Handmade and unique item enthusiasts who are creative entrepreneurs are finding Etsy to be an excellent platform for showcasing their products. However, many are not familiar with the proper ways to use third-party production and fulfillment on Etsy. In this post, we will outline the current rules and steps necessary to establish a business on Etsy that complies with their guidelines.
Understanding Dropshipping
Dropshipping is a business model where a seller can offer products without the need to manufacture goods, hold inventory, or handle shipping to customers. This approach is popular among new entrepreneurs and those who prefer to start an ecommerce business with minimal risk.
In the past, entrepreneurs had to purchase products in bulk at wholesale prices. With dropshipping, however, products are bought individually from suppliers. This means that when a customer places an order, you only order that specific product from the supplier.
Exploring Etsy
Etsy is an online marketplace that allows sellers to feature craft supplies, vintage items, and handmade goods. While originally created for small-batch makers and artisans, Etsy has expanded to accommodate merchants of various types selling their products.
How Dropshipping Works on Etsy
Starting an Etsy business that utilizes third-party fulfillment is not as straightforward as it may seem. Etsy does not endorse traditional dropshipping practices, such as reselling mass-produced goods bought after a sale. Navigating policies related to reselling, production partners, and print on demand can be complex.
However, there are two “Etsy-friendly” methods that align with the platform’s policies if executed correctly:
- Establish an Etsy store and have a third party produce your goods: In this model, you design and own the products, while a third party manufactures them as your designated “production partner.” Many print-on-demand partners also handle fulfillment, but you are responsible for customer service and listing accuracy.
- Source products from Etsy to sell on your own ecommerce site: This approach involves purchasing products from other Etsy sellers (with permission and in accordance with their terms) and reselling them on your own platform. While this grants you more control, it requires additional marketing efforts. It’s important to note that you cannot source products from Etsy and then resell them on Etsy.
Key Rules for Dropshipping on Etsy
Dropshipping on Etsy can be a complex endeavor, as the platform does not explicitly permit it. However, there are specific rules and conditions set by Etsy that are relevant to similar business models. Here are some important guidelines to follow:
- The items you sell on Etsy should fall under the categories of vintage, handmade, or craft supply. Vintage items must be at least 20 years old.
- In the Handmade category, items must be crafted and/or designed by the seller. Reselling ready-made goods in the Handmade section is not allowed, meaning you cannot source products from other makers and present them as your own.
- When working with production partners, you must clearly state the relationship in your product listings. However, these production partners cannot be Etsy shop members or suppliers from whom you source ready-made products for resale.
- For craft supplies, you may resell commercial, vintage, or handmade supplies that meet Etsy’s craft-supply criteria.
- Each listing on Etsy must directly offer and endorse a digital or physical item. Activities like creating referral codes, want ads, or similar promotions are prohibited by Etsy.
- Some prohibited reselling activities include selling products from merchants not affiliated with your business, selling fair trade items that you did not design or make, and repackaging and rebranding commercial products.
- Reselling mass-produced goods from platforms like AliExpress or Amazon typically violates Etsy’s Handmade rules and poses risks to your shop.
Ultimately, it is the responsibility of the seller to ensure that their practices align with Etsy’s policies. It is crucial to review the latest Seller Handbook and policies before listing products, as regulations may evolve over time.
Advantages of Etsy Dropshipping
Dropshipping is a popular model on various platforms, including Amazon, eBay, and Shopify. So, why are individuals interested in Etsy dropshipping? Here are some key reasons:
Popularity of Etsy Products in Specific Niches
Etsy is known for being a major marketplace for handmade goods, printables, and wedding products. Sellers looking to offer digital products or wedding accessories may find Etsy to be a lucrative platform for dropshipping.
Potential for Lower Competition—With Policy Compliance Crucial
Etsy’s stringent rules regarding reselling and print on demand can reduce the number of sellers utilizing third-party fulfillment. While this may result in lower direct competition in certain niches, success hinges on adhering to policies, maintaining quality, and delivering a positive customer experience.
Challenges of Etsy Dropshipping
While Etsy dropshipping presents several benefits, there are drawbacks that may prompt a reevaluation of the platform. Here are some considerations:
High Fees
Etsy sellers are subject to a $0.20 listing fee per item. Additionally, each sale incurs a 6.5% transaction fee and a separate Payment Processing Fee (approximately 3% + $0.25 in the U.S.), both calculated based on the total order amount, including shipping and gift wrapping. Currency conversion fees may also apply. If you utilize Etsy’s Offsite Ads, an extra 12% or 15% fee is charged on ad-attributed sales. Etsy Pattern, a separate branded site, costs $15 per month and has its own fee structure. These expenses must be factored into your pricing strategy.
Limited Scalability
Since Etsy’s inventory primarily consists of handmade, vintage, or carefully sourced items, suppliers on the platform may not be able to produce items as quickly as larger manufacturers. Moreover, the availability of vintage and antique items is limited, posing a challenge to scaling your business and increasing sales.
Starting a Dropshipping Business on Etsy
Now that you understand the advantages and challenges of Etsy dropshipping, let’s explore the steps to launch your venture.
1. Identify Products to Offer
The initial step involves selecting items to dropship. Etsy’s Best Sellers and Top Sellers sections can provide ideas for popular products. For a more focused search, consider sorting results by prices and shipping options to pinpoint the most profitable and sought-after items.
2. Select a Dropshipping Supplier
Choose a dropshipping supplier that aligns with your product preferences. Since Etsy prohibits reselling handmade goods, it is essential that you are the designer of the items, and your supplier functions as a disclosed production partner. Avoid suppliers that solely offer ready-made goods for resale on Etsy.
