How to Make Money on Etsy: A Thriving Side Hustle for Crafters

Etsy can be an extremely lucrative side hustle for crafters and artists. As of 2022, Etsy has over 90 million active buyers and generated over $13 billion in merchandise sales.

With the right products, marketing, and strategy, you too can build a thriving Etsy shop that brings in consistent sales and income.

In this comprehensive guide, I’ll walk you through everything you need to know to make money on Etsy, from setting up your shop to marketing your products.

I’ll share plenty of tips, examples, and resources from my own experience as a successful Etsy seller since 2016.

Step 1: Set Up Your Etsy Shop

Setting up an Etsy shop is fairly quick and easy, but there are a few key things you need to know to give your shop the best chance of success:

Choose the Right Etsy Shop Name

Your Etsy shop name is incredibly important – this is how buyers will find your store and products. Here are some tips for choosing a strong name:

• Include your main craft (e.g. JanesJewelryShop)
• Make it short, simple, and memorable
• Use recognizable keywords buyers would search
• Check name availability on Etsy and elsewhere

I chose “JanesArtStore” for my shop name – it’s short, sweet, and signals I sell art.

Write an Engaging Etsy Shop Bio and Announcement

Your Etsy bio and announcement both show up prominently in your shop. They’re valuable real estate to share your shop’s story and connect with customers. Include details like:

• A short origin story of you/your business
• Your crafting background and process
• What makes your products special
• Your business mission and values
• A warm welcome to buyers

Check out my shop’s engaging bio and announcement for inspiration.

Optimize Your Etsy Shop Sections

Etsy gives you several content areas to organize your shop, including:

• Shop home: Featured items, announcements, story
• About: Bio, profile/banner images, policies
• Listings: All products available for sale
• Shop sections: Custom pages organize products
• Profile: Personal info, conversation history

Optimizing these sections helps buyers easily navigate and understand your shop. Make sure you completely fill out the “about” and “profile” sections, create shop sections that group similar products, and feature your best-selling items on the front page.

Step 2: Find a Profitable Etsy Product Niche

One of the most important things to consider when starting an Etsy shop is finding a profitable niche. Avoid crowded markets like apparel and jewelry, and look for niche crafts and handmade products instead.

Research Best-Selling Etsy Categories

While Etsy allows you to sell almost any handmade and vintage items, some categories simply sell better than others.

According to Etsy’s 2022 seller handbook, the top-selling Etsy categories are:

• Home & Living
• Jewelry
• Craft Supplies & Tools
• Clothing
• Paper & Party Supplies
• Accessories
• Art & Collectibles

Within these broad categories are several highly lucrative niches to consider…

Choose a Specific Craft to Specialize In

Rather than selling every handmade product under the sun, specializing in one craft allows you to hone your skills, streamline production, and stand out.

Some niche Etsy crafts that tend to sell very well include:

• Candles – A perpetually top-selling product. Focus on unique scents, designs, shapes.
• Soaps – Custom soaps and bath products have a built-in customer base. Natural ingredients are popular.
• Calligraphy & stationery – Trending products like custom return address stamps, wedding invitations, and thank you cards.
• Wall art prints – Turn your art, photography, digital downloads into printed products.
• Woodworking crafts – Serve home décor niches like signs, wall shelves, cutting boards.

I chose to specialize in botanical art prints, laser cut wood wall art, and paper flower wreaths in my Etsy shop – all three sell extremely well year-round.

Step 3: Set Competitive Etsy Pricing

Pricing your Etsy products is tricky – price too high and lose sales, but too low leaves money on the table. Use these tips to set profitable yet fair prices:

Research Competitors’ Pricing

Search similar best-selling Etsy listings and average 3-5 top competitors’ prices for each product type.

For example, my 5”x7” art prints sell for between $15-$30, so I priced at $20.

Keeping prices in line with competitors ensures you remain attractive to buyers who likely compare shops.

Calculate Your Costs

Your price must cover production costs plus allow reasonable profit. Tally up:

• Cost of materials + supplies
• Labor time x hourly rate
• Overhead like shipping supplies, fees
• Compare to competitors again

I calculated my art prints cost $7 to produce and ship. By pricing at $20, my profit is $13 per print.

Consider charging rush fees or slight premiums for custom/complex orders that take more effort.

Don’t Undervalue Your Work

As makers, we often underprice our work. Have confidence in your skills and products that buyers love – don’t be afraid to price fairly at market rate!

Remember – once an item sells out, you can always run sales or increase prices later.

Offer Tiers and Product Bundles

Having tiers or bundles allows you to capture customers at higher price points while still offering affordable options:

My shop has:

• Good – 5”x7” art prints
• Better – 8”x12” prints
• Best – 12”x16” gallery prints

I also bundle 5 prints for 10% off.

Step 4 – Set Up Your Etsy Listings

Creating optimized Etsy listings is crucial to getting your products found in search and enticing buyers to purchase.

Follow these best practices for writing effective listings:

Use Keywords Buyers Search

Integrate keywords and phrases buyers actually search into:

• Title
• Tags (13 max)
• Description

I sell “sunflower watercolor print” so I worked those exact words into all 3 areas.

Refer to Etsy’s keyword planner for search volume data.

