Reading time: 6 minutes

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 items 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.

For example, you could sell custom scented candles or handmade jewellery on the website.

You cannot resell items on Etsy, which covers items you had no part in making or designing. 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 store with Etsy 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 that buys or sells on Etsy needs an account, so set up one. 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 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:

5. Set Your Prices

A critical step is developing your pricing for your products. 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 Methods

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 are only occasionally selling items on Etsy, then you do not need to worry about the consumer laws that apply to trading online. However, you will be ‘in trade’ if you sell items:

  • frequently; and
  • for a profit.

This means you have to 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 make a profit from selling your handmade products regularly online.

Key Takeaways

Starting an Etsy online store can be a great source of added revenue if you can sell your handmade or vintage 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, contact LegalVison’s online business lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is Etsy?

Etsy is an online marketplace. You can set up an online store using their systems, and sell your goods using the website.

What can I sell on Etsy?

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.

Can I open an Etsy store in NZ?

You can operate an Etsy store from NZ. You can ship internationally as well, and many international Etsy stores also ship to NZ.

What laws apply to me if I sell on Etsy?

If you regularly sell goods on Etsy and make a profit, then NZ consumer laws and fair trading obligations will apply to you. You also have to abide by their terms of use.

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards