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10 Tips to Build a Successful Etsy Business

etsy business

Guest post from Lauren of Funky Monkey Children

Often times when someone asks the question of how they can bring in extra income while staying home with their children, people respond with “how about setting up an Etsy shop?” While I think that is a wonderful suggestion, and one that I did myself back in 2012, it isn’t really as simple as just building a shop and having customers flow in.

Over the past 2 years of having my Etsy shop, Funky Monkey Children, I have learned some invaluable lessons about running and business. Here are a few things I wish I had known when I started mine:

1. Start by Brainstorming Ideas

What is a skill you have or a product you make that has a wide market of desirability? Are you willing to learn a new skill or craft that could someday turn into a product for sales? Do you have a side hobby that friends keep telling you to sell?

Brainstorming for a product idea is the very first step in setting up an Etsy shop. This may seem obvious, but make sure it is something you like doing. It would be unfortunate to “hit it big” with a product you really have no interest in continuing to make!

It’s also helpful to think long-term with your ideas – are there items you could add for a coordinating set down the road or ways that you could expand that product into a bigger or more complex line in the future?

2. Manage Your Inventory

When I first started Funky Monkey Children, I was open to anything people asked of me. I had no problem driving around to different fabric shops (with my two toddlers!) looking for a certain pattern that someone requested, or running out to the store to pick up a single item to monogram for a specific customer.

I quickly learned, however, that this consumed a huge amount of my time and wasn’t very profitable. I ended up with so much inventory and so many supplies that I wasn’t able to use on a continuous basis.

In order to streamline my business I decided to focus on just a few items (burp cloths, bibs, and shirts) and not expand so wide that I was drowning in inventory (and spending all my profits on more inventory!)

3. Create Specific Goals

When you start a business, it’s important to make very specific goals for the future… as well as a path to achieve those goals.

When I first started, my goal was for this to be a self-sustaining hobby. If I got busy and didn’t have more time to work, I closed my shop for a few days and never thought twice about it. As long as I could make enough money to buy more fabric to play around with in my free time, I was happy.

As time progressed, however, my goals changed in a big way. The goals that I have set for the business now are allowing us to save a 20-30% down payment in the next year to buy a house, which is something I never could have dreamed of a few years ago!

4. Pinpoint Your Market

In order to appeal to your buyer, you must know exactly WHO your buyer is. Once you know who you are appealing to, you can figure out how best to reach them and where to find them.

It is helpful to think in very specific terms; knowing that “women” are your target customers doesn’t really help. Knowing that your target customer is a 25-35 married woman who works outside of the home and lives on the West Coast is substantially more helpful.

5. Make Prototypes

You have to have something to advertise in order to get started. One of the best ways to get more traffic to an Etsy shop is to increase the number of items you have listed.

When I was starting out, I made tons of gifts for friends. Since I primarily make baby items, and I have young children myself, I had no shortage of people around me with babies.

With each and every item I made, I took a picture and listed it as a listing for sale. Eventually customers would ask for variations of the same product (different colors, fabrics, applique, etc) and each time I would take a picture of that item and list it separately.

There is a rumor around Etsy that 75 listings is the “magic number” to really increase the traffic flow to your shop. I’m not sure if that is true, but I can say that the amount of traffic to and subsequent sales in my shop increased substantially with more listings.

6. Price Your Items Appropriately

Make sure you aren’t under-pricing your items! In addition to making people think the item is less valuable than it really is (or cheaply made), if you don’t add in a profit for yourself you are doing a lot of work for no reward.

Another thing to think about is the time involved in each item. When I first started, I priced each item the same. Every shirt had a certain price, every burp cloth, etc. Now when I price something I take into account the amount of time that particular item takes to make.

Since I can only do one item at a time, it doesn’t benefit me to sell an item that takes an hour and an item that takes twenty minutes for the same price.

7. Learn about Tags and Titles

Titles and tags are huge on Etsy. Learning about the basics of SEO (particularly as it relates to Etsy’s relevancy formula) will be extremely beneficial to your shop.

