Shopify vs. Etsy: Where Should You Sell Your Products Online?
If you are a crafter, artist, or maker of any kind, you’ve probably considered opening an Etsy shop to sell your handmade products (or maybe you’re already selling there). Etsy is a great place to dip your toes into the world of e-commerce and learn the basics of online selling. However, many Etsy sellers find that their growth and sales potential is limited by the platform.
When it comes down to it, is Etsy really worth the effort? Or would you be better off running your own e-commerce site through Shopify? In this article we’re breaking down the aspects of each option and weighing them against each other to help you make the right decision for your business.
Before we dive in, let’s talk about the fundamental difference between the two. Etsy is a marketplace while a standalone Shopify website is a platform. You can think of Etsy sort of like a virtual craft fair where you have rented a booth. In comparison, your own dedicated website would be more like a boutique shop. This distinction plays an important role in comparing the two options.
Comparing Etsy and Shopify for E-commerce Sellers
To really know which option is right for your business it’s important to know what sets them apart. We’ll be exploring all of the most important aspects to consider when deciding where to sell your products.
Ease of Setup and Maintenance
If you’re ready to start selling your products, it’s understandable you’d want a quick setup process. This is probably Etsy’s biggest selling point. Because you are setting up your shop on an existing marketplace, you have to spend only a couple of hours setting up your seller account and creating your product listings, and you’re set. The process is incredibly simple, and the tasks involved can be undertaken by those with even the most limited knowledge of online sales.
Designing and developing your own Shopify website, on the other hand, takes time and knowledge, and depending on your level of experience and comfort, may involve a professional web designer/developer like myself. Since you will be creating this platform from scratch, you’ll have added considerations, such as designing the site’s aesthetics and layout, setting up payment gateways, creating graphics and imagery, and telling your brand’s story through written content to name a few.
Although more time and attention is required during setup, building your own e-commerce platform opens up a limitless world of possibilities for how you present your products to the world. Unlike Etsy where you are confined to a pre-built template with little opportunity for customization, building your own e-commerce website with Shopify allows you to customize as much or as little as you need. And as your business grows, you can continue to customize your site to meet your needs.
Additionally, when you own your platform you have an opportunity to do more than sell products. You can tell your story, start a blog, collect an email list, and so much more.
Traffic refers to the number of customers who will have the potential to see your products. When running your own e-commerce site, it’s up to you to generate this traffic through keyword-rich content, search engine optimization, and promotion of your business. It takes time for a newly built website to be indexed by Google and begin ranking in search results, so it’s unlikely you would have much traffic immediately. However you have limitless potential on how much traffic your site can generate with the right marketing strategy.
If you look at the sheer volume of existing traffic, Etsy dominates this comparison. With 45.7 million active users as of 2019 (Statista), it might seem like Etsy is the right choice simply because so many people have the potential to find your products. You have to keep in mind, though, Etsy also has 2.5 million active sellers. Which leads us to our next comparison….
As mentioned, Etsy was home to 2.5 million active sellers. While it may feel like your products are going to be seen by millions of users who are ready to buy, it’s more likely that they’ll be lost in a sea of competition. Because of this, Etsy sellers are often forced to rely on promoted listings to get their products in front of their ideal customers, which leads to hefty advertising costs that directly undercut your profits.
On the other hand, while it’s no secret that you won’t have traffic volumes in the millions right away on your own e-commerce website, the users that do visit your site will be there for one purpose - to peruse your products. We call this qualified traffic — customers who are already familiar with your products and are likely to buy. And at the end of the day, a small amount of qualified traffic making purchases is far more valuable than a large amount of traffic that doesn't lead to sales.
Could you name any of the sellers you’ve bought from on Etsy? I’m willing to be the answer is no. And therein lies one of the biggest drawbacks to selling on Etsy. It’s incredibly challenging to build brand awareness on a marketplace platform like Etsy because products are the focus, not sellers.
If you’re looking to turn your business into something more than a hobby or a side hustle, it’s important that you build up your brand’s image and create a following for your business. Not only will having your own website add a level of professionalism, it’s the best way to begin building a brand.
No matter where you choose to sell your products online, there are going to be fees. The choice comes down to how those fees are structured and how they will impact your profit.
On Etsy, you’ll pay $0.20 to publish each listing for 4 months or until the item is sold. If the item is unsold after 4 months,then you’ll have to pay a new listing fee to keep the product available for sale. When an item is sold, a 5% transaction fee will be charged on the sale price of the item plus any shipping paid by the buyer. And if you accept credit card payments, you’ll be responsible for a 3% + $0.25 payment processing fee.
If you’re running your own e-commerce website, you’ll pay a monthly subscription fee to have your site’s hosting and similar payment processing fees to accept credit cards. Shopify’s monthly subscription fees start at $29 with a credit card processing fee of 2.9% + $0.30 per transaction. Since you’re paying a set dollar amount each month and have no transaction fee, this subscription model is a much better option for sellers with a large product catalog.
Etsy brings a unique challenge in the form of product restrictions. Per Etsy’s website, “Everything listed for sale on Etsy must be handmade, vintage, or a craft supply.” Depending on the kind of products you sell, it’s possible you may not even be eligible to sell on Etsy. You’ll never have that issue on your own Shopify site though! You’re in complete control of what you sell.
So, Is Shopify or Etsy Better?
The short answer is… it depends. The choice between selling on Etsy and running your own Shopify e-commerce site depends on a lot of unique factors, and only you can decide which is right for your business.
My recommendation is this:
Etsy is best used as a beginner selling channel for those who are starting out in e-commerce selling for the first time. Once your shop starts to grow though, it’s likely you’ll outgrow the marketplace.
Shopify is preferable for a variety of reasons. Owning your own platform provides the opportunity to grow your business beyond the limitations of Etsy and build your brand in addition to selling your products. I’d highly recommend anyone who is serious about the growth of their e-commerce business should consider investing in a well-designed, highly-converting e-commerce website.
Ultimately the choice is yours. And nothing says you can’t have both! By listing your products on your own site and on Etsy’s marketplace, you’ll maximize your reach while still building your brand on a platform you own.
Are you ready to start selling on your own website but don’t quite know where to start? Contact me today to set up a discovery call!