Pros and Cons of Using an Etsy Platform for Your Online Business

When Amazon recently hosted its Amazon Prime Day, there were record profits being made globally. Consumers love the convenience of shopping at home on their computer, and websites like Etsy offer millions of small entrepreneurs an opportunity to connect with those consumers.

But as popular as Etsy has become, is it the right site for your burgeoning online business? It’s one thing if you make antiques as a hobby and need an effective platform to sell them on; but what if you have higher ambitions?

There are pros and cons to using Etsy, and they’re worth considering before you make a decision on which platform to use — particularly if you’re thinking of quitting your day job and becoming a full-time online retailer.

What Can Online Sales Do For Me?

 

Etsy popular right now
Etsy Homepage

Online retailers are reaping huge rewards selling products online. And what a job: working at home, on your own schedule, selling something you’re passionate about.

Sounds ideal, right?

Consider the case of Ryan Grant. He was a student at Winona State University looking to make ends. He started organizing textbook buyback events on campus, then listed the books on Amazon.

He started making a profit of $10,000 a year and learned he could succeed in online sales.

By age 28, he had quit his accounting job in Minneapolis, Minn., and started hitting the clearance aisle at big box superstores like Walmart and Target. Then he resold those items on Amazon. Within a few years, he was making six figure profits.

Stories like that have encouraged more and more people to open a new office – online, that is, and make a full-scale effort at being an online retailer.

If you’re one of them, congratulations on settling on a proven career path.

But ….

Keep one thing in mind: sites like Etsy have become fiercely competitive. It won’t be you and 12 competitors out there. It will be you and thousands of competitors. And that’s part of the challenge.

And Etsy won’t be the answer to everyone’s online dream business.

So first, consider the pros and cons of opening an Etsy store.

What Are The Pros of Using the Etsy Platform?

The good news about using an Etsy Platform? There are several factors:

Sell on Etsy

1. Setting Up Shop

It’s not complicated to open an Etsy shop. No need for your friendly neighborhood techie to walk you through it.

It only take a few minutes to set up, and it’s free. Etsy also has a step-by-step guide that’s easy to follow.

 

2. The Web Traffic is Already There

Etsy has a built-in audience. The website’s fans are highly engaged.

Millions of them come to the site every month, looking for specific items, and they generally are people eager to buy.

What more could you ask for?

And then there are the Etsy sellers as well. Etsy encourages its online retailers to become a collaborative community, where sellers share tips with one another on how to be successful, and are ready to mentor each other.

Etsy is also great for mobile apps, which is where so many consumers do their shopping today, and you can set up new listings through the app as well.

shopping on your app

3. Free To Be You

While consumers love mass-produced items like smartphones, specialized items are all the rage, too.

A lot of the items on Etsy are handmade, and last year, the total value of handmade goods, crafts and vintage items sold on this platform rose by 20% to $902 million. Not too shabby.

Active buyers went up 17%, to about 36 million. The value of goods bought on Etsy rose by an annual total of $3.3 billion — which is up from $1 million in the host site’s first year.

Let’s face it, not everyone wants items that are mass produced. To some, those kind of goods means ordinary, and sameness.

They’re looking for something far more unique that helps sets them apart.

That gives the Etsy sellers an opportunity to showcase what they can make that truly is unique and different.

And the built-in customer base Etsy has is a great platform to start with.

“Marketing trends change over time, and are different, depending on the market segment you are trying to attract. When it comes to fulfilling a very specific need for a demographic, specialty products could be the solution to drive more sales in the door. Specialty products have unique features and characteristics, as they are designed as a unique solution for a designated market group.” – Kimberlee Leonard, SmallBusiness.Chron

 

4. It’s Ideal for SEO

Etsy provides its sellers with great analytics, so you can take time to review your numbers and use them to figure out how to tweak your search engine optimization efforts.

You can check keywords that people are searching for when they find your shop, another great tool for doing online advertising. It’s also easy to download your sales and financial statistics for review.

SEO for Etsy
But there are challenges as well. Here are a few.

What Are The Cons With Etsy Platforms?

1. Pricing competition

Because Etsy is so popular and attracts so many sellers, you’ll find yourself going up against a lot of competitors listing the same type of products. Some sellers feel like the site has become over-saturated.

That’s particularly true considering that Etsy’s platform has been opened to mass producers as well as the small craft shops and individual sellers.

