On this guide
Follow the path in order.Etsy channel guide • Illinois launch path
Start Etsy in Illinois
Decide your setup, get the Illinois registration order straight, and finish the early Etsy launch steps without losing the official detail behind the answer.
Last verified April 26, 2026 7 chapters
Best for launching on Etsy in Illinois. Need the full appendix? Open the full reference guide.
On this journey
1 of 7 reviewed
Current chapter: Choose setup
On this journey
1 of 7 reviewed
Current chapter: Choose setup
01
Chapter 1 of 7
Choose the setup you want to launch with
Start with the setup decision first, then use the rest of the guide to build the state registrations and platform steps around it.
Core chapter
What this chapter does
Your setup choice, the short safe path, and the money realities that matter before spending deeply.How to move through it
Review sole proprietor.Use Part 1 to get oriented, then compare both setup paths before you spend more time or money.
3 parts to review • 29 source touchpoints behind the drawers.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 3
Start here before you spend heavily
A short orientation for the guided journey before the detailed launch steps begin.
Part 1 of 3
Start here before you spend heavily
A short orientation for the guided journey before the detailed launch steps begin.
Short answer
Use this first part only to get oriented. The detailed state, platform, local, and packet steps will follow in order.- First decide whether you are launching as a sole proprietor or a single-member LLC.
- Then work through the Illinois registrations, Etsy setup, local checks, and packet review in order.
Do next: Do not spend money yet.
Why this matters
Key detail
Do not spend money yet.
Keep in mind
- First decide whether you are launching as a sole proprietor or a single-member LLC.
- Then work through the Illinois registrations, Etsy setup, local checks, and packet review in order.
Official links
Up next Compare setup
Part 2 of 3
Compare sole proprietor and LLC
The side-by-side setup comparison.
Part 2 of 3
Compare sole proprietor and LLC
The side-by-side setup comparison.
Short answer
Read both setup paths before you decide which one you want the rest of the launch flow to follow.- Best if you want the cheapest and simplest start.
- Illinois does not register sole proprietorships with the Secretary of State.
- Faster launch.
Do next: Review sole proprietor.
Save the path you want to optimize around
The unchosen setup stays visible for comparison, but the chosen one gets visual priority so the reading path feels more intentional.
Quick tradeoff view
Use one pass to compare the launch speed, separation, and upkeep tradeoffs.The detailed comparison stays below. This lens just makes the two setup shapes easier to scan before you read every bullet.
Best for
Sole proprietor
Best if you want the cheapest and simplest start.
Speed to start Quicker start
Owner and business separation Very little separation
Ongoing admin load Lighter upkeep
Best for
single-member LLC
Best if you want a more durable setup for a real business.
Speed to start More front-loaded paperwork
Owner and business separation Cleaner separation
Ongoing admin load More upkeep
Compare details
Sole proprietor
Best for
Best for
Best if you want the cheapest and simplest start.
What it means
- Illinois does not register sole proprietorships with the Secretary of State.
- If you use a business name different from the owner's full legal name, Illinois routes the assumed-name filing to the county clerk, not the Secretary of State.
- Business income generally runs through your personal tax return, but you still handle Illinois tax registration, local permits, and Etsy requirements separately.
- You usually do not get a liability shield.
Why someone chooses it
- Faster launch.
- Lower up-front filing cost.
- Fewer entity maintenance steps.
Main downside
Personal liability
single-member LLC
Best for
Best for
Best if you want a more durable setup for a real business.
What it means
- Illinois LLC formation uses Articles of Organization (LLC-5.5), a registered agent with an Illinois address, and a recurring annual report.
- If the LLC uses a different trade name, Illinois handles that at the Secretary of State through the LLC assumed-name path, not the county-clerk path used by sole proprietors.
- Illinois tax treatment generally follows the federal classification you choose or default into. A default disregarded single-member LLC reports through the owner, while other elections trigger different Illinois return rules.
Why someone chooses it
- Liability protection.
- Cleaner setup for banking, bookkeeping, insurance, and scaling.
- Better fit for branded handmade or designed goods, production-partner disclosure, employees, and long-term operations.
