5 Reasons Etsy is bad for your crafting business.

I hear the same group of questions time and time again. Is Etsy good for my business? Is Etsy worth it? Can I make money on Etsy? How can I make money from Etsy? And, the depressingly inevitable; why can’t I make money on Etsy?

When Etsy works, it works quite well. But the idea that Etsy is a sustainable entry for a crafting business is overblown. Just make something beautiful, take some pretty pictures, chuck it onto Etsy, and, hey presto, sales galore! Right?!

The reality is quite different though. Etsy has become a victim of its own success. With well over two million individual sellers on Etsy, it’s about as far from an online craft market as you can get. And hopeful sellers are paying the price. Literally.

Copycat crafting

Take jewellery, for example. A product that many people, due to the time-consuming nature, skill involved, and expensive base materials, are normally happy to spend a little extra on. As the daughter of a jeweller, I know firsthand how willing people are to spend on something that will remind them of a special occasion forever.

But a quick look at the jewellery arena on Etsy and it’s more budget fast fashion than heirloom pieces. According to CraftCount’s stats, the 10 top-selling jewellery stores all sell pieces averaging around €25. And each of these 10 stores sells almost identical pieces, each stamped with a custom initial or word.

Why does this work for them? Well, as anyone with any jewellery insights knows, jewellery blanks (the shaped disks that make these pendants) are cheap, even in precious metals. And it’s very easy to personalize them with a stamped letter or icon. In other words, it’s mass-produced materials, with mass-produced customization, all “hand-made” enough to stay within Etsy’s rules.

Great news for an entrepreneur willing to copy and paste products and sell them as cheaply as possible, with little skill and financial outlay required. Not so great for artists who have fallen in love with a craft, immersed themselves in the practical and often academic training required to perfect and refine it, and willing to put their balls on the line to create something unique.

Making it work.

So, how do you make sales on Etsy? Well, one clear way is you buy a sterling silver chain for €5, you buy a sterling silver jump ring for €0.07, you buy a sterling silver blank for €5, stamp it with a letter, and sell it for €25. And repeat. Let’s add the postage and pretty packaging and Etsy fees. You’re still pocketing 50% of that retail price. And spending, I don’t know, 5 minutes max, of your time. Or that of the people you’ve hired.

So when you ask if Etsy is a good idea for crafters, remember that this is often the mindset of your competitors; fast sales, cheap product. Sure, you could argue that you’re competing with cheaper, faster, less imaginative wherever you sell. But the problem with Etsy is it’s built on the idea that it’s an online craft fair.

Buyers can only be expected to have so much savvy. People who don’t craft don’t understand how time-consuming some crafts can take. Buyers go to Etsy because they take for granted that it’s an online marketplace for crafters and they feel good about their purchases, supporting an independent business. But “crafter”, it seems, is a relative term.

So, here are five reasons that Etsy might be killing your craft business.

1. You’re sending your “warm” leads to your competitors.

If you’re serious about selling, you probably have a social media presence. Perhaps you share posts about the challenges you’ve overcome creating your handmade product. You’ve shown a little glimpse into your crafter life.

You finally finish a piece and proudly share your Etsy product link to all your hard-won followers, driving traffic to an external source.

And some of your followers click, excited to see your offering, eager to buy from someone they believe in. But what’s this they see at the bottom of the very page you sent them to? Oh, a similar product, but less expensive. And shipped faster. And, oh hell, might as well order from there if it’s basically the same thing right?

Etsy is a business, not a social enterprise. It’s not in their interest to care which one of their Etsy sellers make the sale, just once someone sells. And their algorithms know just what to show your hard-won followers when they come a-looking.

The bad news;  it’s quite probably not you.

2. Your mass-production competitors are piggy-backing on your genuine crafting.

The items in your shop, your handmade goods, are part of the Etsy experience. And those painstakingly written item listings are part of the Etsy experience. Less scrupulous Etsy stores are piggybacking on your authentic creativity, using it a sales props to their buyers’ user journey. A journey that will most like end with them checking out someone else’s product.

