inc.;

• Place adverts on both print (newspapers and crafts and vintage related magazines) and electronic (radio and TV) media platforms
• Sponsor relevant community programs like school arts and crafts shows et al
• Leverage on the internet and social media platforms like; Instagram, Tumblr, WordPress, Facebook, twitter, YouTube and other sharing sites to promote our brand
• Attend local and intentional fashion expos
• Organize our own arts and crafts show
• Promote our online vintage and craft shop brand on our own official websites and online fashion community
• Build relationship with celebrities especially in the entertainment industry and sports to endorse of online vintage and craft shop brand.

12. Our Pricing Strategy

Edna Elverson® Vintage Shop, Inc. will make sure that we focus on retailing handmade or vintage items and craft supplies from our Esty shop. These items fall under a wide range of categories, including jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools.

All our vintage items are at least 20 years old. We will make sure that the prices of our products are affordable and at the same time competitive with what is obtainable in the ecommerce industry.

• Payment Options

The payment policy adopted by Edna Elverson® Vintage Shop, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Edna Elverson® Vintage Shop, Inc. will make available to her clients;

• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for our products without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget for achieving our aim of establishing a standard Esty shop with a craft factory. Here are the key areas where we will spend our startup capital;

• The total fee for registering the business in the United States of America – $750 .
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, custom apparel design software and other software) – $3,300 .
• Marketing promotion expenses for the grand opening of Edna Elverson® Vintage Shop, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580 .
• The total cost for hiring business consultant – $2,500.
• The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400 .
• The cost for payment of lease for craft workshop (factory) for 24 months – $350,000
• Factory remodeling (construction of racks and shelves) – $20,000
• The amount required for the purchase of machines and handmade products making tools – $200,000
• Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) .
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $250,000
• The cost for start-up inventory (stocking with a wide range of raw materials, accessories and other related merchandize) – $100,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $5,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• Miscellaneous (payment of each listing that is posted in the shop costs $0.20.) – $5,000

We need an estimate of three hundred and fifty thousand dollars ( $350,000 ) to successfully set up our online vintage and craft shop in San Diego – California. Please note that this amount includes the salaries of all the staff for the first month of operation.

Generating Funds/Startup Capital for Edna Elverson® Vintage Shop, Inc.

Edna Elverson® Vintage Shop, Inc. is solely owned and financed by Edna Elverson and her immediate family members. They do not intend to welcome any external business partners which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $250,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of thir employees, their investment strategy and the business structure. If all these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Edna Elverson® Vintage Shop, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our vintage products, handmade products and crafts a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Edna Elverson® Vintage Shop, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Creating a Shop in Esty Platform: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the production facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Packaging Marketing/Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of industrial sewing machines and sewing equipment/tools: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Establishing business relationship with vendors – suppliers of crafts making materials, accessories and related merchandize (vintage items) and other key stake holders: In Progress

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How to Open an Etsy Shop in 8 Steps: Etsy Fees and More

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Etsy is an online marketplace for handmade goods and artwork. Opening an Etsy shop is free and relatively easy, and it can provide a home for your products — however niche — without having to build your own e-commerce website .

Here’s how to start an Etsy shop in eight steps, plus information on Etsy seller fees and tips for success on the platform.

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1. Create an Etsy account

You can set up an account with Etsy by visiting Etsy.com/Sell, then selecting “Get Started.” You can create an account with your email address or an existing Google, Facebook or Apple account.

If you’ve shopped on Etsy before and have an existing account, you can log in with your credentials and then select "Open Your Etsy Shop" to start creating your own store.

2. Set your shop preferences

Next, you’ll be prompted to share some information about your business, like how long you’ve been selling goods. You have the option to skip these questions if you’d prefer not to answer.

Then, you’ll be directed to the "shop preferences" screen where you'll designate the basic settings for your store — your default language, the country where you’re based and what currency you plan to use.

If you list products using a different currency than the one in your Etsy Payments account, you’ll have to pay a 2.5% currency conversion fee on each sale.

3. Name your Etsy shop

Here’s where you can start to get creative: coming up with your Etsy shop name. Your store name can be anything you’d like, as long as it falls within Etsy’s guidelines:

Four to 20 characters long.

No spaces or special characters.

Not a name that’s already in use by another Etsy seller.

No trademark infringements.

No profanities.

You can change your shop name up to five times. After that, you can still request a name change, but it’ll have to be reviewed and approved by Etsy Support.

If you try to enter a name that's already in use, Etsy will suggest some similar names that are available:

To get the ball rolling, consider the following name suggestions:

Try suggestive, descriptive names: You can use words or phrases that evoke the feeling of your brand or describe what you're selling. 

Try abstract names: Abstract names can set your store apart and make it easier for customers to find your store when searching online. 

Use your name: Your own name can be a quick and simple option — and allows you to easily change or adapt the products you sell. Consider adding a modifier like "Studio," "Inc," or "Workshop." 

If you think you might eventually expand your Etsy shop into a larger e-commerce business , do some additional research to ensure that you can acquire things like a business domain name or DBA (doing business as) that match your shop's name.

4. Add items to your shop

Listing physical and digital items (think printable stationery, patterns, stickers, gift tags) in your Etsy shop involves separate processes. We’ll show you the basics of how to list a tangible item; you can consult Etsy’s guide if you’re listing a digital item .

Add photos and videos

You can include up to 10 product photos per item. Etsy recommends shooting in natural light, showing items in use and including other objects to show scale.

You can also include one video lasting five to 15 seconds.

Complete your listing details

Give your item a title that describes the product in as much detail as possible, but keep in mind there’s a 140-character limit. You’ll also have the opportunity to provide an in-depth description, a bulleted overview of the product, and additional details like the product’s category and type.

As you start to fill in product details, Etsy will prompt you for additional information specific to that type of product — like whether a piece of art comes framed, whether it’s designed for a certain holiday or occasion, or whether it belongs in a particular room in the home.

Pay attention to the section called "renewal options." If you select "Automatic," your listing will automatically renew after it expires every four months. Each time the listing renews, you'll be charged a 20-cent fee.

If someone else helps you produce your goods, you may need to add information about them too. Etsy defines these “production partners” as any person who’s not part of your shop’s staff or any outside company that helps produce your goods. This might mean they have some skills or equipment you don’t have or that you’re contracting out some work in order to keep up with orders.

Finally, take advantage of all 13 tags available per item. Shoppers find your item by searching for keywords in the search bar, so work backward and think about what a customer might type into search to discover your item and use those words as your tags.

Complete your inventory and pricing

In this section, you'll enter your product’s price, sales tax (if applicable), quantity (if you have more than one in stock) and SKU number (if you have one).

You can also add variations — like sizes, materials and colors — and link photos to those variations.

Don’t short-sell yourself; price your products so that you can cover your material, labor and production costs, plus Etsy’s fees. But keep in mind that one of Etsy’s major draws is the prospect of buying unique items at prices that won’t break the bank. Try to strike a balance between the two.

Set your shipping prices

Here, you’ll include all the details needed for shipping, like the shipping services you use, costs, country of origin, processing time, and item weight and size.

You can opt for Etsy to calculate your shipping prices for you. In this case, you'll be required to fill in item weight and size when packed. Then, based on that information, you'll be able to preview the buyer’s shipping price.

