7 Reasons why you should NOT open an Etsy Shop

Etsy is a huge and well established marketplace. It has been loved my millions of sellers and buyers since its launch in 2005. But have you stopped to wonder why you should not open an Etsy shop?

Is it right for you?

Maybe you are about to launch your business and were planning to use Etsy. Or perhaps you are torn between Etsy and selling on your own website.

I am going to provide you with my honest opinions and all of the negatives to selling on Etsy.

I have had a failed Etsy shop in the past and I now run a successful shop, so I feel like I have seen both sides and have found all of the pros and cons of selling on the marketplace.

I have already posted all of the reasons why you SHOULD have an etsy shop so you know both sides before you make your decision.

Fees

Whilst the start-up cost for Etsy is low, the costs once you start selling can pile up and start to seriously eat into your profit.

There is the initial listing fee of $0.20 (£0.20) per listing. Then there is a transaction fee of 6.5% that you will be charged on each sale. You can then be charged a Payment Processing fee on top of this. This is all before we consider any marketing fees that you could be charged for (offsite ads) or elect to buy (etsy paid ads).

I am not going to go into the details of each fee here but if you want to see an in depth breakdown you can find it in my beginners guide to Etsy.

Many sellers find that they have to increase their prices after their initial few sales so they can actually make a decent profit. Whilst changing your prices is completely ok, if your price gets too high it may deter customers and encourage them to buy from a cheaper platform or shop.

It’s Oversaturated

There are 4.36 million active sellers on Etsy.

Whilst they won’t all be in your niche, or considered competition, it does mean that the customer has many other options that will keep them from buying from your shop.

Having so many sellers also means that many of the popular niches are oversaturated. For example, there are over 3 million products under “wedding gift”. Over 19 million jewellery products and 7 million “art prints”.

This means that if you want to attract customers you have to stand out. You will have to “niche down” and make a more specific product to be able to found in Etsy search.

For example, instead of making wedding gifts, maybe try personalised groomsmen gifts or wedding guestbooks.

Whatever your niche is, you will have to create a unique product and make sure to list it with the right keywords and SEO so you can be found in search.

Product Restrictions

Etsy is very specific with the products they allow on their marketplace. To sell on etsy your product must be handmade, vintage or a craft supply.

Although they have recently allowed the use of production partners, their policies still exclude thousands of potential products and businesses.

You cannot “dropship” ready made products on etsy like you can with your own site.

Etsy takes their policies very seriously and anyone selling a banned product will be shutdown.

Etsy may also ask you to prove that your product is handmade before they allow you to sell on their platform. They asked me to send them photos and evidence of my design process before they allowed me to sell.

So, before you start on etsy, be sure to read their terms and policies to make sure your product is allowed.

Creative restrictions when Building a Brand

Your Brand is your shop’s identity.

It is everything you stand for and how you will be recognisable to customers.

So having a strong brand is very important if you want to establish your shop.

However, on Etsy it is difficult to show your brand with the limited options given to you.

If you were building your own website, you could make sure the colours, fonts, images, layout and experience were all in keeping with your brand.

This would build a strong brand identity.

However, on Etsy, you can only show your brand through a logo, banner, products and name.

It is hard to set your brand apart from anyone else’s on etsy. This means it is unlikely a customer will remember you and your brand.

This also makes it much harder when you want to market your product with a certain selling point. For example, it is harder to show you are a sustainable brand, or that you are a luxury brand.

You don’t OWN your shop

You may be responsible for your shop, and everything in it. But technically you do not own it. Etsy owns it.

If you created your own website, you would own it, meaning you could do exactly what you wanted with it, and would not have any restrictions.

Having a shop on Etsy means they have the power to suspend you or deactivate certain products. You are also subject to any changes they make, such as an increase in fees or new policies to follow.

If Etsy were to suddenly shutdown tomorrow, you would lose everything.

Although that is an unlikely scenario, you must consider everything when you want a stable business.

I personally would not feel comfortable having an Etsy shop as my only income stream because it could all be taken away tomorrow.

They can shut you down!

As I have mentioned, Etsy can and will shut you down if they feel their policies have been broken.

When their policies have been violated, I believe they should be able to shut the shop down.

But I am aware of many people who were shutdown due to a computer error or were shutdown and not even told why.

You can appeal if you feel you have been wrongly shutdown or suspended, but this is a lengthy process where etsy assumes you are guilty of violating their terms until you prove them wrong.

My current shop was suspended almost as soon as I opened it due to a computer error. I did manage to get it back after appealing for a couple of months. But it took a lot of emails to different departments in Etsy until I found one that could help.

Lack of Customer Loyalty

When a customer buys from your website, maybe they follow your social media or subscribe to your email list. Your brand gains a fan who could turn into a repeat, loyal customer.

But customers on Etsy are a fan of Etsy… not your shop. They are looking for a certain product in a marketplace, not your shop or your product specifically.

When you go to a supermarket for fresh produce, you don’t care about the specific farmer who grew it do you?

This makes it incredibly hard for you to build customer loyalty for your brand.

You are also forbidden to collect email addresses directly from etsy for your email list as you don’t have the customers permission.

Hopefully you can now see some of the drawbacks of Etsy, and some of the challenges shop owners face.

Despite all of these negatives, I personally love Etsy and will always sell on their marketplace.

Some of the drawbacks definitely still impact my shop, but when I wish to expand my brand I can always build my own website. Until then, Etsy is an easy way for me to make passive income and it is a great way of testing new products ideas.

So you can make your own informed decision I have outlined 9 reasons why you Should start an Etsy shop.

Highlighting the honest reasons why I love selling on Etsy and how Etsy can be a powerful tool for a new business owner.

What do you think of Etsy? Have you found success? Have you faced any of these problems?

Let us know below so we can all help each other.