Dropshipping is a flexible and affordable business model for ik-commerce store owners. As an online marketplace for unique, handcrafted, and vintage items, Etsy has a large community of sellers and buyers interested in these products, making it a great dropshipping marketplace.
Dropshipping on Etsy can be tricky, though. There are several factors to consider to become a successful Etsy seller, such as how to legally dropship on Etsy, the steps to establish an online store, and the best products to sell.
However, there is no need to worry. For those considering the merits of Etsy dropshipping, this guide details how to start a flourishing dropshipping business on Etsy.
What is Etsy?
As online marketplaces go, Etsy is unusual. Unlike most other digital market squares like Amazon and eBay, Etsy is not an all-in-one shopping platform. Instead, the platform is primarily known for its thriving market in handmade goods, vintage items, and art and craft.
While it sounds like this should limit the platform’s allure, Etsy’s focus on handcrafted and special items makes it stand out. People view Etsy stores as places to connect over, buy, and sell unique products. The platform is unique in what it does, which is why 88% of Etsy buyers say the marketplace has items they won’t find anywhere else.
Etsy hosts millions of active customers—roughly 96.3 million, at last count. In addition, the platform is home to thousands of small businesses and connects to over 87,000 live seller websites. Consequently, Etsy moves a ton of products yearly.
According to Etsy’s 2021 report, the platform’s gross merchandise value (GMV) was $13.49 billion for the year, increasing from $10.28 billion in 2020.
Why is it profitable to do dropshipping on Etsy？
Apart from the fact that Etsy is a large and busy marketplace, several other factors make it a great dropshipping platform.
- Low entry barriers: Opening an Etsy shop is relatively inexpensive and stress-free. It’s easy to get an online storefront set up in just a few steps, and there are avenues to list products for very low fees or nothing.
- Niche customer base: Etsy caters to a very specific kind of customer—people looking for unique and endearing items. So, sellers who have one-of-a-kind goods or ideas they don’t think can scale elsewhere will feel at home on Etsy.
- High-profit margins: Etsy products tend to be pricey due to these items’ special and rare nature. That’s good news for sellers, though, since they can also enjoy profit margins that can reach 40% or higher.
- Transparent rules: Etsy has clear and straightforward rules that govern how the platform works. Having this clarity makes sellers’ jobs easier and evokes trust in buyers, contributing to the allure of the marketplace.
Of course, that’s not to say Etsy is a wonderland. For instance, listing fees on the platform can get pricey (Etsy charges $0.20 per listing), and the platform’s rules can feel strict, particularly the restrictions related to dropshipping. We’ll discuss more of these below.
How does dropshipping on Etsy work?
The first thing to learn about how dropshipping on Etsy works is whether it’s legal to dropship there. Generally, Etsy allows dropshipping, particularly for craft and vintage products. However, the platform prohibits reselling of handmade items.
According to Etsy rules, goods in the Handmade category must be produced or designed by a seller. Sellers cannot buy and resell handmade products from other suppliers or simply repackage items made by a third-party supplier.
Therefore, dropshipping handmade items is possible on Etsy, but only if the seller designs those items. The seller can then work with a production partner to make the items and must disclose this fact to Etsy and its customers. A production partner can create or supply blank goods to sellers, apply their design, and ship to customers on their behalf.
Likewise, Etsy does not allow cross-platform selling. As a result, business owners on the platform cannot resell products from other platforms, like Amazon, on Etsy. However, it’s possible to work with production partners on Alibaba.com to manufacture goods for Etsy dropshipping.
How to start dropshipping on Etsy
Step 1: Pick a product
More than 60 million items are listed for purchase on Etsy, meaning sellers can’t afford to enter oversaturated categories. So, it’s worth conducting product research and determining the best products to sell.
Product research can start by considering the best-selling items on Etsy. Google Trends and Ahrefs can also help identify what customers are searching for on Etsy. Plug the website into these tools, and they will provide a report that includes the details you need.
When you have the details showing the products Etsy buyers love, determine next if you have the means to produce and sell these items. It’s best to select products that you can deliver top quality on and still enjoy a lucrative profit margin.
Step 2: Create product designs
After selecting a product, it’s time to create unique and engaging designs that buyers will love. The designs created in this step will be printed on your proposed Etsy products, so make sure they’re of good quality.
There are two ways to go about creating Etsy designs. Sellers may draw up designs by themselves, using tools like Canva. Or they may work instead with freelance designers from other platforms, like Fiverr and Upwork.
Step 3: Select a dropship partner
Dropshipping thrives when costs are low and profit margins are high. Working with a production partner helps preserve these advantages, especially in Etsy dropshipping.
There are two options for selecting a production partner. First, sellers may choose a dropship partner to supply blank items, which the seller would then print on. Another option is to seek a reliable supplier on a third-party website like Alibaba.com or AliExpress.
Regardless of your choice, remember that Etsy prioritizes transparency. That means sellers must supply information about production partners to Etsy and prospective buyers.
Step 4: Choose a printing service
After securing the required blank items from your production partner, you’ll turn next to printing on the items. Most Etsy sellers use print-on-demand services for this purpose. Printify, Printful, and Printed Mint are popular print-on-demand services that sellers use.
Some print-on-demand services also double as production partners. So, they’ll produce blank or white-label products like phone accessories or t-shirts on your behalf, print your designs on these items, and then ship them to the customer.
Step 5: Open your Etsy store
With all the work of selecting a product and deciding on your print and production partners done, you’re ready to open your store. To create your Etsy shop, go to Etsy’s website, click on “Sell on Etsy,” and follow the steps.
You’ll need to provide the name of your store, your location, and payment information. The payment details you provide include how you want to be paid on Etsy and where you want them to take fees.
Step 6: Attract customers
Finally, you’re all set to start selling. Promote your store by linking it to your social media accounts or have friends and family spread the news about what you do. Etsy also allows sellers to connect their Etsy shop to other stores elsewhere. For instance, you can link to your Shopify store.
Other ways to market your store to willing buyers include implementing search engine optimization (SEO) on your store and offering freebies like free shipping and discounts. You can apply SEO by finding the keywords buyers use when searching for popular goods and inserting those keywords in your store copy.
Best products to sell on Etsy
Etsy buyers love unique or customized products that aren’t readily available elsewhere. As a result, products that deliver rare or special experiences will thrive on the platform. According to eRank, an Etsy-dedicated SEO service, the following are the top-selling products on Etsy in 2022:
- Craft and supplies, like knitted items and crochet
- Handmade items, such as wooden boxes
- Jewelry, including necklaces and rings
- Wedding items like bells, corsages, and bouquets
- Accessories, such as scarves and hats
- Paper and party supplies
- Clothing, including T-shirts and swimwear
- Vintage items
- Home décor products
- Art and collectibles
Etsy dropshipping can be an avenue for lucrative sales and a fulfilling e-commerce business. With the information supplied by this article, sellers have the knowledge and tools to create a successful Etsy dropshipping business.