After years of ignoring the pleas of friends, family, and clients to start an online business so you can help the masses (really, people are fine with paying good money for your help!), you’ve finally decided to extend your practice to the world wide web. You’re going to offer your services, and/or products online.
But here is the question: which platform is best for an online newbie like you?
If Etsy is the first thing that comes to mind, you’re certainly not alone — Etsy is very popular and there are a lot of merchants selling handmade products and/or their services on the Etsy marketplace.
However, there can be some major disadvantages to the site, and these are significant enough to convince entrepreneurs to choose to sell via their own eCommerce websites.
I started with my own eCommerce website, but I’m not a newbie at selling online.
For the sake of expanding my selling opportunities, I worked on building an Etsy shop too. I have some first-hand experience to share with you and then my advice as a professional who has been marketing products and services online for over 10 years.
So, let’s quickly take a look at which is best for your services: Etsy or your own eCommerce website? Here are some of the pros and cons for both.
The pros of Etsy
The costs to get started are minimal if you have minimal products/services to sell.
It is easy to set up an Etsy shop: no web hosting or domain fees, no design costs. It is literally free to set up shop except for two things:
- Etsy takes a commission on items you sell.
When you make a sale through Etsy.com, you will be charged a transaction fee of 5% of the price you display for each listing plus the amount you charge for shipping and gift wrapping. …
Listings renew every 4 months if there is still a number of products or services to sell within that listing.
You will be charged a listing fee whether or not the listed item sells. (see Etsy Fees)
To illustrate how quantity and listing fees work, let’s say you sell bowls in your Etsy shop:
What if I list only one bowl?
You’ll be charged $0.20 USD when listing your bowl. Listings expire after 4 months. Later, if you choose renew your listing, you’ll be charged a $0.20 USD renewal fee.
What if I list a quantity of four bowls?
You’ll be charged $0.20 USD for the listing. If none of the four bowls sells and your listing expires, it will cost you $0.20 USD to renew the listing.
What if I list a quantity of three bowls and I only sell one before the listing expires?
You’ll be charged $0.20 USD for the listing. When the item sells, the listing will automatically renew because you’ve still got two left. You’ll be charged an additional $0.20 USD auto-renewal fee so that the listing remains for sale in your shop.
What if I list a quantity of ten bowls, and I sell all ten?
When you first list the bowls, you’ll be charged $0.20 USD for the listing. When all the bowls in the listing sell, you’ll be charged an additional $1.80 USD ($0.20 USD for each additional quantity that was sold).
If you renew the listing with the same quantity of 10, you’ll be charged another $0.20 USD. — Etsy Help Doc
Quick to set up
Setting up a product listing on Etsy is fast. You can simply create your account and start selling your products/services within the hour. It takes the same amount of time to set up a product listing on your own eCommerce website, but your website has requirements other than just listing products.
Possibly greater exposure
Etsy shops are set up based on the belief that they get great exposure as clients browse the platform. While this may be true, there are “cons” to this — which we have covered later in this post.
Customers trust Etsy
As a popular and established website, Etsy has policies to protect its customers, thus earning their trust.
Those selling on Etsy do not have to worry about bugs or technical issues on the website. Sure, this can happen but this is rare and dealt with quickly by Etsy’s in-house tech team.
Etsy has a community of like-minded practitioners. There are local groups that organize get-togethers, there are forums to chat and seek advice and discuss things.
That being said, let’s look at the cons of Etsy.
The cons of Etsy
There are selling fees
You already know that using a payment processor involves incurring a fee since it is offered by a business provider bearing the cost of that service.
But as mentioned earlier, Etsy also takes a percentage of every payment you receive plus requires a listing fee. This makes it difficult to price competitively since you have to cover your expenses and make a profit.
There is tough competition
Etsy had over 2.5 million sellers at the end of 2019 and this number is only growing. So, it can be quite hard for a practitioner to be found via search. In fact, Etsy is like a search engine where millions are competing to rank.
Because of the intense competition, search engine marketing on Etsy can be quite a time-consuming effort, often more than doing the search engine marketing for your own eCommerce website.
Just setting up a store on Etsy does not mean that those seeking your services will find you easily.
Not much brand awareness
While Etsy does allow you to customize your store, the design options are very limited and this can make it hard to create brand awareness.
Add the tough competition, and you are lost among others in the same business as you. This makes it difficult to establish your presence.
Moreover, most of the audience on Etsy is there to just browse around and are unlikely to recall your brand.
There is no ownership and therefore, high risk
When you don’t own something, you are naturally at risk as you don’t have full control over your business. What if Etsy decided to revamp its policies or raise its fees? You simply have to take it without question.
You don’t own your customer data as Etsy owns it. Once you make a sale, you cannot approach that customer for more sales.
However, on your own website, you control your activities, your policies, your clients, and best of all — you can market to your audience and convert them into loyal returning customers.
Etsy supports the customer rather than you
Things do go wrong sometimes but on Etsy, let’s say there is a problem with a transaction. When that happens, Etsy is on the customer’s side and will offer them a refund even if you would not.
This is simply because Etsy has ownership of the customer’s data and no matter what the details of the issue, they want to resolve it quickly, even if it is the customer’s fault.
Maybe the customer put in the wrong delivery address and the item sent by you is not delivered to the right destination. Etsy will go ahead and refund the customer, no questions asked.
However, when you do business from your own website, you can clearly state the terms and conditions of your services, indicating that there are no refunds for inaccurate checkout information. You have the right to charge your customer extra shipping costs in such a situation.
