How to start an Etsy shop

If you’re an artist or creative, consider setting up an Etsy shop to market your products around the world. Discover how here

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Do you create unique, handmade items as a hobby or pastime? Whether you’re a calligrapher or a ceramicist, consider starting an Etsy shop to promote your products to the world.

With more than 33 million buyers, Etsy offers you the opportunity to sell your products on a large scale to a global audience. It focuses on unique, handmade items and aims to offer a community where creators and buyers can connect.

Best of all, selling through Etsy is a great way to mitigate the impact of lockdowns caused by the pandemic, or any other as yet unforeseen act of God. Etsy was actually one of the retail world’s big winners during Covid, as demand for bespoke masks, and other goods that consumers were suddenly struggling to find, surged in 2020, resulting in a doubling of revenue and a quadrupling of profit for the company by the end of the year.

Better still, 91% of businesses on Etsy are run by just one person working from home. If you’re thinking of joining them, read on for our full guide on what you need to know. can help your business succeed

At, we’re here to help small UK businesses to get started, grow and succeed. We have practical resources for helping new businesses get off the ground – you can use the tool below to get started today.

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Who is suited to starting an Etsy shop?

  • You’re an artist or creator that makes unique or custom pieces
  • Your products might be a hobby that you’re now looking to make money from
  • You’re interested in connecting with your customers on an individual basis

In terms of skills, you’ll need to be…

  • Organised – running your own Etsy shop means keeping track of your product catalogue, including creating, processing and shipping your stock
  • Patient – if you’re looking to turn your hobby into a professional venture or full-time business, realising that it’ll take some time and effort is essential
  • Passionate – creating one-of-a-kind items requires dedication and inspiration. Consider carefully what you choose to sell on Etsy as you’ll need to be able to make it to the same standard, repeatedly

What are the different types of Etsy shops?

On Etsy, products are split into the following categories:

  • Jewellery & Accessories
  • Clothing & Shoes
  • Home & Living
  • Wedding & Party
  • Toys & Entertainment
  • Art & Collectibles
  • Craft Supplies & Tools
  • Vintage

Think about your products – which category would they fit into? Perhaps it’s clearly one category for some, while for others they could fit multiple categories. If you’ve not yet decided on what you want to sell, read on to get some inspiration.

When you upload a product to list on Etsy, you can choose which category it goes into, and also which sub-categories. You can only choose one category for each item, so really focus on your niche and how you want customers to find your shop and products.

What to sell on Etsy

While the focus on Etsy is all about quirky, individual items, there are a variety of products you could choose to sell. To get you thinking, here are some potential ideas:

  • Homewares – such as illustrated prints and travel maps
  • Clothing – such as denim and patterned items
  • Jewellery – such as personalised name items; birthday or wedding date pieces
  • Children’s – such as wooden toys and fabric storage bags; clothes
  • Vintage – such as clothes, furniture and home accessories
  • Craft supplies – such as stamps, fabrics and paints
  • Wedding items – such as hats, paper flowers and table settings
  • Design – such as decorative cushions or plant holders
  • Furniture – such as natural or reclaimed wood pieces

Etsy top tip #1

Fill your Etsy shop with stock

The more products you list in your shop, the higher your chances are of getting found.

Whichever you choose, remember that Etsy is all about individual pieces that aren’t readily available elsewhere. It’s advisable to focus on one area and do that really well – use Etsy as a way to showcase your expertise.

Plus, as mentioned earlier, what you do choose to sell has to be something that you love to make – and are able, and want to make – many times. That’s the aim after all, as multiple orders suggests your shop is doing well.

It’s useful to consider the weight of your products – heavier items will cost more to ship, so be sure to think about that as part of your decision-making process too.

Also, assess if your product can be sold all year round – while seasonal goods ensure buyers during peak periods, the long-term goal is about creating a sustainable business.

Essentially, the products you choose to sell on Etsy are generally items that you’d be happy to make as a hobby, but now you’re looking to make some money from your talent. This is opposed to starting a shop (whether online or bricks-and-mortar) with a sole focus on making as much money as possible.

Expert Insight – Karen McCluskey, Ash and Dove

How to start an Etsy shop - Karen McCluskey

Veteran Etsy seller Karen McCluskey started her Etsy shop Ash and Dove in 2014 and now sells through Etsy and her own website. She also runs Etsy Zero to Etsy Hero, a Facebook group for Etsy sellers that has over 1,800 members, and so is perfectly placed to offer Startups advice on running a successful Etsy shop.

She notes that:

“You have to be smart these days. I knew that when I first opened my shop selling handmade greeting cards, I would need to sell a lot of cards to make any money. My shop has changed, and I now sell party supplies. If something does not work, be flexible and change it.

