Do You Have To Use Etsy Ads To Make Money?

If you start selling on Etsy, you might have seen videos saying that you have to use ads as part of your marketing strategy. But is that actually true?

I surveyed 598 Etsy sellers who are members of my two Facebook groups to see how many of them use ads on Etsy.

You’re not required to use Etsy ads to sell on Etsy, and ads don’t guarantee that you’ll make more sales even if you do use them. Etsy ads are optional, and most Etsy sellers who responded to the survey said that they don’t use Etsy ads, or only use them seasonally. Paying for ads isn’t 100% necessary for making money on Etsy.

Etsy reports that the revenue from ads is increasing over time, but they seem to work better for specific types of products, and using them may actually make you lose money even if your sales increase!


Table of Contents


How many people use Etsy ads profitably?

I surveyed the members of my two Etsy groups, including a public group and a group for my EShop Success eCommerce marketing programOpens in a new tab..

The people in my groups tend to be more serious sellers than hobbyists, but there’s a mix of different income levels and sales numbers.

I asked them if they used Etsy ads, which are the optional ads that are shown on Etsy, but this didn’t look at the offsite ads program, which is a separate thing.

Pie chart showing the results of the table below.
Do you use Etsy ads? 598 total responses Percentage
Yes, and they’re profitable for me.20
Yes, but I lose money on them and only use them for visibility.15
No, they aren’t profitable for me.28
No, but I used to when they were profitable for me.22
I only use them seasonally.4
I’ve never used Etsy ads.11
Etsy ads use in a sample of 598 sellers.

35% of respondents did use Etsy ads, but not all of them were profitable.

Some used ads for visibility in search, but were losing money or breaking even on them.

For the 55% of respondents who said that they didn’t use ads, a little under half said that they used to use ads when sellers were able to set our own cost per click limit, which made the ads profitable.

About 4% of sellers who answered said that they only use ads seasonally, and 11% said that they’ve never used Etsy ads.


What did people who are using Etsy ads profitably say?

The people who were able to use Etsy ads profitably generally were selling products at a higher price point. Because we’re not able to set limits on the cost per click anymore, and Etsy decides how much to charge sellers for each click on an ad, it seems to work out that ads cost a lot more than they used to, and a higher price point will help to offset that.

Some of the comments mentioned that the cost per click (CPC) for a higher-priced item was pretty much the same as the CPC for a lower-priced item, so only the higher prices were able to absorb the cost and keep a profit.

(For a glossary of Etsy terms, click here: What Does OOAK Mean On Etsy? An Etsy Glossary)

That’s basically what I’ve gathered too, from tests using 5 digital shops to see if Etsy ads would be profitable. The lower price points made it too difficult to absorb the cost of the ads, as I showed in this video:

The people who were able to use Etsy ads profitably had these comments:

-I tend to use them for visibility but they have been profitable for the most part. This month I’ve spent $22.25 and made $127.50. I have to be strategic when I turn them on as mine gets spent fairly quick.

-I am doing good with my larger shop, small shop is suffering.

-I’m getting a decent return.

-I’ve been using them off and on for three years, right now set at max $50/day. I sometimes lose a little in the slow months, but overall they perform decently. My average order is over $200 so it may not work for everyone.

-I do use ads sometimes. However, what I found was that, if I use ads alone, I don’t make that many sales. However, I do better if I have a sale running at the same time that I do the ads. I tend to get more purchases that way.

-Yes, but my average order value is $150.

-I voted yes, they are profitable for me … But they used to be way more profitable for me.

-Yes, my average sale with using ads right now is $200 so they are profitable for me. No matter how much work I put into my SEO I don’t seem to get seen without ads though.

-Yes, they are profitable for my listings that are $100 or more. Any low dollar amount listings ($20-$99) I lose money.

-I only use them for my most expensive vintage items. They aren’t profitable for lower-priced items.

-I use Ads spending $2 per day. I am still in the black at 3 to 1 return.

-I only use them on my more expensive items.

-I only see profit on my $100 items, and they have to be popular items to begin with and I see a huge (6-15x) ROI when I do that! It has been very worth it for these items.

-I voted profitable – for my physical goods shop. But I am getting less and less profits from ads these days. Pretty dismal. I will have to turn them off soon.


What did people who are using Etsy ads for visibility say?

The people who were using Etsy ads to gain visibility in search results basically said that they knew they weren’t making money on ads, but that having their products show up seemed to help their shop be more visible in search.

