How to Start an Etsy Shop (and Make $60K/Month)

by Brandon Boushy
How to Start an Etsy Shop (and Make $60K/Month)

Cash is not king. Creativity is. Have you ever wanted to start your own Etsy shop? Vlad Kuksenko started TagPup and in 18 months became the top pet product seller. You can do it, too!

We sat down with Vlad and learned how he loved art but earning a living as an artist wasn’t an option until graphic design became a major field. Today, he creates personalized dog collars, leashes, and bandanas that fill the number one pet products shop on Etsy.

We’ll share the tips and strategies he used to become number one in his category. (Click the links below to jump to the sections that interest you most.)

Get ready to become your own Etsy shop manager.

What is Etsy?

Wondering about successful Etsy store

Etsy is an online marketplace where shop owners can sell products to Etsy’s 82 million buyers looking for handmade and vintage products. Etsy listings fall into eight major categories:

  1. Jewelry & Accessories
  2. Clothing & Shoes
  3. Home & Living
  4. Wedding & Party
  5. Toys & Entertainment
  6. Art & Collectibles
  7. Craft Supplies
  8. Seasonal Offerings (think Valentine’s Day, Veterans, Memorial, and Labor Days, 4th of July, Halloween, Thanksgiving, and Christmas)

Keep reading for things to sell on Etsy.

What to do before opening an Etsy shop

Before you sell items on Etsy, there are a few things you should do, including answering:

  • What to sell on Etsy?
  • What is the industry outlook?
  • Who are the major players on Etsy?
  • What will my Etsy business plan be?

What to sell on Etsy?

If you’re wondering what sells best on Etsy, check out the Etsy best sellers list. The best-performing segments according to Etsy’s 3rd Quarter 2021 Earnings Presentation are:

1. Homewares & Home Furnishings: $4.2 billion
2. Jewelry and Personal Accessories: $2.1 billion
3. Craft Supplies: $1.4 billion
4. Apparel: $1.4 billion
5. Paper & Party Supplies: $600 million
6. Beauty & Personal Care: $300 million

Many of these are vintage items, handmade goods, or personalized items that do particularly well with Etsy shoppers. Vintage items are classified as over 20 years old, while handmade means that each is unique.

Vlad spent a lot of time talking about the decision-making process of what to sell in an Etsy shop. He explained:

Etsy is a want-based business. If you can personalize it, you can sell it.

He went on to explain:

You need a keyword to be able to sell it. If there is no keyword people are searching, you can’t sell it.

He suggests using eRank to help with your search engine optimization (SEO). eRank has various tools to help small business owners come up with product ideas, optimize their listings, and track their shop page against the best Etsy shops.

Vlad described his product development process as:

  1. Research what has a high search volume using eRank.
  2. Input the term you are targeting into the Etsy search bar.
  3. Look for products with at least one review per day because that means they are selling at least 5 to 10 per day.
  4. Review the listing to establish:
    • What is frequently favorited?
    • What do the favorited items have in common?
  5. Design your offerings based on this search.

Vlad gave two additional pieces of advice that small business owners should follow when wondering how to start an Etsy shop:

  • “You need multiple products that work well together. Carrying a single product doesn’t do as well.”
  • Be aware of seasonality. For instance, items like planners, weight loss tools, and wall hangings tend to do better at the beginning of the year.

Now that you understand how to decide what to sell on Etsy, you’ll want to know the differences between Etsy and other major players in the industry. Let’s take a look.

What is the industry outlook?

Economic forecast for etsy website

According to eMarketer, U.S. eCommerce sales are expected to grow by 10 to 15% per year and total over $1.6 trillion by 2025. Most of the earnings will be from top players like Amazon and Walmart.

Etsy had an industry-leading 107% increase in Gross Merchandise Sales, which means if you meet the requirements to start an Etsy shop, it is the place to be.

Now that you know where the industry is going, keep reading to learn how to start an Etsy shop.

Who are the major Etsy sellers?

