Etsy Dropshipping: The Ultimate Guide for Dropshipping on Etsy

There’s been some buzz about Etsy dropshipping lately. Creative entrepreneurs passionate about handmade and unique items are discovering that Etsy is a great marketplace for showcasing their goods. However, not everyone is familiar with dropshipping and how it can be used to sell products on Etsy. In this article, we’ll break down the steps to get your Etsy dropshipping business up and running.

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What is dropshipping?

Dropshipping is a business model where a merchant sells products without needing to manufacture goods, carry inventory, or ship products to customers. The business model is popular among new and risk-averse entrepreneurs who want to start an ecommerce business.

Traditionally, entrepreneurs were required to buy products in bulk, at wholesale prices. If a product sold, great! If it didn’t, they were left with a box of unsold inventory. Yikes. With dropshipping, you buy products from suppliers on an individual basis. So if a customer places an order on your store, you then order that product—and only that product—from the supplier.

What is Etsy

Etsy is an ecommerce site that allows sellers to showcase craft supplies, as well as vintage or handmade items. Although it was introduced as a platform for small-batch makers and artisans, Etsy has grown over the years and now facilitates merchants of all types in selling their wares. Etsy has more than four million sellers and nearly 81 million active buyers.

How dropshipping on Etsy works

Starting an Etsy dropshipping business isn’t as simple as it sounds. While you won’t find any explicit communication prohibiting dropshipping, the language around similar business models, such as reselling and print on demand, can be confusing to navigate.

That being said, there are two main ways to “dropship” on Etsy, although they don’t exactly fit the traditional dropshipping model.

Open an Etsy store and outsource the production of your goods. This involves getting your products made by a third party, so you don’t have to invest a lot of capital upfront. However, you still have to manage order fulfillment. Also, Etsy requires sellers to have a hand in the design process, meaning you can only outsource the production of items you have designed yourself.
Source products from Etsy to sell on your own ecommerce site. This business model involves buying products from other Etsy merchants and reselling them in your own store. It gives you more control and autonomy in your business but requires more on the marketing front. Note that you can’t source products from Etsy and then resell them on Etsy.

The rules of dropshipping on Etsy

Dropshipping on Etsy can be a tricky business, as the platform doesn’t explicitly allow it. However, there are some rules and conditions that Etsy has put in place that are relevant to similar business models. Here are some of the Etsy dropshipping rules to keep in mind:

The nature of the items you sell on Etsy should be vintage, handmade, or craft supply. Also, vintage items must be at least 20 years old.
All items should be made and/or designed by the seller. Etsy doesn’t permit reselling, meaning you can’t source handmade goods from Etsy sellers and resell them on your own shop.
When working with “production partners,” you must specify the relationship on product listings. However, production partners cannot be Etsy shop members, or suppliers from whom the merchant sources ready-made products to resell.
In case of sourcing craft supplies from a third-party seller, you can buy commercial, vintage, or handmade goods
Every Etsy listing must directly sell and endorse a digital or physical item. Etsy prohibits sellers from creating Etsy listing referral codes or want ads, or similar activities.
Some prohibited reselling activities include: selling products by merchants unaffiliated with your business, selling fair trade items you didn’t design or make, and repackaging and rebranding commercial items.
Etsy merchants may not use AliExpress dropshipping.

So while it’s possible to find workarounds and hacks to dropship on Etsy, it’s important to keep in mind these rules and restrictions. Ultimately, it’s up to the seller to ensure that their business practices align with Etsy’s policies.

Benefits of Etsy dropshipping

Dropshipping is popular on various platforms. There’s Amazon dropshipping, eBay dropshipping, Shopify dropshipping, and so much more. So, why are people interested in Etsy dropshipping in the first place? Here’s a quick rundown:

Etsy products are popular for certain niches

If you’re looking for handmade goods, printables, or wedding products, Etsy is one of the biggest marketplaces for those niches. Sellers looking to sell digital products or wedding accessories might be interested in dropshipping Etsy products.

Competition is low for dropshippers

Etsy’s strict rules and regulations around reselling and print-on-demand make it a tough platform for dropshippers to operate on. But this also means there is less competition on the platform, offering a great opportunity to new dropshippers.

Etsy dropshipping cons

While Etsy dropshipping offers some amazing benefits, its cons can make you reconsider the platform. Here are just a few Etsy dropshipping cons:

High fees

Sellers on Etsy must pay a 20¢ listing fee per item and a 6.5% transaction fee on the displayed price, plus shipping and gift wrapping costs. There is also a 2.5% fee for global currency conversions. If you opt to build a basic branded website through Etsy’s Pattern, it will cost you $ 15 per month. These fees are a necessary part of doing business on Etsy and should be factored into pricing and profit margins.

Low scalability

Etsy’s inventory is usually handmade, vintage, or sourced with care, not mass-produced. Thus, Etsy suppliers cannot create items as quickly as larger manufacturers. Additionally, the inventory of vintage and antique items is limited, making it challenging to scale your business and increase sales.

No wholesaling

In June 2018, Etsy made the decision to shut down its wholesale program, which allowed sellers to sell to retailers. So if you want to dropship Etsy products, your options will be limited to selling to consumers.

Etsy dropshipping on Shopify

When it comes to Etsy dropshipping on Shopify, you’re able to promote Etsy products on your store via Shopify apps.

Remember that the downside to this is that sellers often sell handmade products, so quantities are limited. If you’re sending a ton of paid traffic to a specific product, the seller may be unable to handle all the requests you send over. And since the product is original, you won’t be able to find a replacement seller, which can lead to unhappy customers.

Dropshipping from AliExpress to Etsy

Dropshipping from AliExpress to Etsy is prohibited. Why? Because goods need to be handmade, vintage, or a craft supply. For example, if you’re selling a t-shirt, the design on the t-shirt must have been created by you. While some sellers have been able to sneak their way in, often by having their own custom photos, you’re still not allowed to dropship on Etsy. And getting caught could have you banned from the platform.

Is dropshipping on Etsy allowed? If you’re running a print-on-demand dropshipping store where you design your own products, yes. If you’re dropshipping products that you did not create or design, no.

So, where should you dropship instead? Let’s dive into that.

Dropshipping your own brand

Maybe Etsy isn’t the best marketplace to dropship products. But that doesn’t mean you can’t dropship successfully somewhere else. The best way to dropship products online is by having your own online store. That way, you gain full control over your business. Here are a few benefits of having your own store:

Own your own brand: People will remember your store name, not the platform you sell on, like Etsy.
Own your marketing: Build your own email list, retarget your website visitors, own your customer list.
Sell as many products as you like: You can choose from millions of products to sell on your store, and with no listing fees you can add as many products as you like, without any added fees.

Launch your dropshipping business today

Starting a dropshipping business on Etsy can be challenging, but don’t let that deter you from the idea. Instead, consider building your own online store using platforms like Shopify to access unique benefits not found on Etsy. And if the drawbacks of Etsy outweigh its advantages, you can still set up a Shopify store and start expanding your dropshipping business immediately.