While Etsy brings in a lot of traffic on its own, there are millions of Etsy shops open today, so you need to set yourself apart to see success.

8. Take Good Photos

This is something that is incredibly hard to do when you are first beginning, and something that I continue to struggle with in my own shop. Since Etsy is a very visual platform, clear and bright photographs are a must for any successful shop.

Learning the basics of a good quality camera is helpful, as is finding a consistent light source (whether that is outside or a lightbox). Amazon has some inexpensive and decent quality lightboxes that can be very helpful if you don’t live in a particularly clear climate.

Having consistent product placement and the same background in every picture also helps to build your brand and have a cohesive image of your shop as a whole.

9. Provide Excellent Customer Service

Etsy customers expect top-notch customer service. Because Etsy started as a strictly “handmade” platform for selling (it has since evolved beyond that), a typical Etsy buyer is expecting a more personal interaction than they would get from a traditional store.

This means that often times, buyers will message you for more information, ask lots of questions, and generally expect a dialogue about the product or service as they go. Providing good customer service goes a long way in developing a loyal fan base.

10. Learn Your Limits

This has been one of the toughest lessons for me as my shop has grown and sales have increased. Because Etsy provides a more personal platform for interaction between sellers and buyers, there can be some unreasonable requests at times.

It isn’t totally unheard of for people to message asking for a discount, for overnight shipping at no extra charge, to make an item and ship it out by today, or even for totally free items just because.

As someone who very much wants to make the customer happy, it is hard for me to say no. However, I also have learned to value my time and recognize that the time that I am working is time that is taken away from my family.

Through the years of doing this I have had to find a balance between providing excellent customer service and also not being “on-call” to answer messages, send emails, and jump up and make an item for a customer at all hours of the day. Learning this limit will go a long way in keeping your family on board for your new Etsy venture!

Do you (or have you) run an Etsy business? If so, do you have any other tips to add to my list?

Lauren Keplinger is a part-time working mommy of 2 young children who bring joy and chaos to her life. Her hobbies include sewing, running, cooking and reading, but she spends most of her “free” time now working on her Etsy shop, Funky Monkey Children.

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27 Comments

  • I just started selling items in my Etsy shop again, just this week. I think I’ve finally found a product that I like creating and that also fits in with my love for writing. 🙂 These tips are great, thank you!

  • Lisa Guyer says:

    We have an etsy shop too. It’s been great to read through these! I’d say that customer service has been one of our biggest selling points. We go out of our way to make sure the customer is happy. This has reflected itself in our reviews, which helps sales!!

    I’d also suggest finding a way to make your shop unique. There are a hundred knitting shops on Etsy. How is yours different and better than the rest? Same for woodworking or jewelry shops and so many others!

    https://www.etsy.com/shop/BaldMansWorkshop

  • I love this post. I have found that being able to customize orders, promptly answering inquiries, and being able to ship promptly, with confirmed signature shipping, has helped greatly!

    I also offer quarterly discounts on my shop, which i promote on my blog and Facebook group, and this allows me to reward those who patronize my shop. Also, I have found that you must be willing to think outside the box; I’ve had several buyers who lived say an hour from my home, and in lieu of them paying for shipping, they actually met me in my hometown, and purchased two items instead of the one!

    In addition, another few tips I have picked up: save packing materials you get from other businesses; I often get tons of packing peanuts, reusable boxes, and air packets from Amazon.com orders, and I use these to ship my wreaths and candles safely, for free!

    I also use Paypal funds, earned from surveys and iBotta, to have customized stationary, cards, envelopes, invoices, and labels printed from Vista Print, which add a little something to each order; each order gets a storage box for their wreaths, neatly wrapped like in a hat shop, with a card that contains a personal note and discount card for future purchases. I have found that its the extra few touches that truly make a difference! Awesome post!

    https://www.etsy.com/shop/ShadowCatCrafts?ref=hdr_shop_menu

  • Great list! I have a few friends who sell handmade things on Etsy, and they are all beautiful. Some people have decided to go a different route that does not require them to make things all the time.