If you ship to the European Union, you may need to enter a tariff number for your items. A tariff number is a code that specifies the product type.

Create your return and exchange policy

Etsy offers sellers a templated returns and exchanges policy. This policy allows buyers to return or exchange items within 30 days of receiving them, but requires buyers to cover return shipping costs. If you prefer, you can create your own custom return policy, including policies for specific items or types of items.

Publish your listing

You can preview your listing to see how it’ll look to customers before it goes live.

5. Choose your payment preferences

Once you've added an item to your store, you'll need to set up your Etsy payment preferences.

Etsy generally requires sellers to use Etsy Payments, which allows you to accept credit cards, debit cards, Apple and Google Pay, Etsy gift cards and store credit, Klarna and more.

Etsy Payments charges a payment processing fee of 3% plus 25 cents per transaction in the U.S.

6. Set up billing

You’ll need a credit or debit card on file so that Etsy can charge you for selling fees. This cannot be a non-reloadable prepaid debit card.

If you're a U.S. seller, you have the option to enroll in auto-billing, in which case Etsy will automatically charge your credit card on file for the selling fees you incur. Etsy will either charge you at the time that your last month’s statement is due or when you cross your fee threshold — either $25 in fees if you’re a new seller, or the highest of your last three monthly statements.

Even if you're starting an Etsy shop as a side hustle, strive to keep your business and personal finances separate. The easiest way to adopt this best practice is to open a business checking account dedicated to your Etsy store’s revenue and expenses.

Etsy fees for sellers

Like most e-commerce website builders , Etsy charges its merchants fees associated with listing and selling products. Although joining and starting an Etsy shop is free — unless you opt for a paid subscription plan — you'll need to pay listing and transaction fees for each item you sell.

If you're using Etsy Payments, these fees will be deducted automatically from your sales funds. If you still owe additional fees at the end of the month, Etsy will automatically charge the credit card you have on file, or you'll have to make payments yourself.

Here are the fees Etsy charges.

Etsy listing fees

Etsy charges 20 cents per listing at the time each item is listed.

You have to pay this Etsy fee for each product, regardless of whether or not the product sells. Listings expire after four months; if you want to keep them active for an additional four months, you’ll have to pay the fee again.

Etsy transaction fees

Etsy charges 6.5% of the total order amount, including shipping and gift wrapping costs.

Etsy payment processing fees

Etsy charges 3% + $0.25 per transaction in payment processing fees .

Additional Etsy seller fees

Etsy may also charge other fees, including:

Shipping label fees : If you ship with FedEx, USPS, Canada Post or several other carriers, you can buy and print your shipping labels directly through Etsy. Shipping label fees vary for each purchase.

Square fees : If you sell items from your Etsy store in person using Square POS and don’t sync them with your Etsy shop inventory, Etsy will charge a 20-cent fee. 

Etsy ads : Fees vary, but you can set your daily maximum spend.

Offsite ads : You’ll be charged 15% or 12% of any order made as a result of an offsite ad, depending on how much revenue your shop generated the previous year, up to $100.

7. Open your Etsy shop

Once you click "Open Your Shop," your store will be live. Etsy shoppers will be able to see and purchase your listings.

The URL for your shop will be in one of two formats:

https://www.etsy.com/shop/yourshopname.

https://yourshopname.etsy.com.

8. Customize your shop

Now that you've actually opened your Etsy shop, it's time to start selling online. Just like a brick-and-mortar store, your digital store should be easy to find, well curated, intuitively organized and regularly updated.

Here are a few sections you can fill out to ensure that your Etsy shop opens (and runs) successfully:

Add a personal bio and photo

Your public profile is how visitors to the site can learn more about you, both as a business owner and as a person outside of your work.

You can add four different images to customize your Etsy shop:

A shop banner, which appears at the top of your shop on desktop and mobile.

An order receipt banner, which shows up at the top of customers’ receipts.

A shop icon, which is a small image that conveys your shop’s brand.

A shop owner photo, which is a photo of you that appears in your Etsy Conversations threads.

Rearrange your items

Feel free to move your items around on the page. You can also "feature" up to four items, which will show up high on your shop’s homepage.

Add sections

Group your items into up to 20 categories so that buyers can more easily sift through your products. Sections will appear on the left side of your homepage and include the number of products within each category.

Add your shop’s "about" section

Just like your personal "about" section, your store deserves its own bio, too. You have 5,000 characters to tell customers your business’s origin story. Keep in mind that Etsy (and customers) value transparency and openness, so don’t worry too much about writing traditional marketing copy — just be genuine.

You can also provide photos or a video of your studio space or creative process and add links to your store’s social media profiles.

And you have to list anyone you employ to help you make and sell products.

Add a shop announcement

This text appears on your shop’s homepage, under your listings. It should broadly summarize what your shop is about and include any time-sensitive information, like whether you’re on leave or vacation and when you’ll return.

A version of this article initially appeared on Fundera, a subsidiary of NerdWallet.

While it's free to create your Etsy shop, Etsy charges 20 cents per listing and 6.5% per transaction for U.S. sellers. You'll also pay 3% plus 25 cents per transaction in payment processing fees.

You’ll most likely have to process your customers’ online payments through Etsy Payments. Customers can use credit or debit cards, Apple or Google Pay, Klarna, Etsy gift cards, store credit and more. Etsy Payments takes a payment processing fee of 3% plus 25 cents per transaction in addition to Etsy’s transaction fee of 6.5%.

Sellers are responsible for shipping sold items to buyers. If you're using a shipping or fulfillment service, the seller is still ultimately responsible for getting the items to the buyer. However, you can pass the cost of shipping on to your customers.

You can choose to receive deposits daily, weekly, biweekly or monthly, as long as you don’t owe more in Etsy fees than you’ve made in sales.

On a similar note...

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How to write an Etsy Business Plan

If you’re creative, have an entrepreneurial mindset, and want to sell your crafts on Etsy, writing an Etsy business plan is the first step.

Do you want to start an Etsy shop but don’t know how? You can make the process of writing an Etsy business plan fun and can do it within one hour. You want to create a strategy for selling your products to the world, so ensure that it’s an enjoyable experience. Ensure that your plan is also creative like you.

On this page:

What is an Etsy Business Plan?

What should be your business plan outline, why do you need a business plan, what should be included in your etsy business plan.

It’s a written document in which you provide an overview and the future of your business. Whether starting a physical business or an online business, there must be a business plan.

It should describe your business strategy and your targeted goals. Moreover, it would help to tell where you’re now and where you want to go. Consider the following things:

• How can you make a profit through your business and build assets?
• Where do you see your business in the next 3 to 5 years?
• How many growth chances are there in your target market?

Anyone wanted to start a new business must have a business plan. It’s a vital tool for existing and established companies if they’re going to move in a new direction.

In your business plan outline, you must be clear about what you want to achieve and how will you achieve it? Moreover, you must be clear about your marketing and operational plans.

Business Overview

It means you must have a clear business strategy and action plan. Mention the following things in your business plan outline:

• What are your goals, and what will be your action plan to achieve them?
• How will you make money and increase resources?

