How to Make Money on Etsy in 2022 & Beyond!

by | Dec 13, 2021

Etsy is the online marketplace for handmade, collectible, and vintage items. Etsy was launched by a group of friends in 2005, so they’d have a place to sell their own handmade items. It has since grown into a global platform where millions sell their artistic and creative products.

If you’ve got creative leanings or don’t find selling on eBay or Amazon desirable, you could launch a store and start to make money on Etsy.

The great thing about Etsy is there’s no hosting to find or a website to build. You simply register with the platform and add product listings to your storefront.

This post covers how you can start an Etsy shop and make it profitable in 2022. I’ll also show some examples of successful Etsy stores to give you some inspiration for your store.

What is Etsy

Etsy is one of the top ten eCommerce sites globally, with 4.3 million active sellers on the platform. Most store owners operate in the USA (62%) and UK (13%), but Etsy is a global operation with active sellers in many countries.

It’s free to register and open a store with Etsy; you’re only charged a small listing fee upfront and a percentage transaction fee when you make a sale.

how to make money on etsy

Etsy is loved by shoppers as the place on the internet for handmade items, crafting supplies, plus vintage and pre-loved items.

How much money can you make on Etsy?

The real question here is: how much effort are you prepared to put in?

Remember, Etsy is just an online marketplace for entrepreneurs to build a business. In 2020, Etsy’s gross sales topped $10 billion; it’s up to you to create a store stocked with products that people want to buy to grab your slice of the pie.

Some Etsy sellers will launch a store and fail miserably. Others will learn from their failures, adapt, and keep on trying until they are successful and able to make money on Etsy.

There are no limits to how big your store can get on Etsy. The Cut recently reported on an Etsy seller who achieved over 1 million transactions on Etsy.

There was no special secret to her story, just lots of hard work and a determination to produce a good-value product at a reasonable price.

Cosmo also interviewed several successful Etsy sellers for their advice on how to achieve success, and they recommended;

  • Take things slowly at the start.
  • Find a niche you’re interested in.
  • Product photography is critical.
  • Rely on those around you for support.
  • Market your products off Etsy on sites like Pinterest, Instagram, and TikTok.
  • Manage your time effectively.
  • Don’t let the odd bad review get you down.

Etsy’s just a marketplace. It’s up to you to make it a success.

What should you sell to make money on Etsy?

When deciding what to sell on Etsy, take the lead from Etsy themselves. Etsy says;

“Etsy is the global marketplace for unique and creative goods. It’s home to a universe of special, extraordinary items, from unique handcrafted pieces to vintage treasures.”

Etsy’s main product categories are:

  • Outdoor & Garden
  • Jewelry & Accessories
  • Clothing & Shoes
  • Home & Living
  • Wedding & Party
  • Toys & Entertainment
  • Art & Collectibles
  • Craft Supplies

I recommend that you pick a product niche that falls under one of these categories. Then take a look at existing shops to see what sells. In order to make money on Etsy, you’ll likely have a better chance of success if you emulate what’s already working.

Search around the platform using keywords of products that interest you. Look out for the yellow flags that indicate a Bestseller or Etsy’s Pick. Click into those listings and examine them. Read the purchase reviews left by shoppers to see what the seller is getting right and what they’re getting wrong.

How to make money on Etsy

There is also a range of tools that help you check a keyword’s popularity and competition. Most have a free trial, so you can perform some limited market research before committing to a plan with the tool.

Three tools I recommend are:

Sale Samurai

Marmalead

eRank

Check your Etsy idea is profitable

Before you dive in and open a store, you need to check that your idea can be profitable.

Validate your idea using one of the Etsy research tools and ensure there’s sufficient demand on the platform. The next step is to determine your target selling price and cost up production of the item in full.

Include:

  • The cost of materials, including delivery to you.
  • The time it takes you to make a single unit.
  • An allowance for material wastage.
  • Your time cost for marketing and promotion.
  • Marketing costs (Fiverr outsourcing, blog setup, etc.)

Once you know your startup costs and a price per unit, determine your ideal profit margin and how many orders you will need to break even.

You should also leave room for Etsy’s fees. Next, we’ll look at how these break down.

How much does it cost to sell on Etsy?

The Etsy platform doesn’t charge a fee to open a store. Instead, it earns revenue from fees on product listings, transactions, and payment processing.

Etsy charges a $0.20 listing fee for every item you list in your store, with each listing running for four months. At the end of the four months, you can renew the listing for another $0.20 fee. While your listing is active, you can make as many edits as you like free of charge.

When you make a sale, Etsy charges you a transaction fee. It’s a flat rate of 5% on all sales and is also applied to upsells like gift-wrapping or product personalization. In addition, the delivery and packaging costs you charge customers are included in the transaction fee.

If you use Etsy’s payment service to process customer payments, there is a charge applied to each transaction. It varies from country to country, but in the US, it’s 3% of the value plus $0.25.

With all these various fees, it can be a little daunting to get your math correct. So to make sure you can effectively find out how to make money on Etsy, there are free Etsy fee calculators available to help you get your costs right.