Main downside
Higher setup friction and recurring maintenance than a sole proprietorship
Official links
Formation dceo.illinois.gov
Compare business types
Local dceo.illinois.gov
Sole proprietor baseline
Local illinois.gov
County or local clerk lookup
Federal irs.gov
EIN overview and online application
Formation ilsos.gov
Formation hub
Formation ilsos.gov
Default entity formation filing
Formation ilsos.gov
Immediate post-filing requirement
Formation ilsos.gov
Ongoing entity maintenance
Tax tax.illinois.gov
Entity tax treatment
Tax ilsos.gov
Recurring entity tax filing or fee
Up next Money and risk
Part 3 of 3
See the money and risk realities before you spend
The upfront friction and risk notes that shape the launch decision.
Part 3 of 3
See the money and risk realities before you spend
The upfront friction and risk notes that shape the launch decision.
Short answer
These are the friction points most likely to catch a new Etsy operator off guard in Illinois.- Illinois splits startup tasks across the Secretary of State, IDOR, county clerks, and local government instead of one master filing.
- Etsy identity verification can stall a launch if your records do not match.
- If you sell physical products, commercial general liability and product liability insurance become practical early even though a separate public Etsy liability-insurance mandate was not identified in the reviewed sources as of April 26, 2026.
Do next: Review illinois-specific friction.
Why this matters
Illinois-specific friction
Main takeaway
Illinois splits startup tasks across the Secretary of State, IDOR, county clerks, and local government instead of one master filing.
Watch for
- Sole-proprietor assumed names are local county filings, while LLC assumed names are state filings with a different renewal cycle.
- Illinois tax registration and resale documentation are not the same question. The public record is still messy on the exact Illinois-only-Etsy seller fact pattern.
- Chicago has a meaningful home-occupation branch, and the city's rules can collide with inventory storage, packaging stations, and delivery-heavy home setups.
Etsy-specific friction
Main takeaway
Etsy identity verification can stall a launch if your records do not match.
Watch for
- Etsy's creativity standards are narrower than the broad idea of "online retail," so many ordinary resale products are not launch-safe on Etsy.
- The one-time set-up fee varies by location and is not published as a universal Illinois number in the public help pages.
- Offsite Ads, payment-processing fees, and policy updates can change your margins quickly if you price items too tightly.
Insurance reality
Main takeaway
If you sell physical products, commercial general liability and product liability insurance become practical early even though a separate public Etsy liability-insurance mandate was not identified in the reviewed sources as of April 26, 2026.
Watch for
- Etsy's current public Purchase Protection materials say qualifying orders up to $250 may be refunded by Etsy without taking the refund from the seller, but Etsy also says the program is not insurance, not a warranty, and not a guarantee.
- Etsy's legal policy page currently says the reviewed version is effective until May 6, 2026, and Etsy's help page says updates start May 7, 2026.
- Etsy itself recommends purchasing shipping insurance for orders outside program coverage or for damaged-item situations beyond the covered first case branch.
Official links
Formation dceo.illinois.gov
Compare business types
Formation ilsos.gov
Formation hub
Formation ilsos.gov
Default entity formation filing
Formation ilsos.gov
Immediate post-filing requirement
Formation ilsos.gov
Ongoing entity maintenance
Federal irs.gov
EIN overview and online application
Federal irs.gov
EIN paper form
Tax tax.illinois.gov
State tax registration
Tax tax.illinois.gov
Registration instructions
Platform tax.illinois.gov
Marketplace or platform tax rule
Tax tax.illinois.gov
Resale or exemption certificate
Tax tax.illinois.gov
Recordkeeping guidance
Platform help.etsy.com
Platform protection and shipping-risk checkpoint
Local codelibrary.amlegal.com
City tax or permit warning
Local webapps1.chicago.gov
City filing information
Local webapps1.chicago.gov
City support / clarification path
02
Chapter 2 of 7
Handle the Illinois registration path in order
This is the state-side work before you rely on the platform to carry any part of the operating flow.
Core chapter
What this chapter does
The Illinois and federal registration sequence, tax setup, and state-maintenance checks.How to move through it
Step 2: Choose your name and brand approach.Use the order check first, then move from name and entity work into EIN, banking, and tax setup.
4 parts to review • 38 source touchpoints behind the drawers.
Registration sequence
Keep the Illinois and federal setup in this order.This chapter works best when you keep the filings, EIN, banking, and tax work in one clean sequence instead of bouncing between tabs.
- 1 Use the checklist to keep the order straight
These checklist groups keep the pre-spend, pre-sale, and pre-launch work visible before you open the platform workflow.
- 2 Handle name, entity, and filing setup
Use the name-and-formation steps plus the state LLC order before you open banking or state tax registration.
