How to Make Money on Etsy: The Ultimate Guide

Etsy is one of the fastest growing marketplaces on the internet and now is your time to utilize it to increase your income. Through the platform, you can sell a wide variety of handmade, vintage and supply products.


Whether it’s handmade wooden jewelry, paper supplies or vintage clothing, Etsy is the place for you to access a wide audience. Millions of customers head to the marketplace each year to browse and buy products, and this gives you an existing audience which you wouldn’t have as a solo seller.


Making money on Etsy isn’t easy, but it’s also not overly complicated. The platform itself is straightforward to understand, and this makes it an excellent place for new business people to start.


If you’ve ever been interested in selling your products online, Etsy is an excellent option because of its existing audience of customers who are already looking for products like yours. In this guide, we’ll be looking at how to make money on Etsy and how you can increase your chance of making vast amounts of money.

Searching for Potential Products

Grocery Store

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Arguably one of the most challenging parts of selling on Etsy is deciding on the right product. Without something that people want to buy, you’re going to struggle to make sales. Similarly, if there is too much competition or better goods that are similar, customers might choose your competitors.


Handmade products don’t necessarily need to be made only by you, which means that you could source them from a supplier if you wish. However, the vast majority of Etsy businesses sell goods which they make themselves because it fits the target market and allows you to have higher profit margins as a young business.


For the sake of this guide, we’ll presume that you’re going to create your products because this is the most common method. With this in mind, you’ll want to choose a product that you care about and have the skill to make.


There are plenty of guides which tell you to look for favorite goods, but if you don’t like them or lack the skills to produce them, it’s irrelevant. You need to sell something that you can easily create yourself, a good which is going to be high-quality and desirable for your target audience.


It’s always useful to look at top-selling products, particularly if you have a broad skill base but no idea what you want to make. You might be able to spot something that you’ve crafted in the past and therefore generate new ideas.


From there, you need to come up with a unique twist.


You can always copy somebody else and compete based on price, but that’s not a good idea. You’ll sink to the bottom and compete purely on cost. It’s better to try and create something unique that people are willing to pay money for because they love it.


Having looked at the most popular product listings, fashion items tend to attract a lot of attention. Scarves and other accessories are particularly fashionable, probably because they can be highly personalized and are hard to find in stores.


Small mementos and home furnishings like plant pots and unique storage solutions are also well-liked. Again, the commonality is that they are unique and not easily found in stores. Keep this in mind when you’re deciding what you want to make and sell on Etsy.

Doing the Math

Man Writing On Paper

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While the product itself is important, you have to keep in mind that you’re running a business and not creating crafts for a hobby. This mentality change is the biggest mistake that sellers on Etsy make because they don’t pay enough attention to the financials of the business and therefore find themselves working hard for little money.


Mathematics isn’t the most exciting subject for most of us, but it’s the fundamental basis of being a business person. Without a clear understanding of the costs that you incur as well as the revenue you can hope to generate, you’ll never be confident that you can create a profit.


If this is the case, you shouldn't be running the business. Before starting, you need to have an obvious picture of the financial model before you invest time and money.


When you’re selling on Etsy, the financial component is far simpler. You don’t need to worry about website costs and the effort that comes with it. Your primary costs will be product creation and Etsy fees, while you’ll be generating revenue from a single platform.


You can figure out how much money you should be able to make on each item on a piece of paper. But the easiest way to do it is to use a spreadsheet like Google Sheets or Microsoft Excel, where you can use formulas to quickly change the selling price and supply costs to see how it impacts your profit.


You’ll want to start with realistic figures and then over time increase the estimated sales volume to create a forecast for revenue, costs, and profit. This model will show you in simple terms how much you can expect to earn from your business and is an important step in learning how to make money on Etsy.

Figure Out the Cost of Each Item

Research the Competition

Is There Enough Profit Per Hour?

Setting Up a Successful Store

Bakery Store

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Product selection, manufacturing, and financing is only part of the game. You’ll also need to set up and optimize your store. The sales pages that you use are a huge factor in the sales process, arguably one of the most important.


The greatest benefit of selling on Etsy and what you pay fees for is access to an existing audience of customers that loves handmade products. Your job is to grab their attention and convince them to buy from you.


To do this, you’ll need two things, captivating copywriting and dream-worthy photographs. Most Etsy sellers fail in both of these regards and therefore struggle to generate any significant number of sales each year.


Copywriting is the words that appear on your product page. Believe it or not, studies have shown that your writing makes a huge impact on the percentage of people who turn into customers. By using the right words and framing your product correctly, you can improve your sales rate and generate more profit.


Similarly, low quality photographs plague Etsy and fail to inspire, let alone show people what a product truly looks like. Use a good camera, or borrow one from a friend, and read a few photography articles to figure out how to get the right lighting to make the items pop and look beautiful.

Marketing Your Products

Notebook And Pen

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While selling on Etsy will automatically give you access to an existing database of customers, that’s not enough. You need to give yourself at least a few hours each week to market your products on forums, social media and through blogs.


Without marketing, you’re relying on people finding you on Etsy, and that can be nearly impossible when you’re starting and don’t have any reviews or sales.


A great way to market yourself is to create YouTube videos or social media posts about your topic. You don’t necessarily have to only talk about your products. If you’re selling stencils, you might talk about how to use stencils, how to make them or anything that would interest your potential customers.


You’ll also want to try and rank in the Etsy search results and appear higher in the category pages. While nobody knows the precise algorithm, it relies heavily on the number of sales a product has, the number of reviews and the average star score.


For this reason, you’ll want to try and get as many positive reviews from customers as possible. You should always email them and encourage them to leave a comment if you can get them to so that more people can find your goods.


After a while, you’ll find that you hit a point where you experience a positive feedback loop. You’ll have enough visibility that you get sales and plenty of reviews, keeping you near the top without any extra work. But getting there will involve hustling, which is why you need to get out there and market your new Etsy business!

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