Creative entrepreneurs passionate about handmade and unique items are discovering that Etsy is a great marketplace for showcasing their goods. However, not everyone is familiar with compliant ways to use third-party production and fulfillment on Etsy. In this article, we’ll break down the current rules and steps to get an Etsy-friendly business up and running.
What is Dropshipping?
Dropshipping is a business model where a merchant sells products without needing to manufacture goods, carry inventory, or ship products to customers. The business model is popular among new and risk-averse entrepreneurs who want to start an ecommerce business.
Traditionally, entrepreneurs were required to buy products in bulk, at wholesale prices. If a product sells, great! If it didn’t, they were left with a box of unsold inventory. With dropshipping, you buy products from suppliers on an individual basis. So if a customer places an order, you only order that product from the supplier.
What is Etsy?
Etsy is an ecommerce site that allows sellers to showcase craft supplies, as well as vintage or handmade items. Although it was introduced as a platform for small-batch makers and artisans, Etsy has grown over the years and now facilitates merchants of all types in selling their wares.
How Dropshipping on Etsy Works
Starting an Etsy-based business that uses third-party fulfillment isn’t as simple as it sounds. Etsy doesn’t endorse classic dropshipping (reselling mass-produced goods purchased after the sale), and policies around reselling, production partners, and print on demand can be confusing to navigate.
That said, there are two “Etsy-friendly” approaches that align with the Etsy's policies if done correctly:
- Open an Etsy store and outsource the production of your goods. You create and own the designs, while a third party manufactures them as your disclosed “production partner.” Many print-on-demand (POD) partners also handle fulfillment, but you remain responsible for customer service and listing accuracy.
- Source products from Etsy to sell on your own ecommerce site. This model involves buying products from other Etsy merchants (with their permission and in line with their terms) and reselling them in your own store. It gives you more control and autonomy but requires more marketing. Note that you can’t source products from Etsy and then resell them on Etsy.
The Rules of Dropshipping on Etsy
Dropshipping on Etsy can be a tricky business, as the platform doesn’t explicitly allow it. However, there are some rules and conditions that Etsy has put in place that are relevant to similar business models. Here are some key Etsy rules to keep in mind:
- The nature of the items you sell on Etsy should be vintage, handmade, or craft supply. Also, vintage items must be at least 20 years old.
- In the Handmade category, items must be made and/or designed by the seller. Etsy doesn’t permit reselling ready-made goods in Handmade, meaning you can’t source other makers’ products and list them as your own.
- When working with ‘production partners’ you must specify the relationship on product listings. However, production partners cannot be Etsy shop members or suppliers from whom the merchant sources ready-made products to resell.
- For craft supplies, you may resell commercial, vintage, or handmade supplies that meet Etsy’s craft-supply criteria.
- Every Etsy listing must directly sell and endorse a digital or physical item. Etsy prohibits sellers from creating Etsy listing referral codes or want ads, or similar activities.
- Some prohibited reselling activities include: selling products by merchants unaffiliated with your business, selling fair trade items you didn’t design or make, and repackaging and rebranding commercial items.
- Reselling mass-produced goods from marketplaces like AliExpress or Amazon typically violates Etsy’s Handmade rules and is risky for your shop.
Ultimately, it’s up to the seller to ensure their practices align with Etsy’s policies. Always review the latest Seller Handbook and policies before listing, as rules can evolve.
Benefits of Etsy Dropshipping
Dropshipping is popular on various platforms. There’s Amazon dropshipping, eBay dropshipping, Shopify dropshipping, and more. So, why are people interested in Etsy dropshipping in the first place? Here’s a quick rundown:
Etsy Products are Popular for Certain Niches
If you’re looking for handmade goods, printables, or wedding products, Etsy is one of the biggest marketplaces for those niches. Sellers looking to sell digital products or wedding accessories might be interested in dropshipping Etsy products.
Competition Can Be Lower—But Compliance Matters
Etsy’s strict rules around reselling and print on demand reduce the number of sellers using third-party fulfillment. That can mean less direct competition in some niches, but success hinges on policy compliance, quality, and customer experience.
Etsy Dropshipping Cons
While Etsy dropshipping offers some benefits, its drawbacks can make you reconsider the platform. Here are a few:
High Fees
Sellers on Etsy pay a $0.20 listing fee per item. On every sale, you pay two main fees: a 6.5% transaction fee and a separate Payment Processing Fee (approx. 3% + $0.25 in the U.S.), both charged on the total order amount (including shipping/gift wrap). Currency conversion fees may also apply. If you use Etsy's Offsite Ads, an extra 12% or 15% fee is charged on ad-attributed sales. Etsy Pattern, your separate branded site, is $15 per month and is subject to its own unique fee structure. All these costs must be factored into your pricing.
Low Scalability
Etsy’s inventory is usually handmade, vintage, or sourced with care, not mass-produced. Thus, Etsy suppliers cannot create items as quickly as larger manufacturers. Additionally, the inventory of vintage and antique items is limited, making it challenging to scale your business and increase sales.
How to Start Dropshipping from Etsy
Now that you’re clear on the benefits of Etsy dropshipping, let’s look at the steps to get started.
1. Find Products to Sell
The first step is identifying items to dropship. There are plenty of options available, from handmade crafts to unique vintage finds. You can browse through the Etsy Best Sellers and Top Sellers sections, which provide top product ideas to sell. For more refined searches, sort results by prices and shipping options to narrow down to the most profitable and popular items.
2. Choose a Dropshipping Supplier
Next, select a dropshipping supplier that fits your product interests. Since Etsy doesn’t allow reselling handmade goods, you should be the designer of the item and treat your supplier as a disclosed production partner. Avoid suppliers who only provide ready-made goods for resale on Etsy.
