Pros and Cons of Selling on Etsy
Ease of Use and Initial Setup
If you are brand new to the e-commerce game, you have never sold online before, you are just learning how to create designs, this is your first money venture online, then Etsy is a wonderful place to start. You do not need to build a website. Building a website doesn’t sound that complicated until you realize how many different apps, how many different layouts, what you can do to optimize conversion. There are so many more moving pieces when you have your own website versus with Etsy, you already have a storefront. You just need to upload your branding and you are pretty much set up and ready to start selling. Etsy is actually extremely extremely cheap to start selling and to even make sales. There are no monthly fees.
Understanding the Fee Structure
You don’t have to be paying if you’re not making sales. Etsy is not making any money. You just pay 6.5% of the transaction when you actually make a sale if Etsy drives you that sale. You actually get some money back from that if you drove the sale. But if Etsy drove you a sale, all they’re taking is 6.5%. And then there’s a few extra fees like a 20 cent listing fee and depending on where you live, some taxes on that.
But compared to other platforms out there, if you actually compare them all, Etsy is very cheap. The only upfront fee that you do pay, no matter if you get a sale or not, is the 20 cent listing fee, which is going to be 20 cents every time you put up a brand new listing. Once you got a lot of listings live, that does add up and perhaps your first order might not be profitable, but usually your first sale will cover those transaction fees.
Benefits of the Built-in Marketplace
In the long run of things, it is not a high price at all to get set up. Etsy typically is the fastest path to making your first sale because you can get set up and selling literally within a day. You could have 10 listings up in your first week. You could have 50 listings up in your first month. It actually took 5 weeks to get my first sale. And that was at 70 listings. And that was back before I knew nothing about Etsy.
So, nothing was optimized. All of those were kind of learning points. So, it did take a little bit of time. But 5 weeks of just listing, and I was doing this part-time after work, really wasn’t that long in the long-term view or scheme of things. And probably the biggest biggest benefit for people selling on Etsy is that Etsy is a marketplace. There are already shoppers on Etsy searching for what you’re selling.
Mastering Search Engine Optimization
Your goal is just to write your SEO, which is your titles, your tags, your descriptions, in a way that is going to show up for the right searches and for the right customers. Once you get the hang of SEO, it’s really not that hard. It does take some time sometimes for listings to crawl up in the rankings, but over my about 4 years on Etsy now, I don’t run ads to my store. So, all of my time on Etsy is spent doing brand new designs or doing customer service. There are some drawbacks to selling on Etsy as well. And the first one is that you don’t own the traffic. One of the main drawbacks to Etsy is that Etsy traffic or its customers are exactly that. They are Etsy’s customers, meaning your store is in the hands of Etsy.
Risks of Platform Dependency
If they change their algorithm that might hurt your store. If you get a few flags against your store, they could shut it down, potentially stopping all of your sales. They could run off-site ads, maybe if you didn’t even want to. At a certain point, you do have to have off-site ads on, and they’re going to take more of a cut from that. So, you’re always a little bit at the mercy of Etsy, which isn’t always a great thing long-term if you want to make sure that nothing ever happens to your store. You might lose a little bit of sleep at night, especially about a year ago, there was a time where Etsy was just shutting down stores left, right, and center, and there was a lot of mass panic and a lot of people moved to Shopify because of that reason.
Limitations in Long-Term Scaling
And the other reason that Etsy is a little bit at a disadvantage is because scaling is slower and a little bit more capped. You are competing on search terms and trends. You are competing for inbound searchers, which may be a lot more limited. And you can only sell 30 shirts a month if there are only 30 searches for that a month.
Not everyone knows what they’re looking for all the time. You can still make an insane living off of Etsy. It’s what allowed me to quit my job years ago. But you are limited to your customer base, people that are searching on Etsy. Not everyone in the world is searching on Etsy. And not only that, but you are competing with a lot of people on Etsy as well. Because of the simplicity of use, a lot of people do rely on Etsy to make sales, and you have to continually be trying to find a best seller.
