A Simple Guide to Opening an Etsy Shop

Opening an Etsy shop can help boost your business, as this florist is discovering.

It’s getting tougher to reach potential customers, but thankfully the internet makes it possible for business owners to create digital storefronts. They’re able to expand their reach beyond a physical location if they have one and even serve customers in locations far beyond their region.

Opening an ecommerce shop has its benefits, sure, but it’s not without its challenges. With many platforms in existence (Shopify, Storenvy, and Big Cartel, to name a few), the arguably more popular is Etsy.

There are pros and cons to choosing Etsy (just like any other e-commerce host), but if you’re looking for an easy-to-use platform — especially for signing up and getting started — then opening an Etsy shop may be your best bet.

Plus, Etsy’s high volume of traffic can help you reach many potential customers beyond just local folks. To be clear about Etsy’s fees and functionalities, here is what Etsy states on the seller’s homepage:

Facebook setup screenshot 1

Source: Etsy

Just like anything regarding your business, opening an Etsy shop takes some careful consideration and work. I’ve created a step-by-step guide with everything from creating your inventory list and choosing a name to pricing products and payment options.

By the time you’ve read through the guide, you should feel confident about your Etsy shop launch being successful.

12 Steps to Follow When Opening an Etsy Shop

1. Create an inventory list for your shop.

You’ll need to create a listing of items when you register for an Etsy shop anyway, so it’s helpful to take this step ahead of time so you’re clear on what items you currently have available to sell. Over time, having a detailed inventory list will help you better understand your business’s cash flow and whether or not you need to make adjustments based on what is and isn’t selling.

If you have some products that are in the making, or you’re restocking, it’s important to note those as well — you can create a listing for them on your Etsy shop and have a label that says “Coming Soon.”

When you take inventory, make sure you take a lot of high-quality photos of your products at different angles that show the size/to-scale and that highlight their unique qualities.

If you’re no expert in photography, don’t worry, there are plenty of articles like this one to help show you the ropes. In addition to photos, note all important dimensions including width, height, length, and weight, if applicable.

You’ll also need to be as descriptive as possible, because potential customers may hesitate to purchase something online unless they have every detail about the item. After all, they can’t see it in person.

These descriptions are important for another reason, too, so stay tuned for later in the guide when we talk more about why.

Consider writing down the color, shape, material, ingredients, handling and care instructions, as well as the longevity of the product. The last thing you want is for a customer to return an item because there was something about the product that didn’t meet their expectations or that there was a quality issue with the product.

Etsy also has a direct messaging option, so you may have customers who reach out to you with additional questions to make a more informed purchase. These types of questions are great because they can help you decide what types of changes to your shop may make the experience better for potential buyers.

When you’re setting up your Etsy shop, posting your item listings will be one of your first steps, so getting organized ahead of time will help make the process more seamless!

2. Price your Etsy shop products.

If you have a storefront already up and running, you most likely will want to list the item for the same price on your Etsy store. If this is your first time establishing prices for your product, though, there are a few things to take into consideration, like:

  • How much the materials cost to make your product
  • Overhead costs (office or workspace rent, equipment, driving expenses for buying supplies, mailing/shipping services, etc.)
  • Taxes and Etsy fees
  • Labor (how much time it takes for you to produce, package, and ship your products and answer any customer questions beforehand)
  • Competition (how much your competitors charge)
  • Your target audience and how much they may be willing to pay

Some of this will change over time as your business grows and you learn more about your customers’ shopping habits and feedback. Don’t be discouraged if you need to discount an item that isn’t selling well or find ways to reduce production costs — part of being a business owner is trial and error and learning how to improve your business while running it

To calculate shipping costs, Etsy offers a calculation tool that can help you make an informed estimate for your customers.

3. Choose the right name for your shop.

You may already have a business name in mind, or you may actually already have a physical storefront running with a registered business name, and now you’re looking to add an online shopping option for your customers.

However, with so many storeowners on Etsy, your business’s name may already be taken. With this likely scenario, you’ll need to come up with another creative name.

First, a common thing to do is to add numbers or hyphens to your business name. For example, if your business name is Natural Soaps, but “naturalsoaps” on Etsy is already taken, you can try altering it to be “natural_soaps” or add your city’s area code so it’s “naturalsoaps617.”

I know it isn’t ideal to have a business name that doesn’t match the name elsewhere, but you can still maintain the important part of the name. You can also keep your business’s original logo design and use your business name in shop item descriptions.

