How to become an Etsy seller
Etsy is the platform that combines an online marketplace with a craft fair. On it you can buy vintage goods, handmade wares, and up-cycled clothes from artisans, and as a seller you can easily set up shop and list items.
The same age as YouTube, Etsy has grown considerably in its 17 years with over 80 million daily active buyers and over 4 million sellers on the site. Not to mention a whopping 50 million unique listings. On it you’ll find everything from garden furniture to homemade jewellery, sold by independent sellers and small businesses.
Etsy is the perfect place to try your hand at creating a business or side hustle as it’s easy to use (you don’t need a website) and requires few resources to get going, besides your product.
Here we look at how you can set up shop, make money and, that’s right, pay tax on your income.
How can I become an Etsy seller?
Etsy makes the process of creating a shop and selling on the site pretty easy. In two clicks you can go to the Sell On Etsy section, and set up your Etsy business.
If you’re looking into selling on Etsy you’ll probably have a decent idea of what your product is, but even so it’s good to have done some research on the market space.
Here’s 5 tips for getting yourself in a good place to do business:
1. Photographing your products
Top quality images are more likely to ‘sell’ your product. It could also be worth hiring a photographer if you have the money. Otherwise 5 tips are:
- Use a simple background, nothing to distract from the product
- Lots of natural light
- Make sure to capture all the detail (you can upload up to 10 pics)
- Show the product in its natural habitat, if it’s a watch have a shot of it on a wrist, if it’s a pot then in the garden
- Think carefully about the thumbnail image, it’s got to be the best shot for people to click on it.
2. Personalising your page
Make sure you’ve thought carefully about everything that gives you identity on the page, such as your name, the description on your bio and your thumbnail, which is what people will see. The more detail the more people will warm to your ‘shop’.
3. Track your performance in the stats page
Even right at the beginning it’s worth making sure you stay on top of ingoings and outgoings. And also keep an eye on which products do best and which don’t. Under the metrics page you can see page views and clicks which will indicate how much traffic certain photos are getting and can inform if you need to freshen things up. By staying on top of performance you can ensure you’re always improving.
4. Making sure your products get seen
There’s two key methods for this, pay per click (PPC) advertising, and search engine optimisation (SEO).
PPC is where you pay to have your products featured or advertised more prominently on the page. This should mean more people see it and more people are likely to buy it. Etsy will charge you for each click, meaning it's more expensive if it performs well (although conversely you’ll also be making more money from sales). Generally a good limit to set is between £0.10-£0.50, the higher the bid, the more prominent it will be on the site.
SEO is more associated with search engines like Google. This is where you include the words in the description that you expect people to search for. So if you’re selling a necklace you might include words that people commonly search in relation to it, like ‘chain’ or ‘jewel’. So if someone searched for a ‘chain necklace’, they’re more likely to come across yours.
5. Use Etsy’s social marketing tools
Etsy allows you to connect your shop on their platform with your social profiles. You can share listings directly to Pinterest, Twitter, Instagram and Facebook to get people clicking through and buying your product.
How much can you make on Etsy?
According to Etsy SEO tool, Sale Samurai, the average Etsy business makes around £35,000 ($44,000). This is made up though of a midpoint between massively successful, full-scale businesses making hundreds of thousands every year, and people who make an account, list an item and leave it at that. So it can really come down to how much effort you put in.
You’ll also want to understand your pricing to get the most out of your products. You pay £0.20 per listing. And then for each item sold Etsy takes 6.5% from you, and charges the buyer 4% + £0.20 when they purchase.
So if you sold an item for £10, £0.20 would have already been charged for the listing, then £0.65 once the item is sold leaving you with £9.15, plus the buyer pays £10.60. If you want to cover your costs you could charge more but might put people off buying your product. It’s a fine balancing act to get right.
How does tax work with Etsy?
If you make more than £1,000 selling goods on Etsy, you’ll need to pay tax on it. In which case you should register as having a self-employed income with HMRC.
Even if it’s a side hustle and you have a full-time job which is being taxed through PAYE, your total income (including your Etsy income) will need to be taxed.
The usual cut off date to complete your self-assessment is the 31st of January if you’re doing it online, and 31st of October if you’re completing the form by post.
The tax bands for Etsy income is the same as any other occupation:
- Tax allowance: 0% of earnings (You earned between £0 - £12,570)
- Basic rate: 20% of earnings (You earned between £12,571 - £50,270)
- Higher rate: 40% of earnings (You earned between £50,271- £150,000)
- Additional rate: 45% of earnings over £150,000
You can read more about tax bands, how they work, and what a personal allowance is in our blog post here.
How can Earnr help?
Earnr makes self-employed bookkeeping easy, so that you can spend less time worrying about this kind of stuff and more time growing your business.
You can separate your business transactions from your personal ones, track your expenses and get a real-time tax estimate so you know whether or not you need to submit a tax return. Learn more and download Earnr here.