One question I get asked often is:
Should I start an Etsy shop, or build a website?
This is a great question, and my answer is:
Hattie Rex has two Etsy sites in addition to our own website. We started with our first Etsy shop for pet ID tags, and once we started making "human jewelry," we started our second Etsy site (turns out people didn't want to buy jewelry from a dog store -- or maybe our messaging wasn't quite that sophisticated yet).
So I do have experience with both Etsy and an independent website. And we maintain both right now.
If it weren't for Etsy, I'm not sure if I would have ever been able to make the leap from side-hustle to full-time. Etsy absolutely offered me opportunities that weren't available anywhere else for me and I'll forever be grateful to Etsy for that.
BUT, things are different now, and chances are, your circumstances right now are different than mine were in 2007 when I started my first Etsy shop.
Also, for the purposes of this post, I'll be comparing Etsy to Shopify. That's because I believe that Shopify is the absolute best option for the majority of small and medium business owners who have products (and more) to sell. Shopify is also fairly comparable to other platforms in terms of cost.
So, if you're deciding between Etsy and your own site, I encourage you to explore these three main topics to help you decide:
- Your budget
- Your time
- Your goals
Let me go into more detail. First, your budget.
If your business is a side job or a hobby, and you plan for it to remain a side job or hobby, I recommend starting with an Etsy shop.
Shopify's basic package is $29 per month, or $313.20 per year when you pay annually.
They also offer larger plans, as well as a Lite plan. This article on Style Factory explains Shopify's fees in depth, so if you're wondering how to choose, start there.
If that $300 a year sounds like way too much for some of you, you might just say "ok, I'll stick to Etsy."
But wait! Let me show you the advantages and other factors and then decide.
Shopify allows you to list an unlimited number of products for no additional charge.
The product listings never expire on Shopify. You can always change their visibility, list them on other integrated sales channels (point of sale, Amazon, Facebook, Instagram, wanelo, eBay, etc) and it never charges you an extra penny.
When you sell a product, you'll also pay the transaction fees to your payment processor. Shopify has a built-in payment processor that charges 2.9% + $0.30 per transaction. You can also opt to receive payments via PayPal, ApplePay, GooglePay, or other services. The payments for those processors vary but are around the 2.9% + $0.30 rate.
With Etsy on the other hand, it is free to open a shop. Until you start to list products in it.
It costs $0.20 to list an item on Etsy. The listing lasts for four months, or until the item sells.
When the item sells, Etsy charges a 5% transaction fee (including the item cost AND the shipping charges).
If the buyer uses Etsy's payment processor, they take an additional 3% + $0.25.
Etsy also allows you to accept payments via PayPal, so if the buyer selects that payment option, PayPal would take their 2.9% + $0.30.
Shopify versus Etsy: Fees
So let's turn these numbers into actual dollars so we can get a better picture of what we're working with.
Let's say you are selling a t-shirt that retails for $25 and you expect to sell 10 in a month. You charge $5 for shipping.
With Shopify, you'd pay the $29 monthly fee, plus 2.9% + $0.30 for each product. If you sold every shirt individually, your payment processing fees would total $11.70, for a grand total of $40.70 for the month.
With Etsy, the same 10 $25 t-shirts with $5 shipping would cost you a total of $2.00 to list, and when they sell, you'd pay $15.00 in transaction fees and $11.50 in payment processing fees, for a grand total of $28.50 for the month.
If you happened to list more than the 10 shirts you sold, you'd also pay 20 cents for each listing.
Now let's look at the same shirt, but let's say you're selling 100 in a month.
On Shopify, you'd pay $117 in transaction fees + your $29 monthly fee, for a total of $146 for the month.
On Etsy, you'd pay $20 in listing fees, $150 in transaction fees, and $115 in payment processing fees, for a total of $285 for the month.
As you can see, the cost-effectiveness of Etsy decreases as your sales increase.
If you're selling smaller quantities, it could be more economical to start with Etsy. But eventually, you're going to cross that threshold where it starts to cost you more.
If you're saying "ok, I sell a lot more than 100 t-shirts a month. Give me Shopify!" then I invite you to check out this article on Merchant Maverick to make sure the plan you choose is perfect for your business.
Next, let's look at your time commitment to your side-hustle.
E-Commerce Time Commitment
This is a multi-faceted component. In relation to your time, we're going to look at your setup time and your seasonality.
How much time are you willing or do you have available to commit to setting up your online presence, whether it's on Etsy or on Shopify?
While both are user-friendly, easy-to-use, and intuitive, Etsy is a simpler interface with less moving parts, which makes it inherently quicker to set up.
On both Shopify and Etsy, you can get set up in minutes, but with Shopify, you have multiple pages, plus navigation and checkout to configure.
On Etsy, you upload a banner image instead of fleshing out a homepage, and all your products are listed on one page (with the option of utilizing categories), rather than having to set up navigation.
To give you hard numbers, I would say it would take the average person 4-8 hours to set up an Etsy store and list 10 products, whereas it might take 2-4 times that to set up a Shopify site. This number will vary.
In my online course, "Websites that Sell," I walk you through a 30-day process to create your own Shopify site. If you're curious what that process entails, you can download the site creation planner for free HERE.
Since neither option is a quick 10-minute fix, I'd recommend putting some thought into your budget, your time commitment and seasonality, and lastly, your goals.
One of the best reasons to use Etsy is that you could take time away from it and it wouldn't cost you anything.
If you set up a Shopify site, you'd be paying $29 per month, regardless if you're using it that month or not.
Now, one could argue that if you have the products already listed, you could be selling products even when it's not your primary focus that month.
But if your side-hustle is seasonal, if your products are perishable, or if you often sell out, you might have a few months when you're not creating new products and therefore have nothing to sell.
If your products have an unlimited shelf life or are reproducible, you could list it on Shopify and never have to list it again. On Etsy, it would expire after 4 months if it didn't sell, then you'd have to relist it.
(Relisting a product on Etsy only requires clicking the "relist" button. You don't have to upload products and add in your descriptions and tags again.)
So, although Etsy wouldn't be charging you every month, it would still require maintenance to make sure you still have products available.
Leaning toward Shopify? Click here to download my FREE 30-day website creation planner.
Your E-Commerce Goals
Finally, to help you decide between Etsy or Shopify, let's take a look at your goals for e-commerce and your business.
Consider: Where do you want to sell your products? Are you selling online only, or will you accept payments in person?
Sales channels are different avenues or locations (including both in-person and online) for selling your products.
If you're selling in person, Shopify has a built-in point of sale system that is free to add on. They will even send you a free card reader! Your inventory will be synced between your online store and your in-person store, so you don't have to worry about changing your website quantities after you go to a show.
Etsy also has the option for an in-person card reader, but you have to set up Square and sync your products that way. I've never used this option, but I would assume it works just fine, as long as the syncing is seamless.
Shopify allows you to add on other sales channels as well, with no additional cost from Shopify and without having to list your products again. Currently, Shopify's sales channels include Point of Sale (in-person), Facebook, Messenger, Instagram, Amazon, eBay, Wanelo, Houzz, Google Shopping, and 10 other lesser-known channels.
If you utilized all of these sales channels in addition to your website, that's the equivalent of 20 websites. That's 20 places where you can sell to your customers, versus the one (or two if you sell in person) that Etsy gives you. To me, this absolutely gives Shopify the edge.
With millions of websites online these days, getting customers to your online store can be a challenge.
If you have an email list and/or a following on social media, you can tell your customers about your site and send them there. If this new site is on Etsy, your store name will include Etsy in the url (for example, hattierex.etsy.com). While Etsy is super common these days, it's certainly not the most professional, or memorable route you can take.
It's much easier to tell my customers to visit HattieRex.com rather than having to throw Etsy in there.
But, if you're new to the game (and don't yet have a list of your own customers or a following on social media, Etsy can bring an advantage.
Because Etsy has been around for 14 years, it brings its own internal traffic. It has a bigger following than you do, so tapping into it could benefit your business. Meaning, people visit Etsy to browse and shop for handmade items and if you're lucky, they'll find yours.
The flip side of that coin is that if you DO have a following and you send them to your Etsy site, they may get distracted by your competitors and browse away from your site. Never forget that listing on Etsy is listing your product on a site that also contains alternatives to your products.
Getting customers to your site is always a huge challenge for e-commerce stores. SEO, content marketing, social media, creating backlinks, and nurturing and retargeting your list are great ways to drive traffic to your store.
Which brings up another con for Etsy: ownership.
When a customer buys from your Shopify store, they have the option to join your email list. They may accept or decline, but either way, you have some data about that customer, including how they found your shop, how many times they visited before they purchased, and, if they allow it, their email address so you can send them offers again in the future!
With Etsy, you don't have the option to add your customers to your email list. Etsy forbids it. In fact, not only do you not own your list of customers, you don't even own your store!
As this article from Unsettle puts it, you're renting your land -- you don't own it.
This is a huge disadvantage to putting all of your eggs in the Etsy basket, which leads me to your third element of e-commerce growth.
Potential for Growth
The biggest thing to consider when deciding on Etsy or Shopify is to think not only of where you are now, but where you want your business to go.
If it's a hobby, you want it to stay a hobby, and your fees work out in your favor when you sell on Etsy, that would be my recommendation.
If it's a hobby and you'd like it to be more lucrative, but you're not planning to put a ton of effort into growing it in the near future, I'd recommend starting with Etsy then reinvesting into Shopify when you're ready to give it a go, or when your sales start to make Etsy less profitable for you.
If you want your hobby to grow into a full-time business, and you want that growth to happen sooner rather than later, I'd recommend jumping into Shopify and not bothering with setting up your Etsy store.
If that's you and you're ready for Shopify, I invite you to create a plan and get started! My FREE, 30-day website creation planner tool is perfect to help you set your goals and build that site. Download it here.