Dropshipping on Etsy in 2024: What You Need to Know

If you’ve ever bought anything online, chances are you’ve heard of Etsy. Known for its unique, handmade, and vintage items, Etsy started in 2005 as a virtual storefront where craftsmen could sell their goods online. Nearly two decades later, with over 9 million sellers, Etsy is a leading ecommerce platform. It’s also the perfect place for dropshippers looking to take advantage of the unique product offerings and dedicated customer base that Etsy offers. 

In this blog, we will delve into the specifics of dropshipping on Etsy, covering its benefits, drawbacks, product categories that tend to succeed, and important rules to be aware of so that your business can thrive on this global platform.

What is Etsy & can you dropship on it?

Etsy is an online marketplace focused on handmade, vintage, and craft supplies. Launched in 2005, it has grown from a platform to showcase artisans and small business owners who want to sell their unique products to a hub that facilitates all kinds of merchants. Etsy attracts a niche audience looking for one-of-a-kind items, making it different from other major ecommerce platforms.

Can you dropship on Etsy?

Dropshipping is a fulfilment method that doesn’t require retailers to hold any physical inventory. Suppliers ship products to customers on behalf of the retailer. Compared to the business model of traditional retail, this is an extremely low-risk fulfilment method for entrepreneurs wanting to start their own online store.

Dropshipping on Etsy is now possible. However, the platform requires its sellers to meet certain conditions to be able to dropship on the platform. Unlike traditional ecommerce platforms that allow any type of product to be dropshipped, Etsy has strict rules about what can be sold. These rules include:

• Every Etsy listing must be handmade by the seller, vintage (at least 20 years old), or craft supplies. Craft supplies can be sourced from a third party. This means that if you wish to dropship on Etsy, you need to be creative in how you source or present your products to ensure they meet Etsy’s guidelines.

• All items sold on Etsy must be made or designed by the seller, you cannot resell another Etsy user's products.

• If you are working with production partners, you must disclose this in your product descriptions. According to Etsy’s website, a production partner is a company or individual that helps produce your products based on your original design, for example, a printing service.

• Production partners cannot already be Etsy shop members from whom the Etsy merchants source ready-made products.

• You cannot already be dropshipping on AliExpress.

• All Etsy products must be physical or digital products.

• Prohibited reselling activities include rebranding commercial items, selling handmade goods you didn’t design or make or selling items made by another seller who isn’t affiliated with your Etsy shop.

If you can meet these requirements, there’s no reason why you can’t use Etsy to dropship. It’s a low-risk way to start a business without the need for large upfront investments in inventory and also acts as a way for individuals to showcase their creativity to like-minded customers.

Benefits of dropshipping on Etsy

In 2024, the practice of dropshipping has become widely accessible across various ecommerce platforms such as Amazon and eBay. However, what sets dropshipping on Etsy apart and makes it particularly advantageous?

Niche market

Etsy is a popular marketplace that attracts a specific audience interested in unique, handmade, and vintage items. This niche audience sets Etsy apart from other marketplaces that offer a wider range of products. For dropshippers, this presents a valuable opportunity to target a specific demographic that highly values originality and uniqueness. Certain products may perform better on Etsy compared to other platforms if they align with the niche and the preferences of the platform's audience.

Lower competition

When comparing Etsy to larger ecommerce platforms such as Amazon and eBay, it's evident that Etsy experiences lower competition across many product categories. This can be attributed, in part, to the platform's stringent guidelines on the types of products that can be sold. These guidelines effectively limit the number of potential sellers within each category. For individuals involved in dropshipping, this translates to a more favourable opportunity for their products to stand out and gain visibility. Consequently, this increased visibility can lead to higher profits for sellers utilising the dropshipping model on Etsy.

Branding opportunities

Having an Etsy shop encourages sellers to create comprehensive profiles and backstories for their shops, highlighting the unique aspects of their products and the story behind their brands. This approach helps establish a strong brand identity and creates a more personal connection with Etsy's audience. For dropshippers, crafting a detailed and relatable brand story can be particularly advantageous, as it allows them to resonate with Etsy's discerning customer base and stand out in the competitive marketplace.

Loyal customer base

Etsy shoppers are recognised for their strong brand loyalty. A significant number of customers exhibit a preference for purchasing from the same sellers after having a positive experience. This commitment often translates into repeat purchases and fosters enduring customer relationships, meaning you’ll have more chances to create a loyal customer base if you sell on this platform.

Ease of use

The Etsy platform offers a user-friendly interface, simplifying the process for new sellers to set up their Etsy store. The straightforward design of the interface ensures an easy navigation experience, and Etsy provides ample resources and support to assist sellers in achieving success on the platform.

Negatives to dropshipping on Etsy

When considering dropshipping on Etsy, it's essential to carefully evaluate the advantages and disadvantages associated with selling on this platform. While there are many benefits to selling through Etsy, such as access to a large customer base and easy setup, there are also potential downsides, including high competition and fees. Before listing your products on Etsy, it's important to thoroughly weigh both the positive and negative aspects to make an informed choice.

