Why it's not Etsy vs Shopify

I've been on Threads a lot recently, and the one thread I see often is people asking "Etsy or Shopify?". To which I always get frustrated, because it is not a case of one or the other. They're both different things. Yes they both enable you to sell your products, but that's where similarities end. You can have one or the other, or you can have both. Or neither might be what you're after.

I thought I'd share my experience over the past 5 or so years that I have been running my business with both Etsy and my own website, and sharing the pros & cons of both, so for you to get a clearer idea of what is suitable for you. I'm definitely no expert on either, these are just my honest opinions and experiences, and maybe they'll help you out!

Let's start with Etsy. As this was where I really started.

Just a note, I live in the UK, all examples are in £.

Etsy

If you're just starting your own business selling products (physical or digital), I would very much recommend starting up an Etsy shop. Whilst I have a very love/hate relationship with Etsy, I started on Etsy and still have a shop on there (and probably always will) and it's definitely a great starting point to getting your products out there and for customers to find you.

The Pros

• Customers can find you through search and ads, so you don't have to market the shop yourself. This is a big pro and one of the main reasons that I still use Etsy myself, because it's a very easy way of new customers finding you, and putting in minimal marketing (if any at all). I have never promoted/marketed my Etsy on social media or elsewhere, and pretty much all orders I get on there are found through Etsy search. Successful marketing isn't easy, so as long as you have all your correct keywords and imagery on your listings, your products will hopefully get shown to people searching.
• It's much easier to sell internationally, especially within Europe. The majority of my international orders come through Etsy. Since the introduction of IOSS, it's made it a little difficult selling to Europe from the UK, and for a while I removed European shipping from my own website whilst I figured out the best option. Fortunately Etsy are registered with their own IOSS number, so that if anyone does order through Etsy from a European country, they will have paid the necessary tax upon ordering instead of potentially getting lumped with the tax on arrival.
• People know and trust Etsy. There's probably not many people who don't know of or have heard of Etsy. It's a big company. Some people prefer the peace of mind of buying through Etsy as supposed to a website they've never heard of before, and I totally get that. There's the added buyers protection should something go wrong, as Etsy are likely to step in and help the customer, which they may not get from an unknown (to them) business. You can also easily see reviews, how many sales the shop has had, and location making it easier for customers to shop.

The Cons

• Fees are quite high. Compared to some other marketplaces, the fees aren't that bad, but when you compare them to having your own website, where you only need to pay a payment processing fee and usually a fixed monthly fee for hosting, the fees on Etsy can quickly add up.
  
  An example of fees on Etsy (as of Aug '24)
  Say someone buys one item for £20 + £2 shipping, so in total, £22.
  Bear with, there's a lot!
  You'll pay a transaction fee of 6.5% of the item total (£1.30) and 6.5% of the postage total (£0.13), a processing fee which is 4% + £0.20 of total order (£1.08), a Regulatory Operating fee of 0.32% (£0.06), plus a listing fee per item of £0.15, if you have auto-renewal on. As I'm no longer VAT registered as a business, VAT is then paid on all the listing, processing, transaction and operating fees at 20%, which is an additional £0.54. So if we add all those together, you will pay a total of £3.26, which is around 15% of your total order (including the postage), and receive £18.74 from the order.
  
  One thing to note as well is that Etsy automatically advertises your listings for you offsite, for example, on Google. You can opt out - but only if you have earned less than 10,000 USD in the past year, otherwise it's not an option to opt out. S0 if someone purchases an item through an ad, you'll the lose another 15% of the order total (this does reduce to 12% when you reach a certain amount of sales) on top of the standard fees. So say that £22 order was bought through an offsite ad (15% of £22 is £3.30), you'd pay a total of £6.56 in fees. That's nearly a whopping 30% of the total order. I've only had a handful of orders bought through offsite ads. If it was a more common thing, my prices would be going up further, which is not something I want to do.
  
  Most the prices of products in my Etsy shop are higher than my website anyway, to account for the fees.
  
  I will add that although fees seem quite high, Etsy are essentially doing marketing for you. Also, running a business has it's costs. Nothing is free, there will always be a cost somewhere down the line, it's up to you whether you personally feel it's worth it.
• Star Seller. Some may say this is a good thing, I personally don't see any benefit for either seller or customer, other than making you as a seller feel that you're not doing enough, and putting more pressure on you. Etsy marks you down for not responding to messages within 24 hours (apparently weekends don't exist at Etsy), and not using tracked shipping and/or Etsy's own shipping labels. And you get marked down if someone leaves you less than a five star review. I've always not got it because I don't add tracking on orders over £10 (people aren't going to pay for tracking). That's literally the only reason.
• Etsy very much put the customer first. This might seem like an odd con, as it's obviously a good thing as a customer, but it can be quite frustrating from a seller's perspective. Something that I find very annoying with Etsy is that when a customer contacts me wanting to cancel an order, when doing so Etsy prompt for a reason, and there is never a option for the reason being the customer, they're usually reasons at fault with the seller: "seller cannot fulfil item", "item was lost". Fortunately I've never had to cancel an order because of something that went wrong my end, I've had to do the odd refund when something has turned up damaged, but that is very rare, so it makes me question why Etsy seem to put so much on any problem being the sellers fault.
• There's a lot on there and trying to get seen can be hard. Just type in anything into Etsy search and you get thousands upon thousands of results. So sometimes it may feel like being a needle in a haystack. Not helped by the sheer amount of drop shipping and re-selling items that are clearly not hand-made or designed.

