Do you want to start an Etsy shop? If YES, here is a 20-step guide on how to start an Etsy shop business with no money or experience. Opening a shop on Etsy platform is indeed a profitable venture and they are always improvising on how to accommodate more shop owners under their platform. If you want to deal in products or crafts then it very important that you find an online presence to do this -much more than a physical store. This is one of the reasons why Etsy was created.
To help budding entrepreneurs, as well as the existing ones solve the problems of where to get loads of people to buy their merchandise. Etsy shops are created so that online consumers can see the various things folks have in their stores and then when one is interested in what you have on display, they can place orders, pay and then have then delivered to them.
If you think you would want to start a shop on Etsy, and do not know how to pull things off, then you may want to consider the following hands- on tips. If you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.
Again, you need to pay a visit to the regulatory bodies in your country to get all the information you need to legally open your Esty shop – business in your city. You can start your Esty shop from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand.
27 Steps to Starting an Etsy Shop Business
Table of Content
- Conduct Market Research and Feasibility Studies
- Decide Which Niche to Concentrate On
- Know Your Major Competitors in the Industry
- Decide Whether to Buy a Franchise or Start from Scratch
- Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- Discuss With an Agent to Know the Best Insurance Policies for You
- Protect your Intellectual Property With Trademark, Copyrights, Patents
- Get the Necessary Professional Certification
- Get the Necessary Legal Documents You Need to Operate
- Raise the Needed Startup Capital
- Choose a Suitable Location for your Business
- Hire Employees for your Technical and Manpower Needs
- Write a Marketing Plan Packed with Ideas & Strategies
- Work Out a Reasonable Pricing for your Services & Products
- Develop an Iron-clad Competitive Strategies to Help You Win
- Brainstorm Possible Ways to Retain Clients & Customers
- Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Understand the Industry
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 show 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.
Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who purchase handmade or vintage items and craft supplies (jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools) cut across all genders and age group; male and female, adults and children, hence the demographic composition for Esty shop business is all encompassing.
So, if you are thinking of starting your own Esty shop, then you should look beyond marketing your products to just people in your city, but also people across the United States of America and even in other part of the world.
Decide Which Niche to Concentrate On
There is no niche area of specialization in the Esty shop line since Esty shop is a niche area in the ecommerce industry. Etsy is an American e-commerce website 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. 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.
The Level of Competition in the Industry
The competition that exists in the Esty shop cum eCommerce industry goes beyond competition in your city; it is both national and international. This is because, online stores can be contacted from any part of the United States or abroad especially if they have the handmade products, vintage items or crafts that the customer is looking for. So, it will be right to say the competition in the Esty shop cum eCommerce industry is tough.
The truth is that no matter the level of competition in an industry if you have done your due diligence and your brand and promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to produce unique handmade products and collect vintage items and you know how to reach out to your target market.
There are several players (online vintage and craft stores) on the Esty platform. So, if you choose to open your own Esty shop in the United States, you will definitely meet stiff competition. Besides, there are larger eCommerce shops and online vintage and craft stores that determine the trends in the industry and you should be ready to compete with them for customers.
Know Your Major Competitors in the Industry
Here are some of the most popular eCommerce stores in the United States of America and around the globe;
- Hoovers Online (Amazon Handmade)
- ezebee.com, based in Switzerland
- Bonanza (formerly Bonanzle and 1000 Markets
- Zibbet and Made It (based in Australia)
- iCraft is based in Canada
- Artfire is based in the United States
- Hello Pretty is an online craft marketplace targeted at South Africans
- Tindie is based in Portland, Oregon, and focuses on technology and electronics.
- ArtYah, based in California, United States
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Ecommerce store is no longer a green business. As a matter of fact, you will come across several online stores that retail handmade products, vintage and crafts et al. So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required working capital for purchasing vintage items, production materials, branding and other costs needed to successfully run the business.
Over and above, if you are considering starting a Esty shop, then your concern should not be limited to the cost of setting up the business and churning out quality handmade products and crafts, but also on branding and on how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are sure going to maximize profits in the business.
Decide Whether to Buy a Franchise or Start from Scratch
Unfortunately, you can hardly find the franchise of an Esty shop to purchase meaning that if you want to own a Esty shop, then you must be ready to start from the scratch. This is so because the business is like owning a franchise however because creating a shop on Etsy is free nad each listing that is posted in the shop costs $0.20.