Etsy doesn’t share each company’s revenue, but they share the number of transactions for each Etsy shop and the number of followers. Some of the most prominent players are:

  • Planner Kate: An organization shop with 1.8 million transactions and 60K followers
  • Bead Boat: Craft supply shop with 1.4 million transactions and 57K followers
  • ModParty: A bridal shop with over 1.22 million transactions and 113K followers
  • Peggy Sue Leather: Leather supply shop with almost 790K transactions and 25K followers

Pro Tip: See more top sellers on Practical eCommerce’s blog 20 Top Selling Shops on Etsy.

Etsy offers plenty of opportunities for shop owners to make a great living. Here are a few business owners that we’ve interviewed who run businesses similar to Etsy sellers:

  • Urbanity: $102K per month in revenue selling clothes
  • Portland Gear: $120K per month in revenue selling Portland-themed clothes
  • Blk Sunflower: $180K per year selling homemade candles.
  • TagPup: The Etsy seller we’re featuring in this article. Check out our first of two videos with him below.

Write an Etsy business plan

You don’t need a business plan for an Etsy shop, but it will be much easier to start an Etsy shop if you start by writing a business plan. A business plan is something we recommend for every new business.

Your Etsy business plan should include:

  1. Your business name, idea, and goals
  2. Industry and competitor research
    • Market research
    • Size of market
    • Gaps in market
    • Whether Etsy is the best place to reach your market
  3. Financial estimates and budgeting
    • Are there gaps between the money you have and the money you need? How will you solve them?
  4. Marketing goals and processes.
  5. The path to achieving your set goals

Check out our interview with Mike Andes on how to write a business plan.

We’ve gathered some templates and resources for you to make creating a business plan for an Etsy shop easier. Check them out below.

Etsy Business Plan Templates

We’ve gathered templates to help you develop your business plan. Here are some of the best:

EXCITING ANNOUNCEMENT: Stop wasting countless hours and dollars trying to figure out how to succeed on Etsy. Unlock the proven strategies of Vlad, who built a $3.2M Etsy business from scratch. Learn his secrets and start transforming your Etsy shop today with UpFlip Academy.

How to start an Etsy shop

Starting an Etsy shop can be a great way to sell handmade, vintage, or unique items. Here are step-by-step instructions on how to get started:

  1. Sign up or log in to Etsy
  2. Open your shop
  3. Choose your shop preferences
  4. Name your shop
  5. Stock your shop
  6. Add clear photos
  7. Set your prices
  8. Choose your payment methods
  9. Establish shop policies
  10. Calculate shipping costs
  11. Promote your shop
  12. Fulfill orders promptly
  13. Provide excellent customer service
  14. Monitor your shop
  15. Consider Etsy advertising
  16. Stay compliant with Etsy policies
  17. Reinvest in your business

Let’s start by opening getting an Etsy account.

Sign up or log in to Etsy

If you don’t already have an Etsy account, you’ll need to create one. If you do, log in.

Open your shop

How to make an Etsy shop shown by a desktop with the screen that populates when you click on the "Sell on Etsy" button in the top right corner of the Etsy homepage

Click on “Sell on Etsy” in the top right corner of the Etsy homepage.

To create an Etsy shop, you’ll need to go to the Etsy official site and create an account. You can use Etsy sign-in through Google or Facebook to make it easy. After you have created an Etsy account, you’ll want to go to etsy.com/sell. Review everything and click “Open your Etsy Shop.”

Choose your shop preferences

It will take you to a “shop preferences” page that asks for your shop language, shop country, and shop currency. You can change these with the drop-down menu.

It also asks, “Which of these best describes you?” and gives the following options:

  • Selling is my full-time job.
  • I sell part-time but hope to sell full-time.
  • I sell part-time, and that’s how I like it.
  • Other

All the answers on the shop preferences page have default answers already added. If you wish to change the answers, do so, then click “Save and Continue.”

