Do You Need A Business License To Sell On Etsy?


Tradexcel Graphics

10 minutes To Read


If you are an expert on making products with your bare hand then Etsy is a platform that can boost your spirit of creating and innovating. Etsy is an online product selling platform focused on handmade or vintage products and craft supplies. You can start your own business online and sell your product there. One common question that appears not only for Etsy is, “Do you need a business license to sell on Etsy?”

Today I will answer this question along with a few other points that you will need to know to do business on Etsy. If you are an entrepreneur then Etsy is the best platform to start your business. Etsy offers you no startup cost and also no inventory requirements. On the other hand, you will get tons of active buyers who are interested in buying what you have available for sale.

On Etsy, sellers don’t need to create any website or buy any web hosting. Whoever wants to do business on Etsy, all they need to do is open an account and starts uploading product shots and details to open a store.

Is Etsy the right platform for your eCommerce business?

Though it is an online product selling platform but it’s not like Amazon or eBay. It is for artists and crafters to sell their handmade and vintage items online. You need to ensure that your future buyers are searching for your items at Etsy before spending your time and energy in building your Etsy store.


Pros of selling on Etsy

Easy to start selling on Etsy

On Etsy all you need to just fill out some forms and your online store will be ready in a blink of an eye. You don’t need to worry about designing an attractive template for your online store and then configure it like the way you need.

You may worry about the security but I assure you that part is also covered by Etsy as well. So if you don’t have any technical knowledge no problem Etsy has your back. Etsy covers almost all the parts to make your business which is why selling on Etsy is very easy.

Customer base

Ecommerce platforms like Amazon, eBay, Walmart, etc…  have millions of customers for buying their products. What about Etsy? Etsy is not like the typical online platform we know like amazon. Etsy promotes products that have creativity in it and are purely hand crafted. So Etsy also has a different customer base who also appreciates creative products.

There were 1.9 million sellers at the moment and 31.7 million active customers on Etsy. At this time this is published. 224 million people landed on Etsy in December to buy art supplies and handcrafted jewellery.

Shipping overseas made easy

This is a challenge that most of the new sellers are afraid of or worry about. Etsy has made shipping overseas very easy and effortless for newcomers. This allows your product to be available for the world and the market gets bigger and better.

Though the demand of your product fully depends on the quality that you provide and the product photo you present to your customer. The first thing is to provide eye catchy product photos which you can ensure by

product photography and product photo editing. The second one is your customers review their experience after using your product.

Mobile app

The era we are living in is mostly a smartphone dependent. Everyone has smartphones and they are constantly using it everywhere. So every business platform needs to adopt this technology. Etsy has done it tremendously well. They embrace the technology like it’s the root of their platform.

Etsy has two different mobile apps for the sellers and the customers. A survey shows that over 65% visitors of Etsy come from mobile. The’ Sell on Etsy ‘ program makes it simple when you buy your product or add it to’ Favorites’ to control your Etsy listing, on-going picking and keep updated.

Cons of Etsy


With so many pros there must be some cons also and the first of them is the fee that Etsy charges. Etsy charges for listing your products on their platform and also they charge 3.5% on the transaction fee. So Etsy is not obviously free and you have to make few payments to get started selling your products on it.

No options for personalization

I already mentioned that you don’t need any technical knowledge or designing any template to launch any website and how easy it is to start on Etsy because of that. But this comes with a con of getting a default template for your every product.

Not only that, every seller on Etsy has the same template as well and you cannot do much about it. The only thing you can do is to use top notch, killers and premium quality product photos with a spicy description. So Etsy has a little space for your customization to stand out your products from others in their free version.  Yes you guessed it right they have a paid version where you can build your own website and do everything on your own.

Etsy can ban you anytime

Etsy encourages their seller to produce unique and creative products all the time. Because of that you will find products made with human remains like teeths or hair. Wait before you overthink about using elements like these.

You can use human remains but you cannot use animal remains like bones. It is strictly prohibited to produce products from animal remains and Etsy can ban your account anytime without giving any notice.

Before you start your business on Etsy, read their privacy and policies carefully. They gave a list of products that you cannot produce and sell on their platform.

What You Can Sell on Etsy?

Etsy is a well known online platform for selling handmade products and crafts. Unlike several others, like Amazon and eBay, Etsy imposes substantial limitations on what store owners can deliver.

Handmade Products

Selling handmade goods is it’s speciality and millions of people prefer Etsy for this reason. A seller can sell handmade jewelry, fine art, clothing, leather goods, and similar handcrafted products. It encourages it’s sellers creativity and imaginations a lot.

Notice that the homemade thing doesn’t really signify that all parts of your item must be produced personally. You may have products that are not made by hand and can be supported by others. Currently, your goods can also be developed by other people.

Craft Goods

If you do not make handmade products it’s not a big deal. If you can supply the goods that are used to produce handmade products you can sell it as well. You can’t fully sell “ready to use” commercially manufactured products, but you can sell components, materials or instruments for which someone needs to manufacture a finished product.

Vintage Products

You can’t sell manufactured products on Etsy but if you have manufactured products that are vintage you can definitely sell that. How will you know that the product you have is vintage or not? Well Etsy considers a product vintage if it is more than 20 years old. It can be almost anything, such as clothing, office supply products, and computer games.

Do You Need a Business License to Sell on Etsy?

So do you have to have a business license to sell on etsy? The answer depends on which region you are living in. So the country or the municipality you live in may require a business license.

It is good to research first and know all the rules and regulations of the region you are in before you violate any of them unintentionally.

Legal Considerations before selling any products


Sales and Use Tax

Depending on the region and area or states, Etsy sellers may need to collect sales tax. Visit your local government to know in detail about taxes before you start your online business because there is a law that is announced in 2018 on online businesses that whether you have any physical presence or not you must get a license. Not only that, you need to collect and remit sales taxes also.

Physical Vs. Digital Sales

Taxes that are imposed on sales differ for physical and digital goods. Some require taxes only for physical product selling and some may require for both physical and digital. So business licensing is also different from area to area. Go to the tax authority of your area and check it properly.

Business Names

Giving your business a name is very important because one day it will become a brand. So people try to give a name that describes their business which is good and some people give their own name. So if you give your business a name that describes the products you are selling other than your name, you may need to register a Doing Business As (DBA) with your state or locality.

Selling Food on Etsy

Selling food on Etsy requires a certification from your local Health Department to sell online. Etsy provides you with a seller’s handbook so that you can sell foods online more effectively.

How to increase sales on Etsy?

Now that you learn about what type of product you can sell on Etsy and whether you need a business license for Etsy, the next thing you need to know is how to increase sales on Etsy?

Let say you have products that you can sell on Etsy and you do the business license thing also.Then you set up your account and do the product listing but how will you increase your sales? On Etsy the only personalization you can do is give your best product photo and description.

You may hire a professional product photographer to capture the best photo of your product but you will still need image post processing to make it flawless. Hiring a professional photographer will be costly so you can capture photos of your products then do the post processing from a professional image editing service provider like us.

By product photo editing you can produce jaw dropping images for your products which can attract more consumers and increase your sale. All you need to capture a decent photo and send that to us.

Tradexcel graphics has highly professional graphic and photoshop experts with years of experience on product photo editing. If you upload outstanding product images to your Etsy product listing and give a spicy description with it, your product will stand out among others.

Though today’s article was about answering, “Do you need a business license to sell on etsy?” I gave a few other information and tips to sell on Etsy. Hope you like it and if you have products that you want to sell on Etsy but couldn’t because you don’t have the basic knowledge this article will give you all the information you need to get started.