How to Make Money on Etsy Now: A 6-Step Guide

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Etsy shops are simple to set up, can make you money, and have minimal listing fees when managed correctly.
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Etsy is swimming with people who can’t wait to spend money. The question is whether or not your store will be the one they find.

“Selling on Etsy is not a difficult process, but many creators or shop owners can overcomplicate it,” says Aviad Faruz, Chief Executive Officer at FARUZO, an Etsy shop that sells personalized jewelry. “The best way to deal with this problem is to pick a niche and go along with it when defining the catalog for your shop. It helps in making things easier in the long run.” 

Since going public in 2010, the creator marketplace has exploded with interest from artisans and consumers alike who are wondering how to start an Etsy shop. Etsy had 96 million active users and over seven million Etsy sellers in 2021, according to data compiled by Statista, an analytics company. The platform also produced a whopping $2.3 billion in revenue last year.

Whether you want to build on Etsy for a side hustle or as a small business owner, you can open your own storefront in minutes. Furthermore, it won’t cost you a fortune, and you’ll have potential customers waiting to come and browse your offerings when you launch. We interviewed four current shop owners on how to find success on Etsy; here’s what they had to say.

How Many Items Do I Need to Start Selling on Etsy? 

Good news: You can start selling on Etsy with just one item. However, more listings generally equate to more visibility for your storefront, and a successful Etsy store prioritizes search engine optimization and multiple easy-to-browse Etsy listings. 

“The amount of products you need depends on what your niche is,” says Pat Servin, owner of PicasPrintables, an Etsy shop that sells printable wall art, party games, and planners. “In my niche, it’s important to have more than 25 items. Many in my niche upload new items every week. 

But deciding on an ideal product count sometimes requires a bit of trial and error.”

Having multiple products in your Etsy shop on day one can sound intimidating at first, but doing so will let you accelerate the testing process and discover which products sell better than others. If you’re wondering how to start an Etsy shop that will gain momentum quickly, listing details for multiple items will give you more data.

“Having multiple products in your shop is key; it allows you to do your own customer research,” says Carrie Williams Howe, owner of The Happy Hive, an Etsy shop based in Vermont that sells hand poured beeswax home goods. “When I first started, I had both personal care products and home products in my shop. I found that personal products like lip balm and lotion were harder to sell, possibly because the market was saturated. But the home products started taking off right away. This allowed me to hone my focus and eliminate products that didn’t do well for me.”

Pro Tip

Focus on your niche. Create physical or digital products you love, price them competitively, and create compelling descriptions to attract the right buyers. 

How to Start an Etsy Shop in 6 Steps

You can start an Etsy shop and get your online store off the ground by following these six simple steps.

Step 1: Create an Etsy Account

Visit Etsy.com from your desktop and select the “Sign in” link. Unless you already have an Etsy account, you’ll click the “Register” button and input your email address, first name, and password to sign up. 

Step 2: Activate your Etsy Shop

Once your Etsy account is established, you’ll use it to set up and manage your new Etsy shop. Visit the sellers page, click the “Get started” button, and input the credentials you created in step one. Click the button below the banner that reads “Open Your Etsy shop” and select your preferred language, country of residency, shop currency, and other shop preferences.

Next, click “Save and continue,” enter your shop name, and select “Save and continue” again. If the shop name you want is over 20 characters or already in use, Etsy will prompt you to choose a different name. Keep in mind that you’re only allowed one shop title change once your shop is established. 

Step 3: Add Listings to Your Online Shop 

On the next screen you’ll create your first Etsy listings by uploading or entering the following information: 

  • Relevant images or videos, including a thumbnail image (up to ten photos)
  • A title, brief description, the listing category and attributes (optional)
  • Tags to help make your listing more visible in searches (optional)
  • Materials (physical items only) or craft supplies used in the process
  • The price, quantity, SKU number (optional) and shop tax rate (if applicable)
  • Variations if you’re selling a physical item
  • Shipping price options and the item weight and size (if you’re located in the U.S., selling physical items and using calculated shipping). 