Name your shop

In this step, you’ll choose a unique shop name for your new Etsy shop. The shop name needs to meet the following guidelines:

  • Shop Name Length: Include a maximum of 20 characters, only Roman letters and numbers, no spaces or punctuation.
  • Shop Name Availability: Push “Check availability” to verify whether the name is available.
  • Descriptive: Does it describe what you sell?
  • Memorable: Is it easy to remember?
  • Available in other places: Is the name available as a domain, social media, and trademark?
    • Use our business name generator to verify the name is available as a domain.
    • Search “[your location] business license search” to check availability in your location.
    • Use uspto.gov to check trademark availability.

Once you’ve settled on a great name, enter it then click “Save and continue” to proceed to the next page, where you will create listings.

Want to hear more about Vlad’s TagPup success? Listen to his podcast episode below.

Stock your shop

Concept showing Etsy instructions to list and sell handmade goods with Vlad in the foreground holding his sewing machine on his shoulder.

On this page, you’ll want to add all your listings. You’ll click the blue box that says “+ Add Listing,” which will take you to the “Add a new listing” page. This page is relatively long, so we’ve broken it into sections to make it easier to follow.

  1. Photos
  2. Videos
  3. Listing Details
  4. Inventory and Pricing
  5. Variations
  6. Personalizations
  7. Shipping

What should I include in my Etsy listing details?

You’ll want to include the following information in the listing details:

  • Title: What you call the product, no more than 140 characters
    • Example from one of my hoodies: “Unisex Shaded Hands Heart Hoodie- Artwork by Daisy Gray”
  • About this Listing: Three questions
    • Who made it? Me, member of my shop, or another company or person
    • What is it? Finished product or supplies and tools
    • When was it made? Made to order (use this for print-on-demand), Recent (choose dates between 2003 and today), Vintage (Pre-2003)
  • Category: Search for and select your product type
  • Sizes and Colors: Select the option that describes it best, or select “multiple” to create variations.
  • Optional classifications for Etsy search: Holiday, occasion, style, and graphic
    • There are a lot of attributes, and they change based on the category. Review them and select whatever fits best as they can help with search results.
  • Optional for clothing: Sleeve length, closure, and clothing style
  • Renewal: Auto or manual
  • Type of Product: Physical or digital
  • Description: Describe your product, 1,100-character maximum

Vlad told us:

Read your competitors’ descriptions. Use graphics as opposed to descriptions when possible. For instance, take the dog collars and a ruler to show the different sizes.

  • Production Partners: Asks for information about any outside partners, including the following:
    • Partner name
    • Location
    • Additional information
    • Why you work with them, your role, and their role
  • Tags: Keywords you want your product to show up for, maximum of 13 tags
  • Materials: Type of raw materials. For instance, cotton and polyester.

The tags are the key to getting your shop name in front of your target audience. Don’t forget to use eRank to help with the tag selection.

We asked Vlad, “What Etsy tags should I use?”

Vlad told us:

When creating tags, think about ‘Where should I show this product?’

If you’re creating t-shirts, you don’t need the word ‘t-shirt’ in each one. Just include it in the first three, and use other tags that will put it in front of other people.

To do this section right, expect to spend an hour per product or more.

Example of tags

Given Vlad’s suggestion, you may want to use the following tags if you have a Taylor Swift shirt (which is one of the trending topics for t-shirts this year):

  1. Taylor Swift tour shirt
  2. Taylor Swift Eras shirt
  3. Eras tour shirt
  4. Taylor Swift tour
  5. Taylor Swift Eras
  6. Eras tour
  7. Taylor Swift outfit
  8. Taylor Swift merch
  9. Red Taylor Swift
  10. 1989 shirt
  11. Lover shirt
  12. 1989 Taylor Swift
  13. 1989

How to set up an Etsy shop video

Etsy recommends creating a product video. They give you instructions on how to take listing videos in the Etsy Seller Handbook. If you add product videos, they should meet the following qualifications:

  1. 1080p or higher resolution
  2. 5-15 seconds long
  3. Less than 100 MB file size
  4. 30 frames per second
  5. Don’t edit the video before loading it into Etsy. (If you edit the video from standard video sizing to a 1:1 height-to-width ratio, you may have issues uploading from an iPhone.)

You can make a video with a 1:1 ratio after adding the video to Etsy by using the editing tools on their site.