Let’s imagine the user experience of your aforementioned social media follower who clicked the link to your Etsy shop. They’re thrilled to see your handy work ready to buy, your creativity is finally up in shoppable pixels. They happily follow the link you share to see more. They scroll.

And, oh look, that pesky “You Might Also Like” header, with such lovely items flashes before them. And in different colours, with more options; cheaper, faster, but surely not less creative because, well, you’ve convinced them that crafters like you are who sell on Etsy.

They think, sure, they’re not supporting you directly, but they’re supporting someone just like you, right? Right? Hmm.

That was a lot of work on your part to make a sale for someone who has already made 400,000 sales (yes, there are jewellery stores on Etsy – The “Handmade” marketplace, who have made well over a quarter of a million sales. That’s a pretty good day at the market.)

3. You’re “renting” from Etsy when you should be an owner.

So let’s say Etsy is working quite well for you. Your traffic converts and it’s a fuss-free, no-tech-skills needed way to sell. And then Etsy decides to change their terms of service and that affects you negatively. Or their algorithms change and your sales unexplainably drop. Or an accidental infraction sees you banned (it happens). Now what?

All the links in all your previous social posts are sending your followers to a site that doesn’t stock you. All your former customers on Etsy are gone. And what can you do? Nothing. Nothing, but start afresh somewhere else.

Now imagine you had your own site or form of selling that you controlled. You can see where your traffic comes from, you can invite visitors to follow you on your social channels or join your mailing list. You can email people who have bought from you (with their permission, of course). You’re in control of any changes. You’re the owner of your own domain. Literally. Yes, it’s true that you lose out on the traffic that Etsy has, but you also gain a captive audience who are genuinely interested in your product. A buildable audience.

You can build your own site quite cheaply (we’re happy to help), and there’s no reason why you can’t have an Etsy shop AND your own standalone store. At least if something happens to your Etsy store, you’re not starting from the beginning.

4. Your Etsy customers aren’t YOUR customers.

Look, I’ve already said it; Etsy is a great platform. But making a sale is building a relationship. And once you’ve made one sale, there is a massive, massive chance that that person will buy from you again. By selling through Etsy, you’re outsourcing that relationship, and most likely losing it in the process.  

But if you’re selling from Etsy, they get your customer’s return business, not you. They send out an email saying what’s new this season (and it’s probably doesn’t include you or the other 2 million sellers). They send an email asking you what you thought of the product. They send out seasonal emails reminding people to shop in their marketplace. They learn what Search Engine Optimization (SEO) works  – what keywords your customers are using. And they react to those trends.

The fact is, even if you don’t do a massive amount of newsletter marketing, transactional emails (think; “your item was shipped”, “your order was placed”) get MASSIVE open rates compared to other marketing emails. A great chance to reengage your customers, lost to Etsy.

5. You’re at the mercy of Etsy’s brand image.

For the most part, Etsy has a great image. It’s become synonymous with crafting supplies and small businesses. And even if that doesn’t change on a large scale, even if Etsy is never hit by some kind of scandal or change in consumer trends or values (er, good luck with that!), it’s image changes every day for unhappy customers.

Whenever someone is unsatisfied with a product they bought from Etsy, is underwhelmed and turned off by what the received, and decides not to come back because of that one experience, every Etsy seller loses that potential customer.

So you may have spent two straight weeks figuring out the very best way to ship something safely, securely, and beautifully across the world, maybe a few of those 2 million other sellers didn’t really give a crap.

There are so, so many advantages of selling on Etsy, but each one is double-edged. Lot’s of traffic, sure, but lots of competitors on your very page. Lot’s of creativity, but lots of copy-cat undercutters only too happy to take your idea and mass produce it. An easy to set-up store, but one you never, ever own. Lots of buyers, but none that you can really retain. And while Etsy image as a handmade marketplace is strong, having 2 million sellers undermines this.

My advice, take what you can from Etsy. It can get you some quick wins. But build fruitful, ongoing relationships with YOUR customers somewhere else. You work too hard to serve your leads on a plate to someone else.

Do us a solid.

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