Etsy Fee Calculator

The Omniprofit Etsy calculator can help you work out if your product idea is profitable quickly. Type in your ideal selling price, shipping charges, and manufacturing cost to determine your cost of goods sold and profit for a single item.

Make money on Etsy : Fee Calculator

(Source)

Aim for a healthy profit margin of at least 30%, so you’ll have room to discount should you need to.

Is Etsy Plus worth it?

Esty Plus is a prime service available to all Etsy shop owners. You can upgrade a standard Etsy store into an Etsy Plus one for $10 per month. Your fee gets you 15 listing credits (worth $3) and $5 in advertising credits.

Another neat benefit is that out-of-stock products still appear in the Etsy listings, and shoppers can opt-in to receive email restock notifications.

Etsy Plus could be worth it if you regularly list new items and sell products that need replenishment from time to time.

How to set up your Etsy store

An Etsy store is simple to set up (here are the full instructions).

First register with Etsy, then under your account details, click ‘Sell on Etsy,’ scroll to the foot of the next page and select ‘Open your Etsy shop.’

Set Up your Etsy Store and m ake money on etsy

open your etsy shop and make money on etsy

On the next page, pick your language, location, and currency preferences.

preferences for making money on etsy

The next page is for picking your shop name. You need to use between 4 and 20 letters, without any spaces. If the name you want is already taken, Etsy suggests similar ones that are available.

name your etsy shop

Now it’s time to start stocking your new shop, and the next page is for creating your individual product listings. When you create a product listing, remember that the only reason a shopper will click your item is because of the title and product image.

Spend time creating keyword-rich product titles, and make sure that the product images you use are modern and clear.

stock your etsy shop

After entering your first product(s) details, you then need to add some basic information about yourself.

how to get paid and make money on etsy

The final screen is to enter a credit card so that Etsy can take payment for selling fees. Etsy should only need to charge your card at the start when you begin listing your first products. When you start making sales, Etsy will deduct its fees from your account balance.

billing to make money on etsy

Promoting your Etsy Products

Etsy is a marketplace with lots of visitors who use the search bar to find products to buy. So while you’re likely to get shoppers viewing your products right away, it doesn’t hurt to do some additional promotion to encourage sales.

First, it’s helpful to understand how the Etsy search algorithm works.

The Etsy search algorithm

With millions of sellers and millions of products, Etsy needs a way to order and rank the results it displays when a shopper enters a search term.

Much like Google, Etsy has a search algorithm that determines which order to show products. And like all eCommerce marketplaces, most shopping action occurs on the first page of the search results. So how do you get a product to rank on the first page?

Etsy makes money every time a product sells. So their algorithm returns products that are relevant to the shopper and have a good chance of resulting in a sale.

So the keywords you use in your product title are critical. In its article How Etsy Search Works, Etsy says that;

“Items in Etsy’s search results must match the buyer’s search word or phrase. Items that do not match a buyer’s search won’t be included in results.”

When you list a product, be aware of the search engine optimization requirements, write a keyword-rich title, and include search terms in your product tags too.

Listing Quality

The Etsy marketplace also has an internal metric they call Listing Quality. An item’s listing quality is a score awarded by Etsy on how relevant and ‘buyable’ a product is, this is crucial if you want to make money on Etsy.

Whenever a shopper favorites, buys, or clicks on a listing, Etsy increases that listing’s quality score. Items with a favorable listing quality score will rank higher in the search results.

When you start with a new store, your products have a neutral listing quality score. It won’t harm your search placement, but it won’t help raise it either. If there are lots of sellers with established listings, these will likely outrank you.

You need to get engagement with your product listings to help improve your search rankings. Here are two ways to do that; offsite promotion and onsite Etsy advertising.

Promote your Etsy products on social media.

61% of Etsy’s sales take place on the mobile internet, so social media is an ideal place to post images of your products.

Of all the social media platforms, Instagram is one you should definitely use for cross-promotion. The visual nature of Instagram is the perfect place to repost your product images. Don’t forget to link to your Etsy store in your Instagram profile, so shoppers can click through to buy your products.

instagram to help make money on etsy

If you don’t want to battle to get your images seen using popular Instagram hashtags, you can pay for advertising on Instagram and Facebook.

The For Dummies website has an in-depth article on using social media to promote your Etsy shop if you want further information.

Of course, if you already have your own website with an audience, you can cross-promote your products on there.

Etsy Advertising

The Etsy platform has an onsite advertising program where you can pay to appear amongst the products that rank at the top of the search results. Here it is in action. The top row of results are adverts and appear above the organic search results.

using ads to make money on etsy

With Etsy ads, you can pick a country to target, which of your products to advertise, and set a daily budget to control your costs.

It’s Cost-Per-Click (CPC) advertising, meaning you only pay when a shopper clicks on your advert.

Paying for Etsy CPC ads is the quickest way to get engagement with your products, make sales, start to improve your listing quality score, and ultimately how to make money on Etsy.

Once you’ve established your product in the organic search results, you can switch off your ad campaigns and increase your profits.

Etsy off-site advertising

Etsy also runs its own advertising promotions off the Etsy platform to help bring shoppers to the website.