Know the Possible Threats and Challenges You Will Face
If you decide to start your own Esty shop today, one of the major challenges you are likely going to face is the presence of well – established online vintage and crafts stores whose products are listed on ecommerce stores. The only way to avoid this challenge is to create your own market.
Other major threats that we are likely going to face is economic downturn and the arrival of a new and very popular online vintage and craft shop and even physical vintage shops in your target market location.
Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a Esty shop, the legal entity you choose will go a long way to determine how big the business can grow; some Esty shops design their business for regional market, some for national market and international market.
Generally, you have the option of choosing a general partnership, limited liability company, or a sole proprietorship for your Esty shop. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale Esty shop especially if you are just starting out with a moderate startup capital.
But if your intention is to grow the busines all across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your Esty shop; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your Esty shop so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
Choose a Catchy Business Name from the Ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own Esty shop, here are some catchy names that you can choose from;
- Edna Elverson® Vintage Shop, Inc.
- Mercy Land® Online Crafts Store, Inc.
- Ancient Connect® Edna Elverson® Vintage Shop, Inc.
- Joy Johnson™ Online Handmade Store, LLC.
- The Collectors® Online Crafts Store, Inc.
- Lucy Peak® Online Crafts Shop, Inc.
- Dona Ben® Esty Shop (Online Vintage and Craft Store)
- Ada Kelvin® Vintage Shop, LLC
- The Point® Online Handmade Store, Inc.
- Theme Mack® Vintage Shop, Inc.
Discuss With an Agent to Know the Best Insurance Policies for You
In the United States, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own Esty shop (online vintage and craft store) in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Building/Property insurance (for your warehouse)
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your Esty shop;
- Allstate Insurance Group
- Liberty Mutual
- Progressive Insurance Group (PGR)
- Health Care Service Corporation (HCSC)
- New York Life Insurance Company
- Lincoln National Life Insurance Company
- MassMutual (Massachusetts Mutual Life Insurance Company)
- Northwestern Mutual Life Insurance Company
Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own Esty shop, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to leverage on this business opportunities within the industry and also to protect your unique design, company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Get the Necessary Professional Certification
When it comes to operating a Esty shop, you do not need to have any formal training or special certification before you can be allowed to open and operate a Esty shop in the United States of America. On the other hand, if you come across any form of certification that can aid you to manage your Esty shop pretty well, then by all means try and pursue such certification.
Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
Raise the Needed Startup Capital
Starting an online Esty shop can be cost effective especially if you choose to start on a small scale without a production factory or warehouse. Securing a standard and well – positioned factory and warehouse facility and stocking your warehouse with a wide range of handmade or vintage items including jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools are part of what will consume a large chunk of your startup capital.
So, if you choose to start the business on a large scale, you need to go source for fund to finance the business because it is expensive to start a standard large scale Esty shop. When it comes to financing a business, one of the first things you should consider is to write a good business plan.
If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your Esty shop (online vintage and craft store);
- Raising money from personal savings and sale of personal stocks and properties
- Sell shares to interested investors
- Applying for loan from your bank
- Source for soft loans from your family members and your friends.
Choose a Suitable Location for your Business
Esty shops and most internet based businesses do not necessarily require that you see physically with your customers hence it can be located anywhere since most of your business deals are conducted over the internet. The fact that you can operate your Esty shop from your home does not mean that location has little influence on the success of your Esty shop.
If you have taken your time to study the ecommerce industry, you will realize that players in this industry stay in a busy business district or commercial hub. It cannot be overemphasized that the location you chose to open your Esty shop is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location.
If you make the mistake of renting or leasing a warehouse facility for your Esty shop in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your Esty shop, then you should feel free to talk to a business consultant.
Having said that, these are some of the cities in the United States of America where you can locate your Esty shop;
- Los Angeles, California
- New York City, New York
- Nevada, Las Vegas
- Tallahassee, Florida
- Chicago, Illinois
- Houston, Texas
- Washington, District of Columbia
- Boston, Massachusetts
Hire Employees for your Technical and Manpower Needs
If you are considering setting up a Esty shop, it means that you should be prepared to set a standard production factory except you want to import or contract the sourcing of your handmade or vintage products and crafts. As regard leasing or outright purchase of a production facility or warehouse facility, the choice is dependent on your financial standings.