Based on the way that Etsy looks at interaction on listings, including clicks and favorites, as part of the search placement, that would make sense.

If your listings are being shown in ads and clicked on, that could make Etsy show them to more people organically. So even if an ad click doesn’t result in a sale, it could help the listing to be shown to more people who could purchase organically.

If you’re going to use this strategy, you need to be very careful to watch your budget and make sure you’re not overspending!

These were the comments from the Etsy sellers who were using ads for visibility:

-In my digital shop it’s a wash. In fact, I think I’m upside down on ads for my digital shop.

-I figure I’m throwing $1 a day away zero profit, but doing so really has boosted the number of sales I get in a day. It’s weird because if I don’t run ads, I maybe get a sale or two. If I go all out crazy and spend like $1.25, I could see double the normal sales volume. But ads rarely make a sale themselves.

-I picked using them for visibility, but the truth is that I am superstitious about turning them off entirely and upsetting the Etsy system, so I run them at a dollar a day and rarely look at the page.

-I had them turned on for a long time. I tried different numbers of advertised listings (anything from all of them to only a handful) and different daily budgets. But no matter what I did, my ROAS was just awful. So I decided to turn them off about 2 months ago. However, after doing that my views dropped by about 50%, no more favorites, so I turned them back on 1 week ago for visibility reasons.

-I set an ads budget from prior year sales and rotate about 5 items in and out based on time of year. Ads run year-round. I do it for exposure. And maybe once a week peek in on current listings if one is doing poorly, change it out. Honestly, though, it’s an ads budget for our entire business that I play with, and not so much micro-managing an item’s profit margin. It’s the closest I come to gambling. I’m gambling for money of course, but also shop likes and favorites and hang time in our shop.

-I seem to lose my first month but then it starts making a profit. I recently upped my budget and I am losing money again. I hope next month I start showing a profit again.

-I’m only using them now to spend the ad credit from the subscription.

-Honestly, I’m not sure right now. I set my limit to $5. Kinda low, but I was doing great this last month, then I was getting no sales and less visits overall, so I turned them off. I turned them back on last Saturday and got 2 ad sales pretty much right away. I’m still trying to decide if they’re even worth it beyond the visibility thing.

-I’ve noticed that the weekend seems to get a sale or two when I have them on so I only activate them on the weekends-occasionally. So I get some exposure and might break even. Otherwise they’re useless.

-Some months might actually work in my favor, like May 2022 gave me a little hope, but the past 2 months it’s been horrible and I feel like I have a gambling problem with their on-site Etsy ads.

As a digital file seller, not profitable, but helps people see my shop.

-I use Etsy ads at $3.00 a day. It uses the subscription ad credits and gives me visibility in a saturated market.

-I mostly use them to increase views and clicks, as a barometer of what gets clicked on.

-They have their good and bad days, but I feel they are worth it to bring in new customers. I sell digital, so I don’t mind cutting it close to where they just cover fees (aka break even) sometimes. I’m constantly making adjustments to which products are advertised and how much is spent.

-I chose option 2, when I first started (end of last/beginning of this year) I used them for a few months to help get my shop out there. I lost money on them at the time but I did obtain one wonderful regular customer and get a few other small sales to “spread my name” so to speak, so I see it more as a long-term investment rather than for immediate profit. I may use them again in the future to give my shop another “shove” to spread its reach.


What did people who don’t use Etsy ads say?

The largest group of sellers were the ones who don’t use Etsy Ads, or who used to but don’t anymore. The changes in the CPC system that Etsy made a couple of years ago made ads too expensive for a lot of people, and the lack of accuracy in keyword targeting that the Etsy Ads system has is another difficulty.

The sellers who don’t use ads have this to say:

-I do not and will not as they are not targeted to the interest groups I need. Have much better luck on Facebook where I can do precisely that. I have used advertising of many sorts over my lifetime and what works best is the surgical strike …..I can get that accomplished on Facebook much more easily and cost-effectively. I can spend ten bucks for one day and sell out an edition on Etsy. Without running ads on Etsy, just on Facebook.

-Nope! I test it every six months or so. I sell a low-cost digital item and Etsy sets the price per click way too high for it to be profitable for me.

I find that I do ok in search results without ads. When I have paid for ads I never see more sales than normal, only less money.

-No, they’re not profitable.

-I’ve tried Etsy ads a time or two but didn’t find them beneficial. 

