What Is Etsy? What It Is, How It Works, and More

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vector graphic showing a blogger standing in front of a laptop with the etsy screen open and wondering what is etsy

There are many types of blogs that make money, but blogs that sell their own products are among the best.

Are you looking to sell your handmade items online, but don’t know where to start?

Have you heard of Etsy, but aren’t sure what it is or how it works?

In this blog post, we’ll introduce you to Etsy and explain what it is, how it works, and more.

Plus, we’ll provide tips for getting started with Etsy.

If you’re still wondering, “what is Etsy?” then keep reading to learn more about this popular online marketplace for handmade goods.

What Is Etsy?

Etsy is one of the many online stores that allows almost anyone to sell their products.

As a result, you can find any number of goods to purchase, and you can sell just about anything you want.

Whereas Amazon sells mostly mass-produced products, Etsy is all about selling handmade and vintage goods and digital products.

Etsy launched in 2005.

The purpose of the business was to create a global space for people to list handmade goods and antiques.

All items on Etsy must fit into one of three categories: handmade goods, vintage items (must be 20 years or older), or crafting supplies.

If a product can’t fit into one of these categories, it can’t be sold on Etsy.

Etsy is intended to be a place where people can find unique, even personalized goods.

It’s also a way to support individual sellers and small business ventures.

What Is Etsy Used For?

Etsy is designed for artists and craftspeople to share their many creations.

Sellers can create just about anything they want to sell, including physical and digital products.

Etsy allows people to make extra money, while some turn it into a total income.

For buyers, Etsy allows people to find items they wouldn’t find anywhere else.

It’s a good alternative for those who don’t want to shop at big box stores or significant online retailers.

What Is Etsy Known For?

Etsy is known for selling handmade and vintage items.

Most people think of the store when they want to purchase a gift or buy something nice for their home.

They’re also known for handmade jewelry and clothing.

It’s similar to Amazon Handmade, which also features unique goods.

How Does Etsy Work?

Etsy works like many other online stores.

Sellers list items in individual shops and buyers make their purchases through Etsy.

The seller is responsible for shipping the item.

Browsing Products

Buyers have several options when shopping on Etsy.

You can search for anything, such as personalized birthday invitations, jewelry, or coffee tables.

The search results will show the items that best match your search.

If you’re not sure what you want but just want to shop around, Etsy makes it easy for you to browse through different categories.

Each category is divided into subcategories and further subcategories to help you shop.

For example, under the Home & Living category, there’s a home subcategory with further subcategories like wall decor and cookware.

When you click on something you like, you’ll also see similar suggestions and collections that include that item.

Buying Products

When you find an item to purchase, you add it to your cart.

You’ll have the option to select a quantity if there are multiple products available.

You’ll also be able to choose size, color, etc., if applicable.

If it’s an item to be personalized, the seller will have a space where you can make a note.

Even if you buy from more than one seller, you can still make one purchase from your cart.

Etsy will separate the costs up to pay each seller.

The seller will ship the item to you by the stated time.

If it’s a digital product, you should be able to download it immediately unless the seller has to customize it.

Etsy also makes it easy to buy gifts.

They have a gift-buying guide separated into groups like gifts for pets or birthday gifts.

If you can’t make a decision, you can just get an Etsy gift card.

Fees & Pricing

As a buyer, you don’t pay any fees other than sales tax where applicable.

The seller pays fees to Etsy, so you just pay the price listed by the seller.

Sometimes, different product variations will be priced differently, so be sure to check the price before buying.

You should also check whether the seller accepts returns.

Some items, particularly personalized products, usually can’t be returned.

Shipping Costs

Many items ship for free on Etsy.

You can see if an item has free shipping on the search page or the product page.

If an item has shipping costs, these costs are factored in at checkout.

Shipping fees are based on your location.

Selling on Etsy

Selling on the Etsy platform can be quite profitable, especially if you have a knack for creating homemade products or finding vintage goods.

As with most online marketplaces, there are rules and procedures you’ll have to follow.

vector graphic showing a blogger standing in front of a laptop with the etsy screen open and wondering what is etsy

Buying and Selling

Etsy makes it easy for buyers and sellers alike to use its platform.

As long as you follow a few basic guidelines, you can become a successful Etsy vendor.

What Can Be Sold on Etsy?

Etsy only allows you to sell handmade products, vintage goods, and craft supplies.

When selling handmade items, you have to be clear about all of the people who helped produce them.

You must also use your own photos, not stock photos.

If you wish to sell a vintage item, it must be at least 20 years old.

Be aware that Etsy may ask you questions about your items to verify authenticity.

Craft supplies are anything that can be used to make a craft and also includes party supplies.

Supplies don’t have to be handmade and can be commercial or vintage.

What Can’t Be Sold on Etsy?

All items sold on Etsy must be physical or digital products.

You can’t sell services, post want ads, or share referral codes.

Etsy has a list of prohibited items such as tobacco/alcohol, illegal products, and items that glorify hatred.

Etsy also has policies regarding intellectual property.

You can’t sell anything that violates another person’s intellectual property rights.

Finally, you can’t resell items in the handmade products category.

Everything you list in this category must be handmade items.

