Etsy Dropshipping: The Definitive Guide (2024)

Dropshipping is a business model that simplifies order fulfillment. Many sellers have found success with this hands-off way of doing business by dropshipping across multiple sales channels.

That’s where Etsy, the marketplace for handmade and unique goods, comes in. When starting a dropshipping business, many sellers look to Etsy as an additional sales channel.

However, while Etsy is a great place to launch a new business, it may not be the best option for dropshipping. To find out why, take a deep dive below.

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. This model frees merchants up 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.

Six steps of dropshipping, from partnering with a supplier to the customer receiving the product.

What is Etsy?

Etsy is an online marketplace where sellers list products that are handmade or vintage, as well as craft supplies. While it originally launched as a platform for small-batch artisans and makers, Etsy has since expanded, and merchants of all types and sizes sell their wares. Etsy is home to more than five million sellers and 90 million active buyers.

How dropshipping with Etsy works

Etsy makes it difficult to dropship on its platform. While it doesn't explicitly prohibit dropshipping, Etsy does have rules against key elements of the dropshipping model, such as reselling.

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, you 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.

According to its terms and conditions, “All handmade items [must be] made or designed by you.”

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 storefront offers more control and business autonomy, but you’re also responsible for marketing and driving traffic to your store, since you won’t have Etsy’s built-in customer base.

The rules of dropshipping on Etsy

While Etsy doesn’t explicitly call out dropshipping on its website, it does publish some rules and conditions around similar business models:

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,” sellers must disclose the relationship on product listings.
Production partners may not be Etsy shop members or suppliers from whom the merchant sources ready-made products to resell.
Etsy merchants may not use AliExpress dropshipping.
Vintage items need to 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

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.

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 dropshipping on Etsy

High fees

Dropshipping on Etsy can be expensive. The marketplace’s fees will quickly cut into your profits. Sellers pay a 20¢ listing fee per item and a transaction fee of 6.5% of the displayed price, plus shipping and gift wrapping.

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 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 straigthforward. 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 items sold on Etsy typically means they’re not mass-produced at rapid rates. Because most items are carefully designed and made, Etsy suppliers likely can’t make as many items as quickly as large manufacturers can. Not to mention the finite nature of inventory when it comes to vintage and antique products. This makes it harder to grow your business and drive more sales.

How to dropship products from Etsy

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, there are approved Etsy partners you can work with to design and manufacture your products. They include Printify, an integration that allows merchants to dropship custom print-on-demand 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.

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 sell 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 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. Having 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

Start your dropshipping business today

While Etsy may not be the best place to launch your dropshipping business, opening an online store with a platform like Shopify gives you 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 dropshipping business today.

Etsy Dropshipping FAQ

Does Etsy allow dropshipping?

Etsy allows dropshipping so long as its seller policy is followed. It is the responsibility of the seller to ensure that all items meet Etsy’s requirements 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 any 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.