Dropshipping is a long-term business model that relies on volume to offset low margins. Merchants in various industries have found success with this hands-off way of doing business; often exploring ways to dropship on new channels.
That’s where Etsy, the popular ecommerce platform that focuses on handmade or one-of-a-kind goods, comes into play. Many sellers interested in starting a dropshipping businesses use Etsy as their primary sales channel. And while Etsy is a great place to launch a new business to a targeted user base, it may not be the best option for dropshipping. To find out why, take a deep dive below.
What is dropshipping?
Dropshipping allows you to buy directly from suppliers and manufacturers who then ship orders directly to customers. This frees merchants up to focus on things like marketing and customer service instead of warehousing and the logistical challenges traditionally associated with running a retail business. It’s a less risky way of getting into ecommerce, because you don’t need to invest in inventory.
What is Etsy?
Etsy is a third-party online marketplace that allows sellers to list products that are handmade or vintage, as well as craft supplies. While it originally launched as a platform for small-batch artisans and makers, Etsy has since expanded, and merchants of all types and sizes sell their wares here. Etsy has more than five million sellers and 90 million active buyers.
Further reading: How To Sell on Etsy: A Beginner's Guide
How dropshipping with Etsy works
First: Etsy makes it extremely difficult to dropship on its platform. If you search its site, you won't find any communication that explicitly prohibits dropshipping. However, there is language around similar business models and ways of operating, such as reselling and print on demand.
Technically speaking, there are two main ways of “dropshipping” on Etsy. We put dropshipping in quotations because these methods aren’t exactly dropshipping, per se, but they’re as close as you can get to the business model when selling on this marketplace.
Here are the two dropshipping options for Etsy merchants:
- Open an Etsy storefront and outsource the production of your goods. Like dropshipping, this outsources manufacturing, so you don’t have to worry about production. However, you still have to manage order fulfillment. If you go this route, it’s important that you outsource the production of goods designed by you. Etsy requires sellers to at least have a hand in the design. According to its terms and conditions, “All handmade items are made or designed by you. ”
- Source products from Etsy to sell on your online storefront. This method involves sourcing products from Etsy merchants and then reselling them on your own branded ecommerce site. Note you can’t source products from Etsy and then resell them on your own Etsy shop. Having your own storefront offers you more control and business autonomy, but you’re also responsible for marketing and driving traffic to your store, since you won’t have Etsy’s built-in customer base.
The rules of dropshipping on Etsy
While Etsy doesn’t explicitly call out dropshipping on its website, it does publish some rules and conditions around similar business models:
- All items for sale on Etsy must be handmade, vintage, or a craft supply.
- Any items sold in Etsy’s Handmade category must be made and/or designed by the seller. Reselling is prohibited.
- When working with “production partners,” sellers must disclose the relationship on product listings.
- Production partners may not be Etsy shop members or suppliers from whom the merchant sources ready-made products to resell.
- Etsy merchants may not use AliExpress dropshipping.
- Vintage items need to be 20 years or older.
- Craft supplies may be sourced from a third-party seller and can be handmade, commercial, or vintage.
- Every Etsy listing must directly promote and sell a physical or digital product. You can’t create Etsy listings for a referral code, a want ad, or a “similar activity.”
- Specific prohibited reselling activities include: repackaging and rebranding commercial items; curating others’ handmade goods you didn’t design or make; selling items made or designed by another seller who is unaffiliated with your shop; selling traditional handicrafts or fair trade items you didn’t design or make.
So, in short, you might technically find workarounds and hacks to be able to dropship on Etsy, but it isn’t easy. And Etsy sure isn’t making any changes to make it easier.
Benefits of Etsy dropshipping
Competition for dropshippers is low
Because Etsy makes it so difficult for sellers to use dropshipping, very few are actually doing so. This means there’s little competition, which gives new dropshippers on Etsy an easy advantage.
Niche businesses are warmly welcomed
If you have a dropshipping niche business or product idea that fits Etsy’s requirements, dropshipping that item can be a great opportunity. Etsy welcomes niche businesses that can own their categories. Plus, it categorizes merchants, so it’s easy for customers to discover your business when browsing relevant categories and searches.
Vintage or handmade items are easier to market
Etsy is an ideal third-party marketplace for handcrafted and antique items. So it’s a no-brainer if you’re dropshipping products that fall under one of those categories, because of its highly segmented user base.
Curated customer bases are more accessible
People using Etsy are typically looking for a specific type of item. And many times, they’re willing to pay more for it because it’s one-of-a-kind vintage or handmade.
