How To Make Money on Etsy: A Guide

If you have an eye for vintage pieces, love to craft handmade items, or if you’re a designer selling digital products, Etsy might be a great way to connect with new customers.

Etsy is a natural home for creative talent, and brings unique and individual items to customers around the world. So, if you’re looking for a way to sell your handmade fashions, gifts, homeware, or even music, Etsy could be for you¹.

Read on to learn more about:

• What Etsy is, how it works and what you can sell
• How to set up your Etsy shop
• The fees for selling on Etsy
• How you can withdraw money
• An alternative way to receive payments from abroad

Making international business payments

When you do business internationally, you might need to make, or receive, international money transfers.

Wise Business can be a great way to make these payments. Your money will be converted with the real, mid-market exchange rate, and any fees that are associated with your payment will be shown upfront.

If you need to make a lot of payments in one go, you can use the Wise batch payments tool, or even automate your payments with the Wise open API, to make it easier and more convenient for you.

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What is Etsy

Etsy is an online marketplace which connects independent creators with customers and fans all over the world¹.

Sellers on Etsy are carefully chosen and curated. There are no stores featuring mass produced, factory products - only unique, often handmade or vintage items, which you won’t easily find elsewhere. For the sellers, Etsy provides a great platform to reach customers. For buyers, Etsy gives an easy and secure way to view and pay for the items they love¹.

How does Etsy work?

Etsy is an online marketplace platform. Sellers create an Etsy shop, and list their items there - customers can browse, chat to the sellers, and buy online, having the products shipped directly to their homes for convenience.

Sellers pay a fee for having a “shop” on Etsy, which we’ll cover later. Buyers also get a degree of protection, if they feel they need to dispute a purchase. Etsy can intervene if an item sold is not as described, for example, meaning you may get a replacement, or your money back from the seller².

Etsy has strict rules on what can, and can not be sold. You can sell physical items, or digital products such as downloadable templates for your resume or a wedding invite - but they must all meet the Esty guidelines to be eligible for sale³.

What can you sell on Etsy?

If you’re considering selling on Etsy, the first place to look is the guidelines on what can be sold. Etsy is not like other online marketplaces such as eBay or Amazon, which allow reselling and mass produced items. Instead, Etsy focuses on unique, handcrafted and vintage pieces.

Here’s an overview of the item types which can be sold³:

• Handmade items - you must have made the original designs, or the actual items yourself to list them as such
• Vintage items - must be at least 20 years old
• Craft and party supplies
• Digital downloads such as CV templates or wedding and party invitations, designed by the seller⁴
• Tarot, psychic readings and similar - as long as there’s a physical product, like a download of the reading, offered

Certain items can’t be sold on Etsy. For example: items that are prohibited by laws and regulations and items that don’t follow Etsy’s values or that are not in the spirit of Etsy⁵.

How to start selling on Etsy: Step-by-step

To sell on Etsy you’ll need to create a shop. Here’s how⁶:

• First, you have to create an account on Etsy, or sign in to your existing account

• Go to the Etsy homepage and select Sell on Etsy, and then Open your Etsy shop

• Follow the prompts online to select the store’s language, country and currency. We’ll cover the currency options available to help you sell overseas in a moment

• Choose your shop name, clicking Save and continue after every step

• Add product listings, making sure you’re following all the Etsy product rules³⁺⁵.

• Choose the payment methods you’ll offer, and add a billing method. More on payment options, including the fees involved, later

• Click Open your shop, once you’re all done

Opening a store on Etsy does take a few steps, but by following the online prompts you’ll be able to get set up in no time.

What are the Etsy selling fees in Canada?

Sellers on Etsy pay fees for the services they use. One important point, before we look at the fee details, is that most charges are set in US dollars. If you’re running an Etsy store from elsewhere in the world, the fee you’ll actually pay will vary depending on the currency conversion rate applied from your currency to USD⁸. It’s also worth noting that the exchange rate used may include a markup, which will mean fees cost more than they would if you used the mid-market exchange rate.