If you can’t find a way to stick with your business’s name even with some small alterations, you’ll need to think about another name that resonates with your brand. Think about what you’re offering, things that relate to it, and maybe a quality of your business that you’re proud of. For example, if you use organic ingredients and you’re proud to be using green materials, another option for “naturalsoaps” might be “naturallycleansoaps.”

If you can’t come up with an alternate name, try using a name generator (which will ask you to list some words or phrases that you want to convey).

4. Get business insurance for your Etsy shop.

Speaking of important business details–one thing you may account for in your business plan is a monthly business insurance premium.

You may be wondering why we’re suggesting you look into business insurance coverage even though you’ll be doing business through the Etsy platform. That’s because despite us as business owners taking every precaution, accidents can still happen.

Esty does allow sellers to insure their shipping labels, but doesn’t offer shop owners their own specific policies. As you probably know–a lot more money often goes into making your products than into shipping labels, so it’s important to protect your products, as well as their shipping labels. That’s where business insurance comes into play.

Wondering how business insurance can protect your Etsy shop? Let’s look at a few examples:

  • You sell soaps and lotions and a customer buys a selection. The customer writes to later tell you that your product caused a severe allergic reaction, leading to an ER visit. Your general liability insurance could help to cover the medical bills of your customer and any legal fees if they sue.
  • You work on handcrafted wedding invitations out of a home office. One day when you’re out of town, a storm rolls through and damages that area of the house, resulting in a ton of destroyed inventory. It turns out, your homeowners insurance may not cover your lost invitations. Having business insurance could help to cover the costs incurred in an accident.
  • You bring your Etsy shop into the real world and decide to sell your products at a craft fair. While walking past, a woman falls and twists her ankle, claiming it’s the placement of your shop’s booth that caused her accident. Your business insurance could help cover costs of her visit to urgent care.

Having a policy in place can help keep your business’s finances safe if anything happens. The cost of a claim and any legal fees if a customer sues could be financially devastating to your business. You work hard for your money, so investing in coverage is another way to make sure your money gets to stay in your own pockets.

If you’re not sure what business insurance coverage would mean for you, don’t worry–we can help. We have a great tool that will show you quotes from the nation’s top carriers. You can compare quotes for free here.

5. Write a business plan for your Etsy shop.

It’s true that Etsy is a great platform, but even though they make it easy for you to display and sell your products, it doesn’t mean that you should go in flying blind.

If you haven’t already, then now is a perfect time to sit down and write your business plan (we have a FREE template here). A business plan can be a guiding light as your business grows. If you take the time to have it documented, then it can also help you get a loan or additional funding.

I know that you may not want to sit down and write out a business plan, but just because you’re going to be using a great platform like Esty, doesn’t mean you should let important business details fall to the wayside

6. Select preferences for your shop.

Be sure you pay extra attention to your store settings when you’re opening an Etsy shop, because whichever you select will help set the tone for your shop. You can change your preferences later on, but it’s best to start off on the right foot.The more preferences you decide to include, the better.

You can choose a default language for your store just once, although later on you can add translations for other languages you find in the demographics of your target audience. You also have the option of selecting which region you’re in, but that won’t affect which customers see your shop (it’s more for shipping purposes).

7. Set your shop’s payment options for customers.

As part of the registration process of opening an Etsy shop, you’ll need to provide your bank information. Depending on the country location of your shop, you’ll need to have a credit card on file. From there, Etsy assists you in setting up Etsy payments.

This is a great benefit of going through a platform like Etsy, because they help streamline the payment process for you. And trust me–it’s not always easy to figure out on your own!

As a note, there may be a small fee for payment processing when a customer orders a product, depending on the cost of the item–you can read more information about that on the Etsy payments page linked above.

If you are ineligible to use Etsy payments, you have the option to use PayPal. One benefit of using PayPal is that it prepares a tax form for you as it keeps track of all your store’s transactions (with a business account). When tax season comes around, you don’t have to worry about putting together the correct tax form.

You also have the option to accept checks and money orders. For more detailed information on Etsy payments, go here.

8. Design your shop’s storefront.

Even though you’re using the Etsy platform and not creating your e-commerce space on your own, you need to think about your Etsy store design and how it will look to potential customers. Since there are so many Etsy users now, your logo and page layout are very important to making your business stand out among the competition.

