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The Ultimate Guide to Opening an Etsy Shop

Caroline Goldstein

Contributing Writer at Fundera
Caroline is a former Fundera staff writer and current freelance writer, specializing in small business and finance. She has an MFA in fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

Latest posts by Caroline Goldstein (see all)

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Hand-knit dog booties? Portraits made of gum? “Seinfeld”-themed enamel pins? Whatever objects you love to craft, no matter how niche they are, there’s a horde of consumers out there looking for your product—and most of them are browsing the Etsy marketplace.

If you don’t have previous experience with the platform, starting an Etsy shop may seem like a complicated prospect. But in reality, opening an Etsy shop is relatively straightforward and can provide for an optimal home for your products—either alongside an existing website or ecommerce platformor as your primary online storefront.  

Here, we’ll first walk you through how to start an Etsy shop on the platform with eight simple steps. Then, we’ll discuss Etsy seller fees as well as share some tips from pro Etsy sellers about how to ensure your Etsy shop’s success right from the start of your digital venture.

How to Open an Etsy Shop: 8 Steps to Get Started

Opening an Etsy shop on the platform is easy—just follow these eight steps.

1. Create an Etsy account.

The first step to starting an Etsy shop is simple: You need to create an account. You can set up an account with Etsy by clicking on the “Sell on Etsy” link, entering your email, name, and password and finally, clicking “Register.” You also have the option to create an Etsy account through your established Google or Facebook account.

2. Set your shop preferences.

Next, you’ll set your default language, which is the language in which you’ll describe your items (after opening your Etsy shop, you can choose to translate your page into other languages). Then, you’ll set your home country and the currency in which you’d like to list your items.

3. Choose your Etsy shop name.

Here’s where you can start to get creative: coming up with your Etsy shop name. Ideally, your shop name is intriguing but easy for customers to remember, and reflective of your products and values. And that name can be anything you’d like, as long as it falls within Etsy’s guidelines: four to 20 characters long, no spaces or special characters, not a name that’s already in use by another Etsy seller, no trademark infringements, and (of course) no profanities. If you need some inspiration, check out Etsy’s tips for choosing your shop name.

4. Add items to your shop.

The next step to starting an Etsy shop is to list your items. This being said, listing physical and digital items (think printable stationery, patterns, stickers, gift tags) involve separate processes. We’ll show you the basics on how to list a tangible item; you can consult Etsy’s guide if you’re listing a digital item.

  • Add photos: Etsy recommends using at least five photos per item so that customers can see your product from various angles and that the size of your images is at least 1,000 pixels square. (More tips on taking high-quality photos coming up.)
  • Adjust your thumbnail: Your thumbnail is the first image of your item that your customers see in your shop, via search, and elsewhere on Etsy—think of it as your product’s headshot. Make sure it’s a good one.
  • Complete your listing details: Give your item a title that describes the product in as much detail as possible, considering your 140-character limit. You’ll also have the opportunity to provide an in-depth description, a bulleted overview of the product, and additional details like the product’s category and type.

    Also, take advantage of all 13 “tags” available per item. Shoppers find your item by searching for keywords in the search bar, so work backward and think about what a customer might type into search to discover your item. Those keywords are what your tags should be.
  • Complete your inventory and pricing: Enter your product’s price, sales tax (if applicable), quantity (if you have more than one in stock), and variations (if you offer more than one version of the same product, like sizes, materials, or colors).
  • Set your shipping price: Here, you’ll include all the necessary details about your shipping processes, like the shipping services you use, costs, country of origin, processing time, and item weight and size. Later on, you’ll have the option of setting “shipping profiles” so that you can quickly update items with the same shipping costs.
  • Publish your listing: You can preview your listing to see how it’ll look to customers before setting it live.

how to start an etsy shop

5. Choose your payment preferences.

Once you’ve added your items, you’ll need to set up your Etsy payment preferences. First, you’ll pick how you’d prefer to accept payments—options include PayPal, check or money order, “other,” or Etsy Payments, which is the main way sellers get paid. With this option, you can accept credit cards, debit cards, Etsy gift cards and store credit, and more.

Currently, Etsy requires that any seller who is eligible (based on their location) to offer Etsy Payments do so. Along these lines, although Etsy used to offer PayPal as a standalone payment option, as of May 15, 2019, sellers in eligible countries, including the U.S., must use Etsy Payments with integrated PayPal. Standalone PayPal is no longer available in these countries.

Moreover, if you’re eligible for Etsy Payments, you’ll need to set this up as part of your payment settings—entering your bank account and residential address in order to receive your payment deposits from Etsy.