Own Website

As mentioned previously, I currently use Shopify, and again would thoroughly recommend Shopify for your website if you're looking to start (or change), as it's very user friendly (compared to WordPress for example). The only thing I will say is that figuring out delivery settings if you don't want to charge one fixed price was quite frustrating!

The Pros

• You pay much less fees on each order. The fees are so much lower because generally you only pay a monthly fee (which depends on features you want) and that transaction fee. I currently use Shopify and am on the Basic plan which is £19 a month. The next plans up are really only necessary for bigger shops who for example, have more than 2 staff members needing to access, but you do get slightly reduced transaction fees with these.
  
  An example of fees on Shopify
  You only pay a transaction fee per order, which is 2.2% + 25p, and this is based on being on the Shopify Basic plan of £19 a month. So on that same order of £22 (item + postage) I used as an example for Etsy, you'll pay £0.69 in transaction fees, so will receive £21.31 of the total sale.
  
  Because there is a monthly fee, you'd need to figure out how many orders a month make it worth paying this fee. If we compare it to the roughly 15% that Etsy charge per order, you'd be needing to make at least £130 in orders a month to make it equal to Etsy. If you think that you could easily make more than that a month, and drive your own traffic, then Shopify definitely is the better option for you, particularly if you are looking to only have one shop.
• You have control over how it looks and what it can do. If like me, you want everything to be completely on brand and look good, having your own website is great, because you get to choose how it looks! Add your logo, brand colours and choose the style of fonts you'd like... there's lots of themes you can choose from to adjust to your own style. Also you can have many more features to your shop as well, such as mailing lists (thoroughly recommend building up a mailing list), more granular controls over discounts, for example I offer 4 for 3 on cards on my website but cannot offer this sort of discount on Etsy due to it's discount limitations. You can have pages telling people about your business or have a blog and it becomes your home on the internet.
• People tend to make bigger purchases through the website than on Etsy. Everyone knows Etsy as a place to go to if you need something. A card, a particular gift... The large majority of my orders through Etsy these days are for smaller and individual items like a card, whereas Shopify, I regularly get customers buying multiple items, it's rare for an order to have just the one item, and I also have a lot more returning customers than I do on Etsy.
• If anything happens to Etsy, or any other marketplace your shop is on, customers can still purchase from you. Basically don't put all your eggs in one basket, especially when it comes to relying on another business to bring you customers/sales, it's always worth having multiple sales funnels. I do view both my website and Etsy store differently, because they do bring in different types of customers.

The cons

• You need to do much more marketing for people to find your website. This is a big one. Unless you have an existing mailing list, a large social media following or know a lot of people would recommend you through word of mouth, trying to get people to shop on your website will always be a bit of slog. It's only due to building up my Instagram following that I have been able to get people to shop my website, but also having ads running that direct traffic straight to your website helps to. But of course, all of this costs time and money, which you don't necessarily have to put into somewhere like Etsy (btw, Etsy do paid ads too).
  
  Also bear in mind, and I'm speaking from current experience, that things change. Social media apps aren't quire what they were, so the followers I had on there aren't seeing my content as much as so therefore aren't visiting my shop either, so sales on my website are slow because it's more challenging to bring the customers in. Even with SEO, a bit like Etsy, there is so much out there on the internet competing with you and it can be hard to stand out, especially if you don't have a particular niche. Marketing isn't for the faint hearted, trust me. It's the thing that I am probably worst at when it comes to my business, but it is one of, if not the most important aspect of running a business. Without marketing, no one is going to know who you are!
• Customisability can be difficult. I have an advantage in that my husband is a web developer, so my website was completely custom built by him, but even he said that it was difficult to get his mind round how to do things, so if you're not very tech-savvy, it might not end up looking exactly what you would like it to. Themes are great, but they may be limiting to what you want. Although Shopify is great for customising and adding features you wouldn't get on Etsy, a lot of things end up being apps that you more often than not need to pay for, which is then an added monthly cost.

I don't want to put anyone off using Etsy as the cons list does seem to be a little longer than the pros, and I still would recommend Etsy for anyone, especially just starting out, and if you can, have it alongside your own website as well if you do.

I would also recommend that if you do find a shop you want to purchase from on Etsy, always have a look to see if they have their own website first, as chances are products will be cheaper for you to purchase, and there's usually more deals and products there too!

But yeah, that's my thoughts and experience. If you have your own shops, let me know what you think! Or if you're starting out, feel free to comment any questions and I'd be happy to try and help.