Consider the following tips when selecting a dropshipping supplier:
- Thorough Research: Look for suppliers with positive reviews and transparent business practices.
- Review Policies: Ensure that the supplier permits dropshipping and complies with Etsy’s guidelines.
- Request Samples: Order samples to assess the quality of the products.
- Effective Communication: Choose a supplier who communicates efficiently and promptly.
- Confirm Shipping Details: Verify shipping times and costs to ensure they meet your business requirements.
3. Establish Your Etsy Storefront
Creating an Etsy store necessitates having a seller account. Visit Etsy’s website and click on “Register.” Enter your name, email address, and password. Click “Register” at the bottom of the page to access Etsy’s homepage.
Scroll down to the bottom of the page and select “Open your Etsy shop.” Then click “Let’s do this” and “Start your shop” to initiate the setup process for your Etsy dropshipping store.
Specify the language, country, and currency preferences for your store. Click “Save and continue.”
4. Publish Your Listings
Creating listings is a crucial step in launching your Etsy dropshipping store. Start by entering product details and uploading high-quality images. You can also outline any customization options available to customers. Explain how buyers can provide their preferences during the ordering process.
Use tags and categories to make your products easily discoverable through Etsy’s search function. Once you have entered all the necessary information, click the Publish button to make your listings live. Your products are now available for customers to view and purchase.
5. Fulfill Orders
To fulfill orders, you need to connect your Etsy store with a dropshipping platform. While not all platforms support selling on Etsy, consider options like:
- Art of Where: A partner specializing in print-on-demand items, offering customization options for labels and stickers.
- Printful: Integrates with your store to sell print-on-demand products featuring your unique designs.
- AutoDS: Assists in sourcing products from Etsy for sale through your branded Shopify store.
Dropshipping on Etsy through Shopify
When dropshipping Etsy products on Shopify, you can promote Etsy items on your store using Shopify apps (with the original seller’s permission).
Dropshipping from AliExpress to Etsy
Dropshipping from AliExpress to Etsy is prohibited. Items listed on Etsy must be handmade (by you or your production partner using your design), vintage, or craft supplies. For instance, if you sell a t-shirt, the design on the shirt must be your creation, and the production partner must be disclosed. Reselling mass-produced items sourced after a sale can lead to your shop being suspended.
Dropshipping from Amazon to Etsy
Similar to AliExpress, sellers cannot dropship from Amazon to Etsy. Products on Amazon are typically mass-produced and do not align with Etsy’s focus on handmade, vintage, or craft quality standards.
Dropshipping from Etsy to eBay
While not traditional dropshipping, selling Etsy products on eBay is possible. You can purchase items from Etsy sellers (with their consent and respecting intellectual property/licensing) and list them on your eBay account. However, you will be responsible for managing inventory and shipping.
Dropshipping Print-On-Demand Products on Etsy
Etsy permits the dropshipping of print-on-demand products on its platform. These items can be customized to meet each customer’s preferences, ranging from apparel to home decor.
Print-on-demand providers like Printful allow you to create unique designs for your products, with printing and shipping handled on your behalf.
Ensure that your listings clearly state that they are fulfilled by a print-on-demand provider (production partner) and that your designs are original, compliant with copyright laws, and in line with Etsy’s policies.
Dropshipping Your Own Brand
If Etsy does not suit your dropshipping needs, consider establishing your online store. Having your own store grants you complete control over your business. Here are some benefits of running your own store:
- Brand Ownership: Customers will associate your store name with your products, rather than the platform you sell on, such as Etsy.
- Marketing Autonomy: Build your email list, retarget website visitors, and manage your customer base independently.
- Unlimited Product Selection: With no listing fees, you can choose from a vast array of products and add as many items as you wish without additional charges.
Launch Your Etsy Dropshipping Business Today
Embarking on a dropshipping venture on Etsy may pose challenges, but do not let that discourage you. Consider establishing your online store using platforms like Shopify to access unique advantages not found on Etsy. If the limitations of Etsy outweigh the benefits, setting up a Shopify store allows you to expand your dropshipping business promptly.
Etsy Dropshipping FAQ
Is Etsy Dropshipping a Viable Option?
The viability of Etsy dropshipping depends on your objectives and resources. If you are seeking quick profits, an Etsy dropshipping store may not be the best fit. However, with a commitment to building a robust business, Etsy can be profitable, especially when offering original designs, maintaining strong branding, and ensuring efficient operations. While Etsy provides a broad audience and existing demand, careful planning is essential due to fees and policy constraints.
How Does Dropshipping Function on Etsy?
Practically, a seller establishes a store, partners with a compliant production partner, and creates listings for products they have designed. When a customer places an order, the partner manufactures and ships the product directly to the buyer. It is crucial to disclose the production partner and maintain the role of the designer, as reselling ready-made goods is not permitted in the Handmade category.
Can You Dropship From Etsy to Shopify?
Yes, many merchants list items sourced from Etsy on a Shopify store using apps that synchronize inventory and handle orders. However, this practice requires permission from the original seller, and it does not constitute traditional dropshipping unless the seller fulfills orders on your behalf under a formal agreement.
Is Dropshipping Products From Etsy Legal?
On Etsy, dropship-like fulfillment is acceptable only when the item is your creation, and the manufacturer is disclosed as a production partner, or when selling approved categories like vintage or qualifying craft supplies. Reselling another maker’s handmade goods on Etsy is prohibited. Off the Etsy platform, legality hinges on seller permissions, intellectual property rights, and marketplace regulations—always verify terms before initiating sales.
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