- 3 Get the EIN and banking basics in place
Use the EIN and banking steps before you start platform onboarding, payouts, or supplier paperwork.
- 4 Close the Illinois tax and filing branch
Keep the Illinois tax and maintenance rules together before you assume the platform solved them.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 4
Use the checklist to keep the order straight
The quick-start checklist grouped by the main launch phases.
Part 1 of 4
Use the checklist to keep the order straight
The quick-start checklist grouped by the main launch phases.
Short answer
These checklist groups keep the pre-spend, pre-sale, and pre-launch work visible before you open the platform workflow.- Pick your business name.
- Form the business or file your county assumed name if needed.
- Get an EIN from the IRS if applicable.
Do next: Pick your entity.
See checklist
Do these before you spend money
Grouped so the launch order stays easier to scan.
- Pick your entity.
- Pick your business name.
- Decide your Etsy product lane.
- Avoid regulated or high-risk categories for your first launch unless you deliberately want a harder compliance build.
- Confirm the product is not blocked by Illinois law, safety rules, or Etsy policy.
- Make sure you can document how the item fits Etsy's rules for items made, designed, handpicked, or sourced by the seller.
Do these before your first sale
Grouped so the launch order stays easier to scan.
- Form the business or file your county assumed name if needed.
- Get an EIN from the IRS if applicable.
- Open a dedicated business bank account.
- Register for Illinois tax accounts that apply.
- Check local permits, zoning, and home-based business rules.
- Create your Etsy seller account and complete verification.
Do these before launch goes live
Grouped so the launch order stays easier to scan.
- Finish the Etsy account and seller-managed shipping operations branch.
- Confirm the item fits Etsy's allowed-item rules and your Illinois launch model.
- Build the first listing correctly.
- Open the shop with one or two low-risk listings you can fulfill yourself.
- Start small so you can test demand and catch compliance mistakes early.
Official links
Up next Name + filing
Part 2 of 4
Handle name, entity, and filing setup
The name, formation, and LLC-order work for the state launch path.
Part 2 of 4
Handle name, entity, and filing setup
The name, formation, and LLC-order work for the state launch path.
Short answer
Use the name-and-formation steps plus the state LLC order before you open banking or state tax registration.- Step 3: Form the business.
- If you sell under your legal name:.
- Illinois' public small-business handbook says sole proprietorships and general partnerships must register the assumed name with the county clerk's office.
Do next: Step 2: Choose your name and brand approach.
Step details
Best practical order for a Illinois single-member LLC launch
- Choose the product lane first.
- Choose the entity name.
- File the LLC.
- Get the EIN.
- Open the bank account.
- Register Illinois tax accounts that apply.
- Resolve the Illinois resale-certificate question before making wholesale purchases if you plan to buy supplies or inventory tax-free.
- Check county and city rules, especially the Chicago home-occupation branch if relevant.
- Build the Etsy seller account.
- Create the first compliant listings and shipping setup.
- Open the shop with a small first launch.
- Track the anniversary-month annual report and recurring tax obligations on a calendar.
Sole proprietor: Decide whether you need a local assumed-name filing
Main takeaway
If you sell under your legal name:
Watch for
- Illinois' public small-business handbook says sole proprietorships and general partnerships must register the assumed name with the county clerk's office.
- The handbook says the filing is required in every county where the business is located.
Single-member LLC: Name search and naming standards
Main takeaway
Before filing:
Single-member LLC: File the formation document
Main takeaway
Core filing:
Watch for
- Form name: Articles of Organization.
- Form number: LLC-5.5.
Single-member LLC: Complete the immediate post-filing step
Main takeaway
The public Illinois sources reviewed did not identify a mandatory LLC publication requirement or initial state report immediately after formation.
Watch for
- Timing: do this immediately after the LLC is approved.
- Filing status: the operating agreement is kept internally, not filed with the Secretary of State.
Single-member LLC: File the assumed-name or DBA form if needed
Main takeaway
If the LLC will operate under a name different from its legal name, file Form LLC-1.20, Application to Adopt, Change, or Cancel an Assumed Name, with the Illinois Secretary of State.
Watch for
- The assumed name is effective until the first day of the company's anniversary month in the next calendar year evenly divisible by 5.
- Illinois' LLC guide shows Application to Renew an Assumed Name as LLC-1.20R with a public renewal fee of $150.
Step 2: Choose your name and brand approach
Main guide step 2
What this step settles
You need to decide whether you are:
Why it matters: Important:
- operating under your own legal name,
- using a county assumed name or DBA,
- selling your own handmade items,
- selling your own original designs,
- selling qualifying vintage,
- or selling qualifying craft or party supplies.
