Etsy vs Shopify - Pros and Cons 2024 for Handmade Business

Summary

In this video series, May, an online selling expert, explores the dilemma of choosing between Etsy and a personal website for handmade product sales. She discusses the pros and cons of each platform, highlighting Etsy's built-in audience and search engine benefits, but also its lack of control and competitive challenges. On the other hand, she points out the independence and brand control offered by a personal site, despite the initial marketing hurdles. The summary aims to guide makers, artists, and designers in making an informed decision based on the unique advantages and disadvantages of each platform.

Takeaways

• 🛍️ Etsy is a marketplace with a built-in audience, which is beneficial for new sellers but also means sharing traffic with competitors.
• 🔍 Etsy's search engine is crucial for visibility; understanding its algorithm is key to success on the platform.
• 📈 SEO (Search Engine Optimization) is vital for Etsy sellers, as it helps listings appear higher in search results.
• 🏭 Etsy's fees fund marketing efforts that drive traffic to the platform, indirectly benefiting sellers.
• 💡 Having a standalone website like one built on Shopify requires sellers to generate their own traffic but offers more control and customization.
• 🚫 Etsy has strict policies and limited control over shop design and operations, which can be a disadvantage for some sellers.
• 🚀 Starting a shop on Etsy is easy and requires no upfront costs, making it an attractive starting point for new businesses.
• 🛠️ Shopify offers a user-friendly platform for building a standalone website but lacks the built-in audience that Etsy provides.
• 💰 Both Etsy and standalone websites have their own set of costs and fees, and running a business is inherently expensive.
• 🔑 Control over branding and customer experience is significantly higher on a standalone website compared to Etsy.
• 🔗 Directing traffic to an Etsy shop may inadvertently promote the platform and other shops, whereas a standalone site keeps all traffic and brand awareness in-house.

Q & A

What are the primary differences between selling on Etsy and having your own website?

Etsy is a marketplace with a built-in audience and a search engine that drives traffic to your shop, while having your own website, like on Shopify, means you have to attract and manage your traffic independently. Etsy offers ease of use and a ready-made customer base, but limits control over shop policies and design. In contrast, your own website provides full control over branding and customer experience but requires more effort in marketing and site management.

Why does Etsy have a built-in audience, and how does it drive traffic to your shop?

Etsy has a built-in audience because it is a marketplace with hundreds of thousands of shops, attracting customers who are actively searching for handmade products. Etsy drives traffic to your shop through its search engine, which ranks products based on various factors, and through its advertising and marketing efforts funded by seller fees.

What are the major advantages of selling on Etsy?

The major advantages of selling on Etsy include access to a large, built-in audience, ease of setting up and managing a shop, minimal upfront costs, and not having to worry about site security, speed, or design. Etsy's marketplace environment can also generate shared traffic among shops.

What are some of the disadvantages of selling on Etsy?

Disadvantages of selling on Etsy include limited control over shop policies, mandatory compliance with Etsy's rules, competition with other shops on the platform, and the potential for inconsistent sales due to changes in Etsy's algorithm. Sellers also face challenges with Etsy's policies on free shipping and additional fees for ads.

How does having your own website compare to selling on Etsy in terms of marketing efforts?

Having your own website requires more extensive marketing efforts, including SEO, building a mailing list, getting press mentions, and maintaining an active social media presence. Unlike Etsy, your website doesn't come with a built-in audience, so you must attract visitors independently. However, all traffic and branding benefits go directly to you.

What factors influence the success of an Etsy shop's search visibility?

Factors influencing an Etsy shop's search visibility include the recency of listing renewals, engagement metrics like click-through rates, product photos, pricing, shipping times, and understanding of SEO trends. Successful sellers optimize their listings with relevant keywords in titles, descriptions, and tags.

Why is the competition on Etsy described as a 'race to the bottom'?

The competition on Etsy is described as a 'race to the bottom' because sellers often lower their prices to attract more buyers and improve their search rankings. This leads to intense price competition, making it challenging to maintain profitability while trying to stand out in the marketplace.

What are the benefits of controlling your own website compared to using Etsy?