Strict guidelines

Etsy has established strict guidelines concerning the types of products that are permissible for sale, creating notable obstacles for dropshippers. The platform exclusively allows the sale of handmade, vintage, or craft supply items. This limitation significantly narrows down the range of products that dropshippers can offer. Consequently, some businesses may find it challenging to adhere to these guidelines without incurring additional expenses and investing more time to curate their product offerings.

High fees

If you choose to sell products on Etsy, you will be charged various fees, such as listing fees for each item you post, transaction fees when you make a sale, and payment processing fees. It's important to keep in mind that these fees can accumulate and impact your profit margins significantly. Therefore, it's crucial to take these costs into account and incorporate them into your pricing strategy when selling on Etsy.

Limited scalability

Considering Etsy's focus on showcasing one-of-a-kind, artisanal goods, breaking into the dropshipping industry on this platform presents significant challenges. This is primarily because the usual products associated with conventional dropshipping may not meet Etsy's criteria and might encounter difficulties in gaining visibility and popularity. The key factor determining success is the nature of the products you intend to offer. If your product line resonates with Etsy's overarching vibe, then it may be worth pursuing.

Intense competition in popular categories

In certain niches, particularly jewellery, clothing, wedding supplies, home and living products, wall art, and stickers, the level of competition can be quite high. It can be challenging to differentiate your products in these crowded markets, and doing so often requires a strong focus on creativity and the implementation of effective marketing strategies. However, these efforts often require significant investments of time and money.

Potential for account suspension

As we have discussed, Etsy is widely recognised for its stringent enforcement of policies and guidelines. Because of this, any sellers found to be in violation of Etsy’s rules run the risk of having their accounts suspended or permanently banned. This can have serious repercussions for their businesses, causing significant setbacks and potential loss of income, so this is something to keep in mind when considering listing your products on Etsy.

Which product categories tend to succeed on Etsy?

Etsy is well-regarded for its diverse and distinctive product selection, offering buyers a wide array of items ranging from candles inspired by beloved book universes to just about any sequin colour you could think of. However, within its expansive range, certain product categories stand out as particularly popular.

Jewellery

In 2024, the demand for handmade and personalised jewellery items on platforms like Etsy continues to soar, with some customers even choosing to purchase engagement and wedding rings from the platform. The appeal lies in the unique and high-quality craftsmanship of these pieces, making them an excellent choice for dropshippers looking to meet the demands of discerning customers.

Home décor

As we have discussed, Etsy features a wide variety of unique and handcrafted home décor items. Whether you're looking for vintage furniture, handmade candles, or custom wall art, Etsy offers a diverse array of products that can add a personal and distinctive touch to any living space. It is a go-to destination for individuals looking to curate a home filled with one-of-a-kind pieces that reflect their personal style and taste, making home décor a perfect niche for dropshippers to focus on.

Craft supplies

Etsy was initially established as a platform catering to crafters, so it’s no surprise that the craft supplies category continues to be a favoured product for Etsy shoppers. The assortment encompasses various items such as yarn, fabric, do-it-yourself kits, and tools, making this category an ideal opportunity for dropshippers looking to explore and expand their offerings.

Clothing and accessories

The Etsy marketplace is known for its strong demand for customised clothing and accessories. Unique items such as scarves, hats, and custom apparel are particularly popular among Etsy shoppers. In addition, print-on-demand t-shirts, jumpers, and accessories are highly sought after, making them a viable option for dropshippers looking to tap into the Etsy market.

Art and collectibles

Artwork, prints, and vintage collectibles have a passionate and dedicated community of buyers on Etsy. These items tend to attract collectors and individuals looking for unique and distinctive pieces to adorn their homes. Many Etsy sellers have found success in offering digital downloads of artwork, allowing buyers to print them at their own convenience. This innovative approach has gained popularity and has proven to be a cost-effective way for sellers to generate income while avoiding shipping expenses. While the dropshipping model may not be feasible for selling vintage collectibles, it is certainly a viable option for selling artwork and prints.

Etsy dropshipping rules to be aware of

In the initial section of our blog, we thoroughly examined the specific prerequisites for engaging in dropshipping on Etsy. However, for the sake of absolute clarity, we will revisit and elaborate on these requirements once more.

Handmade requirement

When selling items on this platform as new, it is crucial to be aware that these items should be crafted by you or someone in your shop. This requirement ensures that you are actively engaged in the production or design of the items being offered for sale. For those selling craft supplies, it is acceptable for them to be obtained from a third party. Additionally, print-on-demand items are allowed to be sold if you have personally created the design or if it has been designed by someone within your business.

Vintage items

When listing products as vintage items on Etsy, it's important to adhere to the platform's regulations. According to Etsy's guidelines, items classified as vintage must be at least 20 years old. If you are dropshipping vintage products, it's essential to ensure that they meet this criterion to avoid any potential issues with Etsy's regulations and to maintain compliance with their policies.

Transparency

Etsy's policies mandate that sellers provide clear and comprehensive information about their creative processes and the individuals involved in creating the items. This involves disclosing the names and specific roles of any other individuals who contribute to the operation of your shop.