That has an impact on prices. If your competitors are cutting their prices to gain an edge, you could be forced to do the same. That cuts into your ability to make a profit.

And if you’re lowering your prices, how many items would you need to sell to make a solid profits? Thousands?

That’s a tough haul.

There’s always the likelihood of someone else is ready to take an even lower profit margin than you would . And that’s not even counting the new sellers who keep flooding Etsy with listings.

cutting prices

2. Should You Limit Yourself to Etsy Fans?

Yes, a lot of buyers go on Etsy because the items are unique and hard to find elsewhere. But that’s part of the challenge as well.

Customers who are not looking for specialized items may bypass Etsy and hit Amazon or eBay instead.

Think of it this way: Imagine you decide to buy a new coat. If you’re not looking for a handmade one or a specially designed look, chances are the listings that show up on Google will be for sites other than Etsy.

That also makes it harder for your items to rank higher on Google for the same reason.

3. Etsy Shares Your Profits

Once you’ve made some sales, keep in mind that Etsy takes 3.5 percent of it for the privilege of renting space to you on their site. There’s a listing fee of $0.20 for every item you put up, and then you pay 3.5 percent on top of that.

So every dollar in profits isn’t yours to keep.

In addition, there are fees for accepting credit card payments or PayPal.

Etsy views these fees as the price you pay for taking advantage of their strong customer base.

But still, you’re sharing your profits with them. When you set your prices, you need to factor in what you’re required to pay to stay on there.

4. You’re Always a Renter

You’re essentially renting space from Etsy. The host site fully dictates the terms of what you do, what your website looks like, and how it functions.

In order to gain their online foot traffic, you have to concede a lot of control to them and live by their terms.

As a result, you have limited branding opportunities. Etsy will allow your store to have a banner and the images for your listings, but that’s about it. Everything else is standardized by the platform.

Etsy has the final say, rather than you as the seller, over what happens at your shop and can shut you down immediately and without warning for any rule violations.

So it’s hard to turn your dreams of an online business into a reality, as opposed to just a side business, if you don’t have full control over it.

5. You Can’t Create an Email List

Another rule: Etsy won’t let you ask buyers if you can add them to your email list. You don’t have the ability to communicate with buyers that way.

As any marketing professional can tell you, there’s a lot of revenue and profit to be found on an email list. Etsy cuts out that possibility.

Email marketing has distinct advantages over other modern media. First, it’s direct, meaning that every person on your list receives an email the same way that they’d receive a piece of mail. It’s much different than finding a piece of content in a news feed, even if it’s personalized. Second, email is necessary. You can go for a few days without checking social media or video chatting with your friends and family, but most people check their email several times a day.”  – Syed Balkhi, OptinMonster

 

So the question is, can you overcome those challenges and sell successfully on Etsy?

Is Etsy Better as a Part-Time or Full-Time Gig?

Keep one thing in mind about Etsy: it’s a site where a bunch of different sellers try to sell the same thing. How you distinguish your products from the competition is your biggest challenge, and if your competitors focus solely on reduced price, you could have a problem.

What you usually need in these situations is your Unique Selling Proposition – that which makes you different from the rest, and why consumers should buy from you, not a competitor.

And as we mentioned, Etsy limits your ability to create a unique brand through their platform. As the seller, it’s extremely difficult for you to market your brand and find a way to resonate with buyers.

So a better solution would be to use Etsy as a starting point for your online sales – but not the only one.

Conclusion

Once you’ve started to grow your Etsy shop, explore other options. It could be time to build your online shop, free of the restrictions that Etsy imposes.

You can keep your Etsy shop as well, and the sales and exposure you get from them.

But with your own shop and website, you can:

    • brand yourself any way you want;
    • list products without paying fees;
    • maintain an email list, to stay in contact with your customers;
    • and have more options for your marketing efforts.

If you’re not sure how to set up your own website, contact a company like Chatter Buzz. Hiring e-commerce professionals to help launch your online business is a smart way to expand once you’ve built up some experience through Etsy.

About Michael Freeman

Michael is the Content Writer and Editor at Chatter Buzz. A native of Massachusetts, he has more than 20 years of experience as a print and online journalist & has as a marketing writer for more than 50+ private firms in various industries. He loves red wine and spending time with his cats.

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