Engaging Titles & Descriptions

Your title and description must captivate attention fast. Use:

🚀 Attention-grabbing opening lines

e.g. “Add a pop of colorful blooms with this vibrant hand-painted floral giclee art print”

📝 Short interesting paragraphs about the product, process, story

🛒 Call-to-actions – e.g. “Take home your own today!”

🤝 Warm & friendly tone welcoming questions

Max Out Images

Include the 10 image maximum Etsy allows – showing full product views plus close ups, variants, designs, etc.

High quality lifestyle images dramatically improve perceived value and likability.

I hire a professional photographer annually for all my new products – images are so important!

Video Listings

Adding short video clips of you making the product boosts sales. Show scale, details, process.

These intimate behind-the-scenes style videos build buyer trust and connection.

Check out the video on my bestselling plumeria print.

Step 5 – Market Your Etsy Shop

Opening your Etsy shop is just the beginning – the real work starts with marketing it consistently to bring in sales.

Optimize For Etsy Search

Most Etsy traffic comes from buyers searching directly, so SEO optimizing your shop and listings is crucial.

🔎 Use targeted keywords
🔗 Include outbound links to social channels, website ⭐️ Run sales, offer free shipping thresholds

This helps surface your listings and gives Etsy’s algorithm signals your shop is popular.

I drove over 200 sales in one month just by running a sitewide 15% off sale!

Create Eye-Catching marketing Materials

Design visually appealing banners, business cards, packaging to reinforce your brand.

I hand-paint my logo onto kraft mailers and heap on the ✨extra touches✨. It makes unboxing fun while providing social media photo ops!

Email Marketing

Collect emails in your shop policies and setup automated flows to:

💌 Welcome + thank new subscribers
🗓️ Share upcoming sales dates 🔔 Remind them of abandoned carts

I use Etsy’s built in email marketing platform which syncs directly with my shop – super convenient!

Leverage Social Media

Promote your shop and products heavily on platforms like:

👉 Instagram – Style quality product photos + reels
👉 Pinterest – Link your shop + create eye catching pin designs
👉 TikTok – Share your creative process, business tips

Use related hashtags and always link back to your shop!

I actually landed a small boutique wholesale order just from the steady Instagram brand awareness I built up.

Run Sales + Coupons

Nothing motivates shopping quite like a good sale!

I run sitewide sales every holiday weekend which nets several hundred extra sales.

You can also offer limited one-time use coupons or bundle discounts to incentivize larger purchases.

Reinvest Profits

As your shop grows, reinvest some earnings back into things like:

📸 Professional product photography
💻 Website development 🛍 Inventory + materials 📈 Paid Etsy / Google Shopping ads

This compounds growth for even higher sales long term.

Within 2 years I was able to quit my job and sell on Etsy full time by constantly reinvesting to scale up.

Etsy Shop Management Tips

Running a smooth operation day-to-day ensures great customer experiences leading to more 5 star reviews and repeat business.

Organize Your Workspace

Carve out an efficient creative workspace just for your Etsy business. Store materials, tools, shipping supplies neatly categorized.

Get in the habit of making a few items each week or sets aside specific crafting days so you don’t fall behind on orders.

Track Finances From Day 1

One of the biggest mistakes new sellers make is not properly tracking expenses and profits.

Use an accounting app or spreadsheet to log:

💰 Product costs, monthly expenses
💵 Sales, taxes, revenue
📊 fees, salaries, profit

This keeps you financially organized so you recoup costs and can reinvest wisely.

Apps like Quickbooks auto import Etsy data making taxes easier too.

Stay On Top Of Messages

Set a rule to respond to convos within 6 hours during the week. Quickly answering questions and handling issues increases satisfaction.

To stay organized, star or bookmark important messages needing follow up.

Ship Fast + Carefully

Ship orders within your set processing time (I do 2 business days). Carefully pack using tissue paper, doodles, and thank you notes – it makes the unboxing experience magical!

I splurged for custom branded packaging but even using kraft paper adds a special touch over plain boxes.

Learn As You Go!

Don’t worry about knowing every single thing up front. As long as you have a passion for your craft and enthusiasm for serving customers, the rest you can pick up as you go.

Join Etsy Teams forums to connect with fellow sellers in your niche for advice. And don’t be afraid to experiment with different marketing strategies while tracking what works for your specific products.

The key is showing up consistently and reinvesting over the long term. Etsy favors shops committed for the long haul. Overnight ‘get rich quick’ success is extremely rare.

My income has steadily climbed 20%+ each year simply by sticking with it.

TLDR: Key Takeaways

If this all seems daunting, just remember the core principles:

🛍 Choose a profitable niche: Find gaps in underserved handmade markets

📝 Perfect product listings: Maximize titles, tags, descriptions, images

👩‍💻 Open your shop: Complete entire “about” and “policies” sections

📣 Get the word out: Direct interested traffic through marketing channels

💕Delight customers: Fast shipping, bonuses, excellent service

💸 Track finances: Manage costs and clearly see profitability

📈 Stay persistent: Consistency and reinvesting over years pays off

That’s the blueprint for how to start a thriving Etsy shop that can completely replace a full-time income. By sticking to quality handmade products matched with stellar branding and customer service, you’ll have a formula for crafting success!

I’m rooting for all you Etsy hopefuls! Feel free to reach out if you have any other questions.

Happy selling!

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