“As your sales increase, Etsy will reward you with greater prominence on the site, which should then increase your sales more and lead to even greater visibility etc. So, it’s crucial that you really put the effort in to get noticed, and it’s essential to effectively use social media platforms like Pinterest and Instagram.

“Most importantly, I wish I’d known that you don’t just list things and leave them. You need to be on there tending to your shop every single day, checking the stats to see what is selling and why and, just as importantly, what isn’t selling and why. However, you should also be patient and give things time to work, there are quiet periods in any business and Etsy shops are no exception. A lot of sellers worry, but this is normal and there are still opportunities for sellers with the right approach.”

Etsy top tip #2

Tag your products using keywords

  • Think about the words customers will be using to search for your item – use those words in your product title, description and tags
  • For example, if you’re selling a bracelet, don’t call it ‘The Emma’ – instead give it a descriptive title such as ‘Sterling silver star bracelet’
  • This helps search engines to identify your product, meaning you’re more likely to be found

How to find your Etsy niche

With so many independent sellers and unique items available, how do you find your Etsy niche and stand out? There are several ways you can approach this, including:

  • Consider your customers – curate your online shop just like you would in real life. Which items would you place together? Consider the type of experience you want your customers to have
  • Review your talents – what can you make or do that no one else on Etsy can? Offering something not currently available is a surefire way to differentiate yourself from the competition
  • Tell your story – with Etsy’s focus on authenticity and community, a key point of difference is how buyers and sellers can connect. Let potential customers know the story behind your products. Whether it’s a skill handed down through generations, or a talent you’ve harnessed over the years, knowing what motivates and inspires you can help bring your products to life and encourage people to purchase

At this stage, it’s essential to draw your ideas together and turn them into a strategy for setting up an Etsy business. This means thinking about your business plan – for example:

  • What are your goals for the next one, three, and five years?
  • How much revenue do you expect to make?

Consolidate these ideas into a concise plan that you can return to when needed to ensure your business is going in the direction you want it to.

You can download a free business plan template here.

Naming your Etsy shop: what do you need to know?

Now, for one of the most interesting yet vital steps. Choosing a name is a key decision and a big part of setting up an Etsy shop. Use this as an opportunity to think about your products, your brand and how you want them to be portrayed.

It’s a chance to be creative and utilise your self-expression – it’s how you and your products will be remembered by customers so choose wisely.

What are Etsy’s rules about changing your shop’s name?

Before opening your shop, you can change the name as many times as you like.

After opening, you can change the name once instantly. If you wish to change it again, it’ll be sent to Etsy to review.

Use the pre-launch time to experiment and try several variations of your name. If your chosen shop name is not available (it may already be taken), Etsy recommends adding ‘workshop’ or ‘co’ to it.

You should also think about keywords. Imagine you’re the customer – what would you type in to a search bar to find your shop/products?

You can also use keywords in your product descriptions. If you go to ‘Your Shop’ and then ‘Stats’, you can check your Shop Stats to see which words customers are using most, and least, frequently.

What are Etsy’s brand guidelines?

Etsy’s policy states that ‘everything listed for sale on Etsy must be handmade, vintage or a craft supply’. Plus, it has to be made or designed by you, using your own photos to market it.

If your products don’t fit these criteria but you’re interested in selling online, check out our guides to starting an eBay business and starting an Amazon Marketplace business to find the right online shop for your start-up.

As Etsy focuses on small businesses and independent sellers, there’s a big emphasis on honesty and trust – that the products you sell are really made by you. When it comes to photos, you can either take them yourself or hire a professional photographer – that’s up to you.

If you’re taking photos yourself, use the best camera possible. Think about the location, the angle, and the time of day (natural light is generally preferable) to help you create photos that best, and most accurately, represent your products.

Etsy top tip #3

Have great product photography

  • Photography is the most important thing – make sure your photos are clear, well-lit and appealing
  • Develop a cohesive style for all your product shots – ensure the background is plain and neutral
  • Always edit your photos (you don’t have to know how to use Photoshop) – some great, free, web-based tools available are Picmonkey or Foto Fuze

Once you’ve opened your shop, Etsy provides more information on how you can use and market it. You can read the Etsy brand guidelines in full here. Alternatively, you can find a quick summary of the main points below:

  • You can include your Etsy shop URL on your business card
  • You can’t use the Etsy logo on your business card
  • You can link back to your Etsy shop from your blog, social media or website
  • You can’t use the word Etsy in your business name

Setting up an Etsy shop

How do you start taking payments?

One of the key aspects you’ll need in order to run an Etsy shop successfully is being able to take payments.

