Dropshipping is a business model that simplifies order fulfillment. While many sellers have succeeded with this hands-off approach across multiple sales channels, they face limitations when dropshipping on Etsy, the marketplace for handmade and unique goods.
Although many sellers consider Etsy an additional sales channel when starting a dropshipping business, it’s important to understand that Etsy’s platform isn’t fully compatible with traditional dropshipping models. Below, you’ll learn how to dropship on Etsy and what benefits and drawbacks to expect with Etsy dropshipping.
What is dropshipping?
Dropshipping is a business model where suppliers and manufacturers ship orders directly to customers, once a sale has been made in an online store.
The dropshipping fulfillment model frees up merchants to focus on things like marketing and customer service, instead of warehousing and the logistical challenges traditionally associated with running a retail business. It’s a less risky way of getting into ecommerce, because you don’t need to invest in inventory.

Modern dropshipping software can automate many aspects of running a dropshipping business, from inventory syncing to order processing and tracking updates. These automation tools help merchants to scale their operations efficiently and maintain a lean operation.
What is Etsy?
Etsy is an online marketplace where sellers list products that are handmade or vintage, as well as raw materials like craft supplies. It’s known for offering more unique products consumers can’t find elsewhere, versus mass-produced items on other marketplaces. Etsy sellers are charged fees for listing their products and completing sales transactions.
While it originally launched as a platform for small-batch artisans and makers, Etsy has since developed into a place where merchants of all types and sizes sell their wares. Etsy is home to more than nine million sellers and 90 million active buyers.
How dropshipping with Etsy works
Etsy explicitly prohibits dropshipping except for craft and party supplies. Reselling also is not allowed on Etsy except for the following items handpicked or sourced by sellers:
- Craft and party supplies
- Vintage items more than 20 years old
- Gift baskets
There are two main ways of “dropshipping” on Etsy that comply with the platform’s terms and conditions. Neither method is exactly dropshipping, per se, but they’re as close as you can get to the business model when selling on Etsy.
Here are the two dropshipping options for Etsy merchants:
1. Open an Etsy storefront and outsource the production of goods
Like dropshipping, this method outsources manufacturing, so you don’t have to worry about production. However, unless you work with a print-on-demand (POD) production partner, you’ll still have to manage order fulfillment.
If you go this route, it’s important that you only outsource the production of goods designed by you. Etsy requires sellers to at least have a hand in the design.
To create a successful production partnership while staying compliant with Etsy’s policies, consider these approaches:
- Work closely with manufacturers to develop unique product specifications, like custom patterns or materials that make your items distinct.
- Provide detailed design files, sketches, or prototypes to your production partner that show your original creative input.
- Document your design process and involvement to show your role as the creative force behind the products.
Be transparent about your partnerships in your shop’s About section. Keep in mind that Etsy might request documentation of your design process or partnership agreements to verify compliance.
2. Source products from Etsy to sell in your own online store
This method involves sourcing products from Etsy merchants and then reselling them on your own branded ecommerce site. (Note you can’t source products from Etsy and then resell them on your own Etsy shop.)
Having your own online storefront offers you more control, business autonomy, and a larger cut of your profits. But without Etsy’s built-in customer base, you’re also responsible for marketing and driving traffic to your store.
The rules of dropshipping on Etsy
Etsy has published several rules and conditions related to dropshipping business models on their platform, including the following:
- All items for sale on Etsy must be handmade, vintage, or a craft supply.
- Any items sold in Etsy’s Handmade category must be made and/or designed by the seller. Reselling is prohibited.
- When working with “production partners,” items being sold must be the seller’s original design or customized by the buyer.
- Production partners may not be Etsy shop members or dropshipping suppliers from whom the merchant sources ready-made products to resell.
- Etsy merchants may not use AliExpress dropshipping.
- Vintage items must be 20 years or older.
- Craft supplies may be sourced from a third-party seller and can be handmade, commercial, or vintage.
- Every Etsy listing must directly promote and sell a physical or digital product. You can’t create Etsy listings for a referral code, a want ad, or a “similar activity.”
- Specific prohibited reselling activities include repackaging and rebranding commercial items; curating others’ handmade goods you didn’t design or make; selling items made or designed by another seller who is unaffiliated with your shop; selling traditional handicrafts or fair trade items you didn’t design or make.