6. Set up billing.

When you’re starting an Etsy shop, this step will depend wholly on your country. In certain countries, Etsy will require that you provide a credit card for identity authorization purposes. You’ll also need a card on file so that Etsy can charge you for selling fees (more on that below). If you’re a U.S. seller, you have the option to enroll in auto-billing, in which case Etsy will automatically charge your credit card on file for the selling fees you incur, so you don’t have to worry about paying your monthly statement.

7. Open your shop.

Ta-da! Your shop is open. Next, to actually get started selling online you’ll need to…

8. Customize your shop.

It’s not enough to simply have started an Etsy shop—just like a brick-and-mortar store, your digital store needs to be easy to find, beautifully curated, intuitively organized, and constantly updated. Here are a few more sections you can fill out to ensure that your Etsy shop opens (and runs) successfully:

  • Add a bio and photo: Your public profile is how visitors to the site can learn more about you, both as a business owner and as a person outside of your work. In your bio, you have free range to tell the public pretty much anything you want. Say a little about your background, your interests, your qualifications, and tell the story behind your products, your mission, and why you love what you do.
  • Set your policies: Here, you’ll answer any pertinent questions your customers may have about your manufacturing, processing, shipping, and payment processes. Be sure to include an estimated processing and shipping time so that your buyers have a clear idea of how long it’ll take for their items to reach them. Also, be sure to include your returns and exchanges policy, and the payment methods you accept. If you’ve indicated “other” in your payment settings, you’ll need to include information and instructions about this payment method in this section, as well as in each listing.
  • Add sections: Group your items into categories so that buyers can more easily sift through your products. A bit like a navigation bar, sections will appear on the left side of your homepage and include the number of products within each category.
  • Rearrange your items: Feel free to move your items around on the page.
  • Add your shop’s “about” section: Just like your personal “about” section, your store deserves its own bio, too. You have 5,000 characters to tell customers your business’s origin story—keep in mind that Etsy (and customers) value transparency and openness, so don’t worry too much about writing traditional marketing copy; just be genuine.

    You can also list anyone who helps you produce and create your products or run your store, provide photos and/or a video of your studio space or creative process, and add links to your store’s social media profiles.   
  • Use Etsy’s social media tool: Advertising your Etsy store via social media is essential for garnering new business and keeping your existing base in the loop about new products. Luckily, Etsy makes that really easy to do—with the platform’s social media tool, you can quickly update all your social channels with store announcements, new listings, store milestones, great reviews, or specific items you’d like to promote on social media via your phone or computer.  

how to start an etsy shop

Etsy Fees

Keeping in mind everything we just discussed regarding how to start an Etsy shop, let’s break down another important component involved with selling on the platform: Etsy seller fees. As we mentioned in steps five and six, you’ll need to choose your payment preferences and set up your billing information, both of which are directly related to the Etsy fees you’ll incur.

So, what are Etsy fees?

Like any online marketplace, Etsy charges their merchants fees associated with listing and selling products. Although joining and starting an Etsy shop is free—unless, of course, you opt for a paid subscription plan—you’ll need to pay for the costs associated with actually doing business on Etsy. If you’re using Etsy Payments, these fees will be deducted automatically from your sales funds. If at the end of the month, you still owe additional fees, you’ll be responsible for paying them, as you would any bill. In this situation, if you’re a U.S. merchant enrolled in auto-billing, Etsy will automatically charge the credit card you have on file.

On the other hand, if you’re operating in a country that cannot utilize Etsy Payments, you’ll be responsible for managing and paying your monthly bill on the platform.

All of this being said, Etsy charges three main types of seller fees: a listing fee, a transaction fee, and a payment processing fee.

Etsy Listing Fees

Listing fees are the seller fees Etsy charges to actually list your items on your shop. Etsy charges $0.20 per listing and listing fees are added to your payment account (which you set up in step six) when an item is listed.

You have to pay this Etsy fee for each product you list, regardless of whether or not the product sells. A listing expires after four months, and at this point, if you want to keep the listing on your shop, you’ll have to renew it and pay an additional $0.20. It’s important to note that listing fees are billed in U.S. dollars, so if you’re operating your Etsy shop in another country, your listing fee may be different based on the exchange rate.

Etsy Transaction Fees

Next, Etsy charges transaction fees when an item is sold. Etsy’s transaction fee is 5% of the total item cost, which includes shipping and gift wrap, and is charged in your designated listing currency. Therefore, if your payment currency is different from your listing currency, Etsy will convert the fee amount from the listing currency to your payment currency based on the current market rate. With this, however, it’s important to note that if currency conversion is required, Etsy will charge a 2.5% fee for this process.