    All the best to you on your business, Lauren. I have great respect for women who will help their husbands with the family income.

  • Great article! When I started my etsy shop (www.macccreations.etsy.com), tips like this were so helpful!

  • Kari says:

    Great advice, I definitely had to learn the “know your limits” tip. I’ve been running mine for a little less than a year. Do you have an tips on how to do your taxes? I’m a little curious how that’s going to work.

    Thanks!

    https://www.etsy.com/shop/FromALittleDust?ref=hdr_shop_menu

  • Kristin Mohr says:

    Thank you for all the helpful tips. I just started an Etsy Baby Clothing and Gift shop, and I’ve had a photography shop for the last few months. I’m still trying to work on those key words for good search results and hits on my shops. I’ve had a pretty great start with my clothing shop selling Valentine’s Day Skirts for little girls. They seem to be a hit!
    Anyways, I really appreciates all your helpful insights.

    Little Missy Clothing
    https://www.etsy.com/shop/LittleMissyClothing?ref=hdr_shop_menu

    Kristin of the Sierras Photography
    https://www.etsy.com/shop/KristinoftheSierras?ref=l2-shopheader-name

  • I read an article on here about ways to earn money from home a couple of months ago and a couple people mentioned starting Etsy businesses. I had tried it before and failed but I took the plunge again and made some nice money over the Christmas season! I will definitely be using some of these tips to expand my business!

    I think a major thing for handmade businesses is to keep your cost and time down. You may spend 3 to 4 hours on a skirt for your self and spend $15 on materials, but if you go and sell said skirt on Etsy for $40 you are only making $8/ hr plus the time to take pics and list the item. I am always on the hunt for how I can bring my material cost down. Even though most of my things are from recycled materials I purchase at thrift stores, I still hunted until I found the cheapest thrift store and shop when they have a half off sale.

    Also, branding is important I always add a tag to my items and try to keep my promotional materials uniform (the tag, the shipping envelope, the business cards, and my banner all have the same color and my logo on them). This gives your items a sense of quality, and tell your customer that you are not just a fly by night operation.

    One book that I highly recommend is “The Handmade Marketplace” by Kari Chapin.

    • I completely agree about keeping your materials/time down. I have designs that I LOVE, but that take almost an hour to embroider on my machine. I can’t make these profitable, because they simply take too long. I save those kinds of designs and ideas for my own children 🙂

  • Andi says:

    I agree with all of those suggestions. I have had an etsy shop for a little over a year. Having a varied inventory (I sell vintage stuff) has helped with more views and sales to my shop. I also include a handwritten thank you in each package. I want every person that visits my shop to know that they are important to me.

    https://www.etsy.com/shop/JunkyardElves?ref=hdr_shop_menu

  • The biggest thing I’ve learned from my Etsy shop (Dynamic Crumbs) is to take other’s advice with a grain of salt, especially if the person offering the advice doesn’t have any business experience or if they have a shop that isn’t doing that well. Sometimes, I’ve even done the opposite of what they’ve suggested and it turned out much better.

  • Amber says:

    I have an Etsy shop as well and only really started pursuing it more aggressively since June. Since I really started working hard, tweaking and changing things and most importantly adding listings, I’ve seen my sales double and triple over the same month last year! Plus I’m constantly looking for on trend items to add!

    http://www.etsy.com/shop/simplysweetpartyshop

  • Ronni says:

    Ooh, thanks for this. I’m inventing/creating a new baby product and considering selling it on etsy first to see if it’s marketable and people like it. These tips are helpful!

  • Sarah says:

    Great tips! Nearly all of those things I’ve had to learn over the past 4 years of running my Etsy shop http://www.joyfullysewndesigns.etsy.com I was completely new to any type of online selling when I started, and am so grateful for the help and advice I’ve received along the way.

