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Steph Cole Lewis, founder of the Handmade Bosses is wearing a blue dress in the photo and smiling. She wears a necklace with hello in blue letters. There is Etsy's orange logo in the picture with the caption 3 reasons why most Etsy Shops fail

3 SURPRISING reasons that Etsy shops fail!

etsy 101 basics maker mindset Apr 03, 2024

Before I get right into it, you need to know 2 things.

  1. I have intentionally included the word “surprising” in the title of this blog because I want to highlight that this is NOT yet another clickbaity piece of content that takes you through the basics which you have probably heard 1000 times - yawn!

  2. I am also not a big fan of the word “failure” I am a strong believer that pretty much the only way a shop can “fail” is if the seller gives up completely.  

Great, now we’ve cleared that up, let’s dive in!

Did you know that a significant portion of the 7.5 million Etsy sellers are actually inactive/ failures?! 

Yep, when Etsy released those perceivable skyscraper stats, they included shops where the seller posted 1 listing and then ghosted, shops belonging to sellers that are no longer active and those that live “constantly in holiday mode”... 

Now as I said, this is not your bog standard clickbaity blog. We all already KNOW that good quality photos, recognisable branding, products your target market ACTUALLY want and SEO are all really important if you want to build your very own 6 figure Etsy empire and beyond. If any of those things are new to you, let that be a priority for your shop going forward. 

Here are 3 ACTUAL reasons why Etsy shops fail: 

PS, this is not just for handmade businesses, but businesses in general - you’re welcome! 

  • They fall victim to the Ostrich Effect

Now you’re probably tilting your head to the side thinking “Step, what the hell is that?”. Well, allow me to introduce you, the Ostrich Effect. It's simply my own little way of saying a lot of people are guilty of burying their head in the sand away from their issues. 

The people who tend to bury their heads in the sand are sellers who have dabbled in a few successful products, they’ve probably sold a few things and are now considering where they can refine their shop strategy to amplify their perceived success. 

They probably have thoughts like “wow things are going amazing…maybe I should review my prices, maybe I should see if I can add ‘the latest biggest trend’ to my shop”. Fast forward to the end of that quarter/year where they come to sit down and look through their finances and they feel incredibly disheartened at the size of their profit margins. 

The culprit for this is usually the fact that they rushed into the whole process because they were excited to see the results. Now, this isn’t always a bad thing, in fact I would argue that refusing to be held back by doubt and procrastination is a GOOD trait to have. However, if rushing means sacrificing building strong foundations, then we have an issue. 

At the end of the day, profit is the life blood of any business. Your business needs to be generating enough profit to support your lifestyle, you don’t need me to tell you that.  

  • They don’t take responsibility

Believe me I say this with the biggest amount of love that my heart can hold, but I see way too many posts in Facebook groups “Etsy is expensive, Etsy is hard, Etsy not working for me” all blaming things outside of their business with the view of “why is this happening TO me”. Unfortunately, the buck always falls with the business owner. 

The bottom line is, it costs money to run a business. Sometimes it is a lot of money. Everyone is made aware of the fees before they start so it is something that you should factor into your pricing from day one!

Now I am totally with you that it can be frustrating when someone brushes past something that you need to know, and feeling like you don’t know enough can be so disempowering but I can not tell you how important it is to keep going and push through these feelings. Like every single storm that has ever been, they will also pass. 

Now if a situation crops up that really isn’t your fault, I would highly encourage you to look at how you can reframe your mindset on the citation. You may not always have control over the issues that crop up throughout your business journey but you ALWAYS have control over how you react to them. Nobody can take that away from you lovely. 

I know it’s cliche but, try to hone in on what you can learn from the situation, because funnily enough running a business isn’t always sunshine and rainbows. You are going to encounter issues at some point (unless you bury your head in the sand SO much that you don’t get off the ground for things to go wrong in the first place). 

When mistakes happen (whether it’s your mistake or someone else’s) it can feel like your whole business is caving in and there is no way back from it, I promise you that is not the case. You are simply crossing off something that didn’t work for you and you are one step closer to the perfect thing that does. 

Let me know if you are resonating with any of this by connecting with me on instagram @handmadebosses  

  • They were searching for a “Get Rich Quick” scheme 

I would confidently say that this is the most common reason for Etsy sellers failing (AKA giving up).

I honestly could not quantify the sheer amount of messages I receive daily saying things like “Why haven’t I done 1000 sales yet?” or “Why am I not making six figures yet?”.

Slow and steady has never been more true than in the context of building a business my friend, whether it is handmade or not. 


BOSS! Do you want to make more sales on Etsy? Then you need to increase your conversion rate! DON'T PANIC! I'm going to explain exactly how to do that in my FREE 90 minute masterclass - The 3 Step System To Skyrocket Your Etsy Conversion Rate πŸ™ŒπŸ»


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Let me pose a question to you and I would like you to answer honestly.

Would you rather:

Grow your handmade business slowly and steadily, by solidifying the foundations and your shop supporting you for DECADES (yes, I said decades) to come… 


Set up your handmade business that grows at such an exponential rate that it becomes way too much to handle and metaphorically implodes on itself and you end up resenting all of it because you are back to where you first started. 

If I could give you ONE single line of advice when it comes to Etsy it would be “don’t rock up to Etsy expecting it to make you quick bucks”. 

When I teach this to my clients they often ask something along the lines of “how long should I be doing this before I am flogging a dead horse?”. 

My honest answer is “it’s hard to quantify”, however I would say you need to give your business AT LEAST 12 months of consistent hard work before you can expect really consistent results. If this doesn’t sound like a commitment that you feel prepared to make then perhaps setting up a handmade business is not for you, and that’s totally okay!

If you try to push against the grain with something that doesn’t feel good for you, you’re essentially hopping into the fast lane towards burnout and nobody wants that… 


Steph x



If you'd prefer me to visually teach you this blog post, then you can watch it HERE.

Don't forget to check out more blog posts from Handmade Bosses, and follow us on social media!

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> Join THE most supportive Etsy Facebook group there ever was, and connect with motivated, like-minded people.

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> If you're ready to increase your conversion rate on Etsy (NEWS FLASH! This is key to increasing your sales!), then check out my FREE 90 minute masterclass - The 3 Step System To Skyrocket Your Etsy Conversion Rate.

> If you plan to launch (or relaunch) an Etsy shop, then Boss, you need a roadmap! I've created one that will ensure your Etsy store is set up to make those sales in no time. Download the '30 Days To A Kick Butt Etsy Shop Launch Plan' here.