So, in short, you may be able to find workarounds and hacks to dropship on Etsy, but in general, the marketplace is not designed to support dropshipping.
Benefits of Etsy dropshipping
Despite not being the ideal platform for dropshipping, there are some advantages to dropshipping on Etsy.
Competition for dropshippers is low
Because Etsy makes it difficult for sellers to use dropshipping, few dropshippers focus on the marketplace. As a result, if your dropshipping business complies with Etsy’s rules, you may find little competition and an easy advantage.
Niche businesses are warmly welcomed
If you have a dropshipping niche business or product idea that fits Etsy’s requirements, dropshipping that item can be a great opportunity. Etsy welcomes niche businesses and categorizes merchants to make it easy for customers to discover you in the searchable marketplace.
Vintage or handmade items are easier to market
Etsy is an ideal third-party marketplace for handcrafted and antique items. So it’s a no-brainer if you’re dropshipping products that fall under one of those categories, due to its highly segmented user base.
Curated customer bases are more accessible
People using Etsy typically look for a specific type of item. Oftentimes, they’re willing to pay more for it because it’s a one-of-a-kind vintage or handmade item.
Drawbacks of Etsy dropshipping
Every seller’s situation is unique, but the challenges of Etsy dropshipping tend to outweigh the advantages.
High fees
Selling on Etsy can be expensive. The marketplace’s fees will quickly cut into your profit margins. Sellers pay a 20¢ product listing fee per item and a transaction fee of 6.5% of the displayed price, plus shipping and gift wrapping fees.
Rigid dropshipping rules
It’s clear Etsy isn’t a fan of dropshipping and doesn’t welcome the business model to its platform with open arms. As such, Etsy doesn’t have any features or tools dedicated specifically to helping merchants dropship—and they likely won’t roll out those features anytime soon.
No wholesaling option
Etsy further backpedaled on dropshipping when it sunsetted its wholesale offering. It encourages merchants to have a hands-on role in product development and manufacturing, so it removed the wholesale program that made it easier to dropship on Etsy.
Time-consuming listing process
Listing items on Etsy isn’t super straightforward. Etsy doesn’t offer the ability to bulk upload, so you have to list each item manually. Some merchants also report delays from the time their listing is published to the time it starts appearing in search results.
Low scalability
The nature of the unique items sold on Etsy typically means they’re not mass-produced at rapid rates. Because most items are carefully designed and custom made, Etsy suppliers likely can’t make as many items as quickly as large manufacturers can. Not to mention, there’s a finite nature to inventory if you sell vintage and antique products. All those factors make it harder to grow your business and drive more sales.
How to dropship products from Etsy
Let’s refer back to our two Etsy dropshipping workarounds:
- Open an Etsy storefront and outsource the production of your goods.
- Source products from Etsy to sell on your online storefront.
For option one, you can work with approved Etsy partners to design and manufacture custom products. These partners include Printify, a print-on-demand integration that allows merchants to dropship custom POD products.
Another app to consider is Art of Where, a dropshipping partner that fulfills print-on-demand products with customization options for labels and stickers. You can dropship t-shirts, home décor, wall art, and more with your own designs.
For option two, useful tools include AutoDS, which helps merchants source products from Etsy to sell in their Shopify store.
Dropshipping from AliExpress to Etsy
Merchants are unable to dropship from AliExpress to sell via their Etsy storefront. Etsy requires items to be handmade, uniquely designed, or antique vintage—the suppliers on AliExpress don’t sell products that meet those parameters. Instead, they’re mass-produced, typically in some sort of factory or manufacturing facility.
Dropshipping from Etsy to eBay
Dropshipping from Etsy to eBay is technically possible by sourcing products from Etsy sellers to resell on your own eBay account.
Dropshipping from Amazon to Etsy
Just like AliExpress, merchants are unable to dropship from Amazon to Etsy. Amazon items are typically mass-produced and don’t reflect the high quality of handmade, vintage, or crafting goods that Etsy seeks to maintain on its platform.
Alternatives to Etsy dropshipping
The best way to dropship products is to seek Etsy alternatives and eventually set up your own online store.
Running your own ecommerce site allows you to:
- Sell internationally
- Own relationships and communicate directly with your customers
- Improve customer loyalty and retention
- Access customer data (email, browsing, and purchase history, etc.)
- Gain complete business autonomy and control
Navigating Etsy’s community standards
Etsy’s standards keep it a safe and respectful marketplace for buyers and sellers.
