A Simple Guide to Opening an Etsy Shop

If you’re considering opening an ecommerce shop and looking for an easy-to-use platform — especially for signing up and getting started — then opening an Etsy shop may be your best bet.

This step-by-step guide can help you get started with everything from creating your inventory list and choosing a name to pricing products and payment options.

10 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.”

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. However, if this is your first time establishing prices for your product, there are a few things to take into consideration:

• The cost of the materials to make your product
• Overhead costs, including office or workspace rent, equipment, driving expenses for buying supplies, mailing/shipping services, and more
• Taxes and Etsy fees (1)
• Labor, including how much time it takes for you to produce, package, and ship your products and answer any customer questions beforehand
• Knowing how much your competitors charge
• Understanding your target audience and how much they may be willing to pay

To calculate shipping costs, Etsy offers a calculation tool (2) 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.”

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 Etsy seller insurance.

Why do you need liability insurance coverage for your Etsy shop?

It’s easy to assume that you may only need business insurance if you have a traditional brick-and-mortar or offline business. Unfortunately, there are a good number of risks, even for online businesses.

Business liability insurance can help protect you from costly lawsuits that can put your business underwater.

Plus, it’s relatively low-cost. And it takes just 10 minutes or less for you to get a business insurance quote for your Etsy shop.

Types of insurance an Etsy businesses may need:

General liability insurance

Also known as GL insurance, general liability coverage can help handle costs from third-party accidents, property damage, and bodily injury.

General liability insurance also works if you operate your Etsy business out of an office, warehouse, or your home. 

Professional liability insurance

This coverage can help protect you from claims related to libel, slander, or copyright infringement. Unfortunately, it’s very easy to get caught in a mix-up related to one of these claims, even if you never intended to do harm.

This way, your business can keep operating normally, without facing disastrous financial consequences.

Cyber liability insurance

As an online business owner, you could be an attractive target for people trying to steal customer information or take down your website (which is the same as taking down your business).

Cyber business liability insurance can help claims associated with stolen customer data, cyberattacks, breaches, and fraud.

Even better, we can get you a quote for cyber coverage in 60 seconds right here.

5. Write a business plan for your Etsy shop.

It’s true that Etsy can be a great platform for your business, but that 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.

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. 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 (3).

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.

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. 

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.

9. Craft your Etsy shop’s copy.

When you’re opening an Etsy store, the words you use to describe your products and business are important because potential customers often find your shop based on the words they use in their searches.

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–only if you mention these types of phrases in your descriptions.

This is why your product descriptions are so important. 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.

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.

We can get you started with our state business license guide.

Looking for more information about starting and running an ecommerce business? 

Check out these helpful guides:

The Complete Guide for Building an Online E-commerce Business

How to Sell Products Online: Just Follow Our Easy Step-by-Step Guide

6 Biggest Benefits of Ecommerce Business Insurance

1. Taken from “What are the Fees and Taxes for Selling on Etsy” on help.etsy.com
2. Calculation tool available at etsy.com
3. Taken from “What is Etsy Payments?” on help.etsy.com