10 Things To Consider About Etsy Dropshipping

AliExpress dropshipping is a fairly well-researched business model, while Etsy dropshipping still remains a mystery for the majority of entrepreneurs. In this article, we try figuring it out whether Etsy is a good choice for opening and running a dropshipping venture, and look at this platform from different angles.

Previously, we have researched Amazon dropshipping and dropshipping with eBay. Today, we would love to explore yet another popular ecommerce platform! So, this time, we’ll talk about the possibilities and limitations of Etsy dropshipping.
Is Etsy dropshipping possible and, most importantly, legal? This platform’s core idea is to support crafters and handmade artists who produce one-of-a-kind items. Etsy gained an excellent reputation in the ecommerce industry. However, it doesn’t allow offering items that aren’t manufactured by the seller. Besides, it bears no responsibility of payment processors’ actions that can block your transactions which don’t meet multiple legal criteria.

Why Etsy dropshipping might seem to be a good idea

As an online shopping destination, Etsy, indeed, has a number of solid advantages:

• Reputation

Etsy is famous around the globe as a reputable online marketplace that comes with:

• Convenient and reliable payment gateways
• Strict yet fair usage policy
• Supportive environment that is favorable for both the buyers and the sellers

In other words, you can safely sell and buy the desired products on Etsy. Thanks to the platform’s transparency, you’re not likely to fall victim to an inventive scammer.

• Product range

Contrary to AliExpress, Amazon, and eBay, Etsy has a truly unique range of items. This platform specifically focuses on offering handmade designer products, crafting tools and supplies, and vintage items. This is why it’s safe to say that Etsy offers one-of-a-kind things. In this regard, no other marketplace can compete with it.

• Community

Etsy is not just a well-regulated online marketplace that brings sellers and buyers together. As the company states it in its mission, Etsy is all about supporting craftsmanship and empowering creative entrepreneurs. Its aim is to help artists and designers all over the globe get financial benefits from their meaningful and emotionally rewarding activity.

This is why a whole human-centered community has already formed around this website. Both the buyers and the sellers here enjoy their belonging to this meaningful world. Obviously, they maintain the inspiring, encouraging, and responsible atmosphere on Etsy.

As you can see, Etsy is a very special online retail platform. Many ecommerce entrepreneurs would feel honoured to work with it, no doubt. But is it really suitable for such a peculiar online business model as dropshipping?

What are the limitations of Etsy dropshipping?

So, the platform seems to be perfect for an entrepreneur. It represents a close and safe community that enables riskless transactions, and it features thousands of highly competitive items that might help you create an unbeatable product offer.

Unfortunately, there exist several limitations that may make it somewhat challenging to use Etsy for dropshipping, both as a selling point and a supply source. These limitations include:

• Geographic restrictions

According to Etsy’s Sanctions policy, the platform operates in accordance with economic sanctions and trade restrictions of the United States. It means that if you’re running your business from a sanctioned location, you can’t use an Etsy account for selling your items. Moreover, it is impossible to buy or sell products that are coming from the sanctioned territories.

• Transparency

Your shop location is visible on your Etsy store page, and your production partners (the manufacturers who help you produce the items on offer) must also be displayed in your profile. So, hiding your location or secretly selling items that you didn’t physically produce by yourself is not an option.

• Double control

Etsy’s Sanctions policy also states that the on-site payment processors such as PayPal may independently monitor the purchases. In case the purchases don’t meet the sanctions compliance criteria, these processors may block the questionable transactions. Etsy itself can’t control or regulate such third-party actions.

• Product requirements

The range of items allowed for sale on Etsy is narrowly defined: “Everything listed for sale on Etsy must be handmade, vintage, or a craft supply.” This is why you can’t, for example, sell mass-produced clothes and accessories ready for retail sale here. Such policy, obviously, makes it impossible to use Etsy as a destination for creating a dropshipping store and selling AliExpress items through it.

• Reselling ban

This is yet another reason not to use Etsy as a platform for opening a dropshipping store. Reselling, or selling the item that was not produced or designed by this exact seller, is forbidden on Etsy.

• Wholesale program termination

Earlier, it was possible to register in Etsy Wholesale program as an independent retail location, and purchase ready-to-use goods at wholesale prices. Theoretically, this program could have been used as a ‘loophole’ for dropshipping activity, but, on July 31, 2018, Etsy Wholesale was closed.

• Fee policy

If you try selling an Etsy-listed product through a different website or webpage, it will be viewed as a fee avoidance action which is strictly prohibited by the platform. Therefore, you can’t redirect an Etsy buyer to any kind of an independent dropshipping store.

Also, Etsy obliges the sellers to pay various fees, including, but not limited to the listing fee ($0.2 for each item put on sale) and the transaction fee (5% of the product price plus the shipping charge and gift wrapping cost).

What’s the conclusion?

In general, Etsy is a great ecommerce destination that supports self-made craftsmen, encourages handmade production, and promotes the creation of a people-powered economy. Still, if your aim is to create an online store without inventory, please note that it’s not legal (and actually, possible) to do Etsy dropshipping.