How to Start an Etsy Shop
Getting Started on Etsy
On Etsy.com, you’ll find a community of makers, small-business owners, and shoppers who all share a passion for uncommon and rare goods. Starting an Etsy shop can be daunting at first. But follow this guide, and you can make your shop stand out from the competition, and rank on Etsy search. This guide is highly detailed, and has lots of tips for optimizing your shop. If you need help with some specific aspect of your Etsy store, feel free to jump ahead to that section.
Before you start an Etsy shop, make sure that your products can be sold on Etsy, and that you’re in a location where selling on Etsy Payments is available. Review the Seller Policies and learn about fees for selling on Etsy to make sure that selling on Etsy is right for you and your business.
Create the Right Title for Your Item
Your Etsy title allows for 140 characters. You want your title to be focused on the keywords that folks are most likely to search for when looking for your product or something similar. I recommend breaking your title into 3 parts. Let’s go through it, using this sticker as an example.
Part 1: The “category” that your product falls into.
If you sell stickers, you could simply have the first section of your title be “Sticker,” “Custom Sticker,” or “Funny Sticker.” For our bee sticker, let’s use “Water Bottle Sticker.” Many folks will be searching for stickers for their water bottle, but may not have something specific in mind. This makes sure that your product is in the running if they search for something somewhat broad like this.
Part 2: Narrow the focus of your title. In this section of your title, you will describe more precisely what your product is. Here we will put “Save the Bees.” So far our title would look like this:
Water Bottle Sticker | Save the Bees
Part 3: Add additional relevant descriptors. Be judicial here, Etsy doesn’t actually prefer super long titles for their algorithms. That said, a few, highly relevant labels can help your listing get more views in Etsy search. We could use descriptors of the sticker itself such as “waterproof” or “vinyl.” Or we could use descriptors of the content of the stickers, like “nature” or “environment.” Let’s put a couple that seem the most relevant. We’ll use “waterproof” and “environment.” To tie them together we can use a synonym for sticker, “decal.”
The full title will be:
Water Bottle Sticker | Save the Bees | Waterproof Environmental Decal
Our title is 70 characters, so well below the threshold, and does a good job of describing exactly what we are selling, using terms that people are likely to search for. Our title now has the opportunity to show up in Etsy Search for people browsing Stickers, Water Bottle Stickers, Decals, as well as folks looking specifically for Bee or Environmental stickers.
Add Photos that Make Your Product Stand Out
You don’t have to have professional grade photographs on Etsy, but the higher the quality the better. A few simple tips can help your images stand out.
1. Use good natural lighting. If you don’t have photography lights, put your product by a window, or even outside when you take pictures, so that your photos come out bright rather than dark or shadowy.
2. Use a nice backdrop. Your backdrop doesn’t have to be anything special, but make sure it’s something that looks nice. Light colors can help here too, so that the focus of the photograph becomes your product. You can use something as simple as a table, or a sheet or blanket.
3. Consider adding text or branding. Your product images are an additional opportunity to add more information or selling points, or to add branding, social handles etc. Photoshop is great for this, but you can also find free online image editors that can do the same job. Here’s an example:
We used a white wood background, and added our brand, our Instagram handle, and a few additional details that may help persuade people to buy our stickers over competitors.
For more examples, check out our Etsy shop.
Make Sure Your Item is Priced Right
There are a few ways to price your item. Considering the following variables, and triangulate a price based on all of the them.
1. Cost Based Method: This method uses your product acquisition or production cost, and then adds a profit margin on top. If you buy stickers in bulk from YouStickers, you can get a low price per sticker. For example, our 100 count 3in sticker option brings the price per sticker down to $0.37.
You then have to factor in the time it takes to fulfill and process orders. You can get a good estimate of this by tracking the hours you spend over a week fulfilling orders, responding to messages, and updating listings. Divide the hours by the number of orders you fulfill in a week. Keep in mind that the average time will drop as you become more efficient, and move from setup to maintenance of your listings and shop. Stickers are pretty simple to pack and fulfill, so let’s say it takes 5 minutes on average per order to pack and ship and respond to miscellaneous messages. If you want to make sure you are paying yourself a baseline of $20 per hour, 5 minutes per order means you should factor in a cost of $1.67 per order.
Now you are up a cost of right around $2 per order. Let’s now add an additional margin of ~30% and set our price at $3 per sticker.
2. Competitor Pricing: This method involves researching competitors to see what price they are charging for similar products. You’ll come up with a range. From there you want to think about what your strategy and selling points of your product vs the competition is. Also think about how you want to position your product (value vs premium).
