Etsy Myths- 3 Popular Myths About Selling On Etsy Debunked

Have you heard any of these Etsy myths? They may be preventing you from opening a shop! Check out these 3 Etsy myths and why I think they’re wrong.

As an Etsy seller with years of experience, I have come across a number of Etsy myths.

There are a lot of opinions floating around out there, and some of them could be preventing you from opening an Etsy shop and creating the crochet business of your dreams!

In this post, I want to set the record straight by debunking three common myths about Etsy that I believe are simply untrue.

Whether you’re a new seller just getting started or a seasoned pro looking to expand your business, understanding the truth behind these myths can help you make the most of what Etsy has to offer. So, without further ado, let’s dive into the truth about Etsy!

Etsy Myth # 1: Etsy is Oversaturated

I hear this all the time. People will say they believe Etsy is oversaturated in the *insert niche* so there’s no reason to open a shop now.

You are a unique human being, I am a unique human being- You can sell crochet Claire Bun Beanies, and I can sell crochet Claire Bun Beanies and we will both reach two unique groups of people!

Who we resonate with is as unique as we are.

Oversaturation does not exist.

Think about blue jean companies. Back in the day, there was just Levi’s and now there are thousands of blue jeans companies and they are ALL thriving and doing well.

If they can do it, we can too!

I don’t know why people tell others that Etsy is oversaturated and to not open a shop because of it. Believing this is holding you back from starting a business that could change your life!

Opening an Etsy shop changed my life immensely! I wouldn’t be here doing what I am today if I didn’t open my Etsy shop.

So when you hear others saying this, don’t get disheartened. Think about how you are a unique human and your ideal customer is going to be unique to you- you are the only human that can serve them well!

If you are not currently serving your ideal customer, she is going unserved!

I don’t believe oversaturation is a thing in any industry.

Even if we both made crochet beanies using the same pattern and the same yarn, the words you use to describe your listings are going to be different then the words I use to describe my listings.

The color palette you use is going to be different than the color palette I use.

The way you take your photos is going to be different from the way I take my photos.

Everything you do to create your listing is going to be different than mine, and that is GOOD!

Different is good! You don’t want to be like everyone else, I promise 😉

If 2020 taught us anything- there are more people in this world than there is stuff.

Etsy is a worldwide platform! You can reach people from all over the world hat you normally wouldn’t reach otherwise.

Etsy Myth # 2: Etsy only cares about buyers, and not about the sellers

I want to think about this from a business perspective just for a moment.

Etsy is a business, and they want to make money.

How do they make money? When people buy things.

How do people buy things? From individual shop owners.

If it wasn’t for the individual shop owners, Etsy would NOT have a business.

They would go out of business immediately if they truly did not care for their sellers. I don’t see how they could function as a business if it this myth was true.

Etsy does a lot for sellers, but a lot of people overlook or even take what Etsy does for them and turn it into a negative.

One of the things they started doing a couple of years ago, was offering offsite ads.

What this means is Etsy has a team of highly skilled and trained professionals to make ads to go on things like Google or Facebook.

They make those ads for you, and then put them out into the world on their dime. You don’t pay a single thing unless you actually make a sale from that ad! That is unheard of!

If you hired an ad company to create strategic, well-thought-out ads for you, and manage them, and put them in all the most well-researched places, it would cost hundreds, if not thousands of dollars.

I have never invested in ads for my business, because of how expensive it is! With Etsy, I don’t have to, because they are doing it for me.

Plus you can turn off this ad feature if you don’t want Etsy to make offsite ads for you.

If you make a certain amount of sales each month, the option to turn off off-sight ads will not be available to you.

I am at that threshold, but I don’t want to turn it off. The benefits of paying for off-site ads significantly outweigh the cost for me.

Say you sell beanies- you want to make sure your beanie is listed at a price point where if you get the fee attached to an ad, you are still in the green.

Even if you aren’t making the highest profit possible on that one sale, just know that one sale leads to more potential sales.

If that customer searched for “winter beanie” in the Etsy search box and clicked on the ad they made for your listing, that is going to give your shop serious search engine juice!

Plus it opens the door for you to get a 5-star review from that customer, which will give you even more search engine juice which will help you get more sales!

These ads are a very good thing. A lot of people twist it to make it seem like “Oh Etsy is forcing me to have these ads”- but offsite ads are actually great.

Another thing Etsy does for the platform that benefits individual sellers is commercials! I have been seeing all kinds of Etsy commercials on TV.

Do you know how to create and produce high-quality commercials on TV for your crochet business? Because I sure as heck don’t!!

Especially not on a national level, and Etsy is doing that for us! Things like that are what our fees go towards.

Plus Etsy is a very user-friendly platform. You can start your business in a day if you want! It could take weeks to build your shop on other platforms like Shopify if you are starting your shop from scratch.

Here’s another, very recent thing Etsy has done for sellers.

Back in 2022 when Ukraine was needing funds really quickly, Etsy turned off the fees for Ukraine-owned businesses for an entire month! 4 million dollars in Etsy fees were completely forgiven.

They did this because they cared about those shop owners!

If you have heard this myth, and it has prevented you from opening your Etsy shop- I would like to tell you it’s not true!

Etsy Myth # 3: Ety’s Fees are outrageous!

A lot of people are quick to say Etsy’s fees are too high- especially after Etsy raises them.

The good thing about Etsy fees is, you do not pay virtually anything unless you make a sale. The fees are a percentage of your sale. If you do not get a sale, you don’t get charged any fees.

The only thing that you get charged, is the $0.20 cents to list an item. You get three months to sell that item before you are charged that $0.20 cents again.

If you are a brand new shop and you sign up through a referral link (like this one!) you will get 40 free listings!

So it is completely free to start an Etsy shop, and you do not pay Etsy a single dime until you make a sale!

Let’s take a look at a physical crochet product you could sell on Etsy and break it all down. You can use an Etsy Fee Calculator like this one.

The Transaction Fee is 6.5% plus the 0.20 listing fee.

The Payment fee is going to be from the credit card companies or PayPal. In the US, it will be 3% plus $0.25 fee, for PayPal it will be 2.99%.

Using this calculator, let’s imagine we’re selling a Claire Bun Beanie for $20.
The shipping charge (what we charge the customer) is going to be $4.50. The shipping cost (what we pay to ship the item) will also be $4.50.

For materials, let’s say it costs us $1.50 in yarn and $0.25 for a beanie tag. The material cost is $1.75.

Let’s leave the taxes portion blank. Etsy charges customers the proper tax for their state/country and remits those taxes to the proper governments on the seller’s behalf.

Our calculator shows

Revenue will be $24.50
The payment fee is $0.98
The transaction fee is $1.59
Total fees are $2.77
Total cost (materials, fees, and shipping) is $9.02
Gross Profit (what you make after the sale) is $15.48
The profit margin is 63.18%.

Since you will be charging the customer the 4.50 for shipping your total cost is actually only $4.52.

I hope this breakdown helps you better understand how Etsy fees really work! So if you have heard this myth, I hope I busted this myth for you!

Check out the full video on Youtube: