Youtube tutorial: (for written tutorial, keep scrollin'!)
Etsy VS Shopify
So last week I went over the steps you can take to start selling digital products.
As I mentioned in the tutorial, this week I am going to answer the most common question I get:
“what’s your opinion on Etsy vs Shopify? Should I start selling on Etsy or should I start my own website using Shopify?
My definite and short answer is BOTH.
Let me break down into 5 points to explain why you might be missing out a LOT as a small business owner by just selling your product on Etsy alone.
Difference Between Etsy & Shopify (website)
Before we jump in, if you don’t know the difference between Etsy and your own website by using platform like Shopify, let me explain briefly so that you have the knowledge before you get into the 5 points.
Opening a shop on Etsy is like having your product available on a shopping mall. When you walk into the mall, you can see a lot of different shops everywhere, each of them selling their own products.
You are one of the sellers there, and you’d have to compete among those products and other brands that are selling similar products as yours.
Yes, you do get a LOTS of traffic, because that’s what this shopping mall mainly do- they provide the location, advertise, work on marketing for you.
But if this shopping mall decide to kick you out, you have no choice left but to close your shop.
Website with Shopify
On the other hand, making your own website is like owning a shop all to yourself. And no, you are not renting the location, you OWN the location as well. So no one is going to, or can kick you out.
you might not get as busy traffic as the shopping mall do, but when people walk into your shop, these customers are exposed to your product ONLY.
You might be able to have a chat with these customers, build a relationship, hand out a business card, even make them add to your customer list so you can reach out to them later on.
I hope this analogy helped you understand what is it like to have shop on Etsy vs starting your own website. Assuming that you did, let’s dive into WHY you should have your own website in addition to your Etsy store.
1. In-depth relationship with customer
When it comes to building your own brand and business, building your customer list is the root of your success.
On average, your e-mail list should be bringing 25-30% of your total revenue. But let me ask you this to Etsy sellers: Do you even have e-mail list for your business?
I am assuming most of the sellers answer “not really.” That’s because Etsy does not have any tools to have e-mail marketing for things like sending out automated sequence or newsletters.
Etsy won’t allow you to add your customer’s e-mail on your marketing list, unless you get the permission. Which means, you’ll have to personally reach out to every past customer and ask for their permission.
This task alone is a LOT.
When you have your own website, you can automate everything starting from sign up phase, welcome e-mail, 2nd welcome e-mail, product review request e-mail, weekly newsletters and more.
Customers will simply give their consent when they check out your product, automatically adding their e-mail address to your e-mail list.
Keeping in touch with customer and sending out personal greeting, coupon codes, sales event and stuff like that, gives the sense of legitimacy and trust to your business.
And also brings sales, which e-mail list’s main purpose.
E-mail list should be the FIRST thing you need to work on as a business owner. Etsy is certainly not helping you with this area, so you need to be in control of this ASAP.
2. Freedom to Cross-Sell
Having your own website, it gives you so much freedom.
On Etsy though, your freedom is limited. you can list products, add production description, option to personalize.
But everything else, you are given one template which you will apply your branding information and banners to, then that’s pretty much it.
When you run any type of online business, how you can increase the sale per person is something you’d want to work with. One of the most common technique, is called cross-selling, which basically encourage the buyer to add more items in their cart by suggesting other recommended products.
Let’s say Customer added a boho digital art in her cart. You could have a pop-up suggesting another matching digital art by saying
“You can have a matching wall art by this art too!” ...something like that.
If you have your own website, you have the freedom to encourage cross-sale like this.
However on Etsy, not only they don’t have a specific tool for cross-selling, but also they encourage customers to buy items from other sellers.
This is problematic for all us sellers, because if Etsy suggest similar product from other seller that offers cheaper price, then your potential customers will drift away from your store and lands on your competitor’s shop.
If your customers are on your website, you will be able to gain their full attention and they won’t get sidetracked by other seller’s products. It’s only you on the stage, single spotlight shining on you.