When you are clear about your long-term goals, you can take steps towards success and keep your business on track. Moreover, consider your competitors in your target market and determine why your business will succeed and others might fail. A competitor analysis can better indicate where you stand and which innovations can help you grow your business?

Know your business best

Your business plan will indicate that you understand your business and the target market. You must be clear about how to deal with the potential obstacles and what are your expectations in the coming years? Your business plan must be a helpful tool to:

• Focus and develop ideas
• Find your business priorities
• Explore different options to find opportunities and get the most out of them

Be clear about your Funding Requirements

You need to have a clear financial plan because all the banks want you to have a detailed business plan for loans. You can convince banks and other potential investors to fund and grow your business when you have an in-depth plan in place. So, when you’re clear about your funding requirements, you can have a clear financial plan.

Plan for Hiring employees

When you plan to start a business, you can’t do it alone. You need to hire employees to expand your resources and increase your assets. This plan can help you attract new senior management, distributors, and business partners. You must be clear about:

• Your company’s vision
• Company’s mission statement
• Why does someone need to work with you

As mentioned earlier, it’s a detailed and written document that describes your business. It should cover business objectives, sales, marketing strategies, and financial predictions. A clear business plan can help you to:

• Set business goals
• Spot potential obstacles
• Clarify your business idea
• Measure your progress

Moreover, you must have a business plan to get investors or a loan from the bank. It also helps employees, suppliers, and customers to support you.

Let’s include a brief detail of what should be included in your Etsy business plan. Ensure that it’s under 140 characters and keep the Twitter example in mind.

• Value Proposition – Think, if you have only 140 characters, then what would you tweet to describe your business? It will encourage you to share only something unique about your business.
• Market Need – If you’re unsure about the market need, you can’t market your product. You can speak with potential customers to obtain feedback and understand what they like about your product. It will give you an answer to market needs.
• Your Solution – Describe why your product is unique and when someone would ask, what do you sell? What will be your answer?
• Target Market – Be clear about your target market: whom you want to buy your product, for example, gender, age, shopping habits, and geography.
• Competition – Identify where you and your buyers will buy if your products are out of stock. Knowing your customer is essential. Knowing your competition is also crucial.
• Funding Needs – You need loans from banks to purchase material. Be sure about how to use these funds and how much time will you take to pay the debt?
• Sales Channel – Here, Etsy is your selling platform. You can sell at a local boutique, but your goal should be to have wholesale accounts. You must have multiple sales channels.
• Marketing Activities – How will you market your products? You can advertise on a design blog or use Etsy Search ads for marketing. You need to perform different activities for each market segment.
• Financial Projections – How much will it cost you to make and market your products? How many sales can you generate in a specific time? Answer to these questions can help you set financial projections.
• Milestones – What you have achieved so far and what you want to accomplish in the future. It will help you to stay on track.
• Management Team – Let your employees know why you’re the right person to lead this venture. Hire employees that you need to run your business.

The Etsy Business Plan Checklist

This Etsy business plan checklist can help you a lot:

• Business Proposition – A brief description of your business can be even one sentence.
• Market Need – Which problems will your product solve by being in the market?
• Your Solution – Description of your products, and you can also add photos.
• Competitor Analysis – Who else is selling the same products in the market? How are your products better than theirs?
• Target Market – Who will be your potential customers?
• Budgeting and Forecasting – How much is your product’s manufacturing cost, and how much are you expecting to sell this year? Moreover, what will be your profit margin?
• Marketing – Which channel will you use, and what will be your marketing strategy?
• Milestones – What are your business goals, and what do you want to achieve in the next few years?
• Management Team – Do you have the guts and expertise to lead a team?
• Funding Resources – It’s optional because you might already have enough capital and not need any sponsor or bank to grow your business.

Pia has consulted for a number of digital startups and small businesses in Asia before coming to the UK. Pia writes about a wide range of SaaS and B2B products, including trends and issues on e-commerce, accounting and customer service software. She’s also covered a wide range of topics in business, science, and technology for websites in the U.S., Australia and Singapore.

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• Retail, Consumers & E-commerce

Etsy Business Plan

Etsy is a well-known eCommerce site where you can buy anything handcrafted, including baby outfits and personalized jewelry. With over a million active sellers and over $1 billion in sales, it is a thriving online economy.

If you are creative & ambitious enough and thinking of opening an Etsy shop to earn money from your hobby, then you are at the right place. To start an Etsy shop, you will need a plan first.

Need help writing a business plan for your Etsy business? You’re at the right place. Our Etsy business plan template will help you get started.

Free Business Plan Template

Download our free Etsy business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write an Etsy Business Plan?

Writing an Etsy business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

• Introduce your business: Start your executive summary by briefly introducing your business to your readers.
• This section may include the name of your Etsy business, when it was founded, etc.
• Market opportunity: Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.
• Products: Highlight the products you offer your clients. The USPs and differentiators you offer are always a plus.
• For instance, you might make homemade jewelry, art pieces, etc.
• Marketing & sales strategies: Outline your sales and marketing strategies—what marketing platforms you use, how you plan on acquiring customers, etc.
• Financial highlights: Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.
• Call to action: Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

• Handmade goods
• Vintage items
• Digital products
• Custom products
• Home and garden, etc.
• Describe the legal structure of your Etsy business, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.
• Owners: List the names of your company’s founders or owners. Describe what shares they own and their responsibilities for efficiently managing the business.
• Mission statement: Summarize your business’ objective, core principles, and values in your mission statement. This statement needs to be memorable, clear, and brief.
• Business history: If you’re an established business, briefly describe your business history, like—when it was founded, how it evolved over time, etc.
• Additionally, If you have received any awards or recognition for excellent work, describe them.
• Future goal: It’s crucial to convey your aspirations and vision. Mention your short-term and long-term goals; they can be specific targets for revenue, market share, or expanding your services.

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

• Target market: Start this section by describing your target market. Define your ideal customer and explain what types of products they prefer. Creating a buyer persona will help you easily define your target market to your readers.
• For instance, if your Etsy business is of jewelry, then ladies’ luck is all you need.
• Market size and growth potential: Describe your market size and growth potential and whether you will target a niche or a much broader market.
• Competitive analysis: Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your products from them. Point out how you have a competitive edge in the market.
• Market trends: Analyse emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Here are a few tips for writing the market analysis section of your Etsy business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific products that will be offered to customers. To write this section should include the following:

• Handmade Jewelry
• Cute little keychains
• Customized products, etc
• Describe each service: Provide a detailed description of each product you provide, including the process involved, and the time required.
• It can contain specifics on the product categories you’ll sell, the materials you’ll utilize, the custom choices you’ll provide, and any other pertinent information.
• Quality measures: This section should explain how you maintain quality standards and consistently provide the highest quality products by using top-notch materials, or by providing excellent packaging services, etc.

In short, this section of your Etsy business plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

• Unique selling proposition (USP): Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.
• For example, using eco-friendly material that lasts longer than any other material can be the USP of your business.
• Pricing strategy: Describe your pricing strategy—how you plan to price your products and stay competitive in the local market. You can mention any discounts you plan on offering to attract new customers.
• Marketing strategies: Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, Google ads, email marketing, content marketing, etc.
• Sales strategies: Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include offering promotions & discounts, offering excellent customer service, etc.
• Customer retention: Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts on bulk purchases, personalized service, etc.

Overall, this section of your Etsy business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your Etsy business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

• Staffing & training: Mention your Etsy business’s staffing requirements, including the number of employees. Include their qualifications, the training required, and the duties they will perform.
• Operational process: Describe your production procedure and how you’ll carry out orders submitted through your Etsy shop. It should contain information about your plan for obtaining supplies, creating your goods, packaging them, and delivering them to clients.
• Equipment & machinery: Describe your plan for managing your inventory levels, including the tools or software you’ll use to keep checks on stock levels and place new orders for supplies. It should also cover your strategy for handling inventory.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your Etsy business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

• Founder/CEO: Mention the founders and CEO of your Etsy business, and describe their roles and responsibilities in successfully running the business.
• Key managers: Introduce your management and key members of your team, and explain their roles and responsibilities.
• It should include key executives including their education, professional background, and any relevant experience in the industry.
• Organizational structure: Explain the organizational structure of your management team. Include the reporting line and decision-making hierarchy.
• Compensation plan: Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.
• Advisors/consultants: Mentioning advisors or consultants in your business plans adds credibility to your business idea.
• So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.

This section should describe the key personnel for your Etsy business, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

• Profit & loss statement: Describe details such as projected revenue, operational costs, and service costs in your projected profit and loss statement. Make sure to include your business’s expected net profit or loss.
• Cash flow statement: The cash flow for the first few years of your operation should be estimated and described in this section. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.
• Balance sheet: Create a projected balance sheet documenting your Etsy business’s assets, liabilities, and equity.
• Break-even point: Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.
• This exercise will help you understand how much revenue you need to generate to sustain or be profitable.
• Financing needs: Calculate costs associated with starting an Etsy business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your Etsy business plan should only include relevant and important information supporting your plan’s main content.

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This sample Etsy business plan will provide an idea for writing a successful Etsy plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our Etsy business plan pdf .

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Frequently Asked Questions

Why do you need an etsy business plan.

A business plan is an essential tool for anyone looking to start or run a successful Etsy business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your Etsy company.

How to get funding for your Etsy business?

There are several ways to get funding for your Etsy business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your Etsy business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your Etsy business plan and outline your vision as you have in your mind.

What is the easiest way to write your Etsy business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any Etsy business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start an Etsy Shop

Steps to Starting an Etsy Shop

How big is the etsy industry, what are the key sectors of the etsy market, what external factors affect the etsy market, who are the key competitors in the etsy market, what are the key customer segments in the etsy market, what are the typical startup costs for a new etsy store.

• Is an Etsy Business Profitable?

What are the Keys to Launching a Successful Etsy Store?

How to start an etsy shop faqs, helpful videos, additional resources for etsy store owners.

• Other Helpful Business Plan Articles & Templates

Opening an Etsy shop is a great way to turn your creative passions into a profitable venture. With over 4 million sellers, Etsy provides the perfect platform to reach a worldwide audience of buyers looking for unique and handmade items. By taking advantage of Etsy’s features, you can create a cohesive online presence that showcases all your hard work and attracts new customers.

In this article, we will provide the steps to take to start your Etsy business, and some tips to help you succeed.

Importantly, a critical step in starting an etsy shop is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

1. Create an attractive shop name and branding 

The business name that you choose can have a big impact on the success of your online store. Etsy recommends that you choose a name that is short, memorable, and reflects your personality or product offerings.

In addition to a unique Etsy shop name, it’s important to think about the logo and branding of your business. You should design an identity for your business that sets it apart from other shops while still being recognizable as part of the Etsy marketplace. In order to see how well your Etsy product names fit with your overall brand, consider searching for them on Google, Flickr and Pinterest before you start an Etsy shop.

2. Choose your product category 

Before you start an Etsy shop, take some time to think about the products you want to sell. Etsy offers a wide range of categories, including clothing and accessories, home and living, art and craft supplies, and digital downloads. Choose the category that most closely aligns with your product offerings.

3. Write compelling product descriptions

In addition to quality photos, Etsy shoppers also look for well-written product descriptions. Your Etsy product descriptions should be concise and interesting, explaining the unique features of your products. Be sure to use strong keywords throughout your product descriptions in order to increase your Etsy shop’s visibility in search engine results.

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4. Create a cohesive brand 

Your Etsy shop should be consistent with your personal brand or the brands of your business partners, if applicable. Use the same colors, fonts, and branding across all of your Etsy listings to create a unified look. This will help customers recognize your shop and increase the chances that they’ll return in the future.

5. Upload quality photos of your products  

High-quality Etsy photos are the key to selling your Etsy products. Etsy recommends uploading images of items that can be zoomed and cropped, as this will increase sales for your Etsy shop.  When taking product photos, be sure to use natural light and avoid harsh shadows. If you don’t have good photography skills, consider hiring a professional photographer to take your shop photos.

6. Market your shop and products online and offline

Finally, Etsy recommends that you actively market your shop to increase its visibility. Online marketing efforts include creating a website for your business and promoting your Etsy products on social media sites like Facebook, Pinterest, and Instagram. Offline marketing refers to networking in person at craft shows, flea markets, or other events.

7. Optimize your shop for search engines

Like any other business, it’s important to take steps to optimize your Etsy shop for search engines. This will help you increase the visibility of your shop in online search results. Etsy provides a number of tips for optimizing your shop, including using keywords throughout your shop name, title, and description.

Finish Your Business Plan Today!

Etsy is the largest creative marketplace in the world. Etsy has seen a significant increase in revenue and usage since it went public in 2010. However, this business growth was accelerated significantly in recent years. As a result, Etsy doubled its revenue to 1.72 billion in the last year.

Etsy is a very unique and diverse site, with users selling an extremely wide range of products.

However, Etsy reports that the top five most popular categories for Etsy sellers are:

• Craft supplies and tools
• Home and living
• Personalized items
• Clothing and textiles

Etsy is very dependent on the global market, as it is a worldwide site. Etsy has seen significant growth globally since its inception in 2005. The coronavirus pandemic had a particularly large effect on the industry and drove many users towards online shopping sites like Etsy.

There are a number of external changes that could affect Etsy’s market share. The growing strength of Amazon, for example, could drive buyers to Amazon rather than Etsy. Another major shift would be if Facebook continues to grow its online shopping presence – this could make it more appealing to buy established brands on Facebook rather than the Etsy platform.

The Etsy market is composed of a variety of competitors. This can range from small businesses to large businesses. The key competitors in the Etsy market can be identified by their size, the products that they offer, and the services that they provide. Some of the key competitors in the Etsy market include:

Etsy’s biggest competitor is Amazon. Amazon is a behemoth of a company and offers a variety of services and products. Etsy is more focused on handmade products, while Amazon has many different types of goods for sale. Etsy cannot compete with the size and scale that Amazon offers. However, Etsy does offer unique products that Amazon does not have.

eBay and Etsy are both similar in that they both allow users to sell products and goods. However, it is important to note that while Etsy does focus on handmade items, eBay has a much wider scope of products available. The sheer number of different types of products sold on eBay is too great for Etsy to compete with.

