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The Ultimate Guide to Etsy Dropshipping


Are you planning to start a dropshipping business on Etsy but don’t know where to start?

Today, many stores are adopting drop shipping, with 30% being E-commerce store owners. Lately, there has been a constant buzz in the market around Etsy dropshipping.

Due to the rising trend of buying unique products and 96 million active buyers on Etsy, you can make excellent profits by dropshipping on Etsy. Moreover, it will save you overhead, inventory costs, and the hassle of logistics.

But you may be turned off by the strict selling criteria of Etsy and think that this platform is unsuitable for dropshipping. But that is not the case. Dropshipping on Etsy can be complicated, but it’s not impossible.

In this guide, we’ll give you a complete breakdown of what Etsy is, how dropshipping on Etsy works, and how you can leverage it for your benefit.

What is Dropshipping? How does it Work?

In dropshipping, a customer places an order in an online store. Rather than keeping stock and shipping directly to the customer, the merchant forwards the order to the supplier or manufacturer.

The dropshipping supplier prepares the forwarded order and ships it directly to the customer. This frees the merchant from handling retail stores’ shipping and warehousing challenges. Moreover, they can focus more on marketing and customer service.

Dropshipping is a less risky way of starting an E-commerce business as it doesn’t require much investment or a physical inventory. Let’s break down the dropshipping process in simple steps:

Step 1: Find the Right Niche

Find out what you want to sell through dropshipping. The key is to sell products in a specific niche rather than different items.

Step 2: Research Future Competitors

The next step is to look up your future competitors by browsing their websites and learning what they sell in a specific niche. Try to find out particular things, such as if they have a retail store or warehouses. If they have no physical presence, this means they are dropship suppliers.

Step 3: Set Up Your Storefront

Before finding suppliers, set up your storefront. This will build trust with them, and you’ll be able to show them that you are serious about selling their products.

Step 4: Find Suppliers

Find suppliers for your niche and get their approval for selling their products in your store. Reach out to them via email and phone. Contacting suppliers may take time, but your perseverance will ultimately pay off.

Step 5: Optimize Your Website for Conversions

Optimize your store website for more conversions. Attract people to buy your products through organic and paid rankings. Rather than wasting money on attracting everyone, the trick is to bring only good quality traffic.

Step 6: Automate Tasks and Start Outsourcing

To build a successful dropshipping store, start automating your tasks. But follow this step after all other actions and only when you get enough sales. You can automate daily tasks using apps and plugins, so you won’t have to work much while making money.

Dropshipping doesn’t need to be a hassle. You can take as much work as you can responsibly handle or as little as you want. If you feel overburdened, start outsourcing by hiring remote virtual assistants to do repetitive tasks.

Why is Etsy the Best Choice for Dropshipping?

– What is Etsy?

Launched in 2005, Etsy is a third-party marketplace for buying and selling handmade, vintage, and crafts products. The idea behind its original launch was for artists and hand and craft makers to sell their wares.

As of 2021, it has 7.5 million active sellers and 96 million active buyers. Hence, dropshipping on Etsy is best for small-scale entrepreneurs who can generate income through selling unique products.

– Why is it best?

Here are the advantages of dropshipping on Etsy:

1. Competition is Low

Etsy has strict restrictions for entrepreneurs to launch their businesses. That’s why many sellers are reluctant to choose this platform for drop shipping. But it also means that the competition is low, giving new drop shippers an advantage over other dropshipping platforms.

2. Appeals to Niche Businesses

Etsy appeals to niche businesses that fit its handmade and vintage product requirements. It has a segmented user base and is the first platform where people search for home decor and arts and crafts supplies.

So, if you want to drop ship products that fall under this niche, you can never go wrong with dropshipping Etsy.

3. High Profit

Typically dropshipping sellers keep a 10-15% profit margin, while other successful drop shippers can even make 30% of the profit. Fortunately, consumers of handmade products know the effort it takes to craft them.

So, they are willing to pay more. This could benefit you as you can keep a 40% or higher profit margin.

– How does it Work?

Etsy dropshipping is somewhat similar to how you would do it on any other platform.

There are two ways to dropship on Etsy:

1. Open an Etsy Store and Outsource

You can start a store on Etsy and outsource goods from manufacturers so you won’t have to worry about producing them. But the order fulfillment process will still fall upon you. In addition, you need to have a hand in designing pf dropshipping products.