But the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location for such business.
When it comes to hiring employees for a standard Esty shop, you should make plans to hire a competent 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. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard Esty shop.
The Service Delivery Process of the Business
When it comes to operating an Esty shop, the first step to take is to create your own Esty shop. 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, PayPal, among others.
Write a Marketing Plan Packed with Ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a Esty shop, then you must employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for ecommerce industry.
Customers will purchase and make use of your products if they know that they are going to get the best in terms of quality and value for their money. As a matter of fact, your marketing strategy should center on quality and pricing, and above all excellent customer service and prompt delivery. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your vintage items. Here are some of the platforms you can utilize to market your Esty shop;
- Introduce your Esty shop by sending introductory letters alongside your brochure to all your online contact and people that appreciate vintage, handmade products and crafts.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know who to call when they need vintage items, handmade products and crafts
- Creating a basic website for your business so as to give your business an online presence aside from what Esty platform offers you
- Directly market your products.
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your vintage items, handmade products and crafts at rock bottom prices is to purchase your raw materials and supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantities of items that you purchase directly from wholesalers, the cheaper you tend to get them.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
Develop an Iron-clad Competitive Strategies to Help You Win
The Esty shop line of business is not a competitive industry, but you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry.
Part of what you need to do in order to stay competitive in the industry is to ensure that your vintage items, handmade products and crafts are unique and well designed to fit with the trends and safety must also be your guiding principle.
In other to stay competitive in this industry, you must ensure that your clients are always comfortable when making use of your products and crafts and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the quality of your products, customers can choose to shift allegiance and settle for other options available.
Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your the quality of your products and customer service fluctuate, you are likely going to struggle to get your customers coming back to purchase your products or services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be.
One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your Esty shop (online vintage and craft store);
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your Esty shop (online vintage and craft store)
- Install your billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your Esty shop (online vintage and craft store) in local directories/yellow pages
- Advertise your Esty shop (online vintage and craft store) in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your Esty shop (online vintage and craft store) is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.
21. Decide on What to Sell
Since Etsy is an e-commerce site that deals mainly with crafts, then it might just be a good idea to want to sell your handiworks there. So, decide what it is you want to trade in. It could be female wears, male wears, accessories, homemade products and what have you. Bottom line is that you have to make sure that what you plan to sell is such that would be needed by people.
22. Set up Store on Etsy
You will need to visit the site. www. Etsy.com. Thereafter you will sign up to sell there- it entails providing details like your email, your shop name, what you intend to sell and a host of other information that you would need to supply for effective processing. In addition, you would be asked to choose your language preference.
23. Choose Currency
After you have successfully registered and started your shop, you would be asked to choose a currency. This is so that they would know whether you want to price and in be paid in dollars, pounds, Euros and what have you.
24. Use High Quality Pictures
It is important to note that etsy is an image driven site, as such you have got to do all that it takes to make sure that you create to notch pictures of your products that can attract all and sundry to your shop. First impressions are everything and are such you have to make sure that your photography in flawless, clutter free, and clean.
25. Fix Price Rightly
What is the right pricing, you may want to ask? Fixing your price rightly means that you may want to be careful so that you do not overprice your goods, thereby repelling people from your store. This is why you have got to do the calculations right.
Calculate how much you have spent on a product, the time spent, as well as other vital things surrounding the creation of the product. This way you arrive at a price. You can then fix your price. If you overly add too much money, then you risk losing your clients.
26. Add Listings
After you might have struck off the steps that have been mentioned earlier, then it is important that you begin to add items to your shop. As earlier mentioned, be sure that you have very attractive goods so that people can be attracted once they come by them.
27. Verify Payment Mode
It might interest you to note that there are various payment methods. They include through PayPal, check or money order, or the billing method. Be sure that you put in place all these things in place so that you do not run into a hitch with your customers.
If all is set then congratulations your shop is ready. This means that your shop address on etsy would be www. etsy/shop/your shop name. Do continue to look for ways to serve your clients for that is the way to stay successful in business.