We find prices ranging from $1 up to $6 for custom single stickers. At a lower price, we can undercut the competition, but the perceived quality may also go down. Our stickers are extremely high quality, so we don’t want to put ourselves at the bottom of the pricing here. Our Bee design is fairly simple, and didn’t require a significant amount of time to create, so that gives us a data point that points towards a lower price. On the other hand, if you are selling your own artwork that took a significant amount of time to create, and that people can’t pick up anywhere else, you would want to consider a higher price.
In our case, the Bee sticker is very high quality, laminated, waterproof, etc, but the design isn’t particularly unique or special. So middle of the road pricing at $3 is probably good.
3. Demand Pricing: This pricing model requires some data. So it’s best to implement as a phase two of pricing. The idea is to organize your products into categories based on demand, and then raise or lower the price accordingly.
Say we have 10 unique sticker designs. Over time, clear best sellers will emerge. Perhaps 2 of our stickers are best sellers, and they’ve sold 50+ in a single month. Then we might have 5 average sellers that have sold 20-50 copies in the month. Finally let’s assume we have 3 stragglers that have sold just a few copies.
Clearly there is a lot of demand for the best sellers, so we can try raising the price and see what it does to the sales quantity. Start with a $0.25 or $0.50 increase. If we still maintain our sales volume, we could try increasing the price again.
For the average sellers, we’ll leave them at $3.
For our bottom tier stragglers, we can drop the price to $2.50 and see if the sales volume picks up. If it doesn’t, we could try dropping it once more. Maybe two of them pick up in sales but one doesn’t. For the two that picked up in sales, we leave them at the lower price. We are still covering our costs for time and materials.
For the single sticker that didn’t see increased sales even when dropping the price, we should put it back to $3. This is because clearly it isn’t a pricing issue that is holding back buyers. More likely it’s just a design that has narrow appeal.
Demand pricing can optimize your sales revenue and profit, and is usually worth doing once you have a good chunk of sales data.
4. Other factors and options: Bundle Pricing and Loss Leading Pricing. You should consider other ways to drive up your average order value. There is a lot of value to having people spend $20 on a bunch of stickers, rather than one single $3 sticker.
The time you spend fulfilling an order of 10 stickers (for example) is far less than if you were to fulfill 10 individual orders. For that reason, it’s worth offering bundled stickers for a lower price per sticker.
For example, you could let people buy all 10 of your sticker designs for $20. This is a win-win for you and the customer. The customer pays less per sticker, and it requires less time and money for you. It will cost you $7.40 for the stickers (based on our $0.37 per sticker price), and it will likely still only cost you $2 to fulfill the order, barely more than the $1.67 we estimated for a single sticker. Now you are netting over $10 in profit for that bundled order.
Loss Leading pricing is a concept where you offer a certain product at a price below cost, to drive traffic to your store with the hope that they offset that loss by buying other items as well. So you could offer a sticker as an add-on for $1 if they purchase other stickers. Or you could do a BOGO, buy-one-get-one.
Consider Free Shipping
When you offer free shipping, you get a small badge on your listing that shows up in Etsy search. According to Etsy, products that have free shipping get a boost in Search, and have better sales than those that don’t. For stickers and products that you can ship in a standard envelope, it may make sense to ship free. For larger items, it’s something to consider.
As a sticker seller, you should definitely give free shipping for orders over $35, even if you don’t give free shipping for all orders. With an order of $35+, your shipping will be covered by your profit, and you’ll get a boost in Etsy search that will drive sales.
Use Tags to Get Noticed in Etsy Search
In addition to your product title, Etsy tags are a major driver of how your listing performs in search. It’s also an opportunity to give more detailed search terms than what you can fit in the title. Tags, in combination with titles and product categories are used by Etsy algorithms to try to serve up the most relevant products in Etsy Search.
Use all available tags. You can use up to 13 tags, and you should use all 13 if possible. Each tag is an opportunity to match your product to what someone searches.
Target “long tail” phrases. For our bee sticker, instead of using the tag “Sticker,” you should use a tag that is more descriptive. For example “nature lover sticker.” Although fewer people may search for this phrase vs “sticker.” The long tail will have far less competition, and our product is more likely to be relevant to someone who searches for “nature lover sticker.” The key here is to be descriptive.
Describe why your product is different. Your goal should be to stand out from the competition. To that end, you want to think carefully about how your product is different and better than other options. With our stickers we can use tags such as: die-cut sticker, weatherproof, quality vinyl, etc.
Explain who or what your product is for. Here we can use tags such as: sticker for laptop, water bottle sticker, environmental sticker. For other designs you could do things such as: fathers day sticker, sticker for kids, etc.
