If The Marketplace Is Pay-to-Earn, You Must Pay to Be Successful
I have a theory...
While I'll discuss Etsy in this article, it can also relate to similar online marketplaces.
I've been selling on Etsy for several years and have multiple shops, but I've never paid for ads there.
Why? I don’t know.
Maybe because I'm good with SEO and marketing, I always made sales.
But for my new shop (full of digital products), I decided to turn on the Etsy ads.
I'm starting small, with just $5 per day, to promote only two products, and I'm confident I can make a nice profit.
Let me tell you why I'm sure.
But first, the basics.
What Are Etsy Ads?
Think of Etsy ads as your way of shouting, “Hey, look over here!” in the middle of that crowded marketplace.
When you use ads, your products get a prime spot in search results or appear as sponsored listings.
This means more people are likely to see them (people already browsing on Etsy with their wallets ready.)
Unlike some advertising platforms, Etsy ads operate on a pay-per-click system.
This means you only pay when someone clicks on your ad, not just because they saw it.
These clicks are inexpensive, averaging around 15 cents.
There Are Some Benefits of Ads
1. Reach People Ready to Buy
Etsy isn’t like social media platforms where people just scroll. People visit Etsy when they’re ready to buy something special.
When your ad appears, it’s in front of people already hunting for products like yours.
2. Stay Budget-Friendly
You set a daily budget, and Etsy won’t spend more than that. Whether you can spare $1 or $50, you control how much you’re investing.
Plus, Etsy often doesn’t even spend your full budget if your ads have already reached the right audience for the day.
3. Boost Your Shop’s Visibility
Running ads isn’t just about clicks and sales.
Etsy’s algorithm notices when you use ads, and it can give your shop a gentle boost in search rankings.
This can help your non-sponsored items show up higher in searches over time.
4. Learn What Works
Ads aren’t just about selling; you are collecting data about your shop. By running ads, you’ll see which products attract clicks and which don’t.
This data can guide your shop’s future—helping you improve your listings, focus on winners, and retire the non-sellers.
Of Course, There Are Cons
1. Costs Can Add Up
While you control your budget, ad costs can still feel like a lot if you’re just starting out. If a product isn’t selling well, you are paying for clicks that don’t lead to sales.
2. Not All Products Are Winners
Some items just don’t convert, no matter how much visibility they get. It could be due to pricing, competition, or customer interest. Ads won’t fix a product that isn’t appealing to buyers.
3. You Must Adjust
As with other things, even ads come with a bit of a learning. You need to understand your profit margins, track performance, and adjust your strategy. If you’re not ready to crunch numbers or experiment, ads are a gamble.
Should You Use Etsy Ads Right Away?
Some sellers swear by using ads as soon as they open their shop. Others prefer to wait until they have a handful of proven listings.
Here are two ways to approach this:
Start Small
Dip your toes in. Run ads on a few products with a modest budget. This is a low-risk way to see how ads work and whether they drive results for you.
Focus on Proven Listings
If a product already gets views and sales organically, ads can improve its success. This is what I do. I select listings that already sell and have good profit margins.
Making the Most of Etsy Ads
Before you spend a cent on ads, understand your profit margins. If it costs $10 to make a product and you sell it for $20, you need to account for Etsy fees, shipping costs, and ad spending.
Ads only make sense if you’re still making a profit after all expenses.
Most sellers make the mistake that they turn off the ads after a week or two.
Let's run ads for a month or two without modifying too much. Let Etsy collect data about which listings perform well.
Once you have enough data, you can double down on your winners and adjust or drop the underperformers.
Also don’t forget to set a budget that makes sense for you.
In fact, you don’t need to break the bank. Start with $2 or $5 a day or whatever feels manageable. The key is consistency.
Ads work best when they run steadily over time, gathering clicks and sales to optimize performance.
Don’t Forget About Etsy Offsite Ads
Etsy also offers something called Offsite Ads. Here,
Etsy advertises your products on platforms like Google, and you only pay a commission on sales made through these ads.
The commission ranges from 12% to 15%, depending on your total yearly revenue. The good about them is that you only pay if a sale happens, making it a lower-risk option to explore.
Are Etsy Ads Really So Good?
I have a theory.
If you are using ads, you are telling Etsy that you are serious about your business.
And Etsy algorithm will notice it and reward it.
Just a theory, I know.
But…
who knows.
If you’re not ready to invest money just yet, that’s okay too. Focus on improving your shop’s foundation—your photos, descriptions, and customer service. When you’re ready, ads will be there as an option to scale your shop.