- Etsy shop names do not replace the legal entity name or tax records behind the business.
- Etsy account, bank, identity, and tax details still need to match real-world records.
- If you plan to use a production partner, Etsy expects that production partner to be disclosed in the relevant listings.
- Illinois splits assumed-name filings by entity type: sole proprietors usually file locally with the county clerk, while LLCs use the Secretary of State assumed-name path.
Step 3: Form the business
Main guide step 3
What this step settles
If you choose sole proprietor: If you sell under your legal name, Illinois generally does not require a separate state formation filing.
- If you choose sole proprietor: If you sell under your legal name, Illinois generally does not require a separate state formation filing.
- If you choose sole proprietor: If you use a business name different from the owner's full legal name, file the assumed-name certificate with the county clerk in each county where the business is located.
- If you choose sole proprietor: Either way, still handle IDOR registrations and local licensing separately.
- If you choose single-member LLC: Do this in order:
- If you choose single-member LLC: Search name availability with the Illinois Secretary of State and optionally reserve the name if you want short-term hold time.
- If you choose single-member LLC: File Articles of Organization (LLC-5.5) with the Illinois Secretary of State and appoint an Illinois registered agent.
- If you choose single-member LLC: Put the operating agreement, EIN, and annual-report calendar in place. The public Illinois sources reviewed did not identify a separate mandatory initial report or publication requirement after formation.
- If you choose single-member LLC: If the LLC will operate under a different brand name, file the Illinois LLC assumed-name application separately.
Official links
Formation dceo.illinois.gov
Compare business types
Formation ilsos.gov
Formation hub
Formation ilsos.gov
Default entity formation filing
Formation ilsos.gov
Immediate post-filing requirement
Formation ilsos.gov
Ongoing entity maintenance
Local dceo.illinois.gov
Sole proprietor baseline
Local illinois.gov
County or local clerk lookup
Federal irs.gov
EIN overview and online application
Tax tax.illinois.gov
Entity tax treatment
Tax ilsos.gov
Recurring entity tax filing or fee
Federal dceo.illinois.gov
State start-here page
Formation ilsos.gov
State business portal
Local illinois.gov
State small business support hub
Up next EIN + banking
Part 3 of 4
Get the EIN and banking basics in place
The EIN, banking, and recordkeeping baseline before launch.
Part 3 of 4
Get the EIN and banking basics in place
The EIN, banking, and recordkeeping baseline before launch.
Short answer
Use the EIN and banking steps before you start platform onboarding, payouts, or supplier paperwork.- Step 5: Open banking and bookkeeping.
Do next: Step 4: Get your EIN.
Step details
Step 4: Get your EIN
Main guide step 4
What this step settles
Use the IRS EIN application if applicable. For most LLCs this is required in practice. For many sole proprietors it is optional, but it is still useful for banking, supplier paperwork, and Etsy setup.
Why it matters: Illinois-specific nuance:
- If you are a single-member LLC with no FEIN, Illinois DOR says you must use the paper REG-1 path instead of the online registration path.
Step 5: Open banking and bookkeeping
Main guide step 5
What this step settles
Do this right away:
- Open a business checking account.
- Keep business money separate from personal money.
- Save every invoice, receipt, Etsy fee statement, shipping bill, and tax record.
- Keep a sourcing folder and a tax folder from day one.
Official links
Federal irs.gov
EIN overview and online application
Federal irs.gov
EIN paper form
Tax tax.illinois.gov
State tax registration
Tax tax.illinois.gov
Registration instructions
Platform tax.illinois.gov
Marketplace or platform tax rule
Tax tax.illinois.gov
Resale or exemption certificate
Tax tax.illinois.gov
Recordkeeping guidance
Up next Tax + maintenance
Part 4 of 4
Close the Illinois tax and filing branch
The Illinois tax stack, registration timing, and maintenance follow-up.
Part 4 of 4
Close the Illinois tax and filing branch
The Illinois tax stack, registration timing, and maintenance follow-up.
Short answer
Keep the Illinois tax and maintenance rules together before you assume the platform solved them.- A typical single-member LLC needs an EIN for banking, payroll, and platform operations.
- Illinois uses MyTax Illinois and Form REG-1 for business tax registration.
- Illinois defines a marketplace seller as a person making sales through a marketplace operated by an unrelated third-party marketplace facilitator that has certified it will collect and remit the Illinois taxes.
