Which one should you use?
Investing in your own website has TONS of pros— it's fully customizable, every website has its own side plugins and apps for more upselling / automation features, your shop comes off more established, it's easier to build a brand recognition... BUT the time and monetary investment ADDS. UP. compared to starting on Etsy (which only takes fees when you sell).
I'd advise starting your side biz on Etsy UNLESS:
- You are confident in your brand presentation
- You have a marketing plan and / or budget
- You are willing to spend 80+ hours learning how to use the website hosting platform before you begin
- You are willing to spend $500+ in website fees before you make any significant sales
- You definitely want to try upselling features like writing in a blog, capturing leads through an email pop up form, have a customer loyalty system, etc.
Etsy vs Shopify fees
Hosting a website costs upwards of $29 a month and if you're not making much sales, add any software costs, inventory, other fees will amount to quite a bit. Etsy only charges you when you make sales, so your margins won't be as good but you won't spend all your profit (and more) paying website fees.
My journey with Etsy
When I first opened my Etsy in 2013, I just listed random cards I designed. To my surprise, I got a couple hundred in sales that year just from purely "having fun" with no actual goals. So the next year in 2014, I spent a lot of time launching a more cohesive visual look and it paid off; Etsy sales grew by 9.4x between the years.
But if you look at this graph (a little more zoomed in than this one), my Etsy sales are decreasing YOY and at this rate, 2019 sales turned out as low as they were when I opened my shop 6 years ago.
It's not discouraging to me; I knew Etsy was getting increasingly saturated over time and therefore found other revenue streams in 2015. (An interesting tidbit: though Etsy sales in 2014 were double Etsy sales in 2018, they made up 100% of total sales in 2014 and only 3.3% of total sales in 2018.)
But I will always love Etsy, and it's still been a huge part of Pickles through the years. It's the platform I started on and I don't think I'll ever get off, even if it takes so. much. time. to upload. new listings on all the selling platforms I'm on. There's a community within Etsy sellers and still a lot of opportunities for features, press, resources, etc from Etsy.
I hear small businesses often advise others to not open an Etsy site and go straight to your own e-comm site for many valid reasons, but I think there is a lot of value to starting with a smaller investment and selling on your own website only as your sales gain more traction.
I still recommend every single person I chat with that's thinking about starting a creative side thing start off with Etsy, and keep it open as long as it makes sense. In the long run, your own website should be the goal: it'll take a smaller chunk of your sales, you can collect email addresses for marketing, you can make it look better visually, it's much better for brand establishment, etc. But it will be quite a financial investment until you hit a certain point of sales.
I opened my e-comm website in 2015, when I was making a consistent sales volume per month, and I am always happy to share that I spent very little to start this side hobby of mine, only growing it slowly based on sales. Risk-free way to start a business :)