It has come to my attention that I often explain all the great things that exist about Etsy — like how to make the most out of Etsy and how to get sales on Etsy — because I do believe that Etsy is a platform that you can make money from and I help and work with Etsy sellers every day.
But I realized that I’ve never really talked to you about
What things do I see getting in the way of some people making the money or getting the success that they really want from Etsy?
And I think it is a good question to ask, because it’s healthy to always look at both sides of an argument.
I’ve never actually opened up, at least not on this channel, about what I see being problematic with Etsy . . . as in the things that concern me a little bit and what might get in the way of some people making the money or achieving the success that they really want from the platform.
And so today, I want to talk a little bit about that, and what I think the problems with Etsy are — essentially talk about some hard truths and encourage conversation about them.
I’m going to cover some main points, but there might be other things that I’m not going to have time to cover in this article so please bring anything you would like to hear more about to my attention in the comments and I might write more articles on them if you’re interested.
So, ready? Let’s dive in.
So before I start I want to emphasize again that this isn’t an anti-Etsy article, it’s more just an honest talk about how Etsy has evolved and what that means for you as a handmade seller — specifically how these changes affect your ability to make money on the platform, or as I call them, the “hard truths” of the Etsy branding changes.
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The first of these truths is about positioning.
Etsy used to be a handmade marketplace, and it’s just not anymore. They have gone through what many growing companies go through: things like brand pivots and going public so having investors to make happy, and because of that they’ve needed to open up to selling different kinds of products to attract more people.
They aren’t hiding this, they are changing how they position their brand and now focus on being a marketplace for “unique and creative goods.”
People can sell vintage things, pre-manufactured things, and of course can still sell handmade things.
With this pivot in what Etsy allows people to sell on its platform, they have also changed WHO they are targeting and bringing to the platform.
I’m not bad-mouthing this change, from a business perspective it makes complete sense and Etsy’s got to do what’s best for them.
But the consequences of this pivot are two-fold:
It’s 2 ends of the same thing.
— if you don’t sell handmade necessarily and sell digital products or POD, etc. this might be an ok change for you, but if you do sell handmade products it’s important to know that the brand is a bit diluted on that front.
Another consequence of Etsy’s brand pivot and allowing new types of products is that it’s growing bigger and bigger, so organic reach is not as guaranteed or as abundant as it used to be.
Etsy has many many shoppers visiting the platform every month, right? And that’s wonderful because it means that we can tap into that using Etsy SEO – and of course I think it’s smart to tap into that. (like why wouldn’t you?)
I think the problem, though, is that there’s this expectation from most Etsy sellers, that their business should be able to be completely sustained via Etsy SEO.
Now, for some, it’s going to be possible. But it’s a lot less realistic that it was years back when there was a lot less competition on the platform.
Because the more competition there is, the more people are going to be competing for the exact same keywords, and so even with the best Etsy SEO strategy in the world you’re still competing against other sellers using the exact same best strategy in the world . . . and there’s only so many results that Etsy can show to one person at one time.
So even if you’re doing really well with your Etsy SEO and you’re seeing consistent traffic and sales, you might get to a point where you want more but can’t quite get more from SEO only. That’s when you have to start driving your own traffic from outside of Etsy to your Etsy shop — and when you start doing that, then you’re starting to work for Etsy instead of Etsy working for you.
Selling your products on Etsy can also make pricing for profit more difficult.
A lot of sellers on Etsy are completely under-pricing. It’s not that they’re trying to price cheap, it’s more that they just don’t know how to price for profit, or some of them are selling for a hobby and they just want to cover their costs and aren’t even interested in pricing for profit.
And so in doing that they’re making everyone lower their price because people want to compete on pricing – which you should not do, but that’s what people do. And so it creates a race to the bottom which is a big problem.
The second pricing problem I see on Etsy now is that there are a lot of people who are selling products that they manufacture, or print-on-demand — which again lower the prices for products on the platform overall.
Sure, someone who is looking for a truly handmade item will not necessarily look at those, but there are less people coming to the platform for truly handmade and more coming for a “unique product idea” and then tempted to choose the lowest price when comparing options.
So again, like everything that I’m saying here, it doesn’t mean there’s no way around it. Of course you can sell at much higher prices on Etsy but generally as a whole the competition is tougher price-wise.