Do next: Step 6: Register for state tax, seller permit, or resale setup.
Step details
1. EIN
Main takeaway
A typical single-member LLC needs an EIN for banking, payroll, and platform operations.
Watch for
- A sole proprietor often needs one if hiring employees and may still want one for operations even when not strictly required.
- Illinois DOR also says a single-member LLC with no FEIN must use the paper REG-1 path instead of the online registration flow.
2. Illinois sales tax, seller permit, or equivalent registration
Main takeaway
Illinois uses MyTax Illinois and Form REG-1 for business tax registration.
Watch for
- IDOR says to register before you make purchases, sales, or hire an employee.
- IDOR says there is no general registration fee.
- If applicable, IDOR issues a Certificate of Registration or License electronically through MyTax Illinois.
3. Marketplace or platform tax rule
Main takeaway
Illinois defines a marketplace seller as a person making sales through a marketplace operated by an unrelated third-party marketplace facilitator that has certified it will collect and remit the Illinois taxes.
Watch for
- A marketplace facilitator that has assumed retailer duties must provide CRT-63 or similar certification to the marketplace seller.
- Illinois' marketplace FAQ says sales made through a marketplace that is collecting and remitting tax for you are not reported on your Form ST-1; you leave those sales off your ST-1.
- Etsy's public tax help also says Etsy automatically calculates, collects, and remits U.S. sales tax where required and lists Illinois as collected and remitted as of January 1, 2020.
4. Resale purchases or exempt purchasing
Main takeaway
Illinois uses Form CRT-61, Certificate of Resale, for resale documentation.
Watch for
- Illinois sales-tax guidance says tax-free resale purchases generally require an active Illinois retailer or reseller account ID, unless you qualify as an out-of-state purchaser under the form instructions.
- Illinois also requires marketplace sellers to keep CRT-63 or similar facilitator certification as proof that the marketplace facilitator collected and remitted the tax.
- Public-source caveat: the reviewed Illinois sources do not cleanly answer whether an Illinois-based Etsy-only marketplace seller that is not otherwise registered can both avoid REG-1 and still make Illinois resale purchases tax-free. Verify that fact pattern with IDOR before relying on it.
5. Entity tax treatment
Main takeaway
Illinois says the return an LLC files depends on how the LLC is treated for federal tax purposes.
Watch for
- If the LLC is a disregarded entity for federal purposes, the income and deductions are reported on the owner's Illinois return and the LLC has no separate Illinois income tax filing requirement.
- If the LLC is taxed as a partnership or corporation, different Illinois return and replacement-tax rules can apply.
6. Entity filing-fee or franchise-tax rule
Main takeaway
The recurring statewide Illinois LLC maintenance item verified in the public sources reviewed is the annual report, not a separate default LLC franchise tax.
Watch for
- Illinois public sources reviewed did not identify a separate statewide annual franchise-tax payment for a default disregarded single-member LLC.
- If you elect corporate or partnership tax treatment, Illinois income-tax and replacement-tax filings can apply at the entity level.
7. If the founder changes entity type later
Main takeaway
IDOR says certificates of registration cannot be transferred. If you change the structure of the business, you must discontinue the old entity and register the new one.
Watch for
- IDES also has change-of-entity and succession forms, including UI-1 S&P and updated REG-UI-1 filings.
- Do not assume a sole-proprietor registration, permit, or employer account automatically carries over to a later LLC.
Sole proprietor: Register for Illinois tax, seller permit, or reseller setup
Main takeaway
Illinois tax registrations run through MyTax Illinois using Form REG-1.
Sole proprietor: Understand the tax reality
Main takeaway
Sole-proprietor business income generally flows through to the owner's Illinois individual return.
Watch for
- Illinois income tax is based to a large extent on the federal Internal Revenue Code.
Single-member LLC: File ongoing entity maintenance
Main takeaway
Key points:
Watch for
- due: before the first day of the LLC's anniversary month each year.
- a $100 late penalty applies if the report is not filed within 60 days after the due date, and missed filings can also lead to loss of good standing and eventual administrative dissolution problems.
- Illinois ties the due date to the month the LLC was organized, not one universal calendar date.
- for example, if the LLC was organized on September 15, the annual report is due before September 1 each year.
- filing method: Illinois Secretary of State annual report filing path using Form LLC-50.1.