Etsy is an eCommerce platform that allows entrepreneurs and other small businesses to sell their handmade and vintage goods. The most common customer segments shopping on the Etsy platform include:

Craft Enthusiasts

These Etsy buyers are looking for unique or handmade items that they cannot find in traditional retail. Etsy is a more niche market, and the majority of Etsy product sales come from their core group of craft enthusiasts. This customer segment is loyal to Etsy and continues to shop on the platform because it provides them with a variety of unique items.

Culture Enthusiasts

These Etsy customers are interested in learning about and experiencing new cultures. As a result, they seek out products on Etsy that allow them to do this. They will largely frequent the site as there is such a wide variety of regions represented with different types of jewelry, clothing, or other goods for sale.

Other Consumers

While there are other customer segments shopping for specific items to purchase, consumers are typically window shopping on Etsy. Consumers may use Etsy as a resource to find inspiration about craftsmanship, trends, and other information. While these users may not be fully committed to purchasing something immediately, Etsy is a good platform for them to come across new ideas in the future.

When you start an Etsy shop, there are a few initial costs that you should keep in mind.

Purchasing Inventory

The first cost that you will have to cover is purchasing inventory for your Etsy store. If you are selling items that you already own, this step may not apply to you. However, if you are looking to purchase new supplies or materials to start producing more goods, these costs can be very high. It is important to remember that you should not invest more money into your Etsy store than you can afford to lose.

Offering Shipping Worldwide

Another cost that will be part of your startup is the cost of shipping items around the world. This step is extremely important when it comes to international sales, which has become significantly more popular in recent years. However, offering international shipping can also increase the costs of your products.

Creating Your Shop Logo and Brand Identity

The final cost that you will likely deal with when starting an Etsy shop is the creation of a logo and brand identity for your business. This step may not be necessary if you are selling new or unique items that already have an established brand image. However, if you are selling a new type of product or a product that does not have a well-known brand identity, it is likely that your business will need to invest in creating your own brand image.

Packing and Supplies

Another cost to consider before you open your Etsy store is packing and supplies. Depending on the type of product that you are selling, you may need specific supplies or boxes for shipping. If your products are fragile or breakable, then you will also have to factor in tape and other materials that can help protect your items as they travel.

Paid advertising is another key cost when you are starting an Etsy. This includes spending money on things like Google AdWords campaigns, Facebook ads, and other paid forms of promotion that will help drive traffic to your Etsy store.

Etsy charges a listing fee and a commission on each sale. The commission varies depending on the type of product sold, so be sure to check the Etsy Fee Schedule before listing your items.

Other Operating Costs

Other costs that you will have to consider when starting your Etsy store are things like utilities, business taxes, and even insurance. While these costs may be minimal, they are still an additional cost associated with startup.

Overall, the average startup costs for a new business range from $5,000 to $10,000. However, depending on your specific business needs, your costs may be higher or lower. For example, if you need to hire a designer to create a custom website, your marketing expenses will be higher than someone who is able to create their own site.

Keep in mind that these are just estimates; your actual costs may vary depending on the products you choose to sell and the marketing strategies you employ, but this gives you a general idea of what to expect.

Is an Etsy business profitable?

Etsy shop owners can make a lot of money if their business is successful. However, there are many costs that come with opening an Etsy shop, so it’s important to do your research before you launch.

In general, most Etsy shop owners make a couple of thousand dollars per year. However, this number varies significantly depending on the type of products you sell, the time you are committed to marketing and growing your business, and how successful your shop is.

Hands-on Approach

In addition to selling your products on Etsy, it’s a good idea to be proactive about growing your business. That means you should engage with other Etsy sellers and join relevant Facebook groups. You can also purchase advertisements through Etsy – though this is not advisable until you have built up a following and have some sales under your belt.

Marketing Plan

As mentioned earlier, having an effective marketing plan is key to getting customers as soon as you launch your shop. This includes developing a strategic social media presence – which could include paid ads on Instagram or Twitter – as well as partnering with local or national brands that would be interested in buying from small businesses like yours.

Branding & Logos

Oftentimes, the foundation of a good marketing plan is good branding. You can establish an effective brand presence by picking a memorable store name, creating a logo that’s versatile and relatable to your customer base, and developing clear messaging about your story, products, and services.

Hire a Professional Photographer

Photography is an important aspect of your new Etsy shop – customers can’t buy what they can’t see. It’s critical that you have high-quality pictures of the items in your shop, and this isn’t something you should try to DIY. You should hire a professional photographer or use a photo studio for all product photos.

Creating a Plan & Budget Ahead of Time

Before launching an Etsy shop, it’s crucial to create a solid Etsy business plan and budget. This means coming up with financial goals, as well as crafting a marketing strategy, designing your brand identity, and developing strong relationships with suppliers or manufacturers if appropriate. Before opening an Etsy shop, take some time to consider these questions: “What do I want for my hobby or side business?

If you want to open a side business on Etsy, it’s a good idea to use an alias so that your main job isn’t jeopardized. You should also develop a separate brand identity for your side business.

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What is the best Etsy business to start?

The best Etsy business to start is a business that is based on your skills and interests. For example, if you're good at making crafts, then you may want to start an Etsy shop that sells handmade goods.

You'll need to create a business plan and do some research to see what kind of products are in demand on Etsy. You'll also need to invest some time and money into setting up your shop and promoting your products. If Etsy is successful, then your business could be as well.

You can set up an Etsy shop even if you don't have any products made yet. Etsy has a section where you can sell digital downloads. For example, if you're good at making patterns for cross-stitch or knitting, then you may want to upload the designs that you've created and sell them on Etsy. Making digital items is quick and easy and it won't cost much to get started selling on Etsy.

How can I promote my Etsy business?

There are many ways to promote your business. Etsy offers some free marketing. Etsy has a blog with free marketing advice for new Etsy sellers, including Etsy 101 articles. Etsy also offers live help during the normal workweek.

You can also purchase Etsy's Marketing Package to promote your Etsy shop. The Marketing Package includes email marketing, advertising, and special discounts for Etsy purchases.  Etsy also offers Promoted Listings for Etsy sellers who want to promote their products on the platform.

To determine the best marketing campaigns for your business, it's important that you know your target audience. You can use Etsy Analytics to learn more about what your Etsy customers are interested in and how they behave on Etsy.

You can also make use of the free Etsy posts on tips and tutorials on their blog on topics like branding your Etsy shop, running successful promotions, increasing sales with SEO, promoting with social media channels like Facebook and Instagram.

What licenses should I get for my Etsy shop?

Etsy's seller policies do not require you to have a business license to sell on their platform. However, a seller of goods on Etsy may need a license or permit from municipal, county, state, or federal agencies regulating businesses.

You can check with your local business licensing office to see what licenses or permits you need to legally operate your Etsy shop.

How do I set up my Etsy shop?

Setting up your Etsy shop is a simple process that only takes a few minutes.

First, you'll need to create an Etsy account. Then, you'll need to provide some information about your shop, including its name, type of products sold, and location. You'll also need to choose a payment method and shipping carrier.

Once you've created your shop, you can start adding products and customizing your shop's appearance. You'll also need to create listings for your products and write descriptions of them.

What are the different Etsy fees?