Your Esty shop page is just one of the many places where potential customers may interact with your business’s brand. You want your shop to have a similar feel to your business’s website.

Make sure that the aesthetic is consistent with what your business is selling, and that you’re posting high-quality images of everything. Make sure when naming your products that they’re also on-brand (we’ll get to naming in the step below). If you’re stressed about the investment of design, don’t worry–there is a way to do design on a budget.

Making your Etsy shop appeal to potential customers is a lot like creating and building your business’s website. Luckily, we’ve got you covered there, too. Check out the 75 FREE website tips below for ways you can improve your website that also apply to your Etsy shop.

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9. Craft your Etsy shop’s copy.

Remember how I mentioned descriptions a couple of times so far? Well, when you’re opening an Etsy store, the words you use to describe your products and business are super important, because potential customers find your shop through the language you use. I’ll explain:

What I’m talking about is search engine optimization, or SEO. Search engines, like Google or Bing, use specific keywords to help people find what they’re looking for.

For example, if you make hand soaps, a potential customer might type “homemade hand soap for gifts” into Google, or “homemade lavender hand soap.” Then, the search engine may display a link to your Etsy shop URL–ifyou mention these types of phrases in your descriptions.

This is why your product descriptions are so important. When you’re listing them on your Etsy shop and thinking up a description–slow down and take some time. Think about how a potential customer may be looking for your product while searching for it online.

Keep in mind that it takes a bit for search engines to pick up on the words and phrases you’re using, so if you don’t see customers right away, wait a couple of months before switching up your wording.

10. Register for a business license for your shop.

Opening an Etsy shop online doesn’t mean that you have to skip getting a business license.

Even though your business is online, it’s a good idea to look into whether or not your state or local governments have requirements for business licenses. This is especially important if you’re making your product at home or if you ever plan to expand your business outside of your Etsy shop and into a brick-and-mortar store.

Depending on how you plan to file your taxes, whether or not you’re registered as a business and have a license may play into how you file your taxes, depending on where you live.

If you have questions about taxes, we suggest asking a tax professional or accountant.

11. Be prepared for your Etsy shop to have strong customer service.

On Etsy, you have the option to send a message to people who have checked out your shop. Since you won’t see these buyers in person, it’s important to have a strong presence online. By sending them a note welcoming them to your e-commerce shop and offering to answer any questions or concerns, you can stand out among other shop owners.

I’ve been more impressed by the few shop owners who took the extra step to start a conversation with me — it shows that they’re approachable and resourceful, and they even feel more trustworthy. If I ever end up having a question, I feel less hesitant to ask it.

That said–know that not every customer that stops by your Esty shop is going to be a gem. It’s typical to get a difficult customer now and then.

And you’ve worked hard on your product, so of course you want to sell it. But how do you deal with a difficult customer? We’ve got some strategies and tips for that here.

12. Be mindful of your productivity while running your shop.

Completing all of the above steps to opening an Etsy shop can be tiring. And I won’t lie–so is continuing to upkeep your shop. But it’s one of the side effects that comes with being a business owner.

You may end up having a lot of sleepless nights or early mornings, or having to update your shop between other daily tasks. If you’re not already, try to be mindful of how you’re using your energy. As business owners, it’s really easy for us to get burnt out.

As you may know–being burnt out is bad for business. It means stress and overwhelm to the point that you produce products slower, or even start making mistakes. As you grow your Etsy shop, try to make time to prevent burnout. Etsy cares about its sellers and even has some productivity tips in their seller’s handbook.

Opening an Etsy Shop Makes You a Business Owner

By now, you should be off to the races when it comes to opening an Etsy shop. It won’t necessarily be smooth sailing right away–there may be trial and error along the way (like deciding which words work best in your product descriptions).

But don’t be too hard on yourself–this is another learning experience that you’ll have as a business owner.

Remember–your Etsy shop makes you just as much a business owner as if you had a brick-and-mortar shop that customers could walk into. Especially if you’re protected by business insurance and have your business license!

By opening an Etsy shop, you’re already doing one of the most important things a business owner could do, which is put the customer and their experience first.

Good luck!

Pauline Germanos

When she’s not writing for SB, Pauline runs an intuitive healing business… and is still writing as she types up psychic readings! As she was raised by entrepreneurs, she knows what it takes to be a small business owner.

Pauline writes on a number of topics such as small business owner resources, marketing, and customer service and retention.