Controlling your own website allows you to fully customize the design, branding, and user experience, ensuring consistency and quality. You can retain 100% of your traffic and sales without sharing it with a platform like Etsy. This control helps build long-term brand recognition and customer loyalty.

How does Etsy's policy on free shipping impact sellers?

Etsy's policy on free shipping impacts sellers by giving higher search rankings to those who offer free shipping. This creates a challenge for sellers of heavier products, who might struggle to absorb shipping costs without raising prices, potentially making them less competitive.

What are some of the long-term benefits of having your own website for your business?

Long-term benefits of having your own website include building brand equity, creating a unique and memorable shopping experience, maintaining full control over marketing and customer interactions, and fostering direct customer relationships. This approach supports sustained growth and brand recognition, unlike the shared and competitive environment on Etsy.

Outlines

00:00

🛍️ Etsy vs. Own Website: Making the Right Choice

The video script discusses the decision between having a presence on Etsy versus operating an independent website. The speaker, May, introduces herself as a guide for creators selling handmade products online and shares her experience with both platforms. She explains the fundamental differences between Etsy, a marketplace with a built-in audience and search engine, and a personal website, which requires more effort in marketing and traffic generation. May emphasizes the importance of understanding Etsy's search algorithm and SEO for success on the platform, while highlighting the lack of a built-in audience as a challenge for standalone sites.

05:03

🚀 The Pros and Cons of Selling on Etsy

This paragraph delves into the advantages and disadvantages of selling on Etsy. It highlights the ease of starting a business on Etsy due to its user-friendly setup and the immediate access to a large audience. However, it also points out the lack of control over the shop, Etsy's policies, and the competitive nature of the marketplace. The speaker mentions the challenges of dealing with algorithm changes and the pressure to offer free shipping to improve search rankings. Additionally, the paragraph touches on the cons of Etsy's business model, such as the requirement to pay extra commission on sales generated through Etsy ads for high-earning shops.

10:06

🏠 Building a Business Beyond Etsy

The speaker contrasts the limitations of Etsy with the freedom and control offered by an independent website, particularly when using platforms like Shopify. They discuss the ability to customize the shopping experience and brand communication, which is not possible on Etsy. The paragraph also addresses the issue of traffic retention, as directing traffic to an Etsy shop can result in customers being exposed to competing products. The speaker argues that having your own site allows for better brand recognition and a more controlled shopping environment, which can lead to higher conversion rates and a stronger brand identity.

15:07

💰 Navigating the Financial Aspects of Online Selling

The final paragraph addresses the financial considerations of selling on Etsy versus running an independent website. It acknowledges that both platforms involve significant costs, but emphasizes the importance of building equity and long-term brand value. The speaker warns against relying solely on Etsy for business growth, as the platform's policies and changes can negatively impact sales. They advocate for the benefits of owning a website, where all promotional efforts contribute directly to the business's success, and where there is potential for greater long-term profitability and stability.

Keywords

💡Etsy

Etsy is an online marketplace focused on handmade or vintage items and craft supplies. It is a platform that hosts a variety of shops and is powered by a search engine where customers can find products they wish to purchase. In the video, Etsy is compared with having one's own website, highlighting the built-in audience and search algorithm that sellers must understand to succeed.

💡Website

A website is a collection of related web pages, including multimedia content, typically identified with a common domain name and accessible via the Internet. In the context of the video, the speaker recommends using Shopify to create a standalone e-commerce site, which offers more control and customization compared to Etsy.

💡Marketplace

A marketplace is a location where buyers and sellers come together to exchange goods and services. The term is also used to describe online platforms like Etsy, which function as digital marketplaces. The video discusses the pros and cons of operating within a marketplace versus having an independent website.

💡Search Engine Optimization (SEO)

SEO refers to the process of improving the visibility and ranking of a website or a product listing in search engine results pages through understanding and influencing search algorithms. The video emphasizes the importance of SEO for Etsy sellers to increase visibility and sales.

💡Shopify

Shopify is an e-commerce platform that allows users to set up their own online stores. It is mentioned in the video as a recommended option for those looking to establish their own website separate from Etsy, providing a site builder that specializes in shops.