2. Source Products from Etsy and Sell on Your Store

This method allows you to open a store and source products from Etsy merchants. Afterward, you can resell them under your branding.

But remember, you cannot source products on Etsy to resell them on the same platform again. With this dropshipping method, you are responsible for marketing and driving traffic to your website.

What Are the Most Popular Niche/Items to Work on Etsy Dropshipping?

Choosing products for Etsy drop shipping follows the same criteria as any other platform. However, never choose fragile items to dropship. Here are the popular items that you can dropship:

1. Home Decor

Etsy offers a large market for home decor products because consumers look for creative furniture, mantels, carpets, wall art, etc. You can easily dropship concrete or other home decor products on Etsy.

2. Stickers

Stickers may seem like small items, but they are one of the bestselling items on Etsy and remain on the list of the top trends every year. The best part is that people buy them in bulk. You can create customized stickers with the help of a print-on-demand service and dropship them on Etsy.

3. Candles

Colorful handmade candles are the most accessible products on Etsy. They are also very cheap to modify in different categories. Websites like Pinterest will give you hundreds of DIY ideas for designing them. You can sell them in customized jars and lanterns.

4. Jewelry

Jewelry is one of the hottest-selling products on Etsy. In fact, nine out of ten are jewelry stores on Etsy. You can find jewelry in multiple categories, such as rings, bracelets, necklaces, and earrings. They have the potential to get your store at the top of popular store listings.

5. Personalized Items

Personalized items are always in trend as people love to design and purchase products. They have a significant advantage over other products. So you won’t need a considerable investment to start dropshipping personalized items.

6. Notebooks

Printable or crafted notebooks sell like hotcakes on Etsy. People who like writing diaries or traveling love to purchase them. So, if you offer notebooks with creative designs and high-quality pages, they are bound to sell faster.

etsy popular items

What are the Rules to Follow When dropshipping With Etsy?

Etsy doesn’t have specific drop shipping rules, but it has regulations for similar business models. Below are the rules you must follow when dropshipping with Etsy:

1. You cannot sell items other than handmade, vintage, or craft products.

2. You should design all handmade items that you want to sell.

3. Etsy allows reselling only if you have a hand in making or designing products.

4. While working with production partners, you must disclose your relationship with them on product listings.

5. You cannot use AliExpress dropshipping on Etsy. The reason is that not many products on AliExpress are handmade.

6. If you are dropshipping vintage items, they should be 20 years old or older. Moreover, you can resell vintage items. 

7. You can source craft supplies from a third-party seller to create handmade products.

8. Etsy prohibits creating listings for a referral code or a want ad. Moreover, every listing should directly promote and sell digital or physical products.

9. There is no wholesale option on Etsy.

10. You’ll have to pay a listing fee for each listing plus a transaction fee and payment processing fee. 

11. Prohibitions on reselling include: 

· Rebranding or repackaging commercial items.

· Curating other’s handmade goods that you haven’t manufactured or designed.

· Reselling product designs created by another seller who isn’t affiliated with your store.

· Selling fair trade items that you haven’t made or designed.

If you break these terms and conditions, Etsy will remove your listings and terminate your account. On top of that, you won’t get any refunds for your listing fee. However, if you drop ship properly, you’ll get access to built-in analytics and reporting to manage your business.

Step-By-Step Guide to Start Dropshipping on Etsy

Starting Etsy dropshipping requires opening a store and finding suppliers. Now follow the set-by-step guide to learning dropshipping on Etsy:

– Open a Store on Etsy

The first step to Etsy drop shipping is to set up a storefront on Etsy. If you already have a store, skip to the next step. Setting up a dropshipping store entails visiting the Etsy website and choosing the “Sell on Etsy” option from the bottom of the homepage.

This is the entry for registering a seller account on Etsy. You can sign up by filling required information and registering your account with an email address. After registering, you’ll need to fill in your store’s settings, such as:

· Preference in language, currency, and region.

· Store name.

· Listing of at least one product.

· Payment and billing methods.

– Look For Trending Dropshipping Products

After registration, search the marketplace for the trendiest handmade products. Simply check best-sellers’ e-commerce websites to get ideas. Etsy puts top-selling items in collections, so you can also check the best-selling products in Etsy’s search results.

Check with influencers on social media for the best dropshipping trends. You can also use advanced tools to research popular dropshipping products. Another way to look for trending products is to check recommendations on Etsy. Many suppliers list best-selling products on their websites.

– Add a Listing

Once you figure out what to drop ship, build a product listing. Take photos of products and add details such as description, title, category, type, pricing, and shipping time, and stock.

You’ll have to pay a listing fee of $0.20 per product, and it will expire if the product sells out or after four months of listing. Additionally, you won’t have to pay a private listing fee for custom orders, as the fee will add to the buyer’s payment account.

– Find Suppliers for Etsy Dropshipping

The next step is to find the right supplier for Etsy drop shipping. Look for suppliers that offer Etsy dropshipping integration. Not all suppliers are able to integrate your store with their platform.

This leaves you without an automated dropshipping process. You’ll have to do more work manually, such as creating listings manually instead of one-click importing products to your store. Or you may be unable to proceed with direct payments to your supplier.

So to find credible suppliers use a search engine and put relevant keywords in the search bar. You’ll get plenty of results.

– Connect Your Store with Your Suppliers

Now’s the time to connect your store with your supplier’s platform. Register an account with your supplier and ask for authorization. After building a partnership, you can easily dropship on Etsy.

– Import Items to Etsy

Select the products from your supplier that you want to dropship on Etsy. But don’t forget that you must have a hand in their design. If you import the products, they will automatically be active on Etsy. Promote them through marketing and wait for customers.

– Fulfill Orders

When customer will place orders and you’ll sell products, your sales info will show on both your store and the dropshipping platform. So, you can confirm the order and proceed with payment on the platform.

After paying, the responsibility for stock and shipping will be upon your dropshipping supplier. On Etsy, the transaction fee is 6.5%, and 3% + $0.25 is the payment processing fee for each item you sell.

5 Tips for Beginners to Dropship on Etsy Successfully

For a successful Etsy dropshipping business, you must take some steps to generate more sales. Here are five tips for beginners to dropship on Etsy:

Tip 1: Create More Listings and Sell Only Allowed Products

There are certain restrictions on selling some products on Etsy. In case you violate the rules, Etsy will disable your store. So, make sure to check the Prohibited Items Policy of Etsy and the directory before adding listings.

If you have small item listings, they won’t appear in searches. So, create at least ten listings of products, as it will make your store more prominent in customers’ inquiries. Gradually increase the listings to attract more customers.

Tip 2: Sell Unique Products

Etsy encourages sellers to list their self-designed products as people love creative and unique products. This can make your dropshipping business more competitive, and you’ll get more repetitive customers.

Tip 3: Optimize Your Store

Usually, visitors don’t go beyond the first page of rankings. Therefore, search engine optimization is necessary to increase your store’s operability by keeping it in front. Using keywords and optimizing product tags and inbound links are bound to improve your store’s ranking.

Tip 4: Choose a Simple but Broader Store Name

Choose a simpler but broader name that won’t kill your chances of integrating other items into your listings. It’s a high chance that you will come up with ideas to sell more items. In that case, if your store name is not broader, you’ll have to create another store for other products. Besides, a simple name is easy to remember by customers.

Tip 5: Promote Products with Etsy Marketing

Marketing is a beneficial tool in dropshipping. You can promote your dropshipping business through Etsy Ads. It will cost you less than $25 per day, and your store will appear on the top of Etsy search results.

Another way to promote your dropshipping business is through influencer marketing. Reach out to micro and macro influencers on Instagram and Facebook. But make sure they are associated with the niche you are selling.

5 Tips to dropshipping on etsy successfully

Pros and Cons of Etsy Dropshipping

If you can’t determine whether Etsy dropshipping is a suitable business model for you, here we will list the pros and cons of dropshipping on Etsy, to help you judge it more accurately.


  • Huge customer base

Etsy as a good-sized e-commerce platform, already has a huge customer base, more than 80 million, numerous. Dropshipping on other platform you may face the difficulty of lacking customers, while dropshipping on Etsy, you have numerous potential customer. You only need to rank higher on the listing of  Etsy to activate these prospects.

  • Lesser Competition

Due to the products restriction of Etsy, most businessmen may not so willing to set the Etsy as their main business model, this means dropshippers will face less competition on Etsy.And with the fast verified time within 5 days, it’s easier for you to sign up.

  • Creativity

Someone may know that Etsy is a platform focus on handcrafts. So if you are a seller who wants to activate your creativity, and make money by your own original thoughts, Etsy is absolutely the right choice. Etsy is a platform that can motivate you to create your own brand and stand up from other products.

