Your Side Hustle Guide: Amazon vs. Etsy
If you’re not getting paid enough at your day job, if you’re not getting enough hours at work, or if you’d just like to earn a little extra income on the side, you might want to join the ranks of Americans who have started a “side hustle” on Amazon or Etsy. Both of these online business ideas can be good ways to boost your income while having fun and being creative in your spare time.
As a side hustler, you will find a number of benefits with both Amazon and Etsy, even though they initially seem very different as selling platforms. Making the decision between Amazon vs. Etsy may come down to product and audience, or even personal preference between the websites.
Differences Between Selling on Amazon vs. Etsy
Both Amazon and Etsy are going to take a cut of your profits in return for allowing you to list your product for sale on their website. With both of these platforms, you will be selling products via online retail as the business model of your side hustle. The type of product that you sell is where these two platforms tend to be different.
Etsy is a crafty, creative space where you can sell your unique, handmade craft products. Etsy is the more well-known destination for crafty buys than Amazon, but Amazon Handmade launched in 2015 to compete.
The handmade product side hustle, regardless of platform, is going to be dependent upon a crafted item, rather than general wholesaling or reselling. While you can sell handmade items on both Etsy and Amazon, the market for selling mass-produced items like used books, clothing, household products or other everyday consumer product categories is more of an Amazon activity. Amazon Handmade also does not allow items to be sold in the Digital or Downloadable Products, Food & Grocery items and Electronics categories, so if your items are in those categories, Etsy may be the better choice.
Most people who have an Etsy shop are artists, artisans and crafters who sell products that they made themselves; most people who start Amazon businesses sell any type of retail inventory, and they aren’t expected to make their products from scratch.
As a side hustler, you first need to decide what it is you will be selling, and then decide if Amazon or Etsy is a better fit. If you are selling handmade items, take a closer look at the fee structures for sellers on Amazon and Etsy.
Two Ways to Get Started with an Amazon Side Hustle
- Sell a product at a higher price than that which you bought it. This is an easy and lucrative way to get started on Amazon. You will need an Amazon Seller Account and your inventory. If you find a great deal on an item, you can buy it and then resell it on Amazon for profit. Scour the clearance racks, hit the estate sales, dig in and find popular items for cheap.
- Purchase items as a wholesaler. Wholesaling allows you to purchase a significant quantity of a product directly from a wholesaler or the manufacturing company with the direct intent of reselling it. If you have a great line on a sweet deal for a wholesale lot of items, this could be the perfect opportunity. Don’t forget to acquire a state-issued resale certificate or seller’s permit before you get started.
Three Ways to Start an Etsy Business Side Hustle
Etsy has a few limitations on what you can sell on its platform. Even if you’re not a “crafty” person who makes things by hand, you can still sell items on Etsy if your business fits into these categories.
- Sell handmade items. This is what most people probably have in mind when they think of an Etsy side hustle: selling handmade crafts or art projects. Any handmade items that you sell on Etsy have to be made by you; you’re not allowed to use the platform to resell other people’s work. Etsy intends to be a platform where people can find unique gifts and crafts, and support artists, artisans and crafters directly. If you work with any partners in creating your handmade items, you need to disclose their names and give them credit.
- Sell vintage items. You can sell vintage items on Etsy, even if you didn’t make them yourself, but the items have to be at least 20 years old. You also need to be prepared to provide information to Etsy about the items, such as where the item came from, how you determined the age of the item, brand labels, care instructions and more.
- Sell craft supplies. Craft supplies and materials, even if they were not handmade by you, can be sold on Etsy. Types of craft supplies might include beads, paints, fabric and some party supplies like cake toppers and balloons.
Learn more about the rules of starting an Etsy business in the Etsy Seller Policy.
What Goes into Becoming an Amazon or Etsy Side Hustler?
Once you make the decision to start your Amazon or Etsy side hustle, the next step is to actually start your business! As with all new business ventures, this does require some planning on your part to be successful. Read on for an overview of the five most important steps to starting your side hustle with Amazon or Etsy today.
- Draft a business plan and commit to following it. A business plan will change and grow with your business, so be ready to update it as you go along. Your business plan is your dream for the future of your side hustle and the steps that are going to get you there. If you’ve never written a business plan, here is a helpful guide to writing a business plan to get you started, as well as some examples. Your business plan is going to help you determine what it is you do, how you are going to make money, focus on a target market and drill down on your business goals and financing plans.
- Understand your finances and determine how you will finance your side hustle. You will need to make an investment in your business before you start to see a profit. Unless the products you intend to sell are already at your disposal (like with handmade crafts for an Etsy side hustle), acquiring inventory should be at the top of your list. Depending on what you’ll be selling, you will either need to purchase components or the products themselves. Be prepared for inventory expenses, shipping expenses (boxes, tape, etc.), marketing products and materials, as well as any costs associated with listing your goods on Amazon or Etsy. Be aware of the costs involved with selling on your chosen platform.
- Plan ahead for taxes. Do you need to charge your customers sales tax? If so, how much? It varies by state. Have you owned your own business before? If not, be prepared to pay taxes quarterly, depending on how much profit you’re bringing in. You will need to track your expenses as well as your sales and be prepared to present all of this information to your accountant at tax time. Also, be aware that there is no withholding when you are self-employed, which means nobody is removing a portion of your pay to set aside for tax purposes unless you are doing it. It also means that there is no employer paying a portion of your payroll taxes; you are responsible for 100 percent of your federal, state and local taxes, which includes income tax, Medicare and Social Security. Profits, revenue, costs and expenses all play an equally important part when it comes to taxes, so be prepared.
- Determine how you’ll manage your money. Money management is a fundamental part of business and life. Be sure that you have a plan for how you will manage your profits, but don’t forget you need to cover your costs as well. Don’t spend what you can reinvest. If you want your side hustle to become your full-time income, you are going to want to manage your money well.
- Implement a marketing plan. Selling products is the most important aspect of your new side hustle. Do you have a marketing plan? If you have a product, but no sales strategy, now is the time to start working on that. Take some time to research how similar products are being sold. This is your Amazon or Etsy side hustle, but don’t limit yourself just to seeing how sellers on these platforms do things; look at all the selling platforms. Look at the top sellers of similar products. How are they describing their items? What is the photography like? Are they grouping like items together? Read through the reviews, understand what customers appreciate and what upsets them. Now take some time and see what appeals to you — what makes you different? How can you avoid 1-star reviews and keep it 5-star across the board? What can you do stand out and compete? Maybe your product is awesome, and maybe you have spectacular customer service (hopefully you have both), but sales is about how well you can convey your unique value proposition to the potential buyer. This isn’t just about selling the product; you are selling yourself as the best choice of seller too.
Online sales are at an all-time high right now; people are looking for fun new products and are open to buying from small businesses. This makes for an excellent opportunity to get started with a successful Amazon or Etsy side hustle. Understand the process, make a plan for how to connect your products with buyers and make your side hustle a success!