Now that you know how to add a video to your Etsy listing page, let’s look at the other information covered in Etsy listing details.

Add clear photos

How to open an Etsy shop with great pictures shown with a polaroid of Vlad and his sewing machine next to a tablet with Etsy products loaded on a wood grain table

High-quality images are crucial to start selling. Take well-lit, clear photos that accurately represent your items.

Etsy allows you to add up to ten photos on the website. Want some tips on how to create great product images? Check out the list below.

  • Use natural light and no flash. Late afternoon is the best time to photograph.
  • Include a common object for scale, or use a ruler if needed.
  • Show the item being held, worn, or used.
  • Shoot against a clean, simple background. Most platforms require white backgrounds for the primary photo, so it’s best to have at least one that shows the image on a pure white background because you’ll probably sell on other platforms too.
  • Add photos of your variations so buyers can see all their options.
  • Set the pixels per inch to 72 and 2000 x 2000 pixels.
  • Verify that the combined photo image sizing is no larger than 1 MB total. Otherwise, it slows pages on mobile devices not connected to WiFi.

After you add photos, remember to edit the meta description to help with search engines by hovering over the image and clicking on the pencil. You can also crop or delete the image in the hover menu. If you click and hold onto an image, you can change its placement.

Set your prices

Consider the cost of materials, time, and any fees when setting your prices. Be competitive but also make sure you’ll make a profit. The pricing should be high enough to cover the following:

  • The cost of the goods
  • Your time
  • Etsy’s $.20 listing fee
  • Etsy transaction fees of 5% of the product price plus shipping price
  • The Etsy payment processing fee of 3% + $.25 in the U.S. (varies by country)
  • Etsy’s 15% off-site marketing fee, which is charged every time Etsy randomly places your product in an off-site ad that results in a purchase
  • Cost of shipping labels ($6.99 at the time of writing; learn more about shipping labels in Etsy’s Seller Handbook)
  • Any other costs associated with your Etsy shop

How to start an Etsy shop with no money

You can open an Etsy shop without money, but the Etsy platform requires a $.20 per item listing fee that you’ll have to pay when the product sells. If your items are not made-to-order, Etsy shop owners can get started for free. This is especially true if you can start selling vintage goods you already own as you won’t have to buy new materials.

Now that you know how to start an Etsy shop, let’s look at Etsy payments.

Choose your payment methods

Considering Etsy payment processing fees shown by business owner holding a smart phone with PayPal loading=

Set up your preferred payment method. Etsy Payments is a commonly used option that allows buyers to pay for a physical or digital product assuming your payment account settings allow each of the options as Etsy payments:

  • Credit cards
  • Debit/bank cards
  • Etsy Gift Cards and Etsy Credits
  • Apple Pay
  • Google Pay
  • PayPal
  • Klarna Financing (U.S. only)
  • Klarna installment payments (Australia, Canada, Spain, UK, U.S.)

Establish shop policies

Define your shop policies regarding shipping, returns, and exchanges. This helps set clear expectations for your customers. You’ll have to follow Etsy’s policies, but as a shop owner, you can also define your own about subjects like returns, exchanges, and cancellations. Printify goes into more detail about Etsy store policies.

Calculate shipping costs

Etsy offers a free shipping option, and I highly recommend using it. While Vlad didn’t specifically mention offering free shipping, he offers it on many of his products, and considering how much we love free shipping, we assume that’s part of TagPup’s success! He made some comments that suggest including the shipping in the price of the goods:

Be very clear in what they are buying to get better reviews.

and

Don’t trick people.

Additional shipping charges can be tricky at times, so I (the author) suggest using the free shipping feature. It is straightforward; they’ll ask you a couple of questions, including:

Origin zip code: Where it’s mailed from
Processing time: How long it takes from when the customer orders until when it ships
Where I’ll ship: Continents or specific countries
Shipping services: Your offerings for shipping
Free shipping: Domestic or international (I would discourage offering free international shipping unless you are well-versed in shipping and pricing costs)

Then you’ll have an option to add shipping to the price of the product. Review Etsy pricing strategies to include free shipping and learn how to include the pricing in the product cost.