💡Audience

In the context of the video, 'audience' refers to the pool of potential customers that a platform or website has access to. Etsy is said to have a built-in audience, which is one of its advantages, while an individual's website does not start with this benefit.

💡Traffic

Traffic in the digital realm refers to the number of visitors to a website or online platform. The video discusses how Etsy's marketplace model and marketing efforts contribute to its high traffic, which can benefit the shops within it.

💡Algorithm

An algorithm in the context of online platforms like Etsy refers to the set of rules that determine how products are ranked and displayed in search results. The video explains that understanding Etsy's algorithm is crucial for sellers to increase their product visibility.

💡Branding

Branding is the process of creating a unique name, symbol, or design that identifies and differentiates a product or service from others. The video contrasts the limitations of branding on Etsy with the potential for strong branding on one's own website.

💡Control

Control in this context refers to the degree of influence a seller has over their shop's policies, design, and operations. The video outlines the lack of control sellers have on Etsy due to its policies and the advantages of having more control on one's own website.

💡Competition

Competition refers to the rivalry among sellers to attract customers and make sales. The video discusses the intense competition on Etsy, where sellers may engage in pricing wars and struggle to stand out, versus the potentially less direct competition on one's own website.

Highlights

The speaker, May, helps makers, artists, and designers sell handmade products online.

Etsy and personal websites are fundamentally different business models.

Etsy is a marketplace with a built-in audience powered by a search engine.

Shopify is recommended as an e-commerce platform for setting up a personal website.

Etsy's traffic is partly due to seller fees used for ads and high search rankings on Google.

Promoting an Etsy shop also promotes Etsy and potentially competing shops.

Personal websites lack a built-in audience and require more effort to attract traffic.

Understanding Etsy's search algorithm is key to increasing listing visibility.

SEO is crucial for successful sales on Etsy, involving keyword research and optimization.

Successful Etsy sellers often don't need extensive marketing beyond the platform.

Making sales on a personal website involves more complexity, including email lists and press mentions.

Etsy is easy to start with, requiring no upfront costs and offering setup assistance.

Shopify requires consideration of site speed, design, and security, unlike Etsy.

Etsy provides a consistent platform, whereas personal sites offer customization and control.

Etsy's policies and algorithm changes can negatively impact sellers.

Personal websites allow for better brand communication and customer experience.

Etsy's competition is fierce, with a tendency for price wars and ranking pressure.

Personal websites can build long-term brand awareness and customer loyalty.

Both Etsy and personal websites have their costs, but the latter builds business equity.

Transcripts

Should you have your own site or stay on Etsy in this video series,

I'm going to help you make that decision and today I'm going to share with you

the pros and cons of both Etsy versus your own website.

Hi, my name is may and I help makers,

artists and designers make a living selling their handmade products online.

I have both and at shop and my own website.

Before I dive in,

actually you first have to understand that Etsy and your own site are completely

different business models in a way because FC is a marketplace filled with

hundreds of thousands of other shops, right? Just like Amazon and eBay,

and it's completely powered by a search engine where people type in stuff that

they're looking to buy like floral tea towels,

and then Etsy gives the person a huge list of floral, tea,

towel products from all the different shops that have them.

Whereas your own website is a standalone site and if you go with something like

Shopify, which I recommend that you do,

Shopify is just an eCommerce platform.

It's merely a site builder that makes setting up your own website that people

can shop on so much easier.

I think the biggest advantage to having a shop on Etsy is because it is a

marketplace site,

it has a built in audience full of people who are already searching for products

to buy well. How does Etsy get all of this traffic? Well,

part of it is the fees that Etsy takes from sellers, right?

They use that to pay for ads and marketing Etsy shops and search listing pages

appear really high in Google search and part of that and how it gets its traffic

is because hundreds of thousands of shops on Etsy is helping it bring traffic to

the platform. When you promote your Etsy shop,

you're inherently also promoting Etsy as a whole,

including other Etsy shops,

some of them who you might consider your competitors,

but they're also bringing in traffic of their own and some of them might land on

your own shop.

So it's almost like shared traffic and it can be a double edged sword.

