Etsy Seller Insights: How to Make $1 Million, Top Earning Shops, and Buyer Trends
Despite a large client base (89.4 million) and a large number of sellers (5.4 million), an average Etsy seller makes only $2,200 in annual sales, which is below what someone joining Etsy would expect. However, the average is skewed, as many stores on Etsy make only a few sales a year.
The ability to generate more than the average depends on 1. market size for a given product 2. product presentation 3. marketing and 4. successful order fulfillment & customer service.
How much do the top Etsy sellers make?
Alicia Shaffer, referred to by Yahoo as the richest seller on Etsy, made $65,000/month in 2014 by selling boho-inspired hats and scarves. While the data is somewhat outdated, it still remains representative of the earnings potential.
Data by MarketPlacePulse indicates that the top 10 Etsy shops make somewhere between $1-2 million a year, which aligns with the historical data and inflation levels and takes into account the expansion of the Etsy platform over the past decade.
Some of the biggest shops include ArrowGiftCoLt, SilverRainSilver, and TheGreenEscape, each generating about 20,000 sales a month, with the average price tag between $5–15.
Who is a typical Etsy buyer?
A typical Etsy buyer is someone who uses Etsy to find inspiration and search for unique products. Most buyers are women (75% of the US & UK shoppers are women and 25% are men).
A foreign client base is large. In 2022, 34 million out of 89 million total active buyers were non-US based, which is roughly every third buyer. Meanwhile, foreign revenue accounts for 46% of all sales, which implies foreign shoppers are willing to pay more.
An average Etsy buyer spends $132 on Etsy products a year, and only half of all customers make repeat purchases. Foreign shoppers are less inclined to make repeat purchases.
What do Etsy shoppers buy most often?
When shoppers think of Etsy, they typically associate the platform with gifts (11% of all shoppers), home & living (3%), and style (3%).
Home & Living is the most popular segment, accounting for 30% of all Etsy sales, followed by Jewelry & Accessories (20%), apparel (15%), craft supplies (10%), paper & party supplies (10%), and toys & games (5%).
Within the Home & Living segment, wall hangings account for more than 1/2 of all segment sales, as discussed in one of my articles “What products to sell on Etsy to generate high sales?”.
What is a typical seller profile on Etsy?
A typical seller is a 40-year white woman with a household income of $62,000 running an Etsy business from home. Financial filings indicate that 82% of all Etsy sellers in the US and 77% in the UK are women, which is representative of the client base consisting mostly of women,
Sellers spend about 50% of their time designing and producing products, with the rest time being spent on administrative tasks.
Two major challenges that Etsy sellers encounter are marketing their businesses (56% of all sellers) and dealing with inconsistent sales (52%).
What is the optimal strategy to make $1 million on Etsy?
- Choose the right market. On Etsy, the optimal bet is the home & living segment, given it accounts for nearly 1/3 of all sales.
- Make sure you understand your buyer profile. Given 75% of all shoppers on Etsy are women, the optimal bet is to sell products that women find attractive. This directly translates into developing the right marketing strategy and choosing the right product presentation.
- Tap into foreign markets. Given foreign shoppers account for 1/3 of all sales and foreign shoppers’ higher spend (though fewer repeat purchases), one might capture a larger market by tailoring their products to foreign buyers, which once again translates into developing the right marketing strategy.
- Make sure your product prices are reasonable and meet the criteria to become “popular”, meaning an average product price is within the $5–15 range for the US market.
- Ensure you can handle large volumes to process your orders quickly, as Etsy shops that focus on volumes, rather than price, tend to generate the highest revenue.
- Invest in marketing and outsourced production. Knowing that Etsy sellers spend a lot of time designing and producing products, which limits their ability to scale up the business, and struggling with marketing their products, which is important given the low share of repeat customers, investing in marketing and outsourcing is critical.
Some math behind the $1 million target
Assuming you sell physical products and your average price tag is $10, you would need to make approximately 8,300 sales per month (which implies you would need a production partner).
Depending on the nature of your products, you may be able to make repeat sales to the same buyers; however, given half of Etsy buyers never make a repeat purchase, you would most likely need to build your marketing strategy around attracting new customers, as much as on retaining existing clients.
Knowing that an average Etsy buyer spends $130 on Etsy per year, and half of all buyers do not make a repeat purchase, it is safe to assume that repeat purchases for your products would most optimistically account for 25% of total sales. Therefore, in any given month, you would need to attract 6,200 new Etsy shoppers to your store.
Final words
Unlike Amazon, Etsy presents unexplored opportunities to new sellers as most Etsy sellers treat their shops as a side hustle rather than a real business, and thus are not investing enough to scale up their business.
