If you’ve been dreaming about getting your home bakery up and running, or maybe you just want to expand your customer base to earn more money, Etsy could be the perfect fit.
One of the best online marketplace platforms in 2022, there’s a lot to fall in love with as a creator – especially as a creator of physical, edible goods like a baker – when it comes to Etsy.
At the same time, there are certainly some pitfalls, risks, and drawbacks to operating your baked goods business on this platform. Worse, some of the more serious risks may not be immediately apparent (but we highlight them below to know what you’re getting into).
Below we dive a little deeper into the pros and cons of selling your baked goods on Etsy. We cover what you need to know about the advantages of this platform and the drawbacks you’ll want to be aware of as you assess the viability of starting your home bakery on Etsy.
Etsy’s Policy on Selling Food and Edible Items on Their Platform
To be crystal clear, you should know that Etsy allows food and other edible items to be sold on the platform.
You have to be sure that you abide by all local, state, and federal government regulations that dictate who is legally able to make, package, and sell food and other edible items – like baked goods – online or anywhere else.
You can find details about these specific requirements in the Etsy Seller Handbook (found here).
It’s also important to know that shipping companies (including USPS) have specific and stringent restrictions and rules for shipping food and edible items.
At the end of the day, abiding by all of these laws, rules, and regulations falls on Etsy shop owners’ shoulders, and it will be your responsibility to ensure you comply.
Easy to Get Started
The biggest benefit of selling your baked goods on Etsy is how simple and straightforward it is to pop open a shop, hang out your shingle, and start selling your baked goods – often in the same afternoon.
You can go from having no Etsy account to a full-blown storefront in about five minutes. There aren’t a lot of other platforms out there that make it this easy to build a legitimate business from the ground up in record time like this.
Costs Almost Nothing Upfront
Secondly, you won’t have to worry about spending a mountain of money getting your online baked goods operation up and running on Etsy.
Building a website from scratch can be expensive, even if you do most of the heavy lifting yourself. You have to worry about paying for web hosting, technical support if something goes sideways, designing or building the website itself, and perhaps paying for graphic design elements, updates, administration, and search engine optimization help. Although I think it’s worth having a website long-term, it can be something you build as your business grows. Here, you can read my blog post about using a website to drive sales.
With Etsy, you can immediately hit the ground running with a free storefront.
Very Established Marketplace
Etsy has already worked hard to build a community and a marketplace for your products. All you have to do is jump in the pool and make something to offer!
You don’t have to build your customer base from scratch the way you might have elsewhere.
The most expensive thing any business has to do is convince complete and total strangers to trust them with their hard-earned money.
Easy to Test New Offerings
Lastly, Etsy allows you ample opportunity to test all of your products, your offerings, and even different price points, combo deals, and other specific details of your baked goods operation without many risks.
You can tinker with different products, try different pricing strategies, and make various offers at different times to see what works best. Anything can be changed, modified, updated, and optimized on the fly, allowing you to build a successful business without having to do much of the heavy lifting on your own.
TONS of Competition
On the flip side of things, you will be swimming in a world of competition right from your first day in business on Etsy.
Worse, more and more people are going to flood the market regularly. Even if they aren’t necessarily direct competitors offering baked goods, they may offer something similar and siphon customers from you, too.
You’ll have to have a strategy to overcome all of this competition, to effectively market and advertise your baked goods.
If you can’t, you’ll be in for a tough time.
Always Have to Worry About Copycats Undercutting
Hopefully, your baked goods shop will make sales, customers will love everything you offer, and you’ll have a success story on your hands.
That’s great news!
Should that happen, you’re probably going to have to worry about copycats that pour in from every direction to offer exactly what you have to offer – sometimes even stealing your photos, your copy, and your story – while offering them at lower prices to undercut you and steal your customers.
You’ll need to develop unique strategies to overcome these inevitable challenges, or you’ll have a tough time succeeding.
No Real Customer Loyalty
Etsy customers LOVE Etsy – but they don’t (necessarily) create real, lasting, and long-term relationships with the individual vendors they find and buy from on the platform itself.
This is just the nature of the beast.
Think about the last time someone told you about something they purchased on Etsy or the last time you answered someone that asked you where you got something from Etsy.
The odds are pretty good that the specific name of the vendor or the storefront was the first thing said when telling people where an Etsy purchase came from. Most people just say “Etsy” and then move on.
That can be a little tough when your business is still brand new.
A huge benefit of using Etsy is the enormous number of shoppers who buy daily. That baked-in audience means you pay fees to access it. Knowing the economics around your products is essential so you don’t lose money and get killed in fees.
Tough to Brand and Market
Branding and marketing on Etsy can be a little challenging, especially if this platform is the only place you are offering your baked goods. Be sure to read my blog post on creating our visual identity here.
This is why many bakers start their operation on Etsy, build up a bit of a war chest, and then create their own online platform (a website, social media, etc.) when they have the funds to do so.
You’ll want to brand your shop as your own (thinking about the shop’s name, any graphics or logos, unique photo editing styles, etc.) while recognizing that the Etsy brand will be doing the bulk of the heavy lifting for you.
A great way to overcome this is to pack your own specific branding items inside each baked goods order when you fulfill them. That’s a personal touch you can add that can make a difference.
Closing Thoughts on Selling Baked Goods on Etsy
When you get down to it, there are a lot of benefits to selling baked goods on Etsy.
Getting started is easy and inexpensive, and you have customers looking for handmade, delicious baked goods (and other handmade stuff straight from creators).
Yes, there are big drawbacks too, including fees and competition.
Before you decide if Etsy is a good option for your home bakery business, research your local cottage food laws and clearly understand your expenses. Most options have pros and cons, do your research and make the best decision for you and your home bakery business.