When you're on your own site,

you don't have the benefit of starting out with your own built in audience.

I see a lot of people complaining that they set up a shop on Shopify but they

didn't get any traffic or sales.

And that's the mistake going into Shopify is having the expectation that it has

that built in audience. It doesn't.

Shopify is just a website builder that specializes in shops.

So if you sell a physical product, Shopify is the best option for you,

but it doesn't have an audience waiting to buy your stuff. Having said that,

that doesn't mean it's easy to make sales on Etsy.

The primary way of doing well on Etsy is pretty simple relatively,

and you'll see why. You have to understand how their search algorithm works.

Meaning you have to have an understanding of what factors help you get your

listings,

more visibility and which such as how new or how recent you renewed your

listing. Um, how much engagement you get on your listing.

Are people clicking on your images?

What your click through rate is from when your listing appears in a search and

how likely is it that people will click on your product instead of other

people's products? There are many factors and as with any algorithm,

there will never be a public list of them because Etsy or anything that uses

algorithms like social media,

they don't want people to exploit the algorithm and find loopholes to misuse the

algorithm for their advantage in a bad way.

A lot of Etsy success comes from understanding search trends and getting really

good at SEO, which stands for search engine optimization,

so that means researching what keywords to target and putting them in your

titles, descriptions, tags, and so on.

That is it. You know,

many successful sellers on Etsy don't have a large social media following.

They don't have any press mentions,

they don't have a blog or an email list or an active one. Anyway, and yes,

of course if you looked at some of the top sellers,

you will see that many of them have these things,

but you have to ask which was cause and effect,

which came first that these Etsy shops succeed because they had press mentions

or did they have press mentions because they were already doing well and getting

a lot of attention.

So generally speaking from the patterns I've been seeing and I've been selling

online for 14 years now as of this recording,

successful Etsy sellers don't have to worry a lot about marketing.

The way to make sales is a pretty straightforward and simple one. And again,

I'm not saying it's easy, I'm just saying it's simple with your own website,

the process to make sales is a lot more complicated.

You can't just rely on SEO, you have to have a mailing list,

you have to do outreach and get press mentions and it definitely helps to have

an engaged social media following when it comes to standalone sites.

The pattern I've seen over and over again because you know,

success leaves clues is successful.

Shops have a track record of press mentions and if it wasn't that it was paid

advertising. Some shops do really well with just SEO, but that's less common,

so this is a huge disadvantage with having your own site because you have to

worry about a lot more when it comes to marketing it and sending traffic to it.

If you want to make sales and advantage to Etsy is it's super easy to start

with. If you know anyone who's starting a handmade business,

it is the first thing most people would recommend, right?

You should cover and there's validity in that because they do make it easy.

There are no upfront costs that 20 cents per listing and they really hold your

hand to help you set everything up.

You don't have to worry about whether or not your shop is loading quickly or if

your website works correctly or not. Your shop is secure.

You don't have to fuss about shop design.

All you need to do is fill in the blanks with configuring your shop settings on

Etsy. It's so easy.

Etsy is undoubtedly a great place to learn how to sell online if you've never

done it before. It's like if you don't know how to swim,

Etsy is like starting at the kitty pool now.

Even though it's also really easy to set up a Shopify store,

it is not nearly as easy as Etsy and with Shopify.

While you don't have to generally worry about site security,

you do have to still consider site speed and design of your site and this is

where so many people go wrong,

especially if you didn't take the time to learn what makes a good site design

and what makes it bad, and unfortunately it's all on you.

It's your responsibility to make sure your site loads quickly, it looks good,

and it gives your potential customers a great user experience.

You don't have to worry about that with FC because they've already done it for

you. You don't have to worry about conversion rates as much when you're on Etsy

because the number of factors to consider is far fewer. For example on Etsy,

it's really just about having a good products,

getting your photos looking good and that you have a reasonable price with

reasonable shipping and a short turnaround time. That's really about it.

But with your own site you have to do all of that and more you have to consider

the checkout process and your site design. And between those two things,

a lot can go wrong if you don't know what you're doing.

