Etsy is an online marketplace that allows people worldwide to sell their handmade or vintage goods. If you have a creative skill or an eye for vintage products, then opening up a shop on Etsy may be a good source of added revenue for you. The website is easy to navigate and the starting process is simple, so it may be a worthwhile investment. However, there are a couple of things you should know about setting up a store on Etsy, particularly about whether you have any legal obligations when you sell online. This article will explain how you can set up a store on Etsy and what legal requirements you should be aware of.
What Can I Sell on Etsy?
Etsy is an online marketplace that caters to a specific market niche. You can only sell these kinds of items on the website:
- handmade goods that are made or designed by you, the seller;
- vintage items that are over 20 years old; and
- craft supplies, such as tools or materials a person would use for a special occasion or making something.
You cannot resell items on Etsy, which covers items you had no part in making or designing. This can lead to your Etsy account being shut down and Etsy payments being refunded for unfulfilled orders. There are also items that you cannot sell on the website, known as ‘prohibited items,’ such as:
- alcohol; and
- items that promote or glorify hatred.
Etsy Policies
When you set up a store on Etsy, you agree to be bound by their policies. This includes their terms of use and other legal documents, which you can find on the website. Before you open your online store, be sure to read through these documents to know what you agree to. Such examples include:
- only selling their allowed products;
- not using off-site payment methods to avoid seller fees;
- complying with local laws about trading online;
- protecting customer privacy;
- respecting the intellectual property rights of others;
- being upfront and honest with customers; and
- not collaborating with other sellers to fix prices.
You will also have fees to pay to Etsy as a seller, including:
- listing fees;
- transaction fees;
- payment processing fees; and
- advertising fees (if you want Etsy to place ads for your shop with third-party sites).
How Can I Start a Store On Etsy?
Setting up an online Etsy shop is fairly straightforward. But first, consider what you want to sell and how much time and effort you will put into it. Once you have figured this out, you can follow these steps to move forward:
1. Create an Account
Anyone who buys or sells on Etsy needs an account, so set one up. Your profile is how your customers will get to know you, so make sure to create a professional and inviting image.
2. Set Up Your Shop
You will then have an opportunity to customise your online shop. Think of a unique shop name that customers can remember you by, being careful not to infringe on any that already exist. This will also determine your shop’s URL, so put some thought into what you choose. You will also deal with administrative details here, such as choosing your location and currency.
3. List Your Products
The next step is to list your products in your store. This means taking pictures of your goods and listing them on your web page for customers to examine. Customers are more likely to buy from you if they can get a clear picture and description of your products. Take photos of your goods:
- against a plain background;
- with good lighting; and
- using a good camera.
4. Develop Shop Policies
You should also set up simple store policies that cover how you will handle:
- shipping;
- returns, exchanges, and refunds;
- privacy; and
- accepted payment methods.
5. Set Your Prices
A critical step is developing your pricing for your products. Although pricing is based on the Etsy seller’s preferences, look for similar products on the site to see how they have priced their goods. You should also consider these costs when determining price:
- supply costs for materials;
- how many hours you put into making goods;
- delivery fees; and
- Etsy fees.
6. Choose Payment Options
Etsy’s payment system, ‘Etsy Payments’ allows for a wide variety of ways customers can pay for goods using a secure system, including debit cards and Apple Pay. They also allow you to process customer payments through PayPal.
7. Open and Market Your Shop
Once you have dealt with these administrative details, you can open your shop. Be sure to:
- keep it up to date and amend listings as needed;
- manage your store’s SEO; and
- advertise your brand using social media.
What Laws Apply To Me?
If you only occasionally sell items on Etsy, then you do not need to worry about the consumer laws that apply to online trading. However, you will be ‘in trade’ if you sell items:
- frequently; and
- for a profit.
This means you must uphold certain guarantees about your products, ensuring they are of acceptable quality and fit for purpose. Clearly state whether you are in trade on your Etsy store, and do not mislead customers. You will also have additional tax obligations if you profit from selling your handmade products regularly online.
In New Zealand, your Etsy store must comply with several key pieces of legislation, including the:
- Fair Trading Act 1986: This law prohibits misleading and deceptive conduct in trade. Ensure your product descriptions are accurate and that you do not make false claims about your items.
- Consumer Guarantees Act 1993: This provides automatic guarantees for goods and services consumers purchase. Your products must be of acceptable quality, fit for purpose, and match their description.
- Privacy Act 2020: You must handle customer information in accordance with New Zealand privacy laws. This includes being transparent about how you collect, use and store personal data.
- Goods and Services Tax Act 1985: If your annual turnover exceeds NZ$60,000, you must register for GST and include it in your prices.
- The Income Tax Act 2007: Any income earned from your Etsy store must be declared on your tax return. Keep accurate records of your sales and expenses.
This guide will help you learn how to launch your new online business.
Key Takeaways
Starting an Etsy shop can be a great source of added revenue if you can sell your handmade or vintage items. However, there are limits on the items you can sell on Etsy. If you are looking to make a profit selling items, you will need to comply with their terms of use and consumer laws if you sell online regularly.
If you would like more information or guidance around an online Etsy store’s legal aspects, our experienced online business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to solicitors to answer your questions and draft and review your documents. Call us today on 0800 447 119 or visit our membership page.
Frequently Asked Questions
You can sell handmade, vintage, and craft supplies on Etsy. Note that you can only sell these items. If you did not have a part in making or designing the product, it is not handmade. Vintage items also have to be 20 years or older.
If you regularly sell goods on Etsy and make a profit, then consumer laws and fair trading obligations will apply to you. You also have to abide by their terms of use.
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