New research from the handmade marketplace revealed that nearly two-thirds of Etsy entrepreneurs don't consider themselves hobbyists and instead view their Etsy shop as a full-fledged business.
While nearly 91 percent of Etsy shop owners aspire to grow their business, the vast majority aren't looking to build it beyond something they can't handle on their own. More than 60 percent of those surveyed said their goal within the next five years is to keep their Etsy shop a size they can manage on their own.
"They prioritize independence and long-term sustainability over growth, for growth's sake," researchers wrote in the report.
The study discovered that Etsy entrepreneurs, 88 percent of whom are women, are driven by both creativity and income. More than 80 percent of those surveyed said their motivation for opening their shop was driven in part as an outlet for creativity, while 68 percent said they were motivated because it was a way to provide supplemental income for either themselves or their family.
The research shows that the Etsy income is making a difference in the everyday lives of Etsy entrepreneurs. Overall, the research found that Etsy revenue is contributing an average of 7.6 percent to Etsy sellers' total household income. Specifically, 36 percent of those surveyed use their Etsy income to cover household expenses, 24 percent use it for discretionary spending and 20 percent use it to build up their savings.
"For the average Etsy seller earning $44,900 in [total] household income, the impact of this supplemental income is meaningful, enough to cover the cost of annual car payments or several months' rent," researchers wrote.
Should that income disappear, the majority of those surveyed said they depend on it enough that they would be forced to find a way to replace it. Close to 20 percent of Etsy sellers said they would have to look for another job, 27 percent would have to cut back on their spending and 54 percent said they would have to try to supplement their income in another way.
When opening their Etsy shops, most of those surveyed needed less money than those starting other types of small businesses. The study shows that 35 percent of Etsy sellers reported not needing much of a financial investment to start their operation. That's compared with U.S. Census research that found that only 21 percent of small businesses were launched without startup capital.
For those Etsy entrepreneurs who needed money to get started, 56 percent used their own savings, 13 percent relied on credit cards and 10 percent asked family and friends to help out.
"The fact that so many Etsy sellers have successfully launched shops without outside investment reflects the low-cost nature of their businesses," researchers wrote in the report. "Etsy also reduces costs by making it simple and affordable to create an online shop and by providing a global market of motivated buyers."
Founded in June 2005, Etsy now includes more than 20 million products and more than 1 million sellers worldwide. In the last year alone, they generated over $895 million in sales.
Originally published on BusinessNewsDaily.