In addition to specifying shipping options, remember to establish and post a very clear return policy that details:

  • When you accept returns (standardized product, within 90 days, not-made-to-order, manufacturer error)
  • When you will not accept returns (damaged after shipping, custom made, after 90 days)
  • Time frame to return the product
  • Who pays for return shipping

Promote your shop

Marketing is the trick to growing any business. You have to get your business and products in front of people to sell them. Fortunately, Etsy makes it pretty easy for a small business to sell on its marketplace.

If you don’t have much experience with marketing, it starts with market research. Mike Andes goes into great detail about market research, including identifying potential customers, target markets, and demographics. Check out our interview with him below:

Vlad had a lot of input on how to sell on Etsy. He emphasized the importance of product design:

Art ought to communicate to [potential customers]. If it doesn’t communicate, it’s not art and won’t sell.

He also told us you should “price your products based on the middle of the pack” because Etsy customers aren’t looking for items they need but that they want. They will go for the one that meets their desires the best.

He also shared this advice:

Don’t race to the bottom and satisfy the keyword.

His strategies for becoming one of the best Etsy shops for pet products are also used by retail giants, and you can leverage them, too. As you start marketing your Etsy shop:

  • Create a loss leader: This is a pricing strategy that intentionally takes a loss on a product to gain market share. Vlad uses this with new products to gain traction on the Etsy website.
    • Vlad told us: Underbid, rank, then raise the price.
    • Use Etsy promotional pricing.
  • Utilize Etsy free shipping: Everyone loves something free. With the success of Amazon Prime, online shoppers expect every online marketplace to offer free shipping.
  • Gather data and improve: While underbidding, he’s able to gather data.

He told us:

I’ll take a loss to gather data and improve my knowledge about whether it performs, then introduce new keywords.

Vlad also suggested:

Use the sales and coupons. I’ll set the product to the original price, then discount it heavily. I also match products together to create packages people love. Always create sales for holidays.

He also said that he throws in a small gift for repeat customers occasionally, but he doesn’t do it all the time.

For more on TagPup’s winning formula, watch our second video with Vlad here.

Helpful marketing tools

There are some useful marketing tools that small business owners use to market their companies:

  • Canva: Simplify graphic design with Canva. Get access to thousands of templates for websites and social media for as low as $4.99 per month.
  • SurferSEO: Write blog content faster and rank higher on search engines with SurferSEO.
  • MailChimp: Email and SMS marketing automation is one of the keys to success that many small business owners mention. Get started with Mailchimp.

Fulfill orders promptly

Ship orders as soon as possible after they’re placed. This will help you provide excellent customer service. You can use Etsy shipping labels to save up to 30% on your shipping cost. Learn more about shipping label fees on Etsy.

You can also provide tracking information by using Etsy tracking labels or providing the tracking codes to the customer by other means. You’ll need to check Etsy and your preferred shipping provider to figure out the best way to handle shipping.

Provide excellent customer service

Action shot of Vlad holding his sewing machine and a custom dog collar and surrounded by blurbs of his customer service advice

Respond to customer inquiries and concerns in a timely and friendly manner. The service you provide both before and after a purchase will impact customer satisfaction, whether they return to your shop, and whether they review and suggest your shop to other people.

According to inc.com, it takes 40 positive reviews to fix the damage done by a single negative review. When someone is upset, take the time to solve their problem politely. Vlad told us:

I work with customers on returns as long as they are less than 90 days. After that, we don’t. I just try to make them happy.

The process I (the author) have found works wonders for dealing with unsatisfied customers is:

  1. Apologize for the inconvenience they are experiencing.
  2. Ask what you can do to fix it.
  3. Listen to their answer.
  4. Gather information about whether it was your error or theirs.
  5. Do exactly what they asked unless it is unachievable.

This can be a challenge because it may result in a single order resulting in a loss, but it’s far less costly than a bad review.

Monitor your shop

Vlad discusses his workflow at the 35-minute mark of UpFlip podcast episode 10. If you haven’t already listened to it, check it out now.

