Whether it’s a side hustle or a full-time small business venture, thousands of independent Canadian creators use Etsy, an e-commerce platform, to sell their goods.

 It can serve as an on-ramp for creative entrepreneurs, designers, and makers to market their products online to the broader world. According to Etsy, more than $10 billion worth of goods were sold on the platform in 2020, and it’s estimated there are about 199,000 active Canadian Etsy sellers as of 2021. Of Canadian entrepreneurs on the platform, 97% are home-based businesses, and 83% are sole proprietors.

 Is Etsy the right e-commerce marketplace for your independent business or startup venture? The answer to that question becomes apparent with a greater understanding of Etsy and how you can use it to sell your merchandise.

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What Is Etsy?

Etsy is an online marketplace founded in 2005 that allows independent creators to open digital shops and sell a wide variety of handmade, custom-made, and vintage items. Etsy is designed for all creators and artists to share and sell their products.

What Can I Sell on Etsy?

Etsy’s shops and creators focus on handmade, custom-made, or vintage items. However, the categories are endless. You can sell jewellery, clothing, furniture, toys, home decor, crafts, craft supplies, and so much more. Many shops allow you to personalize your items, and most items are made to order. Before opening an Etsy shop, be sure to read the company’s Seller Handbook to understand its guidelines and position your online shop for success.

Do You Need a Business Licence to Sell on Etsy?

Although you do not need to submit business documents when signing up and selling on Etsy, Canadians must adhere to all local laws. In Canada, you do not need to register your business if you are the sole proprietor and use your legal name as the name of your business.

What Kind of Business Insurance Do Etsy Sellers Need?

Etsy sellers are not required to have business insurance, but it should always be considered. Insurance is meant to protect you and your business, even if operating and selling online exclusively. Here are the types of insurance you may require:

  • Commercial general liability insurance provides coverage for damages, as well as legal defence costs if it is alleged a product you sold caused bodily injury or property damage to a customer, and they sue you. It includes product liability insurance that protects you if you are faced with a lawsuit due to bodily injury or property damage caused by your product. You can be held liable for any product you offer on Etsy that you manufacture, distribute, or sell.
  • Commercial property insurance protects your business’s property from physical loss or damage, including your equipment and inventory if affected by an insured event such as a fire, theft, or vandalism.
  • Equipment breakdown insurance provides financial support for a broad range of machinery and equipment crucial to your business operations such as air conditioning and refrigeration and computers.
  • Legal expense coverage includes access to legal advice with an experienced lawyer as well as financial support to cover the cost to retain a lawyer.

How Much Does It Cost to Open an Etsy Shop in Canada?

Etsy in Canada charges sellers five different fees to sell on their platform: 

  • Listing Fee

Etsy charges US$0.20. This fee is charged once every four months, whether the listed items are sold or not.

  • Listing Currency Conversion Fee

Etsy charges 2.5% if your listings are priced using a foreign currency. If someone purchases your items from a different country, Etsy will convert the cost, and charge you a fee.

  • Transaction Fee

Etsy charges 5% of the total item cost regardless of currency. This fee is based on your listing price. It is set based on the total cost, including shipping and handling, gift wrapping, and taxes.

  • Shipping Transaction Fee

Etsy charges an additional 5% of your shipping and handling costs. You can consider including the shipping cost in the total price of your item and offer free shipping instead.

  • Payment Processing Fee

Etsy charges Canadian sellers CDN$0.25 plus 3% for domestic orders or 4% for international orders regardless of your payment method.

What Are Etsy’s Subscription Fees and Plans?

Etsy offers two different plans: Etsy Standard and Etsy Plus.

Etsy Standard is free. It’s a basic tool offered when signing up for an account. Sellers are still offered to pay for tools only as they use them without upgrading their subscription package. The availability and pricing of tools and services such as Etsy Ads, Pattern, and Etsy Shipping Labels, remain the same.

Etsy Plus costs US$10/month and allows sellers to pay for specific tools and services as a bundle. This subscription includes 15 listing credits and US$5 ad credits. Both will appear on your advertising management page.

Custom Web Address Discounts Through Hover

Etsy has partnered with Hover to offer discounts on custom web addresses. That can make it easier to build your brand and for customers to find your shop easier. The features it includes are:

  • Restock Requests. Allows your shoppers to be notified when an item currently sold out in your shop is restocked. Etsy will automatically send them alerts.
  • Advanced Shop Customization. It includes the option to have multiple banners, the ability to feature specific listings or shop sections, and new, exclusive layout options.
  • More Discounts and Perks. In Canada, Etsy plus offers access to discounts on shipping boxes. Subscribers can also take advantage of a 30% discount for Moo, allowing sellers to create custom business cards and other promotional materials.

Before Opening Your Shop on Etsy

There are several things to consider before opening your Etsy shop, so take the time to research. First, think about what you will sell and ensure it falls within Etsy’s guidelines. Next, consider comparing your products to others already sold on Etsy. Next, think about branding. Create a brand name, make sure it isn’t already taken, and a logo. Then, create an Etsy account!

4 Steps to Sell on Etsy

  1. Go to Etsy.ca and create an account.
  2. Enter the required basic information.
  3. Once your account is created, click on “Open Your Etsy Shop”.
  4. Enter your shop preferences, including language, country, and currency. Enter your shop name. Be sure to use 14-20 characters, no profanity or special characters, and ensure the shop name does not already exist on the Etsy platform.

Start Uploading Your Items

Here are six steps to take to advertise your goods on Etsy:

  1. Start listing your physical items by adding photos. Add five to 10 photos of each product you will sell.
  2. Adjust your thumbnail. It will be the first thing people see when searching for your items.
  3. Give your product a title.
  4. Add a description of each of your items.
  5. Use meta tags. These are essential for your product to be found. Etsy offers 13 tags per item. That will help shoppers find your products using specific keywords.
  6. Next is inventory and pricing. This section will include everything your shoppers need to know about the cost of shipping, shipping process, processing time, country of origin, weight, and size.

Preview and publish your listings so customers can start shopping!

Decide How to Receive Payments

Etsy allows you to choose from four payment options: PayPal, money order, cheque, or Etsy payments. Etsy payments enable you to charge shoppers via credit card, debit card, store credit, or Etsy gift cards. You will also need to enter the bank details of where you’d like to receive your revenue.

Set Up Billing

As mentioned before, selling on Etsy is not free. Etsy will require you to have a credit card on file to charge selling fees. They will also use your credit card for identity authorization purposes. 

Design and Customize Your Etsy Shop

Finally, be sure to customize your Etsy page. Do the following:

  • Add photos and a business bio.
  • Add specific sections, including your shop policy.
  • Organize and rearrange your items to your liking.
  • Add some information about yourself and make your potential customers feel confident they’re buying goods from an independent Canadian small business.

Protect Your Business and Wallet

With any business, great or small, new or established, there are always risks, unexpected events, or accidents that can occur at any time. That’s why it’s vital to protect your finances and reputation by purchasing a customized e-commerce insurance policy.

That’s where we come in: as a digital brokerage, we help Canadian entrepreneurs and small business owners find the policies they need to protect themselves through our network of more than 50 Canadian insurance carriers. Fill out an online application and get a free quote. Our licensed brokers will contact you with the tailored policy you need at the best price available on the market.

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