Etsy 101 - What Is Etsy & How Does It Work + Beginner Marketing Tips

What is Etsy?

Etsy is an online marketplace where individual sellers can open their shops and list their items. Founded in 2005, Etsy has grown into a global platform where they have generated billions of revenue ($2.73 billions in 2023).

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Etsy attracts customers who are specifically looking for unique, especially handmade products that they can't find in large retail stores. Popular categories on Etsy include handmade jewelry, clothing and accessories, home decor, digital products (such as printables and digital art), craft supplies, and vintage items that are at least 20 years old.

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How Does Etsy Work?

Etsy functions as a two-sided marketplace, bringing together sellers and buyers in a user-friendly environment. It provides a space for craft makers and artisans to showcase their creations to potential customers from all over the world.

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Setting Up Etsy Shop

The process begins with creating an Etsy account. Once registered, sellers can set up their new Etsy shop by customising the shop name, logo, shop banner, etc. The look and feel of the shop should reflect the brand and the products offered.

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Listing Products In Etsy Shop

Once the shop is set up, sellers can start listing your products. Creating a product listing involves providing detailed information about each item, including a title, product description, pricing, and product photos.

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Because one of the main ways shoppers find products on Etsy is through keywords, it’s important to use relevant keywords in your titles, tags, descriptions, and categories. This process is also known as search engine optimisation (SEO).

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‍High-quality photos are another important aspect as they can significantly increase the chance of making a sale.

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The Buying Process

Shoppers can explore products on Etsy by browsing categories or using the search function to find specific items. When a customer decides to buy something, Etsy handles the transaction by collecting payment from the buyer. The seller is then notified of the sale and is responsible for fulfilling the order.

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Order Fulfilment & Shipping

Once an order is placed, sellers need to make the product, package it securely, and ship it to the customer. Etsy provides shipping labels for some countries, which can streamline the shipping process. Sellers can input order tracking codes into the Etsy system, where Etsy updates the customers about their order status.

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Getting Paid On Etsy

Etsy manages the payment process through its Etsy Payments system. Etsy deducts fees before paying you. Here are some of the Etsy fees that you would need to pay for selling on Etsy:

Listing Fees: $0.20 per item listed, active for four months or until it sells.
Transaction Fees: 6.5% of the total sale price, including shipping.
Payment Processing Fees: Varies by country but typically includes a fixed amount plus a percentage of the sale.

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After deducting these fees, Etsy pays out sellers periodically. Sellers can choose how often they receive payments: daily, weekly, biweekly, or monthly.

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Using Etsy Tools

Etsy also provides some tools to help manage and grow shops. Etsy stats provides important data on shop performance, like visits to your shop and number of sales of a particular listing, which allows sellers to make more informed decisions. Messages facilitates communication between sellers and buyers. Etsy Ads allows sellers to increase visibility in exchange of ads fees. And coupon codes can be created and sent to shoppers to incentivise purchases.

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Marketing Your Etsy Shop

Marketing is important for the success of an Etsy shop. Here are some strategies you can use to attract more potential customers, increase visibility, and boost sales. Here are some key ways to market and promote your Etsy shop:

Optimise listings with relevant keywords in titles, descriptions, and tags to improve visibility in Etsy search.
Pay for Etsy Ads to promote listings in Etsy search
Build an email list to keep customers informed about new products, sales, and special promotions.
Run promotions and sales to attract buyers and create a sense of urgency for purchases.
Use social media platforms to showcase products, share behind-the-scenes content, and engage with potential customers.
Collaborate with influencers and bloggers to reach a wider audience.

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By consistently applying these marketing strategies and monitoring their effectiveness, Etsy sellers can significantly enhance their shop's visibility and growth potential in the competitive handmade marketplace.

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What To Do First For Your Etsy Shop

Now that you know how Etsy works, here are some resources to help you get started on your Etsy journey:

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