If you can swing it, offering free shipping as an incentive is a strategy many Etsy business owners use to increase interest in their online store.

Step 4: Spruce Up Your Storefront

Before adding items to your shop, customize its appearance to make it shine. Consider adding a banner and shop announcement to greet online visitors, and don’t forget to upload a logo that complements your brand. 

There’s also a space to educate potential customers about your company and what it stands for. You can add photos or videos to the about section to illustrate the evolution of your brand, define your niche market, introduce the shop manager or other team members, and share visuals of anything else you’d like visitors to know. 

Most importantly, don’t forget to include your store’s policies. Be sure to provide guidance on payment options, order processing times, shipping, and your exchange and return policies.  

Step 5: Select Payment and Billing Settings 

You’ll need to indicate your tax filing status to get paid on Etsy. Here’s what you’ll input based on your selection: 

  • Individual or sole proprietorship: your full name, address, phone number, date of birth, last four digits of your Social Security number and country of residence
  • A registered legal entity or incorporated business: name and address of the business entity, EIN, business registration number and information about the shop owner (including the name, date of birth, address and last four digits of their Social Security number) 

Related: LLC or S Corp? The Tax Decision New Business Owners Need to Make

Remember that if you’re pursuing Etsy as a small business owner, it’s wise to set up a separate business bank account that can serve as the payment account for your Etsy business.

The final step is to select the county where the bank you’ll use to receive sales proceeds from Etsy is located. Enter the routing and account number, and from there you’ll be all set to get paid through Etsy. You’ll also need a credit card on file for Etsy to collect fees, such as the payment processing fee, the Etsy listing fee, and any other Etsy transaction fees. Enter your full name (printed on the card), card number, expiration date and CVV number, and Etsy will withdraw its fees monthly. Consider applying for a business credit card to help you keep business and personal expenses separate.

Step 6: Open your Etsy Shop

The final step is to open the virtual doors to your Etsy shop. You can do so by selecting the “open your shop” button after entering your credit card information. 

For More Visibility on Etsy, Prioritize Descriptions and Visuals

You want to make the best first impression possible when prospective customers discover a product in your Etsy shop, especially if they’ve found you from either the Etsy search bar or other search engines. Two best practices for this are to prioritize quality product descriptions and incorporate good images or videos into your listing.

“With each product, it’s important to create descriptive overviews and use a lot of synonyms in describing it,” says Meaghan Thomas, owner of PinchSpiceMarket, a Kentucky-based Etsy shop that sells fair trade spices. “Thinking a step past just the keywords is important, too. You’re trying to sell your product to people, so giving as much relevant detail about it is helpful.”

Visuals are equally important to garner attention for the items you’re selling. 

“Videos are also key to catching eyeballs and sales,” Thomas adds. “Etsy’s algorithm loves when you have a video showing your product or how to use it. They are easy to do and don’t have to be heavily produced.” 

Does It Cost Money to Start Selling on Etsy?

It’s free to start an Etsy shop. However, sellers pay Etsy listing fees and transaction fees. You’ll also remit payment processing fees if you use the Etsy Payments feature. The fee schedule is as follows: 

  • Listing fees: $0.20 per listing (each listing is valid for four months)
  • Transaction fees: 6.5% of the order amount, including shipping (and gift wrapping if applicable)
  • Payment processing fees: $0.20 per transaction if you use Square when selling on-site

How Do Taxes on Etsy Work? 

Some sellers are subject to VAT or value-added tax. It must be added to the transaction and payment processing fees if applicable. Check the fine print from Etsy and with your industry to determine if you’ll need to add any other taxes or fees to your listings and ensure transparent pricing.

If you love to create physical or digital products and find visibility to be your biggest problem, becoming an Etsy seller might be a perfect fit for you. Set up an account and start listing items today to accelerate the trial-and-error process and move yourself that much closer to making money online.