Multichannel eCommerce: The benefits and costs of selling on Etsy

October 28, 2022

  • jamescarr

Home » Multichannel eCommerce: The benefits and costs of selling on Etsy
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The challenges of Ecommerce

Operating as a multichannel online retailer poses challenges far wider than just listing the right product to potential customers. From supply chain issues, the cost of living crisis, to order management, and stock control, the challenges for eCommerce brands and businesses are in abundance. So deciding which marketplaces you should list your products on is a key aspect that is critical to helping your business scale. Having explored Amazon and Ebay we look at Etsy, one of the fastest growing marketplaces in the UK.

The benefits of selling on Etsy

Etsy values individualism, community, sustainability and responsibility by encouraging unique products and storefronts. Unlike other marketplaces, it has only three product categories focus: handmade, vintage and supplies. Any products that do not fall within these product categories are prohibited.

Founded in 2005, Etsy has 4.36 million sellers in 234 countries and 81.9 million active buyers. Etsy shoppers often are looking for unique products, ones that you are unable to find elsewhere. This therefores differentiate Etsy from marketplaces that often compete against bricks and mortar stores and other online retailers with their products.

Etsy is a fantastic marketplace to start your online business with a wealth of resources and tips to get you started. At the centre of its marketplace has three pillars: sell extraordinarily, buy extraordinarily, and shop securely. Each one of these pillars benefits sellers as they are customers have confidence in using the marketplace.
These resources include step by steps guides which will take you through how to open an Etsy shop, product listings, how to create a storefront and post-sales support. Most (61%) of Etsy sellers are also on other marketplaces or selling direct to consumers from their eCommerce website taking orders from multiple channels. Another point of difference is the higher representation of female sellers in comparison to Amazon or eBay with 83% of the sellers being female.

Etsy also offers Pattern, a direct-to-consumer storefront, that sellers can set up with a custom domain to become their own website. There are no additional listing fees to list items on both Pattern shops if you already have listed an item on the marketplace. Listings only available on your Pattern shop do not incur a listing fee.

The cost of selling on Etsy

Like most marketplaces, Etsy charges a listing fee for products of 17p (or $0.20 USD) that expires after 4 months. Once a listing expires Etsy Sellers can create a new one or renew a current one. Listing multiple items is possible on Etsy, with each listing incurring the same standard listing fee. In addition to the listing fee, there is a transaction fee of 6.5% of the listing fee plus the price of delivery and gift wrapping.

Etsy sellers have two options for advertising and promoting products. The first is Etsy ad Fees. Through the advertising Dashboard under shop manager, you can predetermine budgets to limit your total ads spend per listing or shop. Etsy Sellers will not be charged more than a predetermined value but must spend the minimum amount which is determined by Etsy. The second option is Offsite Ads, which is a digital advertising space that Etsy purchases from a network of partners. If a user purchases an item through one of these ads within a 30-day period then the Etsy seller will be charged a fee for the order. More information on these fees can be found here.

Most Frequently Sold items on Etsy

Unlike eBay and Amazon, Etsy is much harder to crawl product data from. However,  according to lit extension, the top-selling items on Etsy are:

  • Sticker
  • Notebook and journals
  • Jewellery
  • Home decor
  • Digital designs/Graphic designs
  • Posters
  • Toys & baby items
  • Vintage items
  • Organic cosmetics
  • Sewing and Crochet Patterns

Due to the nature of Etsy it is much harder to establish the profit margins on different product categories, but those with lower production costs, such as products that are upcycled, sourced at a lower cost and have lower shipping costs associated with them will logically be more profitable.

Should Etsy be part of your Multichannel eCommerce businesses?

For eCommerce businesses, Etsy provides an interesting opportunity. Although its products are more niche, and not so suited to the mass drop shipping model that Amazon caters, it presents an opportunity to build a much more personable business. With the right approach, Etsy can still be used to sell multiples of singular products, provided that they have a distinct feature that helps to feel unique or boutique. We support many Etsy sellers and have supported them in their journey to grow their businesses into successful brands. If you would like to expand your eCommerce operations to start selling on Etsy or if you would like to grow your business beyond Etsy, then be sure to reach out to the ChannelGrabber team. Our multichannel inventory and order management software can integrate Etsy, eBay and Amazon with Shopify, WooCommerce and more into one platform to help you manage your eCommerce brand more efficiently.

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