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How to run a shop on Etsy

Do you have a love for creating handmade items?

Or perhaps you enjoy collecting vintage products?

Etsy can help you turn your passion into a business by showcasing your unique products to customers who appreciate and admire your talents.

Established in 2005, Etsy’s e-commerce marketplace is a platform that exclusively sells hand-crafted items opens in new window and vintage merchandise, which are difficult to purchase elsewhere.

While there are many online marketplaces selling similar crafted items directly from makers, Etsy had over 7.5 million sellers in 2021 opens in new window and an active customer base of around 96 million opens in new window, making it, along with eBay opens in new window, a platform to consider for selling your crafted products online opens in new window.

Discover how Etsy could help you earn money by doing what you love.

 

What to sell on Etsy?

When setting up a shop on Etsy, you’ll need to consider what items you want to sell, which could be items such as:

Etsy merchants can also sell vintage items such as artwork, clothing, collectables, home decor and accessories, provided the vintage items are over 20 years old opens in new window.

Read our guide on how to turn your hobby into a profitable business opens in new window.

 

What are Etsy’s brand guidelines?

Etsy has strict  policies opens in new window regarding the commerce of handmade items, which you will need to understand before commencing your business.

Some seller policies include:

  • reselling handmade items is strictly prohibited
  • all products listed as handmade must be made or designed by the seller
  • you can work with others to create the products, but you must be transparent as to how your products are made, which means if you are a designer and you’re working with an artist to produce the items, you must disclose their information
  • using a contractor to help you produce your products is not permitted
  • imitating another brand’s products opens in new window or content is prohibited; your product descriptions must be written in your own words, and your photographs must be yours (stock photos won’t be accepted).

 

How to take payments on Etsy?

You can use Etsy Payments opens in new window to manage your costs and administration tasks.

Etsy Payments accept payments opens in new window through Etsy gift cards, PayPal, Apple Pay, and Google Wallet, alongside credit and debit card transactions.

To use Etsy Payments, Etsy charges a fee of 4% + £0.20 per sale.

Once the funds are processed, Etsy Payments deposit the money into your bank account.

 

Fees, postage, and tax considerations

 

Fees

Etsy charges several fees for merchants; the current mandatory fees opens in new window are:

  • a charge for every product listed
  • a percentage on all product sales, including postal costs
  • a regulatory operating fee
  • international transaction fees for overseas sales.

You can also make use of Etsy’s optional marketing strategies opens in new window.

 

Postage

As with many e-commerce businesses, the success of Etsy sellers relies on their ability to retain customers, which is greatly determined by the efficiency of their delivery services.

It’s a good idea to take into account the following guidelines:

  • aim to deliver your customer’s order within 30 days, unless agreed otherwise with the customer, and it’s good practice to provide customers with ways to track their delivery
  • you’ll need to accurately calculate the postal costs by weighing the package, measuring the dimensions, and considering the location
  • ensure products are packaged securely opens in new window; for example, delicate items may need additional care
  • Lastly, it’s worth keeping proof of dispatched packages to protect yourself from liability if a delivery becomes lost.

 

Taxable income 

As with any business, the income tax opens in new window you pay is subject to your annual earnings and business structure.

If you’re a sole trader opens in new window selling items on Etsy, HMRC allows you to earn up to £1,000 before needing to declare earnings through self-assessment.

However, you must register for self-assessment opens in new window if your self-employed income exceeds £1,000 within the tax year, regardless of source.

 

How to set up your Etsy shop

Etsy has a user-friendly approach to setting up a shop:

  1. Set up an account:register with your email address and create a password.
  2. Click “sell on Etsy”:proceed to “open your Etsy shop”, where you can select your preferred language and currency.
  3. Customise your shop: decide on a name for your shop; it’s best to make it concise and memorable. You can find branding tips on Etsy’s  seller handbook opens in new window.

You can then customise the shop by creating colour schemes, font styles, banners, and logos that suit your brand.

  1. Upload product descriptions and photographs: Start listing your products on your shop. Consider taking high-resolution pictures of each product from various angles to give potential customers a realistic representation of your product.

For the product descriptions, it’s worth including the necessary details relative to the style of the product.

You could add creativity to your product descriptions, such as telling a story about how the product was made or writing eye-catching headlines that can spark customer interest, making them more likely to purchase your product.

Another aspect to remember is writing for search engine optimisation opens in new window.

Incorporating  keywords opens in new window in your product descriptions may help increase traffic and sales to your Etsy shop.

  1. Choose your payment details: Register your bank details so Etsy can deposit the funds into your account, then select the payment method you want your customers to use.
  2. Select delivery options:Etsy has a guide on deciding the correct  delivery costs opens in new windowfor your products and location.
  3. Promote your products: Consider advertising your Etsy store on social media platforms like Facebook, Instagram, TikTok, and Pinterest.

You could offer customers incentives, such as special discounts, if they spread the word and share your products on social media.

Discover how to promote your business on social media with our guides to advertising and marketing on:

 

Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free  Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.

 

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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