As with any other online shop, you need to follow certain guidelines when opening an Etsy Shop.This blog post explains in detail which requirements you have to fulfil in order to open an Etsy shop. Etsy is a marketplace for everyone who likes handmade goods. Both selling and buying is made very easy on this online platform. Etsy is becoming more and more popular because of the unique and homemade products on offer. Personalisation plays a big role in this. Customisable products from Wunderlabel will add more value to your items and make them truly unique. If you want to start selling your handmade products then you should definitely open an Etsy shop. We have put together a few tips to help you get started. We hope that this blog post will help answer some of your questions!
Do I Have to Be Registered as a Business to Open an Etsy Shop?
Before you open an Etsy Shop make sure that you inform yourself about the legal requirements to avoid any issues with Revenue and Customs (HMRC). An important question to ask would be if your shop is considered a business for tax purposes.
The first thing you must determine is whether your new venture is a hobby or a business in the eyes of HMRC. A hobby is something that you do for pleasure rather than financial gain. But when you start receiving money for your hobby - be it pieces of handmade jewellery, custom artwork or even musical performances - things change. If your income exceeds £1,000 you will need to declare it and pay taxes. Please be aware that there is an important difference between income and profit: Your income is all the money that you have coming in (your gross revenue), the profit is what is left over after expenses (your net revenue).
How much you pay also depends on your business structure. If you plan on keeping things small you can declare your Hobby Business Income by registering as self-employed with HMRC. It’s a simple process that can be done online. Once you are registered you will need to submit a tax return once a year stating your income and expenses and HMRC will calculate how much you need to pay in taxes.
For those who want to turn their hobby into an actual business, whether part-time or full-time, we recommend looking into forming a limited company or becoming a sole trader.
Whatever you decide, make sure to keep meticulous records of all your expenses and payments received. For larger enterprises hiring the services of an accountant could help avoid any misunderstandings with HMRC.
Do I Have to Pay Tax when Selling on Etsy?
As an employed individual casually selling items on Etsy you will be covered by the Trading Allowance. This is specifically aimed at micro-businesses on platforms such as Etsy, Amazon and Ebay, and means that you do not need to declare your extra income as long as it doesn’t exceed £1,000. You will need to declare any amount that exceeds this threshold.
If your aim from the start is to make a more significant financial gain from your shop then it would be best to register as self-employed, form a limited company or become a sole trader right away.
Those who are not employed or self-employed and selling on Etsy as a hobby will benefit from the Personal Allowance: Earnings of up to £12,570 are therefore tax-free for these individuals.
You can find plenty of information and even tax calculators on the HMRC website to help you figure out what applies to you and which route to take. We also recommend speaking to a tax adviser in your region to find out more about the latest rates and regulations.
If you want to find out more about the other costs you will incur when opening an Etsy store please read our blog post "What is Etsy".
Do I Need a Packaging License for my Etsy Shop?
The EU Packaging Waste Directive dictates that businesses shipping to end consumers must pay a fee to finance the recycling of their packaging. In the UK this type of license is currently only required by companies with an annual sales turnover in excess of £ 2 million who circulate more than 50,000 kg of packaging annually in the UK - as per the Producer Responsibility Obligations (Packaging Waste) Regulations.
If you plan on selling and shipping to customers outside of the UK, you will need to join one or more packaging registers for a fee.
Since the packaging recycling regulations in Europe are not uniform and the fees, thresholds and legal obligations vary depending on location, you will need to make sure that you have the proper license for all your target countries.
If you need help figuring out which licenses you need, search online for companies that specialise in offering solutions for complying with all the packaging regulations that are relevant to you.
After you have sorted out the legal requirements don’t forget to add a personal touch to your packages with a personalised sticker from Wunderlabel to make your product truly unforgettable!
Tips for a successful launch on Etsy
Before you start selling your products and opening your Etsy shop, think about how to best promote it to draw attention to your items. Your goal should always be to stand out with unique ideas. You can showcase your Etsy products perfectly with personalised Wunderlabel products. Why not add a personalised ribbon to your gift boxes printed with the customer’s message?
Or use self-designed swing tags with a logo or even QR code to give a special touch to your products. There are numerous design options to be found in our shop with an interactive preview. Try them out in our online swing tag configurator!
If you sell clothing then our custom labels will get you noticed and impress potential customers.
Add personalised finishes to your products to increase sales and open your Etsy shop. Start selling now!
Don't miss these blog posts from Wunderlabel: