Etsy Pre-Launch ChecklistLaunch With Confidence

Plan for 2-4 weeks of preparation before launching. Shops that spend 3+ weeks preparing have 2.3x higher first-year survival rates than those who rush to open in under a week. This time allows you to: complete legal setup and understand tax obligations, create 8-12 quality listings with professional photos, validate product demand and pricing, write clear shop policies, and set up marketing channels (social media, Pinterest). Rushing to launch with only 1-2 products and poor preparation is the #1 cause of failed Etsy shops.

It depends on your location and sales intent. Hobby sellers (occasional sales, no consistent income intent): Generally don't need business license, but must still report income on taxes. Business sellers (intent to earn profit consistently): May need business license depending on city/county laws, should register as sole proprietor or LLC if earning $10K+/year. Check requirements: Google "[your city] home business license requirements", consult your local city hall or county clerk, consider hiring tax professional for first-year setup ($100-200 consultation). Even if you don't need a license, open a separate bank account for shop finances and track all income/expenses from day one.

Minimum 8-12 listings before opening your shop. Here's why: Etsy's algorithm favors shops with inventory depth (not single-product shops), more listings = more search exposure opportunities, buyers trust shops with selection (1-2 listings looks like a scam or abandoned shop), you can test which products resonate before going all-in. Launch strategies: Option A: 1 core product with 8-12 variations (colors, sizes, personalizations), Option B: 3-4 core products with 2-3 variations each = 8-12 listings (recommended), Option C: 8-12 unique products in one cohesive niche collection. Don't make 20 units per design—create 3-5 ready-to-ship samples, then produce-to-order.

Decision framework: Start as hobby seller if: Selling occasional items or decluttering, earning under $3,000/year, testing the waters before committing, want simplest tax setup. Register as business if: Planning to list 20+ items or earn $3,000+ annually, want to deduct business expenses (supplies, fees, home office, mileage), need liability protection (form LLC once earning $10K+/year), operating under business name instead of personal name. Tax implications: Hobby sellers: Report income, limited deductions. Business sellers: Deduct expenses, more complex taxes but better long-term positioning. Pro tip: Even if starting as hobby, use business practices from day one (separate bank account, expense tracking) so you're ready to scale.

Validation checklist before making 20+ products: ✅ Search demand exists: Target keyword gets 500+ monthly searches on Etsy, use Inventory AI Keyword Research Tool to verify volume, check Google Trends—is interest growing or declining? ✅ You can compete: Fewer than 10,000 competing listings (sweet spot: 1,000-5,000), top listings aren't all established shops with 1,000+ reviews, you can differentiate (better quality, unique style, personalization). ✅ Profitable pricing possible: Calculate: Materials + Time + Overhead + Etsy Fees + Profit Margin, minimum viable price at least 3x material cost, comparable items sell for price that allows you profit. ✅ Consistent production: Can create 10-20 units without burning out, sourcing materials is reliable, production time is predictable. Action step: Before making 20 products, create 3-5 samples. Photograph them. Show to 10 people in your target audience. Ask: "Would you buy this for $X?" Listen to hesitations.

Top 7 mistakes new sellers make: 1. Launching with only 1-3 listings — looks incomplete, limits search exposure, buyers don't trust tiny shops. Fix: Wait until you have 8-12 listings. 2. Skipping keyword research — beautiful products no one searches for = zero traffic. Fix: Use Inventory AI to validate search volume before creating inventory. 3. Poor product photography — blurry, dark, cluttered photos = instant "back button." Fix: Invest one day learning basic phone photography with natural light. 4. Underpricing — working for $2/hour isn't sustainable. Fix: Use pricing formula, include your time, don't race to bottom. 5. Vague shop policies — leads to disputes, refund demands, negative reviews. Fix: Write clear, specific policies. 6. No marketing plan — "If you build it, they will come" doesn't work. Fix: Launch with social media ready, share daily for first month. 7. Ignoring taxes/legal — IRS penalties, business shutdown, suspended account. Fix: Register business, understand tax obligations, keep clean records from day one.

Breakdown of startup costs: Etsy fees: $0.20 per listing (one-time until sold), 6.5% transaction fee + 3% payment processing fee on sales, ~4% offsite ads fee if applicable (shops earning $10K+/year). Initial inventory costs: $50-500 depending on product type and materials, start small—make 3-5 samples per design, then produce-to-order. Photography equipment: $0-50 (smartphone + natural light + white poster board = sufficient). Legal/business setup: $0-100 (sole proprietor = free or minimal DBA filing fee, LLC = $50-500 depending on state). Realistic total to launch: $100-300 to start safely with 8-12 listings. You don't need thousands to start—but you do need enough to create quality inventory and professional photos.

Key tax facts: Income reporting: You must report all income—even $100 in sales (hobby or business), Etsy reports to IRS if you earn $600+ or process 200+ transactions (Form 1099-K). Sales tax: Etsy collects/remits for you in most US states (but not all—check your state), you may need to register for sales tax permit in some states. Income tax: Quarterly estimated taxes required if you owe $1,000+ annually, set aside 25-30% of profit for taxes (don't spend it all). Business deductions (if registered as business): Product supplies and materials, Etsy fees and payment processing fees, shipping supplies, photography equipment, home office percentage, software and tools, mileage for business errands. Action steps: Open separate bank account for shop income/expenses, download tax tracking spreadsheet or use software (Wave, QuickBooks), research your state's sales tax rules, consult tax professional for first year ($100-200 consultation can save thousands).

Pricing formula (minimum): (Materials + Labor + Overhead) ÷ (1 - Etsy Fee % - Profit Margin %) = Minimum Price. Example calculation: Materials: $5, Labor (1 hour @ $15/hr): $15, Overhead (10% of materials + labor): $2, Subtotal: $22, Etsy fees (6.5% listing + 3% processing + ~4% offsite ads): 13.5%, Desired profit margin: 20%, Calculation: $22 ÷ (1 - 0.135 - 0.20) = $22 ÷ 0.665 = $33 minimum price. Common pricing mistakes to avoid: Forgetting to include your time (you deserve to be paid!), not accounting for all Etsy fees (13-15% total, not just listing fee), ignoring overhead (shipping supplies, electricity, tools, software), racing to bottom on price (cheap = perception of low quality). Pricing psychology: $29.99 looks cheaper (value positioning), $30 looks more premium (quality positioning), round numbers ($25, $50) suggest quality, charm pricing ($19.99) suggests value/discount.

Yes—minimum viable social presence recommended: Instagram account: Use shop name, create 9-12 posts ready to go (product photos, behind-scenes, shop story), link to Etsy shop in bio, research relevant hashtags. Pinterest business account (critical): Create boards for product categories, pin all your listings with good descriptions, Pinterest drives significant Etsy traffic—don't skip this. You DON'T need: TikTok (unless product is visual/demo-worthy), Facebook page (can add later), Twitter/X, YouTube. Action plan: Create Instagram + Pinterest before launch, batch-create 12 posts/pins during product photography session, schedule first week of content, notify friends/family of launch to get initial momentum. Post 3-4x per week for first month, then adjust based on results.