In 2020, Etsy had $1.72 billion in revenue, with $10.3 billion in gross merchandise sales. The site boasts 89 million active buyers. The marketplace seems like a great opportunity for dropshipping – but is it allowed? Here are the pros and cons.
Can You Use Etsy for Dropshipping?
Etsy is well known for handmade goods and personalized products. While the site used to have specific rules that limited sellers to handmade items only, it has since evolved to match its competition. This means that you can now practice dropshipping on Etsy.
It’s important to note that Etsy has some stipulations. Although Etsy’s policies don’t directly mention dropshipping, they do allow reselling. It defines reselling as selling an item that you, as the seller, didn’t design or make. It also notes that reselling is only permitted for vintage items and craft supplies. The policy clearly states that reselling is not allowed for handmade goods. This would make it seem that dropshipping is not allowed – you can’t resell items, even if they are handmade. You can dropship vintage goods or craft supplies, though, if you can find a supplier.
However, Etsy’s handmade policy specifically allows production assistance. It states that “Designers may work with production partners to help make handmade items in certain circumstances. […] We expect your production partner to produce items themselves in their own facilities. A contractor or agent who outsources production may not be used as a production partner. ” If you go this route, you must include your production partner’s name, location, details of your relationship, and the work that the partner does for you in the listing process.
This would imply that dropshipping is allowed, so long as you’re designing the products. That could be via your own private label or through print on demand. However, dropshipping in the traditional sense could get you in trouble.
Benefits of Dropshipping on Etsy
Maximize Niche Sales
Etsy has a huge reputation for unique, artisanal, niche products. This targeted audience drives big business to the site. If you can capitalize on a niche, you could make big money.
High Retail Prices
Since Etsy is known for artisanal, original items, customers expect the higher retail prices that are often found on the site. This could mean a higher profit margin for you as a seller. However, it could also be a downside – shoppers who do their research and find cheaper alternatives elsewhere won’t be willing to buy your higher-priced version.
Etsy is unique from other marketplaces, like Amazon, in that it has a supportive community amongst its sellers. Even the customer base is more friendly, creating a family-like atmosphere.
Drawbacks of Dropshipping on Etsy
Etsy has lengthy policies that highly regulate what you can and cannot sell. It also has a community of customers who will report any products that don’t fit these policies. So, while you can dropship craft supplies, vintage items, and private label – or practice print on demand – more traditional dropshipping is banned. You must be designing the product in some way or reselling a vintage item, otherwise, you may face suspension or termination of your account.
Etsy charges a $.20 fee for every listing. The listing then expires after four months. When this happens, you must re-add the listing and pay the fee again. There’s also a 5% transaction fee, as well as shipping and wrapping costs that can quickly add up.
Ultimately, selling on Etsy could be worth it if your product fits into their strict guidelines. Still, it’s important to read their policies in full to make sure you don’t break any rules. It’s also worth noting that staying on Etsy or putting all of your efforts into Etsy probably isn’t worth it in the long run. For most people, dropshipping is about scaling and selling your products to the masses. Etsy’s stringent policies are against mass-selling. Plus, its fees add up. Once you reach a certain level, you’d save money by having your own website.
If you have a dropshipping business that you’re ready to scale, whether you’re looking to get away from Etsy or already have your own site, check out Obor Desk. We offer white-glove service and a dream team of international supply chain and sourcing experts to take your business to the next level.