From guidelines on intellectual property to rules against prohibited items, these standards outline the dos and don’ts of operating on the platform.
Best practices for compliance
Before listing new products or engaging with buyers, spend time reading through Etsy’s community guidelines:
Those pages in particular will help you know exactly what Etsy expects from its community.
Some other best practices for compliance include:
- Accurate and honest product descriptions: Explain your items, what they’re made of, how they’re produced, and any relevant information. Honesty in listings helps you avoid misleading customers and supports the process of building brand credibility.
- Respect intellectual property rights. Guarantee your product’s don’t violate another brand’s or artist’s copyrights or trademarks. If you’re unsure whether you infringe on someone else’s work, consult an IP attorney.
- Engage positively with the community. Treat every customer with respect in all your communications. Respond to messages promptly and resolve any issues or misunderstandings professionally.
Policies can change over time. Keep an eye on your Etsy dashboard and official Etsy announcements regarding community standards.
Consequences of violating standards
If Etsy believes you or your content violates its terms, they can do the following:
- Remove your listing. Etsy may remove products if they violate Etsy’s policies, like prohibited items, copyright infringement, or misleading claims.
- Temporarily or permanently suspend your shop. Repeated or serious infractions (for example, selling blatantly disallowed items) can result in your selling privileges being suspended.
If your listings are pulled or your shop is shut down, you’ll lose sales and revenue. Minor violations also hurt buyer confidence, which could affect your shop reviews and brand reputation.
Resources for sellers
Stuck on next steps? Here are some resources to help you thrive on Etsy, whatever you decide to sell.
- Etsy Seller Handbook. A go-to resource filled with articles and tips on how to run a shop and adhere to Etsy policies.
- Etsy Community Forum. Connect with other sellers, ask policy-related questions, and learn from the experiences of seasoned shop owners.
- Etsy Support. If you need more assistance, Etsy has many support channels to guide you through compliance steps.
If you’re unsure about legal considerations, like potential trademark or copyright issues, it’s worth consulting an attorney. Professional advice can protect your shop from unwanted claims or penalties.
Start your dropshipping business today
Etsy may not be the best place to launch your dropshipping business, but opening an online store with a platform like Shopify gives entrepreneurs more dropshipping options.
If you find the drawbacks of dropshipping on Etsy outweigh the benefits, you can pursue other options with Shopify and start growing your ecommerce business today.
Consider joining Shopify Collective to connect with established brands and sell quality products without holding stock. You can import products from top Shopify brands and only pay when you make a sale—giving you a risk-free way to grow your ecommerce business today.
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Etsy dropshipping FAQ
Can I sell digital products on Etsy as a dropshipper?
Yes, you can sell digital products on Etsy. But digital products are a bit different from traditional dropshipping.
Digital products don’t involve physical inventory or shipping, which makes their fulfillment process fundamentally different from the dropshipping model.
Make sure your digital products are original work and that you have the rights to sell them.
Can I use print-on-demand services with Etsy?
You can sell print-on-demand products as long as you create the designs yourself. Use services like Printful or Gooten to create products and have them fulfill your Etsy orders.
What are the fees associated with selling on Etsy?
Each listing costs 20¢ to publish, plus you’re charged a transaction fee that’s 6.5% of the price you display for each listing. You’ll also need to account for your shipping and gift wrapping costs.
Does Etsy allow dropshipping?
No, Etsy does not allow dropshipping except for craft and party supplies. It is the responsibility of the seller to ensure that all items meet Etsy’s policies and that they are being shipped properly.
Is Etsy dropshipping worth it?
If you have the time and resources to build a strong dropshipping business, Etsy can be a profitable platform. It has a large customer base, low fees, and a wide range of products. Ultimately, the success of your Etsy dropshipping business depends on the effort put into it.
Can you dropship from Etsy on Shopify?
You can dropship from Etsy to Shopify. Shopify offers a number of apps that can help you to connect your Etsy store with your Shopify store, allowing you to sync inventory, manage orders, and more.
How does dropshipping work on Etsy?
Dropshipping on Etsy works by connecting an Etsy seller’s store with a supplier, who ships products directly to the buyer. The seller lists the item on their Etsy store, and when a customer orders the item, the seller forwards the order to the supplier. The supplier then ships the item directly to the customer.