Etsy places a Payment account reserve for new sellers.
If you have a reserve on your account, for each subsequent sale you receive, a set percentage of the sale amount will not be available for deposit for up to 45 days from the sale date. This reserve will be removed from your account in 90 days, unless there are additional policy infractions with your account. Learn more here.
Negative feedback from customers
Feedback is always welcome from customers, but this can escalate in a negative way on platforms like Etsy. Since customers have the freedom to post an “honest” review, some can be quite nasty and unreasonable.
For example, if they don’t receive an instant response to their messages to the seller, they leave a one-star rating even if the services/products were excellent.
It does not matter if the seller is located halfway across the world with a twelve-hour time difference. This, even if the service is delivered according to the terms promised.
This sort of thing does not happen when you have your own website because you’re able to evaluate the review before publishing it on your site. This will allow you to email the customer and resolve the issue, possibly resulting in a more positive review.
While this may not actually look like a big disadvantage with Etsy, it can still be discouraging as prospective clients do go by your ratings and you could easily lose a potentially good client simply because someone was unfair.
Now let’s look at the other option: running your own eCommerce website
Sure, Etsy is good for the advantages listed above, but if there is one challenge with Etsy, it is the huge competition one has to deal with. Your customers can easily access both your services as well as your competitors’.
Also, not much can be said about brand awareness on Etsy.
With Etsy, you can’t really establish yourself as a brand and expect people to remember and follow you, and share your services with everyone they know.
The reason is there is too much distraction, what with your competitor’s listings. On top of that, the design options for your shop front are quite limited.
Etsy controls your client’s purchase journey. As a result, should someone ask your client where they availed your services, they’ll just say Etsy instead of referring to you specifically by your name or brand.
When you set up your own eCommerce website, besides the unlimited design options and space to present yourself, you can establish your unique brand and personality exactly the way you want.
You also control your shop policies and incur no extra fees on payments received except the standard fee charged by the payment processors.
Your own website also gives you the freedom to promote your services via a blog, an events page, and sign-up forms for your clients.
You can build an email list to keep in touch with customers, alerting them to new products/services. In fact, your website is your home on the world wide web that you can completely customize for your business.
Here are the main advantages of setting up your own website.
Greater control over design and digital marketing
As we mentioned earlier, your website is yours to control. This includes the layout, branding, design, and marketing. You can add any feature that will help you attract more loyal customers. You can tweak the design, add a button, run a promotion, change your policies, and more. You never have to worry about someone else calling the shots.
Fewer distractions for your customer
When your customer lands on your website, you can rest assured that they won’t be distracted by competitor ads. You will have their full attention when they are on your website.
You are seen as a professional
With a beautifully designed website, your customers take you more seriously. Unlike Etsy where you can only upload a few photos and add content, your website can reflect your branding with your personal URL and design and bring you more referrals.
Your prospective customers will also find you online more easily with a well-optimized site.
There are some perceived disadvantages.
A website takes time and money to set up
Setting up your own website means more time and costs compared to setting up on Etsy. Also, managing it all on your own, unless you are an expert, can take months along with a steep learning curve to get it right.
It makes sense to hire an experienced website designer to handle it quickly and professionally. Costs typically include setup fees, ongoing hosting costs, and domain registration charges.
Once you are up and running you save money in the long run as you no longer have to incur recurring fees every time a customer uses your services.
You have to manage and maintain your website
When you have your own website, you have to take care of maintenance and ensure that your website runs smoothly. You can choose to hire a reliable website maintenance expert to manage updates, database maintenance, and fix any technical bugs. If you host your website with SiteGround, your designer can configure these tasks to run automatically for you.
You have to look after your own marketing
Unlike Etsy where you may be featured among popular stores as soon as you set up shop, you will need to come up with an effective marketing plan to promote your services as soon as you set up your website. This includes social media marketing, blog marketing, and other ways to get the word out there. A digital marketing strategist can guide you on where and how to start.
Yes, competition. Even though you have your customer’s attention when they are on your web page, you will face competition from other websites, including Etsy. At the same time, you also have plenty of opportunities.
By creating a search engine marketing plan based on the right keywords for your services and your target audience, you can compete on the web more successfully than on Etsy.
When we combine your knowledge of your customers’ needs, your services, and your website, with a bit of search engine marketing research, a solid plan, and a bit of training so you can do it yourself, competing on the web will be more beneficial to your business than trying to compete on Etsy.
Something to bear in mind
In the process of deciding between setting up your own website vs Etsy, there is a common misconception that website marketing is much harder compared to Etsy where it is easy to be found.
The truth is, Etsy is not easier. You can easily be lost in the massive competition. Also, Etsy’s search engine marketing is tough to master. Attracting people to your website takes just about the same effort as bringing them to your Etsy store; in fact, it is harder with Etsy which is crowded with similar listings. You can pay for Etsy advertising but I find the fee structure overwhelming.
At the end of the day, whether you set up your own website or use an Etsy store, the main goal should be to build your brand through marketing to gain repeat business.
I am not disputing the fact that Etsy is a good platform to attract customers and make sales. But if you plan to grow your business into a sustainable brand that your audience will recognize, Etsy is just not enough.
Quite a few merchants maintain both an Etsy store as well as their own website. I tried it in an attempt to expand my selling channels for wuvala.com, and decided the fees were not worth it.
If you’ve had experience with selling on Etsy, please share in the comments. I’d love to know.