Etsy sellers are charged a variety of fees, depending on the type of Etsy shop they have and the services they use. The main Etsy fees are:

Listing Fees: Etsy charges a listing fee for each item listed in an Etsy shop. The initial charge is $0.20 and Etsy does not charge a percentage of the final sale price. Etsy also charges sellers to renew items that have been sold or expired, this too is a flat rate fee depending on the type of listing.

Transaction Fees: Etsy takes 5% from every transaction as a transaction fee, plus another 3-5 cents if you use Direct Checkout through Etsy. Direct Checkout allows buyers to pay with credit cards without leaving the Etsy website. If you accept credit cards directly on your own site (not via Etsy), then there are no additional fees deducted from any part of your sale.

Payment Processing Fees: Etsy charges sellers 2.5% of the total order value plus 25 cents whenever a buyer uses Etsy's Direct Checkout to pay for an item. If you use a different payment processing system, such as PayPal or Google Wallet, then you are responsible for all fees associated with those services.

Shipping Fees: Etsy's shipping fees depend on the shipping carrier, and the origin, destination, weight, and dimensions of the package.

Etsy Business Resources

Etsy – How to Open an Etsy Shop  

Other Helpful Business Plan Articles & Templates

How to Start an Etsy Shop

Angelique O'Rourke

8 min. read

Updated May 10, 2024

Free Download:  Sample Etsy Business Plan Template

Have you ever wondered how to start an Etsy shop? If you’re someone who is both creative and entrepreneurial, you might be considering starting an Etsy shop as a way to monetize a craft that you truly love doing. If so, you’ve come to the right place.

Etsy is a popular eCommerce platform for everything handmade, from custom jewelry to baby clothes. It’s a robust online marketplace, with more than a million active sellers and over a billion dollars in sales in 2014. If you’d like a slice of the pie, it’s wise to do a bit of homework to figure out how to stand out from the crowd.

To help get you started, I spoke to Etsy sellers from around the globe, to get their advice on how to start an Etsy shop. Each of them shared their experiences and their thoughts on what makes an Etsy shop great. From these answers and from a few other resources, I’ve compiled a list that will help you put your best foot forward.

• 7 steps to starting an Etsy shop

1. Make sure Etsy is the best platform for you

As with any business, whether you’re  starting a franchise  or opening a cat cafe,  doing your research is an essential first step you should never skip.

And one of these first considerations should be: Is starting an Etsy shop right for me? Where am I most likely to meet my customers?

You can read more about Etsy products and policies on their very informative blog. One big factor to consider is that a successful Etsy store takes time to maintain, so be sure that you can commit to regularly spending time on this venture.

This is an eCommerce business; it won’t make you money if it’s sloppily created or neglected after launch.

2. Research your product

In addition to researching the Etsy platform, before you dive into starting an Etsy shop, make sure to  research your product.

Ask vital questions such as “Who are my competitors? Who is my target market?”  You don’t want to launch with the wrong idea only to realize you need to go in a different direction and have to re-do a bunch of the work. Save yourself the energy by developing a strategy right out of the gate, including a plan B or a couple of backup products if things aren’t going as well as expected.

This is actually a good time to consider creating a lean business plan so that you have the flexibility to change as you go.

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3. Think SEO and social media strategy

It isn’t just about creating the shop—part of maintaining it successfully has to be focused on actually getting pageviews, and being discoverable through search.

Google Keyword Planner is always a good place to start, you can use it to see what search term people are using to find a site like yours. Another huge aspect of being discoverable online is choosing the optimal name for your business. 

Once you’ve done that, sign up for all of the pertinent social media platforms that you can regularly use and update. The ones that have a visual emphasis are always a good idea for Etsy sellers: Instagram, Pinterest, and Vine are very popular. But don’t forget the great reach that sites like Facebook have!

4. Have high-quality professional photos to post

The Etsy sellers that talked to me couldn’t stress this enough, I lost count of how many people mentioned the importance of excellent photography in making sales on Etsy.

Your photos are your products here in a sense because this is the primary avenue that customers will use to decide if they’d like to buy. They can’t hold or see first hand how great your product is, so the photos will have to do the convincing. Don’t forget to use a compelling photograph for your avatar as well!

5. Create a solid, scalable shipping and returns policy

Your store must be customer friendly and consistent to be successful. Make sure your policy is clear, timely, and that you stick to it every time. You want to achieve a high rating, and providing excellent and expedient customer service is a great way to get there.

6. Have a trusted advisor or friend review the shop

Don’t bring in someone who won’t tell it like it is; you want to receive honest and constructive feedback. Make sure that they find your shipping policy, return policy, product descriptions, images, and about page up to snuff.

7. Maintain the integrity of a successful launch

Once you’ve got your Etsy shop up and running, there are ongoing aspects of operating your business. Stay on top of things like refunds, returns, SEO strategy, social media presence, and responding to reviews.

What some people forget about starting an Etsy shop is that being an Etsy seller is being a business owner. So, staying active and involved in your business is key to success.

• Tips on starting an Etsy shop from Etsy sellers

Get to know the community:

Many people communicated to me that Etsy is really a world of its own; sellers and customers bond, write reviews, help each other out in forums, and generally have a strong and close-knit online community.

This can be a great advantage, but it will serve you well to learn the rules of the road. Derek Coleman, who runs the Etsy shop Lonehood , said: “Etsy is all about the community and the community influences others. Simply put: if a customer has a bad experience the word will start to spread and your ratings will show this. Ratings are very important. If you have excellent customer service, the community will also know of this and it will be reflected in your reviews.”

Understand the platform:

Michelle Gannon of The Language Playground shared an early mishap she had on Etsy: “Once one copy of my digital product was sold, it was gone from the shop and no one else could buy it. I had no idea until a few days later when I checked into my store to see how things were going and realized that my shop had no products in it. Luckily, it does not cost much for shop owners to post products again so the mistake was not huge.”

For a rundown on fees and listing products, look here.

Listen to customer feedback:

Stephanie Maslow of Metalicious gave us this tip. “Some of my best sellers have been from collaborations with my customers.” And, among her tips? The all-important role of good photography in an Etsy business. Surprise, surprise.

Reward loyal customers:

These are the people who are keeping you successful and spending their hard-earned money on your work.

“Offer your clients discounts on all future purchases to encourage repeat shopping. Make sure your buyers know how much you love them, by telling them so with discounts. Repeat shoppers are the best. I have a few clients who come back every year to do their holiday shopping. That’s the best compliment,” says Brooke Malloy of Etsy shop SageLike.

Project a strong brand:

“Make sure your brand is always represented properly. Customers on Etsy provide excellent feedback and can help new businesses hone their customer service experience which makes Etsy great for market testing and startup scalability.Your product may not be the right item for Etsy, but it doesn’t hurt to get it on there to find out, but still take it seriously. Remember that even if potential customers aren’t clicking ‘add to cart’ on your item on Etsy, if handled professionally, you may have made an impression, be certain it’s a lasting one,” says Jed Darland, founder of Plant Picket.

Have measurable goals, and track them:

Dana Reich of SweetDees Closet told me that a good goal to start with is “about $10 worth of sales for every 100 views your shops and listings get. “  From there, you can track your progress and make changes as needed, whether it’s adjusting the goal to reflect your variations in pricing, or boosting your SEO strategy to get more eyes on your shop.

“Make sure your Etsy tags and keywords are those which people can easily find you, both on Etsy and when searching for a particular item on Google. The more items you have in your store with great SEO, the more people will be able to find you and the more sales you’ll generate,” she says.

• Etsy-related resources

If you’re looking for even more info on how to start an Etsy shop, or you’re still not sure if starting an Etsy shop is right for you, check out these resources.

Reading material:

Etsy offers a detailed archive, The Seller’s Handbook, available for perusal with information right from the horse’s mouth.

Moz, a software company, has a great introductory SEO guide.  I’ve used this for reference myself in the past. If you know nothing about the subject, start here.

Sample plans:

Our own library of sample business plans is always a good resource as well, regardless of whether or not you’re starting an online shop. We have over 550 different sample business plans represented. Here are several eCommerce specific options:

• Junior’s Clothing Business Plan 
• Outdoor Clothing Business Plan
• Nutritional Supplements Business Plan 

The independent seller:

Etsy hired a third party research firm to gather data on the type of people who sell on their site. You can check out the report here.

It’s a fascinating look into a group of people, over two-thirds of whom are women, who sell their goods primarily from home and aren’t necessarily looking to be acquired by a larger company or hugely expand their operations, but who value their self-contained businesses.

If that sounds like a group you’d like to join, starting an Etsy shop could be for you.

Angelique is a skilled writer, editor, and social media specialist, as well as an actor and model with a demonstrated history of theater, film, commercial and print work.

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Etsy Business Model

The Etsy business model is a multisided platform focused on handcrafted goods. With 15 years of activity and around 2 million active sellers worldwide (although two-thirds of them are in the United States), Etsy has become a giant e-commerce marketplace. The interesting thing about Etsy is that it is a niche marketplace — and a very specific niche.

As About Us on its website says, “Etsy is the global marketplace for unique and creative goods. It’s home to a universe of special, extraordinary items, from unique handcrafted pieces to vintage treasures”. Etsy connects artists who make handmade unique products to buyers all over the world.

On Etsy, people can sell and buy handmade custom items — such as accessories, clothes, shoes, toys, and decorations —, vintage items, and crafting supplies. Launched in April 2005, the company had a successful trajectory leading to its IPO in 2015.

According to Etsy itself, the goal is to allow its community of artists to develop successful businesses, selling their unique and creative products, “something special with a human touch”. It’s like an Amazon or an eBay, which connects, on the one hand, artists who want to make a living — or at least an extra money — with buyers who are looking for a “one of a kind” product. Follow this article to understand how Etsy’s business model works, which started with a small website aimed at artisans and became a public corporation of more than 360 million dollars.

A brief history of Etsy

The history of Etsy begins in 2005 when Rob Kalin, a bookseller and construction worker, and two other friends — Chris Maguire and Haim Schoppik — were trying to figure out how to sell their handcrafted goods online. Then, Kalin thought of creating an online marketplace for handmade products, and, in a Brooklyn apartment, the three of them created Etsy. Throughout the first year, the site boosted traffic by adding new tools to help sellers gain exposure.

So, two years later, Etsy has nearly 450,000 registered sellers, who generated $26 million in annual sales. Also, in 2007, the company raised over $3 million in venture funding. The following year, Chris Maguire and Haim Schoppik left the company, Maria Thomas was hired as the first non-founder CEO, and Chad Dickerson, the Senior Director of Product at Yahoo, was hired as Etsy’s new Chief Technology Officer and began building an engineering team. In 2011, Dickerson would replace Thomas as CEO of the company.

The next year, Etsy raised $40 million in funding and used it to expand to international markets. And the turning point came in 2013 when Etsy would allow sellers to sell manufactured goods as well as handmade items. There was a certain resistance from the community but, as they knew they would not sell as much out of Etsy, most of them remained. Dickerson made other strategic moves, and one of them was hiring Mike Grishaver (from music streaming service Pandora) because he had experience in developing mobile use and Etsy would have to make that shift.

Over the years, Etsy also invested in some acquisitions. And, in 2015, Etsy went public and raised $237M in IPO proceeds. Nowadays, Etsy has over 80 million active buyers and more than four million registered sellers.

Who Owns Etsy

Etsy is owned by Etsy Inc., which is nowadays run by John Silverman as the CEO. In May 2017, Etsy went through a lot of pressure from shareholders due to poor profits and a first-quarter loss. As a result, Silverman was appointed by the board to replace Chad Dickerson as the company’s CEO.

Etsy’s Mission Statement

To keep commerce human.

How Etsy makes money

The major revenue streams of Etsy comprise the following:

• Listing fees : Etsy charges sellers at least $0.20 for each product they list on the platform. And the listing is valid for four months. If there are multiple quantities of the same item, the listing fee will be automatically renewed after each of the items sells. That’s a profitable stream, considering that thousands of products are listed regularly on Etsy;
• Commissions : Etsy also charges sellers transaction fees, which are commissions of 3.5% of the total amount for every sale made on the platform. As the payment is processed by Etsy, the company gets its percentage and sends the seller the rest of the money;
• Advertisements : Sellers can advertise their items or shops on the platform. The ads are charged on a cost-per-click (CPC) basis;
• Subscriptions : All Etsy’s users have the Etsy Standard suite of tools to help them manage their shops and products. But the company offers a premium option, Etsy Plus, with some extra tools. The subscription fee is $10 per month;
• Pattern : Sellers can build a personalized website to sell their products inside and beyond the platform. But the Pattern shop is free only for the first 30 days. After this period, Etsy charges $15 per month;
• Payment processing : Some sellers are eligible to use Etsy Payments, which provides different methods to facilitate the purchase, such as credit/debit cards, gift cards, online wallets, and coupons. Etsy charges a fee for each kind of transaction, which varies according to the total amount of the sale and the country it takes place;
• Currency conversion : When converting the sale to the seller’s chosen currency, Etsy charges a percentage of 2.5% of the entire product amount.

How Etsy Works

• Sellers sign up on the marketplace and list their products for sale. They will have to pay a fee for getting their items listed, which is valid for 4 months;
• Buyers search for items on the platform, having the option to apply advanced filters that help make the search easier. Buyers can ask the sellers questions before the purchase, or just add the products to the chart;
• The buy-and-sell transaction is done through Etsy, which transfers the payment to the seller’s bank account. The marketplace charges a commission on every sale;
• After receiving their goods, buyers can rate the sellers, and write a review about the product. This enhances the experience for the next buyers.

Etsy’s Differentials

At first sight, Etsy is a regular e-commerce marketplace, which sells goods and earns revenue from commissions — like a lot of others. In spite of that, this simple business model has some special features, that make it exclusive:

• Products listed as art & craft are always unique;
• Products listed as vintage must be 20 years of age or older;
• Products can be shipped globally;
• Sellers can create their own shops inside the platform;
• Sellers can choose more than one option for payment;
• Buyers can rate the sellers, thus helping the next buyers;
• Etsy’s major growth came from word of mouth in women’s circles (67% of its users are female);
• Etsy has its own API, so developers can build their own applications for the web and devices;
• Etsy has given support to artists, by running supporting workshops and services as a business advisor, and even small loans.