When you’re setting up an Etsy account, you’ll be prompted to choose your payment method (how customers will pay for the goods or services you sell on Etsy). There are four options:

  • Etsy Payments – this is the main payment method on Etsy. With an Etsy UK shop, you’re eligible to be enrolled in it. This means you’ll offer customers the options to pay with credit/debit/bank cards, as well as Etsy Gift Cards and Etsy Credits. PayPal, Apple Pay and Android Pay are also offered
  • PayPal – you can also offer PayPal without being enrolled in Etsy Payments, if you set up a shop in a country that’s not a part of the Etsy Payments scheme
  • Cheque or money order – payment methods via post are available, in which you provide an address for the cheque or the money order to be sent to (it’s only shared with customers who purchase using this payment type)
  • Other – if you have another way of accepting payment, you can offer it through this method

This is also a good time to consider pricing. Generally, prices are derived in two ways: either by calculating how much it costs you to make each item for your time and the materials involved, or you base your pricing on what your competitors’ are offering.

Etsy top tip #4

Price it right

  • Make sure you are paying yourself adequately and not undercharging for the items you use to make your products, or the time you spend creating them
  • Here’s a tried-and-tested pricing formula that a number of Etsy sellers use:
    Materials + Labour + Expenses + Profit = Wholesale
    X 2 = Retail

When you’re considering your payment options, you should also consider what your returns policy will be. For custom, personalised items it may not be possible to offer returns, whereas for other items you may be able to offer some window of time for customers to send items back.

What the requirements are for this, such as the amount of time and reasons for returning – as well as the condition the product must be in – is what you’ll have to decide, bearing in mind your customers’ statutory rights.

Whichever payment method you choose, a merchant account will be useful. This type of bank account acts as a mid-point, collecting the funds between them leaving a customer’s account and entering your business bank account.

As an intermediary between you and your customers, it offers a way to ensure the payments are safe, secure and legitimate for both sides. To speak with suppliers and compare quotes for merchant accounts, complete the form.

What are Etsy seller fees?

If you want to offer your items for sale on Etsy, you’ll need to pay Etsy seller fees. While it’s free to join the site, to use the ecommerce function you’ll be required to pay the necessary charges.

On 16 July 2018, Etsy changed its fees and packages. In addition to the fees for listings and transactions, there are charges that also now apply to the cost of shipping and fees for Etsy Payments.

Joining feeFree
Listing fee£0.15 per listing
Transaction fee5% per transaction
Cost of shipping5% per shipping
Etsy payment processing fee4% + £0.20 per item

Etsy also offers two packages – Standard and a Plus plan that offers additional features:

PlanFeeSuitable for...
StandardFreeJust starting out
Plus£7.60 per monthLooking to expand

Note that pricing is based in US Dollars so may vary according to exchange rates.

You can find more information on payments and billing, and other key steps, in the open a shop guide by Etsy.

Set up your Etsy shop

Now, read on to discover each step of opening an Etsy shop.

  1. Sign up by selecting the ‘sell on Etsy’ button at the top of the page
  2. Choose your shop preferences (language, country, currency)
  3. Select a name for your shop
  4. Add your products
  5. Pick your payment methods
  6. Input your billing details
  7. Click ‘open your shop’ to go live
  8. Fill in your profile (about/bio, photos, policies, sections, shipping, social media)

Building momentum and sales

At this point, you’ve opened your Etsy shop, and you may even have had a few sales (although don’t worry if you haven’t). Now that you’ve done the legwork to get your Etsy shop up and running, it’s time to build upon the initial steps, with the aim of building momentum and sales.

You could consider going beyond your Etsy shop as well. If it’s an online business you’re particularly interested in, you can check out our guide here, where you can learn more about ecommerce and other online business strategies.

Market your product

After you create an Etsy shop, you need to ensure that people know it exists. One of the best ways to do this is to use social media – it’s a free way of reaching potential customers around the world.

While there are a number of platforms you could use, think about your target audience and the platforms that best reflect your brand and products.

Instagram and Pinterest are both highly visual platforms, so using them is an ideal way to promote your stock, as well as the process behind the finished product. Similarly, Pinterest has a reputation for being a craft-focused, inspiration-seeking resource – perfect to show how it all comes together. Whereas Instagram is a great way to develop your photography skills to display your products, ideal for when everything’s completed.

Other ways to market your product include creating your own website. This is absolutely essential, as it gives your customers a place to go to find out more.

Web builders like Wix and Squarespace can give you access to tons of gorgeous, eye-catching templates so you can easily create an online face for your store, for potential and existing customers to visit.

Word-of-mouth and recommendations are still a strong way of promoting your Etsy shop. Plus, using this form of offline communication could match your brand ethos.

If you’re a small business or independent seller who offers individual, hand-crafted items, then creating a buzz through word-of-mouth could mirror the back-to-basics approach you take in your work too. This reflects the importance of community that Etsy champions too.