Here are the fees you need to know about⁷⁺⁸:

Not all of these fees will apply to you -and there may be other costs to consider - depending on how you set up your store.

For example, the Etsy payment fees are only applicable when you choose to use Etsy payments instead of another payment route. However, you might choose to buy shipping labels through Etsy, especially if you offer free shipping for deliveries. This will mean that there are additional costs, depending on the size and weight of the goods you sell.[8]

It’s important, therefore, to think about how you’re setting up your Etsy shop, and work out which costs will apply to your listings and transactions.

How can you withdraw money from Etsy?

You can manage your Etsy payment account online. Here you’ll be able to see the payments you’ve received as well as the fees you owe Etsy¹⁰.

If you use Etsy Payments, the fees are automatically deducted from your income. However, if you choose a different payment route, you’ll need to pay your fees and then the remainder will be your profit¹⁰.

With Etsy, you don’t need to manually withdraw funds - this will happen automatically according to the schedule you set up when you create your store. The standard is for your money to be released to your bank account weekly, on a Monday. However, you can change this, including requesting daily deposits. For daily deposits in Canada, you’ll need to have at least CAD25 in your account each day. If you don’t hit the minimum on a given day, you won’t receive a deposit¹¹.

Once funds are released from your Etsy account, they’ll take a few working days to reach your normal bank account. Etsy suggests this will take 3 - 5 days, but it may be longer if there are public holidays to consider¹¹.

What are the fees?

There is no upfront fee for receiving a deposit from your Etsy account. If you use Etsy Pay, all fees are deducted as the money is processed, so you’ll receive the full amount in your Etsy account when it’s deposited in your regular bank account.

All the information you need about your income, fees and any tax to pay is available online once you log into your Etsy account. It’s worth noting that there are also sales taxes if you sell in some areas, including some states of the US. In this case, Etsy must deduct this tax before releasing your money, which will then be detailed on your monthly statement¹².

What’s Etsy’s exchange rate, in case your customers pay in a foreign currency

You can choose to list your items for sale in different countries and currencies if you wish to.

Etsy Payments supports sales in a wide rage of currencies. If you’re using Etsy Payments, your regular selling price in CAD will be automatically converted to the currency chosen by an international customer, using Etsy’s exchange rate. If the customer is looking for a currency not supported by Etsy Payments, they will see the listing price in CAD and their own bank or chosen payment card will select the exchange rate used when they pay¹³.

If you receive payments in a currency other than the currency of your bank account, Etsy will convert it before depositing the money to your bank account. There’s a 2.5% fee to pay in this case¹⁴.

What’s an alternative to receive money from abroad?

Depending on the market you intend to sell in, it may make sense to link your Etsy account to a flexible product like the multi-currency account from Wise.

You’ll choose the currency you use when you set up your store. So, for example, if you expect to sell mainly in the US, you may want to use the US bank details which come with your Wise multi-currency account to receive USD payments fee free. You can then convert them back to CAD using the mid-market exchange rate when you’re ready to.

The Wise multi-currency account comes with local bank details for the US, UK, Euro area, New Zealand and Australia. You can receive payments from these major regions fee free, and hold dozens of currencies in the same account. Whenever you need to switch between currencies, you’ll pay just a low upfront fee, and get the mid-market exchange rate with no markup. This can mean you save compared to regular bank accounts and other currency services.

Check out the fees, and see how Wise can help you build your business

Source used for this article:
1.About Etsy
2.Buying safely
3.What you can sell on Etsy
4.Custom services
5.Prohibited items policy
6.How to open an Etsy shop
7.Etsy Standard and Plus
8.Seller fees
9.Payment processing fees
10.Manage your payment account
11.How to get paid
12.Reconcile Etsy payments deposit amounts
13.Supported currencies for Etsy Payments
14.Currency conversion fees
*Sources last checked on June 2, 2020