You don’t have any control over whether they pick your products or not. So any traffic that this practice brings in is a bonus. There is no cost to you for the advertising, but Etsy will charge you a small fee if the advert results in a sale.

Etsy’s off site advertising is turned on by default for all new stores. You can only opt-out of the scheme if you have sold $10,000 of products in a 12 month period.

The most popular items to sell on Etsy

Etsy is all about creativity, crafts, home decor, and collectibles. Here are some examples of top-selling items to use as inspiration for ideas for your store. Take a look at these examples to see how these users effectively made money on Etsy.

Handmade Items

Jewelry

Handmade jewelry is a popular product category on the Etsy marketplace. Below is an example of a handmade jewelry store called Emma’s Lovely Creations. Some Etsy shoppers love to buy one-off creations or, at the very least, jewelry that’s handcrafted by an artisan.

Jewelry supplies are cheap to buy in bulk (excluding precious stones and metals), so it’s a low-cost business any individual could set up quite quickly. But, it is a competitive marketplace, so you may need to think of an angle or niche to target to help you stand apart.

how to make money on etsy : Jewelry

Other handcrafts

Etsy is also a place to buy and sell craft supplies; many hobbyists buy fabrics, yarn, and other materials for their own creations. Here is an example store called Craftline Shop. You could purchase the materials to make your own products to sell on Etsy on the Etsy marketplace itself.

how to make money on etsy : crafts

Facemasks

At the start of 2020, nobody was selling cloth facemasks on Etsy; within a couple of months, there were thousands of listings. By August 2020, homemade cloth face masks sales reached $346 million and became the third best selling item on the platform.

While you’ve missed the chance to launch a facemask store, learn from the situation and keep an eye out for fresh emerging trends. TippyBow demonstrates how to leverage events and trends from their handmade fabric accessories shop.

how to make money on etsy : facemasks

Toys, weddings, and art

Toys (and baby)

Toys that are creative, homemade, or unusual are one item you could consider selling on Etsy. MsSensoryToys has ‘niched down’ their store to only sell toys to develop children’s senses. A small wooden ring and some ribbons are cheap and quick to make, and you could source the materials on Etsy.

how to make money on etsy : toys

Weddings

Wedding products are popular on Etsy, and this is a key industry if you want to make money on Etsy, with shoppers looking for items for their wedding day. Party favors, wedding invitations, and reception decorations all sell well.

The average wedding in the UK costs £27,161 ($37,500), so you can see why many Etsy sellers are looking to grab a share of this market. WeddingInATeacup targets not only the wedding market but also a range of other party themes.

how to make money on etsy : weddings

Wall Art

Wall art is another successful niche you could target on Etsy. This market will require some initial investment, as many sellers print their own designs onto canvas or display boards.

You will also need to consider your product photography, like in the example below from Frameitwhynot. A buyer will likely want to see the artwork staged in a furnished room to appreciate how it would look in their own home.

how to make money on etsy : wall art

Vintage Products

Clothing

Some vintage clothing never goes out of style. Whether it’s the brand name or quality you can’t get anymore, many shoppers love to discover an item of vintage clothing that’s perfect for them.

Clearly, to sell in this niche, you need a source for vintage clothing. If you don’t have contacts in the trade, you could try flipping products you buy on eBay and improve the listing and photography quality.

Here is an excellent example of a vintage clothing store called CafeSocietyVintageGB.

how to make money on etsy : vintage

Collectibles and Antiques

The other side of vintage products is collectibles and antiques. Again, you require a source for your vintage products. Local auctions and thrift stores can be a good place to find the unusual and desirable items of bygone times.

20thCenturyStuff focuses on vintage homeware and trinkets and has sold nearly 16,000 items!

how to make money on etsy : trinkets

Printables and Digital Downloads

Customizable Art

A hot trend at the moment is customizable artwork. These are products that are personalized with a name. The deliverable is a digital download that the customer then prints themselves.

It’s an ideal Etsy store idea for someone already familiar with design programs like Adobe Illustrator. But, someone with no experience could pick it up if they take an online course.

Here’s a customizable art store with over 27,000 sales, GingerBelleDesign.

how to make money on etsy : printables

Planners and Stationary

An alternative to digital art is downloadable daily planners and other stationery that help people organize themselves better.

Motivestationary is a store that sells only downloadable stationary. The best thing about this niche is that once you have uploaded your design to your Etsy store, you can sell it over and over again.

how to make money on etsy : stationary

How to Make Money on Etsy Summary

Etsy provides you with a marketplace to sell creative, unusual, and vintage products. It’s free to register and start your own store, and the only cost to get up and running is a $0.20 listing fee for each item you want to sell.

If you want to start an Etsy store, start with product research to determine what sells well. Then cost up the manufacturing price to see if there’s sufficient profit to be made.

You will need to do some initial promotion to establish your store, and you may need to pay for Etsy advertising to increase your product’s listing quality score.

The main ingredient for making money on Etsy is a determination to get through the inevitable trials of launching a business. And once you have learned from your mistakes and made the right changes, there’s no reason you can’t make good money on Etsy in 2022.

Bora Bora

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