Etsy top tip #5

Create a brand identity and promote yourself

  • Think about who your target audience is and what your brand is all about
  • Pick one or two social media platforms and start building a community around your brand
  • Get in touch with bloggers, journalists and magazines that you feel would be a good fit for your brand. Briefly introduce yourself, include some eye-catching product shots and invite them to get in touch with you if they would like more information

Go global

Another way to build upon your current offering is to think about expanding your shipping options. If your current efforts have focused solely on the UK, then consider widening your audience and targeting overseas buyers.

A ‘made in the UK’ product can be really appealing to international customers, and expanding your target audience could help to make your product more in demand.

If you choose to develop your Etsy shop in this way, just be sure to check and refine your shipping process. Be realistic about how long overseas customers will have to wait for their products.

As well as this, assess if your product is suitable to send abroad in the first place – if you work with raw or natural materials such as wood or honey, then it might not make it past customs!

Plus, inform customers of international shipping costs, as well as whose responsibility it is to pay import duty (if any).

Diversify your offering

At the beginning of this guide, we said to focus on only one product to make and sell. If this process has left you thinking you can do more, and you’ve got other products to sell, then now’s the time to consider setting up another shop – it’s possible to have multiple Etsy UK shops.

How to set up multiple shops on Etsy

  • Follow the same process each time to sign up as a seller on Etsy
  • Have a clear reason for the multiple shops (Etsy may ask for this)
  • Ensure that you have the stock levels to maintain multiple shops
  • Include the names of all your shops in your public profile
  • Avoid a high number of duplicate listings

Run promotions

If it’s increasing sales you’re keen to focus on, then running promotions could be helpful. For example, to drum up interest in the beginning or to pick up purchases during a lull, consider cutting prices on certain products and running a sale.

If you’re not keen to cut prices, then think about offering ‘add-ons’. If there are particular pieces that work well together, you could organise these items together and suggest different combinations to customers.

While you’re probably keen to get going as soon as possible, be sure to spend time getting to know the regulations for selling online, such as which laws you need to abide by and what you need to do to ensure you’re compliant with online trading legislation.

Business case study: Nana Evans, founder of LoveYaaYaa

How did you pick a type of Etsy shop?

“I selected to go with a third-party selling site because it seemed the easiest route to an audience already engaged with handmade products. I picked Etsy because it’s the leading site for handmade products and has over 100 million visitors.

What do you do to make your business and products stand out on Etsy?

“There are only five sellers making leather belts similar to me. So, when I first joined Etsy, I looked at the leading seller and added what they were missing and developed a brand identity that would set me apart from my competition.

“I decided to make sure my shop had the largest range of Obi belts available on the internet and that I would focus on a range that everybody could wear, from petite to plus size.

Describe the process for choosing your shop’s name.

“The shop name was more about the energy I wanted my brand to embody. I named my business Love YaaYaa in celebration of my sister’s life.

“Over the years, many people have told me that YaaYaa is used in America as a term for sisterhood, so it’s actually worked well in attracting buyers who feel my products support them to create a style they couldn’t find on the high street.

How did you find working with Etsy’s brand guidelines?

“I’m an Etsy advocate and love what Etsy has done for creative entrepreneurs like me. There is a lot of support for sellers and customers. I think it’s a fair platform and community.

What did you have to do to be able to accept payments through Etsy?

“Etsy make receiving payments very easy – it’s all handled in-house. All you need is a bank account and debit card for the daily, weekly or monthly deposits.

How do you manage the seller fees?

“I choose to pay my seller fees monthly and I use my Etsy sells to pay the fees.

What advice can you offer our readers for growing their shop and/or increasing sales?

Five main points to being successful on Etsy:

  • Good photography

You have 10 images to fill – use all of them; a selection of white background and lifestyle shots

  • Great customer service

Descriptions that have clear, helpful information on your products; answer questions quickly and get items out as soon as possible

  • Be unique

Even if there are other people making similar products to you, add your personal touch to make sure you stand out

  • Be prepared to invest in advertising

Use promoted listings, Facebook ads, Pinterest and Google ads

  • Be positive

Intention is paramount – set out to do your best and solve a problem for your customer”

– Nana Evans, LoveYaaYaa

Next steps

From reading this guide, you’ve learned which steps you need to take to create an Etsy shop. This includes the essentials, such as picking a name and taking payments, as well as how to develop your online shop and take it to the next level. You’ve also learned about Etsy’s top five tips for selling.

So where do you go from here? Now is the time to sign up and start selling, and hopefully, turn your passion into profit!

Written by:
Alec is Startups’ resident expert on politics and finance. He’s provided live updates on the budget, written guides on investing and property development, and demystified topics like corporation tax, accounting software, and invoice discounting. Before joining, he worked in the media for over a decade, conducting media analysis at Kantar Media and YouGov, and writing a wide variety of freelance pieces.
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