-I tried Etsy ads and did not get any sales. I quit using them because the key words they were using for my products were not related to my items or my titles and tags.

-I’ve used them 3 or 4 times but didn’t seem to bring any sales that I could see.


What did people who used to use Etsy ads say?

I used to use Etsy ads but when they changed the CPC system the cost of the ads was too much for me and basically eliminated any profits that I made on each ad-driven sale.

I don’t use them now but I continue to test them out periodically and the problems for sellers with lower price points, or for people who want to target specific keywords, just aren’t going away. I make regular sales without advertising, and it’s clear that you DO NOT need to use Etsy Ads to make sales on Etsy.

The sellers who used to use Etsy Ads and who don’t use them anymore had this to say:

-They used to work great for me, like revenue 10x investment. Over time that declined to something like 2x investment. I felt like even at that point it wasn’t worth it.

-I used them years ago, not recently. It cost me $65 to sell for $30 so I never used them again!

My answer is “I used to when they were profitable,” and that was way back when we had control of CPC. I turned them off the day they switched it and never looked back.

-I used them for a few years and did well but a couple of months ago they stopped working completely! I have been testing to see if they work on certain days but it appears they are not working at all. I’m very disappointed as I was doing well, not so much anymore.

-Before the overhauled Etsy ads, I had quite a few sales from them. And they were more affordable back then too. When it changed, I was shocked at how quickly I’d hit my daily limit, which made my fees go up, & after all that sales from them evaporated.

-Used to find them good when you could set your own CPC. My products are mostly niche, (needlefelt) so the kinds of terms that a low CPC could afford were also niche and specific. When Etsy removed the ability for me to set a CPC, they started blowing my budget on 2 or 3 clicks for a broad, high competition term like nursery decor, or baby mobile, which wouldn’t result in sales as they didn’t describe my product specifically enough… so their ads became completely ineffective for me.

-I did give them a chance, but the best months I was spending $90 to get $100 in sales, and often you’d spend more than you’d get in.

-The rate of return before the changes for me was about a tenfold return… $10 would bring in $100, and that was average. Some months would be better. I miss Old Etsy ads… I would be still using them if they hadn’t changed things.



What did people who use them seasonally say?

Some people will only use Etsy ads seasonally, either during the end of the year or when their specific slow season for sales is. This helps their shops with visibility during the times when shop numbers increase due to people joining the platform only to sell during the holiday shopping season.

These are their comments:

-I’ve used them a couple of times per year, and just for a month each time. I never get sales while running ads, but sometimes get a sale *after* the ads have been turned off. Even so, the total monthly cost for ads is more than what I make in the sales afterward, so it’s not worth it. At most, it might help with visibility for a bit, but otherwise, I think they’re worthless.

-I just advertise during the holiday season… the rest of the year I lose if I advertise.

-I use them in the summer, which is my slower season and still profitable.


What kind of products do Etsy Ads work the best for?

After all of that, what kind of products would Etsy ads work well for?

It’s clear that the people who sell things with price points that are on the higher end seem to be the ones who say that they’re seeing the best results with Etsy Ads.

So if your products are priced on the higher side and you have larger profit margins that can absorb the cost of the ads and still leave you with a profit, it might be worth trying them.

On the other hand, if you sell things that are priced on the lower side, or that have lower profit margins, you might not be able to absorb the advertising cost.

You’ll have to decide whether to use Etsy Ads or not based on your normal conversion rate and how much Etsy charges for the CPC. Since those numbers are going to be different for everyone, read this article to see how to figure that out: How Much To Spend On Etsy Ads (And Are They Worth It?)


How to sell on Etsy without ads.

You definitely don’t have to use Etsy ads to sell on Etsy, and they don’t work for everyone, but they can help to shortcut your shop’s quality score and help to increase your overall traffic.

If you don’t want to pay for ads, you can still send traffic to your shop yourself using social media, email lists, word of mouth, and Pinterest.

It’s a matter of time vs. money in a lot of cases, but if your prices can’t absorb the cost of the ads, you need to be very careful when you use them.

Make sure that you have a goal set for each advertising campaign, whether that’s profit or visibility, and keep an eye on whether the ads that you’re running are actually meeting your goals. If they don’t, stop using ads and try something else!

Kara

Kara Buntin has run a home-based business since 1999, and has a background in art, theater design, and cake decorating. She's a top Etsy seller with over 46,000 sales on Etsy and her own website, and helps other home-based business owners with their business goals and SEO.

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