Who should Sell on Etsy
Advantages for Beginners
Once you have a few best-selling listings, they majorly kick off. But then that trend may pass, your sales dry up a bit, and then your next goal is to keep trying new listings to see if you can find more best-selling listings and designs out there. Etsy is really, really great for beginners to e-commerce, people wanting to sell online for their first time. They want to get set up quickly. They don’t want to worry about the technical side of setting up a website, setting up your taxes, setting up your policies. A lot of the setup that you need to do in Shopify is already baked into Etsy’s profile so that you can focus on just designing and getting out new listings. It’s great for people who are on a limited time budget because you’re not paying a monthly fee.
Flexibility for Limited Budgets
You are just paying for new listings that go up. you can actually just build your store at your own pace. Versus on Shopify, if you’re paying a monthly fee, there is a much bigger pressure to get set up and selling so that you can make that monthly fee worth it. Versus on Etsy, if you want to do everything in the first month, that’s fine. But if you can only have maybe an hour a day, an hour a week, you can build it up at your own pace. If you have a tight budget, Etsy is best as well. On Shopify, my monthly fees are close to $1,000. When I add in my email marketing, if I add in all my apps, I’ve had to upgrade my Shopify plan as well. Granted, that came with sales and it started, I think, at $39.99,
Low Financial Risk
but still, even at $39.99, for a lot of people, that might not be an easy payment to pay if you’re not seeing sales for a few months. Again, with Etsy, you’re only paying for those new listings, and you do pay a fee when you make a sale on Etsy, but that means you’ve already made a sale, which means you should have charged enough to have a profit as well. So, you can go into your business with very, very little in your bank account and still be able to grow that up versus to set up Shopify and to include all the apps that are going to help you actually make sales. And then to run ads, my store fully runs on Facebook ads and I spent quite a bit and I did spend a few hundred in testing ads before I even found some winners.
Validating Products and Learning Design
Etsy is also wonderful for people who have never designed apparel or print on demand products before. You don’t know what’s actually selling out there. You don’t know how to create a design that sells. Etsy is the best place to learn. You’re going to be able to put up new designs and you can validate them, see if they start getting organic sales. If you’re able to get organic sales on a product, you know you’ve created a great design. Otherwise, on Shopify, you’re going to be having to run money a lot of the times to your products and you’ll never know if it was a product problem, an ad problem, a website problem versus if you validate and you have a bestseller on Etsy, it’s likely that you’ve created a good design. So, you can take that out of the running on Shopify.
Pros and Cons of Selling on Shopify
Establishing a Permanent Brand
After setting up both Etsy and Shopify, I can honestly say it’s a complete different ballgame. Your time focus is going to be very different. Shopify is where you build a lasting brand. Think of Etsy as renting a booth at a farmers market versus if you have Shopify, you are building your own business, your own storefront. With Shopify, you have a lot more control. You can build out your full website. You can have your own domain. And you don’t have competition competing with you right beside your listings. Having that control helps you build a more scalable, lasting brand. You don’t have to worry about being shut down at any moment about Etsy now pushing a competitor above yours. You can get in contact with your customers via email and you can sign them up to a newsletter.
Higher Costs and App Management
You do need permission to still message them, but it’s a lot more in your hands when it comes to Shopify. But with that control comes some costs. Shopify is a higher time and monetary investment. Shopify plans start at $29, but that does not include processing fees. That doesn’t include if you’re buying a new theme, if you need any apps.
Once you actually start selling and building and optimizing your website, you are going to need many different apps on your store and the biggest cost for most people is going to be their marketing costs. If you would like, you can build up your site fully organic. If you’ve got a big following on Instagram or Tik Tok, or you want to just focus on releasing videos and reals and Instagram, that is going to be a lot of time commitment to start really getting very good videos that are going to drive sales.
Relying on Paid Advertising
I have tried that for my store and really it did not bring in that many sales. My biggest sales maker is Facebook ads and I have to pay for every single sale that I get. Some months my Facebook ads are more profitable, next month my CPMs or the cost to show my ad to a thousand people has gone up. So my profit can vary quite a bit and sometimes I can easily go into a not profitable sale if my cost per purchase on Facebook is weirdly high. So while I’m not at the whim of Etsy on Shopify, I personally for my store since I rely on Facebook ads am pretty much at the mercy of Facebook ads. And there’s been many stories over time of random Facebook ads, the algorithm being changed, and the cost per purchases skyrocketing.