The good news is that when you're on Shopify,

there are a lot of great themes you can use that help make all of this a lot

easier for you.

And it's almost like a plug and play and you just have to edit the theme with

your brand colors. But even so,

there are a lot of Shopify themes that aren't good,

and I have seen a lot of shops choosing themes that don't give them a good

conversion rate. So if you set up on Shopify,

just make sure you use a theme that's proven to make sales.

So ask around or check for the themes, reviews before you install it. No.

At this point, I know I've made Etsy sound like such a dream to work with,

right?

But that's because I haven't touched on Etsy cons yet before.

I do be sure to give this video a thumbs up and subscribe so you can grow your

handmade business and make more sales. Now,

I don't know if any of these cons are more frustrating than others.

I don't know if there's a hierarchy,

so I would love to hear from you in the comments what your biggest beef is with

Etsy. There's actually a lot to be upset with.

I feel like one of the biggest problems with Etsy is you have almost no control

over your shop,

which is what balances out the ease of use and having that built an audience,

right? If you want those awesome things, you have to play by Etsy rules,

so they're going to enforce all sorts of policies on you that you usually can't

opt out of. Any of you can.

Your shop will suffer for it recently Etsy wanted to encourage people to offer

free shipping for their products, which helps get people to buy on there right?

But they made it so that if you can offer free shipping,

you'll get better rankings on the search engine,

which makes it very unfair for anyone who doesn't offer free shipping or who

can't offer free shipping because maybe they make products that are too heavy

and they don't want to add the shipping price to their product price.

And it's a catch 22 because if you raise your prices to include shipping,

you now also can't compete on price and you're going to see more expensive than

your competition.

It's just this terrible race to the bottom and it's cutthroat.

And I think it's just a really negative, unhealthy environment to be in.

And most recently,

we have all heard of how Etsy is forcing shops that make over $10,000 per year

to pay an extra commission on their sales that were generated through Etsy ads

that they do on your behalf.

And the worst part of that is you don't have a in it,

you have no option and you're just required to do that.

Not to mention whenever Etsy makes design changes on their site,

you can't say yes or no to that. You just have to take it and roll with it.

When their algorithm changes, your shop will be affected by it.

So you know how running a shop feels like a rollercoaster because sales are

inconsistent, right? Some days you make lots of sales, other days it's crickets.

That feeling is definitely amplified when you're on Etsy because it's not your

own site, it's not your own platform,

and you have no control over where the Etsy ship decides to go.

If it sinks, you're gonna sink with it.

I have heard so many stories of Etsy sellers who used to do really well on Etsy,

like making sales consistently only to suffer and not see any sales for months

because of these changes. So fundamentally,

I believe that Etsy is not a good place for you if you've decided that you want

to make your business a longterm commitment, almost like a lifestyle choice.

If you just want Etsy to be a hobby business for you and it's not a big deal.

If your sales ebb and flow, then that's fine. Etsy will serve you well.

But for those of us who want to or are relying on our business income to pay for

our living expenses and to sustain our livelihood,

then do not put all your eggs in the Etsy basket.

So how is it different when you're on your own site? Well,

you can control about 98% of your site when you're on Shopify.

You can't really edit the design of your checkout pages,

which is a deliberate choice on Shopify is behalf because they're the experts

and have so much data to know exactly how to design a checkout process that

gives you the best conversions and the most sales, right?

So they don't really let you fiddle around too much with that.

It's for your own good,

but for the rest of your site you can really make it your own. For some of you,

you may never care to do that,

but I think there is a certain sense of pride we have in the packaging of our

products, right? I mean,

just because you've made a good product doesn't mean we have to stop at that.

We spend a lot of time getting good packaging for it,

designing pretty business cards and making your site look good to represent your

product in the best way. It's the same thing.

Some of us do want that control and to have the ability to change that,

and I think that's one of the keys to making more sales.

It's like when you go into a nice hotel, you get better service, better food,

a beautiful room with comfortable bed sheets and a nice pool and so on.

It's all about the experience versus if you went to a dinky motel,

the experience overall will be less good, right?

Your Etsy shop will always be the same.

It's what Etsy gives you and it's not exactly a high end five star hotel

experience, but your own site can be polished up or down however you want it.