Etsy Payment Processing Fees

If you accept payments on your Etsy shop using Etsy Payments, you’ll incur a payment processing fee for each transaction when an item is sold. The payment processing fees that Etsy charges will vary based on the location of your bank account. For U.S. sellers, Etsy charges 3% + $0.25 per transaction.

Moreover, if you’re a seller in a location that is subject to VAT, or value-added tax, Etsy will incorporate this tax, as required, in both their payment processing and other seller fees.

Additional Etsy Seller Fees

Although listing, transaction, and payment processing are the three main types of seller fees that Etsy charges, there are cases in which you’ll incur additional fees.

First, if you purchase your shipping labels through Etsy, you’ll have to pay the associated fees based on the shipping labels you choose. Shipping label fees, of course, will depend on location and other shipping settings.

Second, if you sell items from your Etsy shop in-person using Square that are not synced from your Etsy shop inventory, you’ll pay a $0.20 Square manual fee per transaction, in addition to the credit card processing fees from Square.

Finally, if you choose to utilize certain add-on services from Etsy, you’ll need to pay the costs associated with that service. For example, if you run ads for your shop and products using Etsy, you’ll be required to set a daily budget for the campaign and you’ll be charged per click.

Moreover, as we mentioned earlier, although opening an Etsy shop is generally free, Etsy also offers two paid subscription plans: Plus and Premium. These plans offer expanded and advanced tools to help you grow and manage your Etsy business. The Plus plan costs $10 per month and as of September 2019, Etsy has yet to actually launch the Premium plan or specify its monthly cost. With either of these plans, however, the standard fees discussed above will still apply.

Starting an Etsy Shop: Top Tips for Success

Now that we’ve explained how to set up an Etsy shop, let’s discuss top tips to ensure your Etsy business starts out on the right foot, sourced directly from Etsy shop owners.

1. Take professional (or professional-looking) pictures.

Whether you like it or not, we live in an image-driven society—and that includes physical objects! It’s crucial that you provide customers with product images that are stylish, well-lit, and portray the product from several angles.

Katarina Vojinovic, co-owner of the jewelry shop Dzefer, offers a few tips on taking the best possible pictures of your items:

On Etsy, it’s very important to have great photographs. They have to be clear, well-lit and brand-oriented. I take all our photos myself, so you don’t need to be a photographer to make it on Etsy, but you do need to learn how to take sharp photos. Also, use as many of the 10 photos that Etsy allows. You’ll need all the angles, at least one photo showing how the product can be used, and maybe even just one pretty picture. How good your photos are will directly impact the number of sales you have.”

As Vojinovic says, you certainly don’t need to be a professional photographer, or even have a special camera or photography gear, to take great pictures of your products. Gari Anne Kosanke has owned her handmade jewelry shop, BeadLoversKorner, since 2010. She echoes Vojinovic’s advice, and knows firsthand that taking pictures is easier (and cheaper) than you might think:

The biggest tip I have is to make sure you take great photos that represent your product. Etsy has an excellent app where you can upload photos directly from your phone and make minor size adjustments. Most phones have pretty decent cameras today, so it’s possible for a beginner to just do everything right from the phone. I still make other adjustments to my photos with Photoshop, but I do upload pictures right from my iPhone.”

For some more direction, consult Etsy’s comprehensive guide to product photography.

2. Curate your store.

Simply having great product photos isn’t quite enough to guarantee that customers are drawn to your store (and are inspired to purchase your goods)—it’s also important to consider how you’re presenting your products on your site.    

Kamaria Hill is the owner of Loccessories, a Chicago-based Etsy shop that sells natural hair accessories, jewelry, and gifts; she underscores the importance of setting up an organized Etsy shop:   

“Your buyer is judging you. That’s the bottom line. And pictures give a powerful first impression. When a buyer clicks over to your shop from one of your listings and sees a jumble of different items, they don’t have any confidence in your skill level at your craft. Having a cohesive look and a selection of similar items suggests to them that you’re good at what you do and that the quality is there.”

As Hill says, a slapdash collection of products implies that the store owner didn’t put too much time and energy into organizing their store—or, potentially, their products. On the other hand, thoughtfully curating your images, organizing them into easily navigable sections, and providing detailed descriptions for all of your items accurately represents the work and commitment you put into your business, and reflects the quality of your products.

how to start an etsy shop

3. Make your store searchable with SEO.

First, a quick refresher on SEO strategy: SEO stands for “search engine optimization.” It’s a marketing tactic that, when implemented properly (which is admittedly complicated), launches your online presence—whether it’s your business website, blog, or social media platforms—to the top of any given search engine. In turn, that increases the likelihood that browsers will click on your link and visit your store.