Time Commitment and Technical Challenges
I had that happen to my store last year where I was doing really well during the summer and then soon as September hit, my cost per purchase doubled and then my orders were not profitable anymore. It’s also going to take a longer time typically to get selling on Shopify. To build a website, you usually can’t just do that overnight. Same with all of listing your products. Same with figuring out Facebook ads and then setting up your Instagram. There’s a lot more moving pieces and a lot of things and different pages to get set up so you can legally be selling on your own website. I have my Etsy and my Shopify currently running. Both are profitable. But I will say I probably spend 80% more time, a lot more time on Shopify because every day I’m checking my ads, trying new creative.
Unlocking Greater Scalability
I’m testing different tweaks on my website to see what affects my conversion rate. It is a lot of fun. I love the technical side of Shopify, but a lot more time on Shopify is optimizing my website and my ads versus my time on Etsy is just having fun creating new designs and getting them listed. But the scalability for Shopify is awesome. You can be reaching people while they’re doing their everyday live things.
You can catch them on Google. And you can catch them while they’re scrolling on Instagram, on Facebook, and get people to say, “Oh, maybe I didn’t need this before, but I just saw this and I want it.” Versus on Etsy, you are only reaching people who had that thought saying, “I already need this product. I’m searching for it.” And then you are competing with everyone who offers that versus your potential for sales on Shopify is much larger.
Who should Sell on Shopify
Scaling an Established Name
You can convince people they need your product and you can reach them at any point and you can reach them multiple times. And the more times they see your ad, the more they might recognize your brand and be willing to buy. The person who should be selling on Shopify might already have a brand out there. They’re already making 5 to 10K on their designs and they want to scale that higher with their own website. They want to build a recognizable brand. They don’t want to sell on a marketplace. And they are more determined to create their own name out there and to work on their own brand type of designs. And then maybe they love doing ads. They want to learn how to do social media. They want to learn how to run Facebook ads, Tik Tok ads, Pinterest.
Data Analysis and Precision Marketing
They like the idea of driving their own traffic and then that is where a majority of their time is spent. They’re a lot more tech focused so that they don’t mind doing these little tweaks, looking at data every day to compare. Did this email work better than the last email? Did having this color of my button get better results than when it was a green button?
This is my honest advice for what someone should do if they are on the tipping bridge and they don’t know still which one to start with. I highly recommend people start with Etsy. If you don’t know your niche, Etsy is wonderful. You can test multiple different niches. You can learn how to create designs. And you can start seeing what designs people are actually interested in. When I first started on e-commerce, I didn’t know what niche I wanted to sell in.
My Final Advice
Starting with Niche Validation
Etsy helped me figure that out. I created designs across many niches and then I found which one people were buying more for me, which designs I was better at appealing to this certain niche. And then once I had that and I had validated designs in that niche, I created my own Shopify website around just that one niche. So my Etsy had a bunch of niches in it. My Shopify had just one niche in it so that I could really target my ads and my social media. And then I put my validated Etsy designs on ads on Facebook. And typically the ones that were already best sellers on Etsy were also my best sellers and my best performing ads on Facebook because I already knew that there was a market for them and people were already resonating with those designs.
Avoiding the Overwhelm of Both Platforms
One thing I wouldn’t personally recommend is starting both at the exact same time. If you don’t have any previous experience with these platforms, trying to learn both at the same time and get both to be successful is going to be very hard and very overwhelming. You’re going to be wasting money on Shopify running ads to things that maybe don’t sell.
Maybe you don’t know how to create good designs yet and you’re not sure on Shopify what part of that isn’t doing well, versus on Etsy, it’s pretty easy to narrow down when it is a design problem. I made sure I knew Etsy like the back of my hand before ever even dipping my toes in Shopify. My Etsy I can spend maybe an hour a week on. I actually have now outsourced all of the customer service, so it’s not something I really have to worry about.
Managing Your Business Efficiently
It is very passive, my Etsy store. Now, I just have to create new designs once in a while, which then will later funnel into my Shopify if they sell and they sell in that certain niche that I am working in. But my Etsy takes up very little time, very little money commitment versus I will say Shopify now takes up majority of my time, but I’m having fun with it. I kind of got bored because I knew Etsy really well and this has been the next new challenge in trying to grow this own brand and it has been doing well, but it has been taking time because there’s so many moving pieces and things I needed to learn to set up my own brand and sell on my own website using Shopify. Read More