Another factor that to some extent has always been there but has gotten worse in my opinion is control.
When you sell on Etsy you lose control on so many fronts, like layouts and fees and customer data, and I’ve talked about that in other articles.
But there are also very important things — like when they announced that if you make more than $10,000 a year they would automatically add you into their offsite ads campaigns and charge a 12% fee for that.
In some regards sure it’s great because cool, you get more exposure and hopefully more customers and I know many sellers for whom those ads work well— but that’s in exchange for losing a 12% cut that you didn’t decide on and that you didn’t take into account when you priced your products.
Same goes with things like the Etsy Payment Account Reserve for example.
And so these are huge things that Etsy can control that can be pretty problematic and unexpected when they drop on you – and you have no control of when that might happen.
Finally, let’s talk about the last hard truth about Etsy, which is growth levers.
What I mean by growth levers is that there are lots of things that make you unable to actually grow in the way that you should be able to grow, and there are four in particular that can really hold you back.
Etsy designs the customer experience at the marketplace level, not at the shop level – meaning they want to keep people shopping for anyone’s products, not just yours!
Not only does Etsy show shoppers products from other Etsy stores, but they also limit the ways you can try to increase your customers’ Average Order Value (things like upsells, discounts, and bundles). You have more flexibility and options for increasing AOV on your own website.
When you make a sale on Etsy, that person becomes an ETSY customer. Etsy doesn’t give you their email, and it’s very hard for you to target that customer to make future sales.
When you have your own website, it’s much easier to convert those people into customers time and time again.
If you run paid ads that bring traffic to your Etsy shop, you are at risk of losing that traffic because they can easily click away to any other Etsy store once you’ve done the hard work of bringing them to yours.
When you have your own website, every ad you pay for is customized and targets or retargets the exact customers who will want to buy your products – and if they click they will only see YOUR products. Much better!
I explain this in much more detail in my article “4 Ways You Can’t Grow With Etsy” so be sure to read that next.
I’d love to hear if you agree and think that Etsy is pivoting and this new brand positioning is affecting handmade sellers or smaller brands – tell me your thoughts in the comments below!
As always please keep it friendly and respectful as there is no one right way to have a successful business, right?!) – this community and all the diverse opinions and experiences you each bring to the table are awesome. 🙂
Thanks for reading, and until next time, aurevoir!
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Hello Debbie,
My name is Rebecca and our team has just launched a new Crafter Selling Platform called MyLocalCrafters.com. It is designed to connect local Crafters to local Sellers and as a hub for Craft Shows. Of course it is also a national platform.
I don’t know if Etsy has changed but I started this because I was trying to find a crafter in my area for a certain project and found that I couldn’t- not on Etsy or anywhere else.
I have been crafting for over 20 years but not as a fulltime job as I know some do, so I do understand the industry, how hard it can be and how costly it can be.
I have done in-depth research on all kinds of platforms. Etsy of course is the largest with 9 million sellers. How can new crafters be found? That was also one of the other reasons why I created this, I wanted to help Crafters keep more profit by concentrating on their local business and to be found locally. (And national business too).
We just recently launched and have been advertising for 2 weeks. Due to the Easter holiday, we have not had anyone register just yet, but there is good activity and responses. So we are truly at the beginning.
When I came across your site, I was looking for any current information about the sellers on Etsy and their opinions. We would like to get access to those who may be looking for another platform to sell on.
And then another thought occurred to me. I would love to invite you to have a free link on our website as an added benefit to our crafters to help them in growing their business. Perhaps this is something that we could discuss. You have a great deal to offer at an affordable price.
I look forward to hearing from you.
I’m new to Etsy, only a few months. I entered the Etsy Design Awards program this week with my exposed-grain product. I really do not believe Etsy can calm they sell Home-made, Many of the shops I am competing against use high-speed machines and engraving machines to produce what they call handmade. I can’t compete with that. Looking for an alternative. I am rated 5 out of 5 on Etsy so far. thanis
Hi Rebecca! Your work deserves a space that truly reflects its craftsmanship. With a 5-star rating and such a unique product, building your own website could give you full control over your brand, story, and customer experience 🙂