Even in today’s modern age, people still seek out vintage and handmade goods. Often, they do so through online platforms like Etsy, Zazzle or CafePress. These platforms are dedicated to artsy goods.
An Etsy entrepreneur business sells vintage or handmade goods on Etsy or these other platforms. By selling through an established platform, businesses are often able to reach more customers than they could through their own website or storefront.
Start an etsy entrepreneur business by following these 10 steps:
- Plan your Etsy Entrepreneur Business
- Form your Etsy Entrepreneur Business into a Legal Entity
- Register your Etsy Entrepreneur Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Etsy Entrepreneur Business
- Get the Necessary Permits & Licenses for your Etsy Entrepreneur Business
- Get Etsy Entrepreneur Business Insurance
- Define your Etsy Entrepreneur Business Brand
- Create your Etsy Entrepreneur Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your etsy entrepreneur business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an etsy entrepreneur business?
The startup costs for an Etsy entrepreneur business are low. The main expense is the cost of materials for making good (if selling handmade items) or the cost of buying goods to sell (if selling vintage items). The other startup expense is Etsy’s listing fee, which is $0.20 per listing.
Many business owners keep only a small amount of inventory on hand. They make or buy more inventory as their current stock sells. This lets them keep their inventory in a small space, usually somewhere in their home so they don’t have to lease space.
What are the ongoing expenses for an etsy entrepreneur business?
The ongoing expenses for an Etsy entrepreneur business are also low. They include:
- material or inventory costs
- a $0.20 listing fee for each new item listed
- a 3.5 percent transaction fee for each transaction
- a 3 percent + $0.25 payment processing fee for each transaction
- shipping fees for each order
Who is the target market?
An Etsy entrepreneur business’ ideal customer is someone who likes handmade or vintage items, and has some discretionary income. Such a person may be interested in the wares an Etsy entrepreneur business sells, and they have money to spend on goods.
How does an etsy entrepreneur business make money?
An Etsy entrepreneur business makes money by selling handmade or vintage goods. Most businesses sell only to customers, but Etsy has a platform for launching into wholesale.
How much can you charge customers?
Business owners get to choose how much they charge on Etsy. Most price their items below $50, though. It’s easier to sell items at this price point than above $50. Also, Etsy’s editors highlight items priced below $50.
How much profit can an etsy entrepreneur business make?
How much Etsy entrepreneur businesses make varies. Some businesses have only a couple of sales per month or even per year. Others have hundreds of sales each day. The most successful businesses bring in well over six figures a year.
How can you make your business more profitable?
An Etsy entrepreneur business can improve its marketing and add a revenue stream by starting an art blog. A blog related to the items that the business sells will increase the amount of exposure the business receives. The blog can also be used to sell other items through affiliate links or sell advertising space.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Etsy Entrepreneur Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state’s business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It’s very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your etsy entrepreneur business is sued.
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It’s really easy and free!
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an etsy entrepreneur business
Since Etsy is an online marketplace, all advertising efforts should grow a business’ online presence. Etsy’s Seller Handbook recommends using the following marketing channels:
- search engine optimization
- social media marketing
- email marketing
- giving samples to influencers
How to keep customers coming back
When setting up an Etsy entrepreneur business, it’s important to have high-quality photos. Not only should photos be clear and focused, but they should also be unique. Different backgrounds and angles can help make products pop — and that’s what convinces visitors to buy items.
Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
What are some skills and experiences that will help you build a successful etsy entrepreneur business?
Etsy entrepreneur business owners need to have a good to sell, and they need to be familiar with how to sell on Etsy.
Most business owners already have a passion for the goods they want to sell. They normally know how to make the goods or where to find them. Those that don’t may want to take an art course at a local community college, or a crafting class at a nearby arts and craft store to learn how to make something. Alternatively, there are also YouTube videos on how to make many different types of handmade goods.
For many business owners, learning how to sell on Etsy is the bigger challenge. First, business owners should familiarize themselves with Etsy’s Seller Policy. This provides the terms and conditions that sellers must follow. There are several other resources that cover strategies. Some include:
- online classes, such as Selling on Etsy, Skillshare’s classes and CreativeLive’s courses
- books, like Etsy Artist, Etsy-preneurship and How to Sell on Etsy with Instagram
- guides to selling on Etsy, such as the one from Intuit Quickbooks
What is the growth potential for an etsy entrepreneur business?
An Etsy entrepreneur business may be a part-time endeavor run by a single person, or it might be a sizable business that has several employees. The overall top sellers on the platform have total sales totaling in the hundreds of thousands. Each day’s top sellers usually have several hundred sales in that day.
Many Etsy entrepreneur businesses only sell on the platform. Some businesses, however, expand to other platforms or even their own site as they grow. (Etsy has a program for launching an independent website supported by Etsy.)
Not sure if an etsy entrepreneur business is right for you? Try our free Business Idea Generator and find your perfect idea.