The Etsy Only strategy is killing your small businesses

Scroll Instagram for 30 seconds and you’ll find someone saying, “I quit my job and built my dream life selling on Etsy.” 

Scroll another 30 seconds, and you’ll find someone else warning, “Etsy is dead. Fees are crushing sellers. Don’t waste your time.”

So which is it?

Is Etsy a golden gateway for small business owners, or is it a crowded, fee-heavy marketplace on its way out?

The truth sits somewhere in the messy middle.

Etsy is still powerful, but only if you know how to play the game.

And you can’t build your entire business there.

Let’s break it down.

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Why Etsy Still Works

Etsy is far from irrelevant. In fact, it’s still one of the most popular marketplaces for handmade goods, vintage finds, and craft supplies.

Here’s why people still set up shop there:

• Built-in traffic. Etsy draws 96+ million active buyers a year. That’s an audience you can’t replicate overnight on your own site.

• Buyer intent is sky-high. Unlike Instagram or TikTok, where people scroll for entertainment—Etsy shoppers come ready to spend money.

• Trust factor. New customers may hesitate to buy from a random website. But Etsy carries brand recognition, giving buyers peace of mind.

• Low barrier to entry. For just $0.20 per listing, you can get started. No web hosting headaches. No upfront web design costs.

In short, Etsy is an excellent launchpad.

It gets your products in front of eyeballs quickly. But that’s also where its limits show up.

Etsy Is Not Your House

Here’s where small business owners run into trouble: Etsy owns the playing field.

• Fee creep. Etsy charges a listing fee, transaction fee, payment processing fee, and an offsite ads fee (which you can’t always opt out of). Over time, this eats margins.

• Algorithm roulette. One day your product ranks high in search. The next day, it disappears. Sellers live and die by Etsy’s algorithm changes.

• Fierce competition. Every listing sits next to dozens (sometimes hundreds) of nearly identical products. Standing out requires sharp branding, photos, and copy.

• Platform dependency. If Etsy suspends your shop (and it happens more often than you think), your income disappears overnight.

Think of Etsy like renting a booth at a bustling market.

Lots of traffic walks by.

But the landlord sets the rules. And at any moment, they can raise your rent or shut you down.

That’s why relying only on Etsy is risky.

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The Smart Play: Etsy + Your Own Ecosystem

The real winners aren’t just “Etsy sellers.” They’re business owners who treat Etsy as one channel in a bigger system.

Here’s what that system looks like:

1. Build Your Own Shop

Use Shopify, WooCommerce, or Squarespace to create a storefront you own.

Why?

• You control pricing and policies.

• You can brand the experience, colors, copy, upsells.

• No surprise fee increases or algorithm changes.

Your Etsy shop becomes the “top of funnel.” Your own site becomes the “home base” where you keep customers long-term.

2. Grow an Email List

If you rely on social media or marketplaces, you don’t own your audience.

Platforms change. Email doesn’t.

• Offer a discount code for joining your list.

• Send updates, product drops, and behind-the-scenes stories.

• Use your newsletter to nurture relationships and sell directly.

The Etsy sale might pay today. The email list pays for years.

3. Leverage Social Media Traffic

Social media isn’t just for memes and dances, it’s the most accessible way to grab attention and funnel people into your ecosystem.

• Instagram: great for product visuals and stories.

• TikTok: excellent for viral reach (short videos of your process or products).

• Pinterest: underrated powerhouse for evergreen traffic.

Showing up online consistently can feel overwhelming. But smart creators repurpose one piece of content across platforms instead of reinventing the wheel daily.

4. Develop a Brand Story

Products alone aren’t enough. Shoppers need a reason to choose you.

So, top chasing validation and focus on building something that aligns with your own standards. When you build around a story and mission that matter to you, customers resonate with it.

Branding isn’t about logos, it’s about identity. Why do you exist? What do you stand for? That’s what keeps buyers loyal, not just curious.

5. Diversify Sales Channels

Don’t stop with Etsy and your website.

Explore:

• Wholesale to boutiques.

• Pop-up markets for in-person feedback and exposure.

• Collaborations with influencers who align with your niche.

Multiple revenue streams mean stability. If Etsy traffic dips, your business keeps moving..

The Mindset Shift: From Seller to Business Owner

Thinking Etsy is the business.

It’s not.

It’s just one shelf in your store.

The mindset shift is key:

• Don’t think, “I’m an Etsy seller.”

• Think, “I’m a business owner who uses Etsy.”

That shift alone unlocks new strategies and removes the anxiety of being at the mercy of one platform.

Is Etsy Worth It in 2025?

So, is Etsy still a good platform for small business owners?

Yes, if you treat it as a piece of the puzzle, not the whole picture.

Etsy is still the fastest way to get products in front of buyers. But smart entrepreneurs use it as an entry point, then move customers into spaces they own, email lists, websites, and communities.

Here’s the formula:

1. Start on Etsy for exposure.

2. Collect customer emails.

3. Drive traffic to your own shop.

4. Leverage social media for reach.

5. Expand beyond Etsy.

Do that, and Etsy becomes a launchpad, not a leash.

Etsy is like training wheels for small businesses. They’ll get you rolling. But if you never take them off, you’ll never ride as far, or as fast, as you could.

The best small business owners in 2025 aren’t asking, “Is Etsy good or bad?”

They’re asking, “How do I build something bigger than Etsy?”

And that’s the real question every seller should be answering.

Have a nice day,

Miroslav from The Design Nexus

TOOLS YOU SHOULD TRY

Even if you sell products other than mugs or t-shirts, it doesn't mean it will cost you more.

There are tools that can help you with the tasks, and most of them have free versions.

• Research: ProfitTree

• Graphic Designs: Creative Fabrica

• Design Editing: Canva, Kittl

• Vectorizing: Vectorizer AI

• POD Fulfillment: Printful, Printify

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