Experiment with Etsy Ads
With Etsy ads, you can start with as little as $1 per day, so it is low risk to test the waters.
Start by advertising your best selling products. If your shop is new, and you don’t know what items will sell best, you can make some educated guesses.
You will want to let your ads run for a least a few weeks so the algorithms can do their work. Over time, you will get impressions and clicks on your advertised listings. Once you have a decent amount of data, you can make decisions on what products to continue advertising based on the results.
Below is a dashboard from our Etsy shop. To get here, go to your Etsy Seller Dashboard, then click on “Marketing” on the left, then “Etsy Ads.” Finally click on “Manage Advertised Listings” toward the top of the screen. Here we can see detailed results for each of our listings.
Let’s go through the metrics.
Ad Views: In marketing terms, this is your impressions. In other words, it’s how many times your product was displayed to someone in the Etsy Search results, regardless of whether or not they clicked. Your product will be intermingled with a screen full of your competitors. This number in and of itself isn’t highly actionable, and is mostly based on the amount of budget that you put towards your Ad Views.
Clicks: Clicks is exactly what it sounds like. How many times did someone click on your listing after it was served up on their screen as an Ad View. Etsy ads currently charges per click, so this number is directly tied to your budget. It can be manipulated by changing the amount you are spending on Etsy Ads. In other words, if you go from spending $1 per day on ads, to $5 per day, you should see your clicks go up roughly proportionally.
Click Rate: The click rate is simply the number of clicks divided by the number of views. So it’s a calculation based on the first two metrics. A high click rate indicates that your product is doing a good job of grabbing the attention of people who see it. You can influence this with nice photographs, and strong titles. If your product doesn’t have a good click rate, you can try experimenting with different primary images on your listing, or changes to your title.
That said, a low click rate is not necessarily a bad thing. It could simply indicate that your product has a more narrow focus. Case in point is our “Man Riding a Snail” sticker. It has a lower click rate than our other products, but it still has a very solid ROAS (which we will address shortly).
Orders: The number of orders that were made by customers who clicked on an ad. Here is where we move into the sales and revenue portion of your advertising. The quantity of orders is frankly not super important compared to other metrics here.
Revenue: This refers to the dollar value of the purchases made by customers who clicked on an ad. It’s simply the value of the orders multiplied by the number of orders. For example, our “Custom Vinyl Stickers” had 152 orders, and Revenue of $4,657. On average, people who clicked on this spent about $31 on our shop. On the other hand for our Jesus stickers, we had a lot of orders but since they are single stickers, the revenue is much lower.
Revenue is an important metric, but the ROAS is far more important as it illustrates the relationship between your spend and your sales.
Budget Spent: This is the amount of advertising dollars that Etsy put towards each of your listings. As an Etsy seller, you don’t have direct control over how much Etsy allocates to each product. You can only decide how much you want to spend in total per day on Etsy ads, and what products you want it to be used for. Etsy algorithms will then determine how the spend is allocated across your listings.
ROAS: Return on Advertising Spend. This is the most important metric on the board because it gives you a direct indication of how effective your advertising spend is. It culminates all of the prior metrics.
So how do we interpret ROAS? A ROAS of 1 means that for each dollar you spent on ads, you made one dollar in sales. With the cost of your product, and time to fulfill orders, a 1 means that you are losing money on those sales.
A good ROAS depends highly on what your product is. For stickers, our costs are pretty low, so the ROAS of 2.15 that we see for our Snail sticker is good. For other products that may be more costly to produce, an ROAS of 2.8 is often used as a benchmark.
To bring some additional context, let’s go through each of our 5 products.
The first listing, our Vinyl Custom Stickers is our best performer in terms of ROAS at 4.22. This is good for our category and industry. This means that for each dollar spent on ads, we had $4.22 in Revenue. Looking at it another way: our average Custom Sticker purchase from ads is $31 (the revenue divided by the number of orders). So to acquire each $31 order we are spending $7.31 in advertising (1/4.22*31). If we assume our material and fulfillment cost is another $10, that means we are making around $14 in profit from each of these orders. Not bad. We also see relatively high returning customer rates, so the lifetime profit generated by a customer may yet be higher. So we clearly leave advertising on for this listing, and it could be worth testing higher daily advertising spend to see how it impacts the ROAS.
Our second and third listings are the two Jesus stickers. They don’t have particularly strong ROAS figures. For that reason we turned off ads for these two products. However, our “I Saw That” sticker is still an excellent seller on our shop, so we put it on our “featured listings” on our storefront.
