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How Does Etsy Work? 7 Answers About Selling Here

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If you’ve ever considered buying handmade, unique crafts online, you must have heard of Etsy. The marketplace connects thousands of artisans with interested buyers.

Whether you want to start selling on Etsy or are just curious, you might have wondered: “How does Etsy work?” In this article, we’ll answer this and all the related questions about selling on Etsy.

1. What Is Etsy, and How Does It Work?

Etsy is a marketplace, like Amazon or eBay, for selling handmade goods, vintage items, or craft supplies. It is a consumer-to-consumer platform that provides value to both buyers and sellers.

Buyers get to purchase unique, customized products that stand out, while crafters can make a decent amount of money.

The process of selling on Etsy is quite simple. First, create an Etsy account, provided you don’t have one. Next, you’ll have to:

sell on etsy screenshot
  1. Set Up an Etsy Shop: To put your products up for sale, you’ll need to create a store, specifying the store preferences and its name.
  2. List Your Products: The next step is to add your products to your Etsy shop. Here, fill out the product details, add imagery and videos, specify the inventory and pricing, and set the shipping options. You can also offer an option for personalization if you like.
  3. Set Up Payments: Once you’ve listed the product, Etsy will ask you about your payment information, including personal and bank account details.
  4. Add Billing Details: Next, you’ll have to set up billing details for Etsy seller fees.
  5. Customize Your Store: Now, you’ll be able to access your Etsy shop. But don’t forget to customize your shop page and set the necessary policies.
etsy shop setting up screenshot

Once your Etsy shop is live, buyers can visit it and purchase your products. On Etsy, sellers are responsible for packaging and shipping the product.

However, you can buy shipping labels directly from your Etsy shop to fulfill your orders. When they receive the shipment, buyers can leave the reviews—which are essential for the growth of your shop.

2. Is Etsy Only for Handmade Products?

Etsy is only for handmade products, vintage items, and craft supplies. This means that you can sell non-handmade products if they qualify either as vintage items or craft supplies.

It is worth noting that you can employ a small team to create handmade products, but you’ll have to disclose it on the About Us page of your Etsy shop.

Vintage items should necessarily not be handmade, but they must be at least 20 years old. This means that non-handmade collectibles that aren’t 20 years old can’t be sold here.

Another exception is craft supplies. According to Etsy, “Craft supplies are tools, ingredients, or materials whose primary purpose is for the creation of an item or special occasion.” They can either be handmade or mass-produced. Examples include beads, DIY items, and knitting kits.

Although Etsy removes shops selling non-handmade items, you’ll still see several products on Etsy that are mass-produced and not handmade. However, if you’re planning to sell, we’d advise you to strictly follow the company guidelines about handmade items.

3. Can You Sell Anything on Etsy?

No, you can only sell handmade products, vintage items, and craft supplies on Etsy. Anything that is produced commercially, can’t be sold here.

handmade necklaces

To give you an idea, you can sell handmade:

  • Jewelry
  • Home decor items
  • Furniture
  • Invitations and notecards
  • Planners
  • Clothing and shoes
  • Artwork
  • Phone cases, etc.

Besides, you can find vintage jewelry, clothing, decor, etc. on Etsy. Apart from all these physical items, Etsy lets you sell digital products as well. A few of the best-selling digital products are printables, business cards, resume templates, and sewing patterns.

4. What Items Are Prohibited? Can You Sell Medical Devices?

Though there are thousands of things you can sell on Etsy, it does prohibit you from selling some.

The items prohibited on Etsy are alcohol and drugs, things that promote violence or hate, illegal/regulated items, weapons, explosives, adult content, and animal or human products.

Additionally, services, rentals, and metaphysical items (spells and hexes) are banned. As for medical devices, you cannot sell medical drugs, pharmaceuticals, and regulated medical devices.

Etsy permits selling face masks and covers, provided sellers comply with the company’s policy. Moreover, you can sell tools like pinwheels and tubie clips.

If in doubt, you should check Etsy’s prohibited items page.

5. What Are Etsy’s Commissions?

With several fees involved, Etsy commissions are not as straightforward.

percent sign calculator

Etsy Listing Fees

For listing a single product, you’ll have to pay $0.20. After every four months, the listing expires (if the product doesn’t sell), and you’ll have to repay the same fee to renew.

If you’re listing more than one quantity (for example, five bags), a listing fee of $0.20 will be charged for each of them. Don’t worry about paying upfront, as the listing fee for the second piece is only charged after you sell the first one.

Etsy Transaction Fee

Etsy deducts 6.5% of the total order amount as transaction fees only after the product sells. This 6.5% fee also applies to shipping, wrapping, and personalization costs.

Etsy Payment Processing Fees

For payments processed through Etsy Payments, the platform charges extra fees. This fee varies depending on the country. For the USA, it’s 3%+0.25 USD. For other countries, it’s in the range of 3-6.5% along with a fixed amount.

Etsy Offsite Ads

Etsy places ads on various social networks and search engines. If someone purchases your product through Offsite Ads, Etsy will charge a 12-15% fee.

For sellers with sales below $10,000 (in the last 365 days), the fee is 15%, and they can opt out of the program. Those over $10,000 will pay 12% with no option to opt-out.

Besides these, there are several optional fees you might have to pay. These include shipping labels, Etsy ads, subscription, pattern, currency conversion fees, etc.

6. Can You Re-Sell Items on Etsy?

No, you can’t re-sell items on Etsy. The only exception to this is vintage items and craft supplies. In other words, anything that falls under the handmade category cannot be resold.

Selling hand-crafted products that you didn’t make or design is considered reselling. However, if products fall under the category of vintage or craft supplies, you may resell them.

7. Are There Any Etsy Alternatives To Consider?

Despite being the first-of-its-kind, Etsy is not the only website for finding unique artwork or handmade products. There are several Etsy alternatives you can consider:

  • eBay
  • ArtFire
  • Amazon Handmade
  • Big Cartel
  • Folksy
  • iCraft
  • Creative Market (for digital products)

Selling on Etsy Can Be the Right Decision

If you’re thinking of starting an Etsy shop, you’re likely to have tons of questions about how Etsy works. The complicated structure of commissions, handmade and reselling policies, and ban on certain items are all too confusing.

However, we hope this article answered most of your questions and provided the information you need to start selling on Etsy.

Welcome to the World of Handmade and Vintage: What You Need to Know About Etsy
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