How To Make Your Small Business Big In Etsy
This is an article “How To Make Your Small Business Big In Etsy” by Marc Primo
There are millions of creative individuals out there trying their hand at selling stuff they make out of their own hands. With that, the eCommerce platform Etsy has been a considerable boost to creators of every niche who want to be more visible in the online marketplace. From original arts and crafts, vintage items to collectibles, the platform has given talented netizens a chance to make their small and humble businesses big while accumulating more customers.
By 2019, Etsy is already catering to around 46.3 online buyers and nearly 3 million sellers. Hobbyists who make do-it-yourself crafts have found a more straightforward way to sell their products and do business wherever they are via the Etsy website. With easy-to-follow instructions to set up your eCommerce marketplace, all you have to do is understand in detail all of the following legal and administrative factors that come with establishing a small business online.
If you are planning to do business via Etsy, here are some tips that can help turn your small business into a big venture quick:
Review your business viability
As in any business venture, your success depends on how determined you are to know the ‘ins and outs’ of your niche market. The same goes for when you set up a shop on Etsy.
To know if your business is viable on the platform, perform thorough market research on the current online market and potential customers on the platform and the competition you'll be facing. With over 3 million sellers on Etsy, you can't always be sure that the products you are offering are unique or that you can monopolize your niche, much less attract the right buyers.
Study the essential factors such as pricing, overhead costs such as taxes, platform fees, or packaging and shipping costs. Lastly, review efficient marketing strategies you can do to reach and interact with the right audience. Doing so will increase your chances of a profitable online business.
Etsy's fees include listing fees and multiple quantity fees, which are both rated at $0.20 per listing, transaction fees at 5% of the total cost per sale, and payment processing fees at 3% of the total sale plus $0.25 per order fee.
Identify the best business structure
Your tax obligations when selling on Etsy may differ depending on your business model. So are your liabilities for debts and other commitments you need to fulfill to keep running your business legally. While doing business via the platform is simple and easy, it's best to consult a tax professional and business attorney when dealing with the platform's legal factors, especially if you are running a sole proprietorship, which most sellers on Etsy are. Other business structures and models allowed on Etsy include limited liability companies (LLC) and C and S corporations.
Sole proprietorships are the most simple business structure of all, as they will not require you to file any formation records with the state. On the other hand, LLCs require legal provisions that shield the business from its owners' separate ventures or legal cases. C corporations submit documentation and perform their income tax obligations at corporate income tax rates via their income tax returns.
Meanwhile, subchapter or S corporations allow their profits and losses to be used in their owners' individual tax returns, usually to lower self-employment taxes.
Knowing the proper business structure for your business can help you run it legitimately and without any surprise and hidden payables springing out of the tax box.
Getting your business state-registered
To entirely turn your Etsy venture into a full-fledged online business, you'll have to file registration documentation to the state according to your identified business structure. Keep in mind that Articles of Organization are required of LLCs, while Articles of Incorporation are of C corporations.
If you want your LLC or C corporation to enjoy the income tax benefits of being registered as an S corporation, accomplish an IRS Form 2553 and submit it along with the other required documents. For sole proprietorships, all that's needed is to file a 'Doing Business As' or DBA document stating their official business name.
All businesses that plan on using another brand name other than the one they registered on Etsy are also required to file for a DBA document. To help you get started with your state registration while saving up on attorney fees, look for CorpNet, an online business formation service that can streamline your paperwork tasks efficiently.
Set up your Etsy shop
Once you've taken care of all the legal and administrative stuff, you are ready to start your business and turn it big on Etsy.
Creating an account to run your shop is easy enough. You'll be asked to upload a high-quality profile photo and a supporting bio to give your target customers the correct information about your shop. Profile images should be at least 400 x 400 pixels but not larger than 10MB. Acceptable formats for images include jpg., png., and gif.
Once your account profile is ready, you can start setting up shop by going to the "Sell on Etsy" button on the top right of the home page and clicking on "Open Your Etsy Shop." You will be asked to choose your shop preferences, language, country, and which currency you'd like to use. Enter your desired shop name, perform the final fine tunings for easier management of your account and check if the exact features you've picked out were also enabled in your Etsy mobile app.
When adding items to sell, go to "Shop Manager" and select "listings" along with supporting elements such as product beauty shots, videos, product details, description, pricing and available stocks, and shipping information. After this, you can then set up which payment mode you wish your customers to pay you.
And just like that, you're on your way to making your small business big on Etsy.
The best of luck on your new venture…and may you prosper online!