Do You Need a License To Sell on Etsy?

Etsy doesn’t require sellers to have a license.

However, you may need a business license based on where you live, how much you’re selling, and what you’re selling.

You’ll need to check your state’s laws to be sure.

Creating a Shop

Your Etsy shop is like your storefront.

It’s a page where buyers can go and see all of your products in one place.

Do I Need a Shop To Sell on Etsy?

You do need a shop to sell on Etsy since it will serve as a landing page for all of your products.

It doesn’t have to be as elaborate as some of the ones you’ll find on the site.

What Do I Need To Create a Shop?

To create a shop, you’ll first need to create an Etsy account if you don’t already have one.

Next, you’ll need a shop name.

Enter your location and type of currency.

You’ll also need to enter the billing information as Etsy will use this account for charging your fees.

Once you finish setting up your shop, you’re ready to list your first item.

You can always make your shop more professional as your business grows.

Fees and Pricing

There are some costs and fees associated with selling on Etsy.

However, when you plan appropriately, you can offset Etsy fees with your pricing.

Do I Need a Credit Card To Create an Etsy Shop?

You are required to have a credit card to be an Etsy shop owner.

Etsy uses the card to verify you.

It also serves as a backup in case you aren’t paying your Etsy fees or if you get chargebacks.

How Much Does Etsy Charge Sellers?

Each time you list an item, you’ll be required to pay a $0.20 listing fee, and you’ll have to pay to relist each time an item sells.

Etsy takes 6.5% of the total selling cost after discounts for every sale you make.
This amount includes shipping and gift-wrapping fees.

You’ll also have a payment processing fee of $0.25 plus 3% of the selling price.

If you want to make your Etsy store feel more professional, you can subscribe to Etsy Plus or Etsy Pattern.

These programs give you more customization options along with extras, like marketing and listing credits.

What Does It Cost To Promote on Etsy?

You have the option to run ads both onsite and offsite.

You can set a daily budget when running an Etsy ad and only pay when a potential customer clicks on your ad.

You’ll pay based on whether the customer buys your item with offsite ads.

If you’ve made less than $10,000 in the past 12 months, you’ll pay 15% of your profit back to Etsy.

If you’ve made more than $10,000 in the past 12 months, Etsy only takes 12% when a customer clicks on an offsite ad and buys your product.

However, you are required to run offsite ads once you reach this price point.

What About Etsy Shipping Costs?

Sellers must pay shipping costs, and it’ll vary based on what you’re shipping and where it’s going.

You can either charge the shipping fee separately, or you can build it into the price of your item and list it as “free shipping.”

Seller Payments

When buyers purchase an item, they’ll usually use Etsy Payments.

This option gives them several options for paying, such as with most major credit or debit cards.

Customers can pick their preferred way to pay.

How Do I Get Paid?

When a buyer makes a purchase, the money is deposited into your bank account.

Is Etsy Legit or a Scam?

Etsy is a legitimate business both for people who want to sell and buy on the platform.

When selling, Etsy is upfront about its fees.

You also receive payment after every sale.

Etsy also offers buyer protection for customers.

Each payment option is secure, so you know your personal information is safe.

While most of the sellers are reputable, you may run across a scammer or someone who doesn’t offer the best products or services.

If you’re the victim of a scam, Etsy’s buyer protection program will ensure you get your money back.

You’re also protected if you receive an item that isn’t as described in the listing.

Is It Safe To Buy Products on Etsy?

There are ways for sellers to try to scam buyers.

The fortunate thing is that Etsy payments are secure, backed by buyer protection, and trustworthy.

Sellers won’t get your private information other than a shipping address.

You can adjust a shipping address to a P.O. box or other location if you’re concerned.

In terms of credit card information, Etsy Payments is well regarded and offers high levels of protection.

If you purchase something and don’t receive goods, Etsy will refund you.

If there are challenges with your product or you feel you’ve been deceived, you can open a case with Etsy.

Is Etsy Worth It?

There are both pros and cons to selling on Etsy.

The Etsy marketplace is vast, so you have the opportunity for many people to see your product.

You don’t have to create a website and do a lot of marketing to get people there.

However, the Etsy market is fairly saturated.

There’s a good chance that many other people are doing the same thing you do.

It can be a challenge to stand out.

That said, if you offer a unique and high-quality product, you can find success on Etsy.

After you build up a following, you may want to transition to your own online store so that you don’t have to share so much of your profits.

Alternatives to Etsy

Amazon Handmade is one alternative to Etsy.

It’s a subset of Amazon that lets you sell handmade goods.

While you’ll get the benefit of Amazon’s much larger customer base, it’s more challenging to get your store approved.

You can also set up your own online store using a platform like WordPress or Shopify.

While you won’t have to share your profits, you’ll have the fees and extra work associated with running a website.

Wrapping Up

The Etsy marketplace is a place where buyers and sellers can share their love for handmade, vintage, and personalized items.

The store makes it easy for buyers to find unique gifts and custom items to match their personalities.

For makers, Etsy is a great place to turn your passion into profit.

You can list your handmade items on a website that already has a large audience.

You can have an online store without the hassle of running a website.

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