A Guide To Sell On Etsy USA

A Quick Guide to ETSY ADS

Etsy ads can significantly boost the visibility of your products within the Etsy marketplace, making it easier for shoppers to find your listings. Here’s a comprehensive guide on how Etsy Ads work, including the types of ads, budget allocation, and key insights to maximise your ad performance:

1. Types of Etsy Ads

Etsy offers a straightforward advertising system, primarily based on promoting your listings within the platform. There are two main advertising options:

a) Etsy Search Ads

These ads appear in Etsy search results when buyers search for relevant keywords. Your listings will be shown in the “Sponsored” section at the top of search results, increasing the chance of being seen by potential customers.

• Keyword Matching: Etsy automatically selects relevant keywords from your listing titles, descriptions, and tags to match buyers’ search queries.
• Placement: Your ad appears prominently on the first page, which can be valuable, especially for highly competitive search terms.

b) Offsite Ads

These ads promote your listings outside of Etsy on platforms like Google, Facebook, Instagram, Pinterest, and Bing. Etsy manages these ads and charges a fee only when they lead to a sale.

• Compulsory for High-Earning Shops: Shops that make over $10,000 in sales annually are automatically enrolled in Offsite Ads, and the fee per sale is lower (12%).
• Optional for Smaller Shops: Shops that make less than $10,000 annually can opt into offsite ads, with a fee of 15% per sale generated from the ad.

2. Budget Allocation

The way you allocate your budget will determine the extent and frequency of your ad visibility. Here’s how budgeting works:

a) Daily Budget for Etsy Search Ads

• Set a Daily Budget: You determine the amount you’re willing to spend each day on Etsy Ads. The minimum daily budget is $1, but you can set it higher depending on your business goals.
• Bid Automatically: Etsy uses your budget to automatically place bids on your behalf. The platform calculates the cost per click (CPC) based on competition for the keyword and your budget.
• Spending Efficiency: Etsy optimises your daily budget by spreading it out across the day and selecting the best-performing listings for promotion.
• Unused Budget: If your daily budget isn’t fully spent, the leftover amount won’t roll over to the next day.

b) Budget Allocation Tips

• Start Small: When you’re new to Etsy Ads, start with a lower budget (e.g., $3–$5/day) to test performance. Gradually increase your budget as you see what works.
• Track ROI: Keep an eye on the “return on ad spend” (ROAS). For example, if you spend $10 on ads and make $50 in sales, your ROAS is 5x. Adjust your budget based on these insights.
• Allocate for Peak Times: During busy shopping seasons (e.g., Black Friday, Cyber Monday, Christmas), consider increasing your daily budget to take advantage of higher demand.

3. How Etsy Ads Work

a) Cost Per Click (CPC) Model

Etsy Ads run on a cost-per-click basis. You only pay when someone clicks on your ad, not for the number of times it’s shown (impressions). Here’s how it works:

• Bidding: Etsy automatically bids for ad space based on your listing’s relevance and the competition for the keywords associated with it.
• CPC Varies: The cost per click can vary based on how competitive a keyword is. More popular searches might have higher CPC rates.

b) Automatic Ad Placement

Etsy’s algorithm determines which of your listings to promote based on the keywords used, listing quality, and relevance to a shopper’s search query. You don’t need to manually select listings to advertise, but you can pause certain listings if you don’t want them to be promoted.

4. Key Factors for Ad Success

To get the most out of Etsy ads, focus on the following factors:

a) Listing Quality Score

Etsy’s algorithm prioritises high-quality listings for ads, so make sure your listings are optimised:

• Relevant Keywords: Ensure your titles, tags, and descriptions are keyword-rich and align with buyer searches.
• High-Quality Images: Use professional and clear images that showcase your products from multiple angles.
• Competitive Pricing: Ensure your prices are competitive within your niche.
• Complete Descriptions: Provide detailed and helpful product descriptions that answer customer questions and build trust.

b) Product Relevance and Popularity

Listings with a high conversion rate (views to sales) are more likely to be prioritised for Etsy Ads. You can improve relevance by:

• Targeting niche keywords: Focus on specific, less competitive keywords to boost visibility in your niche.
• Regularly updating listings: Keep your listings fresh by updating descriptions, images, and titles.

c) Ad Testing and Analytics

Etsy provides analytics for your ads, including:

• Views and Clicks: How many people saw and clicked on your ad?
• Revenue Generated: How much revenue each ad has generated.
• Conversion Rate: The percentage of clicks that turned into sales.
• Adjusting Ads: Use this data to tweak your ads, such as pausing underperforming listings or allocating more budget to high-performing ones.

5. How to Monitor and Improve Ad Performance

Etsy Ads Dashboard: Keep track of your ad performance through Etsy’s advertising dashboard. Monitor metrics like clicks, sales, and cost to ensure you’re getting a decent return on investment (ROI).

A/B Testing: Experiment with different listing titles, images, and price points. Try promoting different products at different times to see what works best.

Seasonal Adjustments: Scale up your ads during peak shopping periods (e.g., holidays) and dial them down during slower periods to optimise spending.

6. Offsite Ads Fee Structure

If a shopper clicks on your offsite ad and makes a purchase within 30 days, you’ll be charged a fee based on your shop’s revenue.

• 12% Fee: For shops earning more than $10,000 annually.
• 15% Fee: For shops earning less than $10,000 annually.

This fee applies only when a sale is made from an offsite ad, making it a relatively risk-free option if you’re targeting growth beyond Etsy.

7. Important Considerations

• Budget Cap: Unlike traditional pay-per-click (PPC) advertising, you set a daily budget rather than bidding directly on keywords.
• Ad Spend ROI: Constantly evaluate whether your ad spend is driving sufficient revenue. If an ad listing isn’t converting, consider updating the product description, images, or even keywords to increase relevance.

By mastering Etsy ads and using data to refine your approach, you can significantly scale your shop’s growth.

Quick Tips on how to boost your Etsy shop’s sales

• Pricing Strategy: Conduct thorough market research to analyse competitors’ pricing and establish a pricing strategy that balances your products’ competitiveness and profitability.

• Customer Engagement: Ensure timely responses to customer enquiries and reviews. Providing excellent customer service has the potential to foster customer loyalty and encourage repeat purchases.

• Discounts: Run occasional offers or promotions to attract consumers looking for a deal.
• Stay informed: Stay updated on Etsy’s policies and any changes that may occur to ensure compliance.

Summing It Up

Etsy offers a low-barrier platform where independent entrepreneurs can reach millions of buyers, with many managing their shops solo. But as you scale, complexities such as VAT, fulfilment, and effective shipping arise. This is where Paxcom can be a crucial partner. Our services span everything from content creation and optimised product listings to advertising strategy, promotion management, brand store building, and advanced analytics, helping you drive engagement and boost sales on Etsy.

At Paxcom, we’re committed to supporting your eCommerce journey. 

For more resources, check out our guide on “Navigating Global E-commerce: Challenges Faced by Brands Selling Internationally.” 

Whether you’re just starting or ready to expand, our team is here to help you succeed.

For expert guidance tailored to your business, reach out at info@paxcom.net for more information.