Here are some tips to help you find the right dropshipping supplier:
- Research thoroughly: Look for suppliers with good reviews and clear business practices.
- Check policies: Ensure the supplier allows dropshipping and complies with Etsy’s guidelines.
- Order samples: Order samples to check the quality of the products.
- Communicate: Choose a supplier who communicates effectively and promptly.
- Validate shipping: Verify shipping times and costs to ensure they align with your business needs.
3. Create Your Etsy Storefront
Creating an Etsy store requires you to have a seller account. Go to Etsy’s website and click ’“Register.” Enter your name, email address, and password. Click “Register” at the bottom and you’ll be taken to Etsy’s homepage.
Scroll to the bottom of the page and click “Open your Etsy shop.” Then click “Let’s do this” and “Start your shop.” This will initiate the setup for your Etsy dropshipping store.
Choose your store’s language, country, and currency for your store preferences. Click “Save and continue.”
4. Publish Listings
Creating listings is an integral part of getting your Etsy dropshipping store up and running. Begin by entering product details and uploading high-quality photos. You can also explain any customization options available to customers. Indicate how buyers can provide their preferences during the ordering process.
Etsy allows you to choose tags and categories for your products. Select carefully to ensure your items are easy to find through Etsy’s search function. Once you’ve added all the necessary information, click the Publish button to make your listing live. Your product is now ready for customers to view and purchase.
5. Fulfill Your Orders
To fulfill orders, you need to link your Etsy store to a dropshipping platform. Not all platforms support selling on Etsy, but here are a few options:
- Art of Where: A partner that handles print-on-demand items, offering customization for labels and stickers.
- Printful: Integrates with your store to sell print-on-demand products featuring your unique designs.
- AutoDS: Helps you source products from Etsy to sell through your branded Shopify store.
Etsy Dropshipping on Shopify
When it comes to Etsy dropshipping on Shopify, you’re able to promote Etsy products on your store via Shopify apps (with the original seller’s permission).
Dropshipping From AliExpress to Etsy
Dropshipping from AliExpress to Etsy is effectively prohibited. Goods listed on Etsy must be handmade (by you or your production partner using your design), vintage, or a craft supply. For example, if you’re selling a t-shirt, the design on the t-shirt must have been created by you and the production partner disclosed. Reselling mass-produced items sourced after the sale can get your shop suspended.
Dropshipping From Amazon to Etsy
Like with AliExpress, sellers cannot dropship from Amazon to Etsy. Products on Amazon are generally mass-produced and don’t match the handmade, vintage, or craft quality that Etsy aims to uphold on its platform.
Dropshipping From Etsy to eBay
Selling Etsy products on eBay isn’t technically dropshipping, but you could buy items from Etsy sellers (with their permission and respecting IP/licensing) and list them on your eBay account. You’ll need to manage inventory and shipping yourself.
Dropshipping Print-On-Demand Products on Etsy
Etsy allows you to dropship print-on-demand products on its platform. You can customize these items to fit each customer’s preferences. It’s possible to sell everything from apparel to home décor.
POD providers like Printful even let you create unique designs for your products. Plus, they handle the printing and shipping for you.
But keep in mind that your listings should clearly state that they are fulfilled by a POD provider (production partner). Additionally, ensure your designs are original, don’t violate copyright laws, and follow Etsy’s policies.
Dropshipping Your Own Brand
Maybe Etsy isn’t the best marketplace to dropship products. But that doesn’t mean you can’t dropship successfully somewhere else. The best way to dropship products online is by having your own online store. That way, you gain full control over your business. Here are a few benefits of having your own store:
- Own your own brand: People will remember your store name, not the platform you sell on, like Etsy.
- Own your marketing: Build your own email list, retarget your website visitors, own your customer list.
- Sell as many products as you like: You can choose from millions of products, and with no listing fees you can add as many products as you like, without any added fees.
Launch Your Etsy Dropshipping Business Today
Starting a dropshipping business on Etsy can be challenging, but don’t let that deter you from the idea. Instead, consider building your own online store using platforms like Shopify to access unique benefits not found on Etsy. And if the drawbacks of Etsy outweigh its advantages, you can still set up a Shopify store and start expanding your dropshipping business immediately.
Etsy Dropshipping FAQ
Is Etsy Dropshipping Worth It?
It depends on your goals and resources. If you’re after quick cash, an Etsy dropshipping store might not be for you. But if you’re ready to invest time and effort into building a strong business, Etsy can be profitable—especially with original designs, strong branding, and solid operations. The platform offers a vast audience and built-in demand, but fees and policy constraints require careful planning.
How Does Dropshipping Work on Etsy?
Practically, a seller sets up a store, connects with a compliant production partner, and creates listings for products they designed. When a customer orders, the partner manufactures and ships directly to the buyer. You must disclose the production partner and remain the designer; reselling ready-made goods is not allowed in Handmade.
Can You Dropship From Etsy To Shopify?
Yes—many merchants list items sourced from Etsy on a Shopify store using apps that sync inventory and fulfill orders. However, it’s only viable with the original seller’s permission, and it isn’t “dropshipping” unless that seller fulfills on your behalf under a formal agreement.
Is It Legal to Dropship Products From Etsy?
On Etsy, you may use dropship-like fulfillment only when the item is your design and the manufacturer is disclosed as a production partner, or when selling permitted categories like vintage or qualifying craft supplies. Reselling another maker’s handmade goods on Etsy is prohibited. Off Etsy, legality depends on seller permissions, IP rights, and marketplace rules—always check terms before you sell.