Compliance with local laws

When selling on Etsy, you must ensure that you adhere to all applicable local laws and regulations pertaining to the sale of your products, including any requirements specific to dropshipping.

How does Etsy dropshipping compare to Amazon or eBay?

When comparing Etsy to other online marketplaces like Amazon and eBay in the context of dropshipping, it’s essential to understand the unique characteristics and demographics of each platform. While Etsy, Amazon, and eBay all provide avenues for sellers to list their products, it's crucial to acknowledge the distinct differences among them, especially when comparing Etsy. Recognising these differences is key to strategically targeting the right demographic and maximising your business's profitability in the competitive world of ecommerce.

Market focus

The primary contrast between Etsy and other platforms such as Amazon and eBay lies in their respective targeted markets. Etsy's niche is centred on handmade, vintage, and one-of-a-kind items, creating a unique selling proposition. In contrast, Amazon and eBay cater to a wider array of products, appealing to a broader customer base. Understanding this, it's essential to recognise that Etsy attracts a distinctive customer demographic, often seeking out unique, handcrafted goods. As a result, when determining your product range and devising marketing strategies for Etsy, it's vital to keep this specific customer profile in mind.

Seller fees

Etsy charges a USD0.20 listing fee for each item and takes a 5 per cent transaction fee on the sale price, excluding shipping. For payment processing, Etsy charges 3 per cent + USD0.25 per transaction for orders. Amazon charges referral fees ranging from 6 per cent to 45 per cent of the item's selling price and a variable closing fee. eBay's fee structure includes insertion fees for listing an item and final value fees which are a percentage of the total amount of the sale, including shipping. Understanding these platform fees is crucial for sellers to accurately calculate their profitability and make informed decisions about where to sell.

Competition and visibility

When considering where to list your products, it's important to consider the different user bases of Amazon, eBay, and Etsy. Amazon and eBay have a much larger user base, which can result in higher competition for your products. On the other hand, Etsy's specialty in handmade and unique items creates a niche environment where certain products can stand out more easily.

It's essential to carefully evaluate the pros and cons of each marketplace to make an informed decision about where to list your products. This decision should be based on your business goals and aimed at maximising profitability. Whether you choose to list your products on one platform or multiple platforms, it's all about finding the best strategy for your business.

Fulfilment options

Amazon provides a service called Fulfilment by Amazon (FBA), which allows sellers to store their products in Amazon's warehouses and have the company handle the packing and shipping of those products. This service is not available on eBay, meaning that sellers on eBay are responsible for storing, packing, and shipping their own products. However, dropshippers can still operate on eBay by leveraging their own supplier networks to fulfil orders.

Similarly, Etsy also lacks a built-in fulfilment program, so anyone interested in dropshipping on Etsy must independently find suppliers to fulfil orders.

Brand building

Creating a distinct brand on Etsy is a relatively uncomplicated endeavour owing to its emphasis on handmade, vintage, and one-of-a-kind products. This environment provides abundant opportunities to craft individually tailored storefronts. The platform's nurturing community and specialised market further facilitate sellers in establishing connections with their specific customer base. On the other hand, larger marketplaces such as Amazon and eBay present intense competition, characterised by millions of listings, meaning it can be arduous for sellers to differentiate themselves, gain visibility, and establish a unique brand.

Customer expectations

Etsy customers typically have a preference for one-of-a-kind, artisanal products that are known for their high quality and personal touch. On the other hand, customers on platforms like Amazon and eBay tend to prioritise factors such as price and convenience over the uniqueness of the items. Ultimately, the choice of platform depends on the focus you want for your business and products, and whether Etsy aligns with your overall plan.

Summary

Having an Etsy dropshipping business in 2024 presents a wealth of exciting opportunities and unique challenges for aspiring entrepreneurs. While Etsy's primary focus on handmade, vintage, and craft supplies may seem limiting, it opens access to a specialised market with less competition compared to larger platforms such as Amazon and eBay. This exclusivity can be advantageous for dropshippers looking to carve out a niche in the ecommerce space.

One of the key advantages of dropshipping on Etsy lies in its lower upfront costs, offering flexibility and a ready-made customer base for sellers. However, sellers need to be mindful of navigating Etsy's strict policies, managing comparatively higher fees, and addressing branding challenges that may arise.

Achieving success on Etsy often boils down to selecting the right product categories. This might include, for instance, jewellery, home decor, craft supplies, personalised gifts, and vintage or handmade items. It's crucial for sellers to thoroughly grasp and adhere to Etsy's rules to avoid potential account suspension and uphold a positive reputation.

Compared to industry giants like Amazon and eBay, Etsy's distinct market focus, fee structure, and fulfilment expectations have both advantages and disadvantages. Therefore, entrepreneurs considering dropshipping on Etsy in 2024 should base their decision on a comprehensive understanding of the platform's dynamics and how they align with their specific business objectives.

By capitalising on the benefits of Etsy's niche market and aligning with its guidelines, dropshipping entrepreneurs have the potential to establish thriving, sustainable businesses both in 2024 and beyond.