He told us:

Review your store and each item for week-over-week growth. If that section of the pie doesn’t grow, stop. If the reviews for it aren’t good, consider discontinuing the product.

Consider Etsy ads

Etsy has a built-in ad feature where you can specify your daily ad spend limit, and they promote your products accordingly. The Etsy Seller Handbook answers how Etsy Ads work in more detail, but you basically create a budget of between $1 and $1,000 a day.

Vlad told us:

I typically spend between $300 and $1,000 per day on ads. Etsy really creates a level playing field, so going higher doesn’t mean it all gets spent.

He went on to tell us the best way to use ads is to utilize keyword research.

Find the most creative way to make the ad as quick as possible to make it where the ad budget goes as far as possible.

Stay compliant with Etsy policies

Young woman holding a laptop learning how to open Etsy shop by reviewing seller policies page

Familiarize yourself with Etsy’s policies to ensure you’re abiding by their rules and regulations.

Reinvest in your business

You’ll want to reinvest in your business to help it grow and get more customers. Vlad told us:

Margins are 50-60% if you don’t reinvest in the business, but we tend to reinvest in machinery.

In addition to adding machinery, you can create new products or increase marketing to expand your business. Once you earn more income consider opening a retail location or hiring more employees to help.

Selling on Etsy FAQ

Where to buy materials and equipment for an Etsy store

You can purchase materials from a variety of places. Some of the places to buy when you first start are:

  • A brick-and-mortar store: JOANN Fabric and Michaels are two that offer lots of selections for craft businesses.
  • Etsy Craft Supplies: Find craft supplies you know are selling well on Etsy.
  • Amazon: Craft supplies and tools can come directly to your home from the number one online retailer.
  • Alibaba: Get bulk orders from overseas (allow weeks to months for shipping).

If you’re looking for equipment, Amazon and Alibaba might have it, but you can also check places like:

Vlad told us:

You can spend 200 bucks at JOANN and customize mugs with vinyl. The materials and equipment costs depend on what you’re making and what machines you need.

He also told us:

Inventory is such a big issue. Sometimes I spend $5,000 on shipping to get $10,000 of product. One of the ways to fix that is to pay half up front and half on delivery.

Do I need a business license to sell on Etsy?

Etsy does not require a business license to start listing physical or digital product, but the government might if you make more than $600 from your Etsy shop. In addition, a business bank account, reseller’s license, and business credit card will all require a business license.

Each city, state, and country have different licenses, permits, and tax forms required. Refer to the SBA License and Permits page to identify what your Etsy shop needs.

Learn more about Etsy businesses

Vlad suggested reading the book E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. You can get it through our Amazon shop.

  • Check out Vlad’s YouTube, TalkShop.
  • Save 30% on Vlad’s course.
  • Etsy has 2 YouTube channels:
  • Nancy Badillo, a highly successful Etsy seller, has almost as many followers as Etsy’s channels combined.

Start your own Etsy shop

We’ve explained the market outlook for eCommerce, how to start an Etsy shop, licensing requirements in case you want to make your shop a formal business, and marketing strategies to improve your business results.

If you’d like to consider other business ideas, check out our blog about the 30 best businesses to start for under $10,000.

Etsy can be an extremely satisfying way to earn a living. What kind of products are you thinking about listing on Etsy?


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Author

Brandon Boushy

Our lead writer, Brandon Boushy, has been a business consultant, business owner, and marketer since 2017. Brandon is committed to the pursuit of knowledge and continuous improvement. He measures his success based on how many business owners he helps succeed. Brandon started Raising Daisy Photography in 2017 with Stephanie MacIver. His role was focused on marketing, estimating, and managing customer interactions. He is also a freelance business researcher and has provided over 3,800 hours of business research for more than 50 clients. His blogs are read by over 2 million people every year. Brandon told us: "My motto is never quit learning. I bring this motto to everything I do, and find writing the best way to help share the data I obtain to assist business professionals pursue their dreams." He empowers companies to improve their communication and brand awareness through creative content strategies and blog writing.

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