As Etsy continues to change their algorithm, update their rules, and grow, more and more makers are questioning if Etsy is worth it in 2020. Should people with Etsy shops continue to put the effort in them and for those who don’t have one, should they start one? Let’s find your answer.
(Wanna know if CRAFT SHOWS are worth it? My thoughts on it here.)
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The bottom line is, Etsy is worth it IF you make a profit from it.
Countless forum threads with sellers stating their sales are down or that Etsy is “dead” or “dying”, doesn’t make it true or make Etsy any less useful to makers.
Obviously, Etsy IS worth it for many businesses or the platform wouldn’t continue to grow (as The Wall Street Journal pointed out this year) and there wouldn’t be sellers continuing to support the platform.
So, the question isn’t: is Etsy worth it?
It’s: is Etsy worth it for your business?
There isn’t a blanket statement that applies to all businesses. Just because one person says Etsy is 100% worth the time and money investment, does not mean it’s worth it for your business.
And on the other hand, if you have an Etsy shop up and running and are profiting from it, no need to read this article any further. It’s worth it for you. Don’t listen to the “Etsy is dead” or “Etsy has lost its soul” opinions. It’s working for you and that’s all the matters.
But if you’re not sure if your Etsy shop is profiting or if it’s quite a fit, the questions in this article will help you.
By the end of it, you’ll know if Etsy is worth your time and money, or if you’re better off spending them on another sales channel (e.g. craft shows, wholesale accounts, or even your own website).
Answer the following 10 questions for your business:
1 – HOW DO YOU PREFER TO SELL?
First and foremost, think about if you’re excited to sell on Etsy. Do you enjoy putting time into your shop or does the idea of starting an Etsy shop excite you?
I’m a big believer in the idea that passion gets results.
If the thought of Etsy fills you with dread, you’re not going to want to put time into it and you won’t be putting your best foot forward when you do spend time on it. That will be reflected in your results.
If you’ve been thinking about setting up an Etsy shop for a while but just can’t get motivated to take the first step, maybe that’s an indication that it’s not the right platform for you, regardless of how much success others have had on it.
One important lesson I’ve learned from over a decade of running my own businesses is: there’s no one size fits all.
It can be frustrating when you’re following the steps that worked for another business and it’s just not working for you.
But on the other hand, it’s exciting. You can pave your own path.
I used to be filled with dread thinking there was going to be a day I would have to go back on television, have more and more, and bigger and bigger media interviews, or even have to talk to a room full of employees. But I’ve slowly discovered that just because most businesses use media for marketing and dream of having an entire team of people working on their business, doesn’t mean that had to be my path.
You can make your own goals and you can achieve them in a way that makes you happy. Passion must be behind everything you do and only you know what sparks that passion.
If sitting behind a computer and posting to Etsy doesn’t make you happy, look into selling at craft shows, selling wholesale to retailers (here’s how to attract wholesale orders at craft shows), or other ways to sell your products locally (here are lots of ways)
You may even find running your own website is more rewarding than an Etsy shop because you get more control over the design and functionality of it.
Consider if Etsy aligns with your passions and skills.
2 – WHAT ARE YOUR PROFIT MARGINS?
For any business to survive, it must have profits. And you must know how much you profit from each sale before you can make solid decisions for your business, such as which sales platforms to use.
*Profit is the money left once you pay for your expenses and pay yourself a wage.
As I mention in THE SUCCESS PLANNER, profits should be used to determine how much money you put towards growth.
Based on your profits, Etsy may be a better fit for your business than a sales channel such as craft shows.
For example, let’s say last month you spent $100 on expenses (e.g. materials, Etsy listings, marketing, etc.) and your wages total $100. If you sell all the product you made for $200, you’ve earned your $200 back and can repeat what you did last month. There is no profit and no extra money to spend on more supplies, marketing efforts, sales channels, or wages.
If you earned $400 dollars from selling all the product you made, you’d have an extra $200 to play with next month. You could put more money towards products, marketing, and selling to earn more than you did last month. With that profit, you can also pay yourself more so you’re not just an employee getting paid for the hours put in.
The expense of selling through Etsy is lower, and lower risk, than selling at a craft show, so if you have lower profit margins, Etsy may be the better choice between the two.
Etsy is also a better choice when compared to selling wholesale, if you have low profit margins.
However, you may find that making sales through your own website is the best option and may not cut into your profits as much as Etsy does. You will be charged transaction fees either way if you’re using a service such as PayPal or Stripe to collect payments online. However, Etsy charges a listing fee for every item, which you won’t have with your own website. You will have domain and hosting fees when running your own website, but those may be lower than Etsy listing fees, depending on your business.
Know your profit margins and how much each sales channel eats into them to determine which is the best option for you.
3 – HOW DO YOUR CUSTOMERS SHOP?
Think about the product you’re selling, the market you’re targeting, and how your target market typically shops for your product.
Are they likely to search online for your product or visit a store and buy it when shopping for other products?
Etsy won’t be worth it for you if your typical customer doesn’t shop on Etsy.
For example, let’s say a vendor is selling high-end jewelry to be worn with evening and ball gowns. They’re targeting women who are in their 40’s to 50’s attending galas, charity dinners, operas, etc. When shopping for a special occasion, most people go to boutiques or department stores so they can try on a gown and see it with all the accessories; the clutch, earrings, necklace, etc.
It’s unlikely that a woman in her 50’s is going to buy a ball gown and then go to Etsy to find high-end jewelry to go with it. She wants to see the jewelry in-person and try it with the dress before deciding on it. Selling that jewelry wholesale to high-end boutiques carrying special occasion wear would be a better option than selling it through Etsy.
On the other hand, a woman in her 30’s who just saw Jessica Biel wearing an amazing pair of earrings on the red carpet won’t go from store to store looking for something similar. It’s easier for her to hop online, type “Jessica Biel earrings at MTV Awards” or a description of the earrings into Google and find something similar. In this case, Etsy would be a good option (if the proper SEO tactics were in place).
Consider your target market and if those customers typically head online to shop for your product.
If the answer is yes, start researching which keywords your target market might type into a search bar and create Etsy listings using those same keywords.
4 – WHAT IS YOUR ROI?
As mentioned in THE SUCCESS PLANNER, it’s important to track how much time and money goes into each major task on your to-do list so you can determine if it’s actually worth your time and money. That’s a task’s ROI; return on investment.
Once you’re set up on Etsy, you need to track how many hours and dollars you put into keeping your shop updated, promoting your shop, communicating with buyers, shipping orders, etc. and how much money you get back from it.
If you spend $100 each month on listing fees, taking photos, creating listings, promoting those listings on social media, etc. but you only sell 2 items per month from Etsy and that results in $50 of revenue, you’re NOT making a return on investment.
If you earn $100 in revenue from Etsy, you’d be breaking even.
And if you earn more than $100 in revenue from Etsy, you’d be making a return on investment. But then the question is; how much?
If you put $100 into Etsy in a month and earn $110 back from it, that’s only $10 profit. Is all the time and money you put into Etsy worth $10 profit or would that $100 be better spend somewhere else?
Know where your sales are coming from and how much you’re profiting after the time and money spent on the sales channel is deducted.
You may find Etsy doesn’t produce enough sales or profit to justify all the hours and expenses it requires.
If another sales channel brings you more sales and requires less time and money to make those sales, it deserves more of your time and money.
5 – DO YOUR PRODUCTS STAND OUT?
Take a look at the category your products fall under and scope out your competition.
In most cases, your products will be competing with thousands of similar products.
If you don’t have something that sets your products apart (aside from being “made by you” or being “your designs”) you may have a hard time making sales on Etsy.
When there are several similar options to choose from, consumers will go for the cheapest, quickest, or most convenient option unless there’s a valuable reason not to.
When you put all the work into getting people to your website, they’re only seeing your products and aren’t distracted by millions of other listings.
At craft shows, there are usually only one or two other vendors selling similar items to you.
Consider how your products will do when placed next to thousands of listings on Etsy. Will they catch eyes and encourage people to click or get lost in a sea of photos?
6 – WHAT TYPE OF FEEDBACK DO YOUR PRODUCTS GET?
Different products attract different types of customers and feedback. And, everyone has an opinion. If your product’s features are subjective they may garner a wide range of reviews (e.g. “oversized” may be big to some and not big enough to others, “subtly scented” may be too strong for some and too weak for others).
With online shoppers, you have to make it crystal clear what you’re selling so customers know exactly what to expect. If a customer receives something different than what they were expecting, based on photos, they may not be happy and leave a negative review.
For example, selling a moisturizer deemed “perfect for summer” is open to interpretation. Some people prefer lightweight oils for summer while others want oil-free options to avoid that greasy feeling. The moisturizer is likely to be too light for some, too heavy for others and could result in mixed reviews.
On Etsy, a negative review is permanent (unless it violates policies).
Even if it’s completely unfair, simply their opinion and not a reflection of your product, or even if they made a mistake when ordering and are making it your problem, customers can leave a review and it’s on your permanent Etsy records.
On your own website, you’re in control of what appears. So if a Negative Nelly leaves an unfair review, it’s your choice if you want to display it.
Obviously, you want customers to be satisfied with their purchase and for everyone to leave a good review. However, if your products read differently online than in person, and are better received when one is able to pick them up, handle them, see the quality, etc. they may be better suited for offline sales.
7 – HOW DO YOUR PRODUCTS SHIP?
Factor in how easily your products ship and how much it costs to ship. Many sales are abandoned because of high shipping fees.
The bulk of users on Etsy reside in the US, so if you don’t live in the US and it costs a lot of money to ship your products to the US, you may want to look at a different online marketplace (there’s a long list here), considering starting your own website and working on SEO for your product name combined with your location, or focusing on selling locally offline.
Also consider how easy it is for you to stay on top of shipments. Do you have a system in place to track orders, package them for shipping, and get them off to buyers in a timely manner?
Online shoppers want their items to ship quickly.
Many negative reviews left on Etsy shops have to do with wait time or lack of communication from the Etsy seller letting them know when to expect their item.
If you can’t get to the post office each week or your products have a long lead time (i.e. you custom make each order and it takes you 2 weeks before an item is ready to ship), online selling may be difficult for you.
8 – WHAT ARE YOUR COMPUTER SKILLS?
Etsy makes it fairly easy to set up an online shop, especially when comparing it to setting up your own website.
If you want to have an online presence but you have minimal computer skills, Etsy is likely your best option.
There are several tutorials that will walk you through how to set up your shop and their interface is pretty user-friendly.
Like anything, it will take some time to understand the platform and become comfortable with it, but if you have limited time to do so, my suggestion is to go for Etsy over setting up your own website.
Once you become comfortable with using Etsy, you can ease into the idea of starting your own website.
9 – HOW WILL YOU GET TRAFFIC?
One thing is for sure; Etsy sellers can no longer rely on adding listings to their shop and watching views and sales pour in.
If you hate social media and other forms on online marketing, it’s going to be hard to get traffic to your Etsy shop and may not be worth it for you to use the platform.
When selling online, it also requires you to invest time into SEO (search engine optimization). Etsy can help your listings show up in Google searches because Etsy has a good ranking on Google. However, within Etsy, they are constantly changing their algorithm and when and how a listing shows up on the platform. So although Etsy might initially help attract Google shoppers, it’s easier to lose those shoppers to other sellers
It may take longer to get your own website to rank on the first page of Google but once someone lands on your website, your products aren’t competing with millions of others just like them. You decide what appears at the top of the page and you can keep your shoppers focused on your products.
You’ll also have an easier time getting someone on your newsletter list when they’re on your website vs. Etsy. Which is absolutely essential to your business.
Seriously, don’t wait. Set your newsletter up today. It’s free, will take 10 minutes and you don’t even need a website to start collecting email addresses. And here are 365+ ideas for what to send to your subscribers.
Etsy may be worth it for your business if you don’t have a lot of time and money to pour into SEO and getting traffic to your personal website (it can take years for your own website to start showing up on the first page of Google).
10 – WHAT ARE YOUR GOALS?
Where do you see your business in the coming years?
Do you want a business that is 100% online? Etsy may be a good starting point and support for your online business.
Do you want to open your own store one day? Perhaps focusing on selling wholesale to retailers is a better path. It may also be more effective to start your own website so you can slowly start to build traffic to it and it’s ready to go when you do open that store.
Do you want to focus on craft shows and make a few online sales? Etsy might be the perfect solution to that as you don’t have to build your own website, pay a developer, pay for hosting and a domain, etc.
Consider if selling on Etsy aligns with the vision you have for your business.
Did those questions help shed some light on whether Etsy is worth it for your business? Share in the comments what you find more difficult about selling on Etsy.