    Another thing you want to be sure to do is write good descriptions. That’s the part I like the least, but it is a necessary part! 🙂 Also, if you have trouble with photos (or are like me with no models), you might consider seeing if a friend who is a good photographer would be willing to work out a trade with you – photos for product. That’s what I do with nearly all of my photos, and it works great! 🙂

    Another thing I do to save money on shipping supplies is to reuse boxes we receive in the mail, FedEx or UPS. I just turn the boxes inside out and line them with tissue paper (to protect the clothes inside as well as giving a nice look to the package). This saves me money and I love being able to reuse the boxes that come in. None of my customers have seemed to mind the recycled boxes. 🙂

    I’m looking forward to checking out everyone else’s Etsy shops now! 🙂

  • Crystal Maze says:

    I have had an Etsy shop for 3 years all of the above is great and vital information.

    It takes time and you cannot be lazy about it. I wrote an overview document on how to get an etsy shop running. This was for a group I admin. Must say just this year I really took off I had a 700% increase in sales. Seems unreal when I started looking at this as a business and not a hobby my whole aspect on Etsy changed and I could never imagine being where I am now.

    Tips I learned Starting an Etsy shop:
    https://www.etsy.com/shop/PersonalizedaMAZEing?ref=hdr_shop_menu

    1) Open it and have really good pictures( I need to improve on this)
    2) When you go to write the title make sure it is something people would type in for example I sell personalized sand buckets so I would do the title as so.. Personalized Sand Bucket, Nautical Theme, party favor, buckets, flower girl gift, beach toy, etc…( use up all the characters in your title. If you are at a lost be a customer yourself and type in something similar to what you are selling and see how it comes up when you type it.)
    This is very important if you want to get found
    3) When you get to the tags part utilize it. YOUR TAGS AND TITLES SHOULD MATCH. IT GIVES YOU DOUBLE WHAMMY IN CUSTOMRE SEARCH. Put in anything you can think of that people would search to find that product (you get 13 tags) For example the Personalized sand bucket:
    I would put the following:
    Personalized bucketBeach, party favor.Toy,personalized children
    beach toy
    Try to think of color, what people would use it for, texture. Etc

    TAGS AND TITLES WILL ALSO HELP YOU GET FOUND ON GOOGLE SEARCH, THE FIND , AND OTHER SEARCH ENGINES

    4) You can pay for ads on Etsy that is your choice I do the $5.00 a week not much but it gives you something called impressions meaning they will promote it for you when someone types in that product. I have determined if this is worth it or not.(THIS HAS CHANGE SO PLEASE GO TO ETSY FOR MORE INFO.)
    5) Link to facebook, pin your product to pinterest, wanelo, and twitter.
    6) Join teams, this is the key I think as soon as I joined teams and got really involved I was rocking they do so many things to get your products favored, people following your shop, treasuries. The more times your product is favored the quicker it will get to top of page for that search
    List of teams I am on:
    AAA Support
    Beginner SEO
    Pirate Booty Treasure
    Shop Help
    I belong to 15 so if you follow my shop I think you can see them all.
    THE MORE FAVES YOU HAVE ON A PRODUCT THE MORE IT GETS PUSHED TO THE TOP OF PAGE WHEN PEOPLE TRY TO FIND THAT PRODUCT. FAVING IS THE LITTLE HEART AT TOP OF PRODUCT ITEM
    7) Have very clear policies, shipping info, return info , etc. the more professionally organized you are, the more likely customers are to trust you and your shop. Put it in writing. try to answer any question that MAY come up in your customers mind and have the answer right there.
    8) Be patient I got my first sale the next day ,but it was Christmas I think I got lucky. I now average about 25 sales a week but a lot of them are bulk orders avg about $ 2,500 a month and around $4000 Christmas .I am a stay at home mom so if I worked it harder I probably could do better. This is just a side thing for me..
    9) Pricing and shipping: Price to make sure you cover your material cost and your time. I usually try to times it by 3. Make sure you also include etsy listing fee of .20 and the commission they take.
    10) Shipping buy a scale I promise it will make your life easier and you will not lose money on shipping this way. Etsy also has where you can print shipping labels right from the customer’s order. When you ship through Etsy it is much cheaper. I suggest as soon as you ship you pay your shipping label fees so they do not add up.
    11) Taxes Etsy will only send a 1099 if you have 200 sales and make 20k. You should still turn in your income for your taxes. (save all receipts including ads you paid for, supplies, office supplies etc. also put some of your income into your IRA it will count as a write off. My Tax representative said calculate 30% of each sale as taxes  But now that I know how to price it I am not as shocked and I had money left over. So always play on the safe side. I pay quarterly taxes, but that is due to my income I made the past 2 years. It takes a lot of stress off doing it this way. PLEASE TALK TO YOUR TAX PERSON. I AM NOT AN EXPERT.
    Make sure you are charging enough for shipping. If you can use the priority flat rate boxes they are free and you pay just the fee of the box. For me this does not work due to size items I ship. You can always add some of the shipping cost into the item total to make the shipping charge not seem so much.
    Whenever I get an order I pay on my Etsy account. I pay whatever the shipping fee is for that item and a percentage of my listing fees , ads, and put 10% -20% aside for materials . This way I know exactly what my profit is and if I need to up the price of my items
    12) Be patient I would love to help you along the way if you have questions. Here are all the links I have right now to help my shop.
    13) https://www.facebook.com/aMAZEing1
    14) https://www.facebook.com/groups/homemadegoods/
    15) http://wanelo.com/amazeingsigns
    16) http://pinterest.com/crystalgayle_t/