And if you want your site to be a three star hotel,

you can make it so if you want it to be a five star hotel, you can do that too.

You have the choice.

Your own site is better at communicating your brand to the customer than Etsy

ever will. 100% of the time.

People buy things on Etsy and not remember what the actual shop name was.

If their friends ask them where they bought their pretty necklace or their cool

wall art, they're going to say they got it from Etsy.

This doesn't do your brand any favors,

so when you send traffic to your Etsy shop,

you are in advertently sending Etsy your traffic.

It's that shared traffic concept I talked about earlier.

You may be get about 20% of the traffic you actually send to your Etsy shop,

but Etsy and all the other shops on there get the majority, 80% of your traffic,

and this is why over time at has all that built in audience.

You helped them grow, which is in itself, not a bad thing,

but you could have gotten 100% of all your own traffic if you had directed them

to your own site.

One of my pet peeves with Etsy product listings is when you scroll down,

Etsy shows you listings from other people's shops directly on my own listing.

And I get why they do that.

Etsy is number one priority is to make sales and they don't care if that sale

was for your shop or for someone else's shop.

Directing your own traffic to Etsy is like trying to collect water with a leaky

bucket. You're putting water in it, but so much of it just leaks right out.

The competition on Etsy is crazy.

Etsy rewards shops and part listings that are already doing well.

So there's a lot of pressure to make sales,

not just because you want to make a sale, right?

But because you want to get on Etsy,

his good side and start ranking better for your targeted keywords, right?

So what do people do?

They try to make their product listing stand out so people click on them.

But even then that's no longer enough so then they succumb to a pricing war.

If I charge less than other people's listings,

it's more likely that I will make the sale and later at sea will push my product

more. If you're thinking that way,

I can guarantee you your competitors are also thinking that way,

so they start to charge even less and it just goes on and on and it becomes a

race to the bottom. I wish I could tell you that people don't price shop,

but on marketplace sites,

prices and reviews are two of the biggest factors that people go off of when

deciding on which item to buy and if you're not the lowest price with the best

ratings, it's going to be really hard.

So let's compare that with your own website. Yes,

there will always be competition.

No matter where you are on Etsy or Amazon or on your own site or at a craft

show.

What I want you to pay attention to is the degree of the competition.

The competition on Etsy is in your own shop,

but when people come to your site,

you can keep them on your site for much longer because you're not sending them

away to go look at other shops or your competitor's shops.

You can design your site in a way that gets people engaging in sticking around

longer.

It's a lot more effort for people to go to a different shop that sells something

similar as you, if they can even find one to begin with or take.

For instance, someone who found you on Instagram,

they loved your work and clicked on your LinkedIn bio to go check out your site.

They're on your site. Your site is essentially a dead end.

If they like what they see,

they'll buy something or join your email list or bookmark your site or follow

your Instagram, but if they want it to find another shop like you,

how are they going to do that? It's not so easy, right?

They have to start a search on Google or maybe go back to Instagram to try to

find something similar. There's no longterm brand awareness.

When you're on Etsy. You might get some repeat sales on Etsy,

but you get to have a lot more with your own site.

This goes back to people not knowing your shop name when they buy from you.

To me, this is a huge detriment to building longterm success and growth.

You're always starting from scratch from zero to make those sales.

Whereas if you had your own site where you could give it a custom brand and a

unique and hopefully positive shopping experience for your customers,

they're going to remember you so much better,

which makes it so that word of mouth later is more effective.

People are saying to their friends, not I ever,

which only helps Etsy and not you.

You're not getting the proper credit that you're due on Etsy basically.

So while having your own website and might feel like it's harder and slower to

make sales in the beginning, in the long run,

you're going to be the last man or woman standing because every effort you make

to promote your shop, 100% of it goes to you.

It's like building equity, right?

You don't get to build equity when you're on rented property,

which is what at sea is when it comes down to fees,

both ways are expensive. You might say FC has high fees, but honestly,

so does selling on your own site,

and it's just generally just expensive and it's getting more expensive over the

years to run a business. So that's just part of the process. Now.