Fourth, we’ve talked about the Snail sticker a couple times now. Relative to our printing costs, our Snail sticker has a strong ROAS so we leave advertisements on for it. Although the click through rate is not particularly good, the high ROAS indicates that a decent portion of those who click on it, go on to buy it. It’s a sticker that has a narrow but profitable appeal.
Finally, our Text Stickers. The ROAS is the lowest on the board. Interestingly, it is our second best selling product on our store. So it’s worth noting that even though Etsy Ads may not be effective for a given product, that doesn’t mean the product won’t sell. For the moment we are turning off Ads. Next steps are to dig into what key words have been driving search terms for this product, and see if we can improve or optimize the title and tags so that when it comes up in search it’s more relevant. This could result in better ROAS in the future.
Be Responsive to Customers
Try to respond to customers in a timely manner. The ideal response time is under 24hrs. However, this may not work for every seller. Etsy is a side gig for many sellers, so sometimes 1-day responses aren’t possible, especially on weekends. However, it’s certainly worthwhile to stay on top of your messages.
Customers often request additional information or ask questions before ordering. Being responsive can help you close those sales before they go elsewhere.
If there are problems or delays in shipping, or production, it’s also important to be communicative with your customers. They will be much more likely to give you positive reviews if you are communicative, and friendly.
If there are any errors or issues with a customers order or shipment, we always offer to fully replace or refund the order. We do this even if the error was on the part of the customer or a shipping partner. Although this has a financial cost to our business, it’s helped to drive loyal customers and positive feedback. This approach may not work for everyone, but it’s worth considering how to continually offer a great customer experience.
Make Sure Your Production and Shipping Times are Accurate
It’s impossible to know all of the factors that go into Etsy’s algorithms for search. But it does seem like accurate shipping and fulfillment times are one factor.
Thus, it’s pretty important to have accurate times posted to your listings. It’s better to show slower, but accurate times, than to display faster times that are inaccurate.
That said, if it’s manageable, a faster turnaround time is better. Etsy displays expected delivery times to customers, and those times influence purchase decisions.
Utilize Sales and Discounts
Sales and discounts can be a great way to drive traffic to your shop and incentivize buying on the spot rather than waiting.
Sales also seem to give shops a boost in Etsy search.
You can and should also setup automated e-mails with coupons. For example Etsy allows you send out automated abandoned cart emails with a coupon code, thank you emails with a discount, and more. These can be powerful tools to incentivize purchases and repeat buys.
Shoot for Five Star Reviews, Always
Etsy puts your reviews front and center, all the time. It’s important to try to maintain an average of 5-stars on reviews. But if you have decent sales volume, you’ll inevitably end up getting a dreaded 1 or 2 star review.
Sometimes it’s due to things that are out of your control as a seller – USPS loses the package, for example. In these cases, don’t panic. In our experience, Etsy customers are generally friendly and understanding when something goes awry. Often a explanatory message and an apology can get a customer to change a review to 4 or 5 stars. This is especially the case if the problem was not your fault as the seller.
If you do make a mistake – say you send the wrong item – you can often still salvage the situation. Again, an apology, a promise to fix the error, and perhaps a coupon, free bonus, or some other incentive will often make your customer happy.
That said, you are likely to get a few bad reviews where you can’t rectify it (ie. customer needs stickers by a certain date, they show up late). Still try your best to work out the issue with your customer. If it’s clear they aren’t going to change the review, you can leave a comment to the public on the review itself. A short apology, and explanation can be a good way to ensure folks who see the negative review understand what happened, and that you tried to solve it.
Consider Product Expansion
You can and should continue to grow your Etsy shop over time. As you get more reviews, more sales, repeat customers, your shop should grow organically. But you can also do things that help speed up that process.
One key thing you should consider is product expansion. Simply put, add additional similar products to your shop. New products, and product variations can win new customers, and incentivize larger purchases. That said, it can also add complexity to your business, so be prudent.
Here are examples of product expansions, using a sticker shop as an example:
1. New designs. This one might be the most obvious, but may also involve more work to create or source the designs.
2. New sizes. Here you can take your existing designs, but offer them in various sizes. If you started with 3 inch stickers, start selling 4 inch as well.
3. New end use. For example, you can offer die-cut stickers that people may put on their waterbottles, or bumper stickers that they may put on their cars.
4. Offer different materials. Rather than just standard vinyl stickers, you offer holographic, clear, or paper stickers.
Fine Tune Your Listings
Finally, don’t become complacent with your shop. Fine tune it, play around with the titles, and tags, especially on products that aren’t selling as well. Add more, or better pictures. Add a short video that showcases your products.