  • Erica says:

    I am bad about the whole being on call thing. If I get a message from a customer I jump on it and answer all the questions and take care of everything no matter where I am or what I am doing. That is the bad thing about having the apps on my phone!
    http://Www.etsy.com/shop/zenbabymama

  • Amy says:

    I am literally just starting. Just opened yesterday as TrueSoapSpa on etsy. Thanks to everyone for the advice. Still don’t know what etsy teams are, though. 🙂

  • Stacie says:

    I’m still building my Etsy shop (and having fun with it.) How do you list an item that you have already gifted? I’m assuming you would keep the same material handy to create another item in order to ship? I am struggling with how to present my items on there. I currently only have two different products listed but want to branch out and offer at least two more. Everything can be personalized and I can’t wrap my brain around how to offer an item at a certain price but give the choice to customize it if they want to. (ie monograms, special request for an item) I have clear goals for my store…I just have to get there 🙂 Thank you for the tips!

  • Mary Ellen says:

    #11 – Don’t plagiarize. It results in a bad grade in high school, but out here in the real world it results in letters from lawyers and ultimately lawsuits. (If you don’t think this is relevant, search for “Disney” or “Frozen” on Etsy and see how many hits you get.)

  • Heather says:

    Hi! All of those are great tips!
    I know I personally struggle with photography. I am constantly trying to make it better. I also know I have a long way to go!
    I never thought my shop would be as successful as it is, and has been a financial blessing for my family. I believe that you have to treat it as a real job, have excellent customer service and constantly try to improve. Most of all, you have to have something that people want.
    http://Www.featherhen.etsy.com

  • Karen says:

    Great tips! I would add –

    Don’t be afraid to ship internationally. Just make sure you weigh your items and find out how much it will cost to ship it. If you don’t want to ship everywhere, start with Canada and Australia. Most of my international orders are from those two countries.

    Offer direct checkout. My sales more than doubled when I did. Not everyone has paypal and if they don’t they are probably not going to open an account just to buy something on Etsy.

    https://www.etsy.com/shop/EllieMarieDesigns

  • Amanda says:

    Thanks for the advice! I’m opening my shop on Saturday and I’m so nervous. This advice really helps, as I want to be able to build a sustainable business and quit my day job. 🙂

  • Shayna says:

    Thank you for you advice! I recently started my shop so this has helped me a lot. I have come a ways in the last month but now I am stalling out on orders now that Christmas is here. I will put all of everyone’s advice to good use.

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