Etsy’s Business Model Canvas

Let’s take a look at the Etsy Business Model Canvas below:

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Etsy’s Customer Segments

Etsy’s business model can be identified as a two-sided marketplace , that is, its customer segments involve both buyers and sellers. Buyers are the people who purchase unique products, whether craft or vintage items, on the platform. Sellers are the people or small manufacturers that produce handmade items. Either they want a shop online or just to earn some money by selling their products.

Etsy’s Value Propositions

Etsy provides value both to its customer segments: buyers and sellers:

• For buyers , the main value proposition is the fact that they can browse unique products, from artists across the globe, or singular vintage items, and have their goods delivered to their home, wherever they live, because Etsy provides international shipping;
• For sellers , Etsy allows them to show the world their pieces of work, choosing the selling price they find fair. Also, sellers can create shops with as many items as they want to offer, and they can even add tags to the products, so the items may be searched more easily.

Etsy’s Channels

The distribution channels of Etsy are mainly:

• Etsy platform itself
• Social media
• Etsy’s workshops and events
• Partner programs
• Online and offline advertising
• Word of mouth

Etsy’s Customer Relationships

The customer relationship of Etsy is based on building an online community, that supports the two-sided marketplace. Besides that, the company works on seller education and support, both by customer support and by hosting events where knowledge is shared, and the local commerce is increased.

Etsy’s Revenue Streams

• Advertisement
• Sales commission
• Listing fees

Etsy’s Key Resources

The key resources of Etsy are the ones that allow the company to provide its key activities in order to deliver its value proposition. So, they are the e-commerce platform, where all the transactions take place, all the structure behind it, with payment and shipping systems and processes, and the buyers-and-sellers community, that promotes the experience in the marketplace.

Etsy’s Key Activities

The key activities that enable Etsy to run its business successfully are, first, the development and maintenance of the platform itself, with all of its tools, processes, and features, including payment and shipping. Besides that, another important activity is to build a community of buyers and sellers to make the marketplace work properly. As mentioned above, there is no point in a two-sided platform if there is no interest from one or two sides of it.

Etsy’s Key Partners

The key partners of Etsy are the same as its customers: buyers and sellers. Because a marketplace only makes sense if there are people who trust its structure to sell their goods through the platform. But, at the same time, if there aren’t people interested in the products and who rely on the website to purchase, then the sellers wouldn’t be attracted by the marketplace. When there is a two-sided platform, the two sides are, indeed, the key partners of the business.

Etsy’s Cost Structure

The cost structure of Etsy is composed of:

• Platform development and maintenance
• Customer support
• Marketing and advertising
• Staff salaries
• Seller education initiatives

Etsy’s Competitors

• ArtFire : It is a platform for crafters to buy, sell and interact. It has the option for buyers to post a “wanted” ad for something specific to be made;
• Amazon Handmade : Amazon’s platform for crafters to sell their work, but all the products have to be handmade, hand-altered, or hand-assembled;
• Big Cartel : Made for makers, to help them succeed in a mass-produced-good world. You can customize the themes to personalize your store;
• eCRATER : A marketplace for sellers and buyers, with access to a forum where users can talk and share experiences. It also has customizable online shops;
• iCraftGifts : The Canadian marketplace only allows handmade art, craft, and fashion items. The stores can access marketing services, community blogs, message boards, and arts and crafts events;
• IndieMade : This website offers photo galleries, web hosting, marketing tools, and support to help artists manage their stores;
• Misi : UK marketplace for handmade and personalized goods, for designers to create, build and expand their businesses and boost their sales;
• Shopify : It enables the seller to create an online store (optimized for mobile also), with a custom domain and layout, without any previous knowledge;
• Society6 : The sellers must be verified artists of Society, and they have total control of the rights of their artwork;
• Volusion : Similar to Shopify since the seller can build its own responsive website, with a custom domain, and many resources such as order, payment, and shipping processing;
• Zibbet : It is the space for over 55,000 independent individual handmade sellers, who manage their work from creation to shipping. It offers numerous tools and supports opportunities.

Etsy’s SWOT Analysis

Below, there is a detailed  swot analysis  of Etsy:

Etsy’s Strengths

• Customer satisfaction : The company has a reputation for delivering unique products, thus offering a nice experience for both buyers and sellers. Besides, the customer can post reviews on the platform, giving them a sense of importance;
• Credibility : Everything that is sold on the platform has to be previously approved by Etsy, which makes the company more credible. The online payment method is also reliable and flexible, enabling the audience to trust the website;
• Cash flow : Etsy has several regular consumers who assure it a steady cash flow, able to maintain the company profitably;
• Distribution : Each state of the U.S. has an outlet for Etsy. Besides, there are outlets in many other countries. All of them are supported by a reliable supply distribution network, that ensures delivering the products on time;
• Relationship with dealers : The relationship between Etsy and the sellers who promote their products on the platform is based on loyalty and great services, keeping a strong dealer base;
• Reputation and brand : Etsy has been gaining market share slowly, but steadily, which has increased its market value and brand name;
• Workforce : Etsy can offer a safe and nice experience for its customers because it counts on qualified and well-trained professionals working from the inside;
• Website : It is very user-friendly, enabling a pleasant experience for both buyers and sellers, and the mobile app has made it even easier and more convenient;
• Reach : The website is global — anyone, from any part of the planet, can buy or sell their products on Etsy.

Etsy’s Weaknesses

• Technology : Although Etsy is the leader in its segment, it is behind some competitors when it comes to technology. And it spends less than many other players on research and development;
• Shipping : As the website operates all over the world, sometimes there are huge shipping and handling costs of purchase. Moreover, sometimes it takes more than a week just to process the order;
• Guarantee : The concept of Etsy includes arts and crafts, and handmade or vintage products, but the customers frequently do not know if these items are authentic or not.

Etsy’s Opportunities

• New markets: There are still plenty of markets for Etsy to explore and expand to;
• Globalization: Any person, anywhere, is able to get to know Etsy, buy and sell over the platform. That can result in more customers and dealers;
• CSR activities : These can empower local artists and, thus, encourage them to use Etsy to sell their products;
• R&D : Etsy can invest more in developing the website and app, so they would enable a better and more appealing experience for customers, who would get more engaged with the brand.

Etsy’s Threats

• Unique products: Although that guarantees Etsy’s reputation, sometimes rare items have strong public demands that cannot be met due to a shortage of copies;
• Exchange rate: As Etsy sells internationally, it has to deal with fluctuating exchange rates that can be responsible for great profits but heavy losses as well;
• Competition: Many new entrants are getting into Etsy’s market, which can represent less revenue and profit for the company;
• Online threats : The whole business is set up online, and no website is completely invulnerable to hackers or viruses, and that can put the business at risk.

The conclusion reached, after having analyzed the Etsy business model, is that the company built its name on the trust of its customers — who are at the same time its main partners. It is an entrepreneurial ecosystem that created a virtuous cycle that keeps getting strong over time. It’s a flywheel that generates network effects that keep adding value to buyers and sellers, as shown in the graphic below.

As Etsy itself highlights on its website , with low fees, powerful tools, and support and education, it helps creative entrepreneurs start, manage, and scale their businesses. “All it takes is 20 cents to get started”.

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

More About Me

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