  • High-Profit Margin

Actually, you can make money easier by dropshipping compared with other business methods. Searching the keyword on Youtube you will find hundreds of true successful cases about dropshipping. Those are all worth-learning experience.

According to statistics, normally new dropshippers keep a 10-15% profit margin. After you becoming more established, you can earn for 20 even 30% profit.

  • Patient customers

Etsy is a market focus on handcrafts. People who are willing to buy handmade goods will understand that it can take a long and long production time, especially when you are buying from a home-made sellers.  However, as a seller, you should keep in mind that you should always fulfill the orders on time, so as not to damage your credibility.


  • Transaction costs is high

According to the platform rules, vendors in Etsy need to pay 6.5% of the price for each sale. Moreover, Etsy will charge $0.20 for each item as listing fee. If the products you are selling are various and your business is expanding, $0.20 listing fee for each items will be a huge expand.

So actually, Etsy is not so suitable to large-scale business as Shopify dropshipping.

  • Expiration of Listings

All your listing products in Etsy may expire every 4 months. To solve this situation, you need to pay an additional $0.20 for each listing to get them renewed.

Another solution is to only list little items and add more products as soon as your previous stock sells out.

  • Lack of scalability

If your business is becoming large and you are about to getting hundreds orders a day, Etsy probably not the ideal platform for you. $0.20 for each listing and a 6.5% fee on every sale will be a large charge if your orders are boosting.

pros and cons of etsy dropshipping


Q1: Is it Legit to Dropship on Etsy?

Etsy’s selling terms and conditions do not directly mention banning dropshipping on its platform. But reselling is prohibited on Etsy. Simply put, Etsy states that reselling is any item you or the seller did not make or design. But this is a technical loophole that all drop shippers need.

Also, the platform allows reselling items in some cases, such as vintage products that are 20 years older or older. It is outright illegal if you resell items from a third-party supplier to Etsy. In such a case, Etsy will suspend your account.

Q2: How to Find the Best Supplier?

A supplier can either make your business successful or waste time and money. The most crucial step is finding a credible supplier when starting an Etsy dropshipping business. Search with relevant keywords on Google to find the most trusted dropshipping suppliers list.

You will have to modify your search to find the most suitable suppliers and look through multiple results pages. Another way is to visit a trade show, meet the suppliers and assess the quality of their products. You can also visit dropshipping websites and databases. It’s an economical way of finding trusted and reliable dropshipping suppliers.

Q3: What Payment Methods Are Supported on Etsy?

Etsy supports several general payment methods, such as Visa, MasterCard, Discover, American Express, Carte Bleue credit, and debit cards. If you have an Etsy Gift Card or Etsy Credit, the option to pay with that balance will automatically be selected unless you uncheck the box.

Another Etsy payment method for mobile phone users is Apple Pay for iOS users and Google Pay for Android users. PayPal is another convenient method supported by Etsy. Buyers can even pay through Klarna installments, but they should have a billing address in the US, UK, Australia, Spain, and Canada.

Q4: What Challenges May You Face While Dropshipping on Etsy?

Etsy dropshipping requires you to design and sell unique products and have a hand in their design. You cannot sell any items other than arts and crafts, handmade, and vintage products. So, your business model must be created around these niches.

Furthermore, Etsy doesn’t offer specific tools to help drop shippers and won’t likely in the upcoming years. It has no wholesale option, so you cannot drop ship wholesale items. You cannot bulk upload items on Etsy but will have to list each of them manually. The listings may also take some time to appear in search results.

Q5: What Are Other Alternatives to Etsy for Dropshipping?

Dropshipping on more than one site is an excellent way to increase exposure. Other than Etsy, you can choose other third-party marketplaces to dropship. Bonanza is a good site for dropship sellers ready to reach a new audience and negotiate prices.

Like Etsy, it focuses on selling unique arts and crafts items and collectibles. Amazon Handmade is another excellent alternative to Etsy offering unique handmade products. The cost to run a storefront is higher on this platform, but the benefits are endless. There is no listing expiration, and you’ll get insightful analytics and Amazon-sponsored ads.


If you are looking to make easy money, Etsy dropshipping doesn’t require investing in a physical inventory, production, or handling logistics. However, this platform is not ideal for everyone. The rules are strict, but it is best for businesses interested in selling innovative products.

Joey Gan
Article by:
Joey Gan
The Co-founder of Ruizhi Sourcing. With 10 years of experience in the field of sourcing in China, we help 1k+ clients import from China and customize new products.. Contact with me at Linkedin
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