Drawbacks of dropshipping on Etsy
Dropshipping on Etsy can be expensive. The marketplace’s fees will quickly cut into your profits—and they continue to rise. Sellers pay a 20¢ listing fee per item—if you sell two of the same item, Etsy will charge the listing fee twice. When you make a sale, Etsy also charges a transaction fee of 6.5% of the displayed price, plus shipping and gift wrapping. Global currency conversions also have a 2.5% fee. You can build a basic branded website through Etsy’s Pattern, which costs $15/month.
Rigid dropshipping rules
It’s clear Etsy isn’t a fan of dropshipping and doesn’t welcome the business model to its platform with open arms. As such, Etsy doesn’t have any features or tools dedicated specifically to helping merchants dropship. And they likely won’t roll out anytime soon.
No wholesaling option
Etsy further backpedaled on dropshipping when it sunsetted its wholesale offering. It encourages merchants to have a hands-on role in product development and manufacturing, so it removed the wholesale program that made it easier to dropship on Etsy.
Time-consuming listing process
Listing items on Etsy isn’t as easy as with a dedicated ecommerce site builder like Shopify. Etsy doesn’t offer the ability to bulk upload, so you have to list each item manually. Some merchants also report delays from the time their listing is published to the time it starts appearing in search results.
The nature of the items sold on Etsy typically means they’re not mass-produced at rapid rates. Because items are carefully designed, made, and/or sourced, your Etsy suppliers likely can’t make as many items as quickly as large manufacturers can. Not to mention the finite nature of inventory when it comes to vintage and antique products. This makes it harder to grow your business and drive more sales.
How to dropship products from Etsy
Refer back to our two Etsy dropshipping workarounds:
- Open an Etsy storefront and outsource the production of your goods.
- Source products from Etsy to sell on your online storefront.
However, there are a couple of approved Etsy dropshipping partners you can work with directly to help streamline the process and do it from your Etsy storefront:
- Printify: an integration that allows merchants to sell dropshipped print-on-demand products featuring the merchant’s designs
- Art of Where: a dropshipping partner that fulfills print-on-demand products with customization options for labels and stickers
- AutoDS: a tool to help merchants source products from Etsy to sell via their branded Shopify store
How to dropship from Etsy to Shopify
Dropshipping from Etsy to Shopify is also not super simple. However, you can integrate the two using some of the many available apps. These integrations mostly focus on syncing inventory data across both channels to improve accuracy and operations—you’ll be hard-pressed to find one that allows for seamless dropshipping from Etsy to your Shopify site. It’s much easier to build your own site and dropship through Shopify directly.
Dropshipping from AliExpress to Etsy
Merchants are unable to dropship from AliExpress to sell via their Etsy storefront. Etsy requires all items to be handmade, uniquely designed, or antique vintage—the suppliers on AliExpress don’t sell products that meet those parameters. Instead, they’re mass-produced, typically in some sort of factory or manufacturing facility.
Dropshipping from Etsy to eBay
Dropshipping from Etsy to eBay is technically not possible, but you can use a workaround. This involves sourcing products from Etsy sellers to sell on your own eBay account. Again, this isn't technically dropshipping, since you still have to handle the product and send it to the customer.
Dropshipping from Amazon to Etsy
Just like AliExpress, merchants are unable to dropship from Amazon to Etsy. Amazon items are also typically mass-produced and don’t reflect the quality of handmade, vintage, or crafting goods that Etsy seeks to maintain on its platform.
Alternatives to Etsy dropshipping
The best way to dropship products is to seek Etsy alternatives and eventually set up your own online store.
Having your own ecommerce site allows you to:
- Sell internationally
- Test to see what most effectively drives sales
- Own relationships and have direct, personalized communication with your customers Improve customer loyalty and retention
- Access customer information (email, browsing, and purchase history, etc.)
- Resolve disputes faster
- Optimize business decisions, operations, products, and services
- Gain complete business autonomy and control
Here’s how to launch your online store with Shopify:
- Choose and register your domain name.
- Customize one of more than 100 professionally designed themes.
- Set up your ecommerce shopping cart, payment gateway, currencies, and languages.
- Select your shipping rates and rules.
- List your products.
- Market your store with built-in marketing tools and third-party apps and integrations.
- Link your sales channels.
- Make your first sale!
Start your dropshipping business today
While Etsy may not be the best place to launch your dropshipping dream, that doesn’t mean you should give up on the idea altogether. Building and launching your own online store with a platform like Shopify grants you access to benefits you wouldn’t have with a marketplace like Etsy. And if the drawbacks of dropshipping on Etsy outweigh the benefits, you can still set up an online store with Shopify and start growing your dropshipping business today.