The short answer is: it does not hurt!
And now, here is why:
Selling your handcrafted items or services on Etsy has some significant advantages:
- It is effortless to get started – there is no technology barrier. You fill out forms about you and your offerings, and that’s it. This is a big deal. Learning new tech or hiring help can be super expensive and time-consuming.
- There are no upfront costs to you – no need to pay for website development, hosting, or a custom e-store solution. Again, you can just start today!
- There are automatic tax calculations and shipping calculations.
- You can easily add tracking information to your dispatched orders.
- You automatically benefit from the audience that Etsy has built, and that is huge if you are just starting with your marketing.
With all these goodies, why am I not hyper-excited about Etsy?
It is because all the advantages above come with a “flip side.”
It is so easy to get started because there is little to no customization you can do for your store. All the stores look the same. They look like an Etsy store. The images are the only differentiator under your control.
And this brings me to another point: You don’t really have your own Etsy shop; what you have is “shelf space” in the Etsy market space. The shelf is ready-made; you only get to place your product in it.
This restriction makes it super hard to build brand awareness. In fact, selling on Etsy builds up their brand, not yours.
Another significant issue is that you have no control over what is next to you on the shelf. Instead of your other products, Etsy places products from your competitors. To understand why this happens, think of the business model that Etsy uses: they don’t care what vendor makes a sales, as long as one of them does. So it makes sense for them to have vendors compete against each other for similar items. This practice is bad marketing for your brand but excellent for Etsy.
Etsy makes money by focusing on the end customer (which is not the vendor) and its brand. People who come to browse Etsy rarely return to visit a specific shop (read “shelf”). They instead want to check “what else is available in the huge market place.” (As a side note: Shopify is different – they focus on the vendor and allow the vendor to take care of their customers)
Indeed, getting on Etsy will automatically put you in front of the entire Etsy audience. And that is both good and bad. It is useful when you are just starting, you are new to marketing, and you have no audience of your own. Then you benefit tremendously from the exposure. But it is terrible news in the sense that it is not “your audience,” and Etsy will not just simply hand it over to you. They will make sure you don’t compete with their brand, so your “store” will always look like an “Etsy store.” They allow for a newsletter subscription but not to you, but Etsy instead. And since your products are discoverable via search, you need to use the product title to optimize for search results, not for brand awareness.
Finally, no upfront cost to you, and no monthly subscription means they have to take a cut out of each sale.
It may look like I am making Etsy be the bad guy, profiting over the vendors who use the platform. That is not the case. Everything they are doing makes perfect sense for their business model and the people they are looking to serve. I am writing this article to make you aware of the full picture as you look at it from both sides of the coin. And if you understand what and why they are doing, you can work with them and not against them.
So, is Etsy good for you?
I would say that is an excellent place to start, but if you want to grow, you will eventually need to build your brand and store and have Etsy be just one of the sales channels but not the only sales channel.
Full disclosure: I am not selling anything on Etsy – so this analysis is my overview based on what I can understand of their business model and my own experience with having an online shop. Therefore I recommend you read this review from someone who is actively using Etsy, and, as always, I recommend you get the best coaching you can afford to help you maximize your revenue from Etsy. Coaching helps you by accelerating your learning. Instead of the slow path of guesswork and mistakes, you already get the map and the guide. You may choose not to follow it, but you at least know how the roadmap to a successful Etsy shop looks like. A word of caution here: when you look at a successful Etsy store, try to understand if they have a repeatable process or they simply lucked out :).
Did you have any “aha!” moments? Share them below.