Leveraging SEO tactics on Etsy will make your store easy to find, so it’s a surefire way of driving customers to your products. But even if you’re an SEO wizard for your website or blog, know that Etsy has its own set of SEO rules that you’ll want to nail down right off the bat. Vojinovic explains:

“Although many of our sales come from social media, most of them are from the Etsy search. SEO is complicated, but the basics are simple: Make a title that is suitable for your product and keyword friendly. Add tags that make sense with the title and allow the search engine to make combinations that work. For example, if your title is ‘pink cashmere sweater for women,’ tags like ‘for her,’ ‘for wife,’ [and] ‘bridesmaids gift ideas’ make sense. The search engine will be able to combine these tags so that if someone searches for ‘bridesmaids gift ideas pink’ your product will be shown in the results. You should also use a tool like Marmalead or EtsyRank to help you find suitable keywords.”

As Vojinovic says, use as many keywords as possible in your tags, shop title, shop sections, and product titles and descriptions. For a more in-depth review of best SEO practices, take a look at Etsy’s social media and SEO guide.

Also know that if your store has more listings, it’ll be easier to find via search. Hill suggests aiming for at least 50. “I have had my Etsy shop for years and really didn’t give it much attention—it was more of a placeholder for my brand name,” Hill says. “Recently, I started adding more listings and saw immediate results from averaging one sale a month to one to two sales per week, and ‘favorites’ have increased significantly.”

Of course, it’ll take some time for you to build up to 50+ listings, but you can use the prospect of increased traffic as fuel to create more and better products.

4. Price your goods properly.

As almost any new business owner will tell you, pricing your products competitively is essential for garnering business and turning a profit, but it can also be one of the more difficult hurdles to overcome. Luckily, Etsy offers a few resources on this tricky topic, including an easy formula for pricing your products and a worksheet to carry out a couple of pricing strategies.

Don’t short sell yourself—price your products so that you can cover your material, labor, and production costs, and at a rate that accurately reflects the quality of your products. But keep in mind that one of Etsy’s major draws is the prospect of buying unique items at prices that won’t break the bank. Try to keep your costs relatively modest so that you don’t risk turning away a big chunk of the Etsy audience.  

Also, remember that joining the platform and setting up your shop is free—but once you start listing and selling items, the various Etsy seller fees will kick in, so account for these fees as you price your products.

5. Keep your financials organized.

Even if you’re starting an Etsy shop as a side hustle, it’s still a good idea to separate your business and personal financesThe easiest way to adopt this best practice of entrepreneurship is to sign up for a business credit card that’s dedicated solely to your Etsy store’s expenses.

There are tons of business credit cards on the market, and the right one for you really depends on what your personal credit score will qualify you for, your spending habits, and the rewards you’d like to earn. But it’s pretty safe to say that you could do with an extra cash infusion—in which case a cash back card is your best bet.   

And if you’re not a natural accounting whiz (few among us are), it’s worth it to sign up for business accounting software so that you can easily track your sales and expenses.  

How to Open an Etsy Shop: The Bottom Line

Starting an Etsy store is logistically simple, thanks to the platform’s user-friendly interface and abundance of internal resources, like their comprehensive seller handbook. But it’s after opening an Etsy shop that the real work begins. Don’t be discouraged if your store opens to little (or no) traffic. Just like brand-new brick-and-mortar stores, it can take time for your Etsy shop to build up a fan base. As Vojinovic says:

“The longer you work at your Etsy store, the more you will learn. The more you learn (and apply) the better chances you have at being successful. When we opened Dzefer, we maybe had a sale a month. Now, we’re considering hiring help over the holidays. As you grow a reputation, get better at SEO, and add more awesome products, you will make your dreams come true.”

And once you do land your first sale, encourage an ongoing dialogue with your customers. Check your messages inbox regularly, respond to questions promptly, address their concerns, and ask for their feedback. Other than the obvious pleasure of treating your customers respectfully, a perk of great customer service on Etsy is the potential for five-star reviews. They’re a welcome source of positive reinforcement, true, but excellent reviews also convey to potential buyers that you’re a trustworthy seller (and that your products hit the mark)—which will directly result in more sales.

Ultimately, your energies are best focused on doing what you love: creating unique, high-quality products. Excellent products are the biggest draw for new and returning customers, plain and simple.

Caroline Goldstein

Contributing Writer at Fundera
Caroline is a former Fundera staff writer and current freelance writer, specializing in small business and finance. She has an MFA in fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

Latest posts by Caroline Goldstein (see all)

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