2. Diversification of income
Etsy is powerful and wonderful, but because of the popularity of starting own business, every day more competitors are being added to the platform and your niche gets more saturated day by day.
Also, Etsy like to support new sellers and boosts their listings for search results. Over time, you might lose your traffic or lose your revenue by a lot.
Trust me, I have been selling on Etsy since 2017, and it has been a roller coaster. At one point, I had no idea why the traffic was reduced by 80%, sales by 90% for really, no apparent reasons.
But I was NOT nervous or panicked, because Etsy is really a tiny percentage of my total income. In addition to Etsy, I sell my products on my own website, and on other third party marketplace, and also ad revenue from my blog posts, and so forth.
My point is, diversification of income is so critical to your business.
You don’t want to sit on a chair with one leg, do you?
You want to make a chair with 4 legs, maybe even 6 or 8 so when one leg is totally broken, you won’ be affected as much, still standing strong.
Depended on Etsy alone is very risky and not sustainable way of running a business.
At one point, if your business is doing good and wish to scale up, building your own website is a great option to achieve that goal.
4. No one can take that away from you
One of the most scariest thing you can experience with Etsy, is to have your store shut down for good.
Past few years, big company like Disney has been making a claim against Etsy and listing copyrighted and trademarked items are one of the most iffiest thing you can do.
Yes, there are tens of thousands of Etsy seller continue to sell their product with copyrighted materials, but this does not mean you want to take the risk.
It is like a walking on an eggshell, you’ll never know when it cracks. They can suddenly close your shop, without notice, for good.
On the other hand, if you have your own website, you don’t have to worry about anyone shutting you down like Etsy can do to you.
Yes, there is a way to shut website down, but it’s really hard to go through.
I am not encouraging you to disrespect copyright law or list exact copy of someone else’s work on your website, but once you establish your website, no one can take that away from you.
This fact alone should convince you to start your own online store. Build something that are not influenced by others.
Also having your own website will give your business more legitimacy, rather than having a URL with etsy.com on it.
5. Traffic & Fees
Etsy’s traffic is something you can’t beat. Currently on Etsy’s platform, there are 50 million active buyers and gets average of 450million visits monthly.
Having your item on Etsy, it is almost guaranteed that someone will see your products. If you are going to add products weekly and maintain your shop, your shop will get traffic & views.
How much you will make, I can’t predict, but I can almost say this with confidence, you will start seeing some money rolling in.
However, the price you will pay for this advantage is pretty high.
Etsy is pretty much doing most of the heavy lifting here, and they do make sure you pay for their effort.
They just recently announced to raise their transaction fee from 5% to 6.5%. In addition to this, you will be charged: Listing fee, Payment fee, Shipping transaction fees to name a few.
You can avoid these fees by having your own website built by Shopify. I am not saying you don’t have to pay anything, but compare to what you can do on your own platform to grow your business as I mentioned in the early points, worth more.
Being able to automatize cross-sell offer, tool to build your own customer list, have your own platform that no one can take away…
Scaling a sustainable business that are loved and supported by customers is the type of brand you’d want to grow to.
In order to achieve this goal, your website should be built to bring majority of your revenue. Etsy and other 3rd party marketplace should be a “supporting” role in your business.
.... SO what did you think? I hope you learned something new and useful today!
Hello Claudia Sanchez!
So short answer here is Etsy takes care of all of the taxing (you still have to claim your income to your accountant), so that is one of the reason why Etsy is a good option for small business start-up!
On the other hand, Shopify, you will need to be in charge of tax (although they do make it easier for you). Also how tax gets applied changed state by state and also depends on the types of products, as well as how much you are selling, so you’d essentially have to consult to your accountant later on.
Hope this helps!
by Claudia Sanchezon March 08, 2022
Great video! I have a couple of questions; I want to open a store on either Etsy or on Shopify, but I wanted to know from an experienced seller such as yourself how do go about the taxes part if you don’t mind? Which is more complex Etsy or Shopify in regard to taxes? That is the only thing that keeps me out of selling stuff online. Thank you in advance.
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