Step 6: Register for state tax, seller permit, or resale setup
Main guide step 6
What this step settles
Caveat:
Why it matters: Illinois' public pages do not produce one perfectly clean answer for an Illinois-based Etsy-only seller that wants resale treatment but makes only marketplace-facilitated sales. Illinois also tells marketplace sellers to keep CRT-63 or similar facilitator certification, and that certification can use a FEIN or SSN if the seller has no Illinois account ID. If you plan to buy supplies or inventory tax-free for resale, verify your exact registration path with IDOR before relying on an assumption.
- Illinois business tax registrations run through MyTax Illinois using Form REG-1.
- Illinois DOR says you should register before you make purchases, sales, or hire an employee.
- Etsy's public sales-tax help says Etsy automatically calculates, collects, and remits U.S. sales tax where marketplace-facilitator laws require it, and Etsy lists Illinois as collected and remitted as of January 1, 2020.
- Illinois' marketplace-facilitator rules still matter because Illinois says marketplace sales collected by the facilitator stay off the seller's Form ST-1, while non-marketplace sales are still the seller's own reporting responsibility.
- Illinois resale purchases generally use Form CRT-61, and Illinois' public resale guidance says tax-free resale purchases generally require an active Illinois retailer or reseller account ID, unless an out-of-state purchaser exception applies.
Official links
Federal irs.gov
EIN overview and online application
Federal irs.gov
EIN paper form
Tax tax.illinois.gov
State tax registration
Tax tax.illinois.gov
Registration instructions
Platform tax.illinois.gov
Marketplace or platform tax rule
Tax tax.illinois.gov
Resale or exemption certificate
Tax tax.illinois.gov
Recordkeeping guidance
Tax tax.illinois.gov
Entity tax treatment
Tax ilsos.gov
Recurring entity tax filing or fee
Federal fincen.gov
BOI or other federal reporting status
Federal dceo.illinois.gov
State start-here page
Formation ilsos.gov
State business portal
Local illinois.gov
State small business support hub
03
Chapter 3 of 7
Finish the Etsy account and operations branch
Use these steps for the platform-side account, plan, operations, and eligibility work after the state basics line up.
Core chapter
What this chapter does
Etsy account setup, operations, and pre-launch readiness.How to move through it
Step 10: Understand Etsy's fee model before you price anything.Open the Etsy branch only after the Illinois basics line up, then finish plan and operations choices.
3 parts to review • 34 source touchpoints behind the drawers.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 3
Open the Etsy account
The first account and verification work for the platform path.
Part 1 of 3
Open the Etsy account
The first account and verification work for the platform path.
Short answer
Start the platform onboarding only after the legal name, EIN, and payout details line up cleanly.Do next: Step 9: Create your Etsy shop and enroll in Etsy Payments.
Step details
Step 9: Create your Etsy shop and enroll in Etsy Payments
Platform step 1
What this step settles
Have these ready:
Why it matters: Platform registration flow: Operational note:
- government-issued ID
- phone number
- email address
- bank account information
- debit or credit card for Etsy billing
- tax information
- business registration details if you formed an entity
- proof of address or identity if Etsy asks
- Etsy's public bank-account help says U.S. sellers use Plaid when adding or updating bank details.
- Start at Etsy.com/sell and set up the shop in a desktop web browser.
- Choose your shop language, country, currency, and a shop name that fits Etsy's naming rules.
- Add your bank details on the How you'll get paid step, add your billing card, and enroll in Etsy Payments.
- Complete seller verification. Etsy's public help says it uses Persona to compare a government ID to a selfie, and the name on the ID must match the bank account details you shared.
- Add at least one compliant listing, set the processing profile and shipping details, and open the shop only after the listing and payment setup are accurate.
Official links
Up next Plan + pricing
Part 2 of 3
Review the plan, pricing, and optional programs
Plan, pricing, and optional program decisions before launch.
Part 2 of 3
Review the plan, pricing, and optional programs
Plan, pricing, and optional program decisions before launch.
Short answer
Use this part for the platform plan, pricing, or optional brand and program choices that come before operations.- Step 11: Decide whether brand or IP programs belong in the initial launch.
Do next: Step 10: Understand Etsy's fee model before you price anything.
Step details
Step 10: Understand Etsy's fee model before you price anything
Platform step 2
What this step settles
Caveat:
Why it matters: Practical rule: Price the first listings only after you account for listing fees, transaction fees, payment-processing fees, shipping, packaging, returns risk, and any advertising charges you choose to use.
- Etsy does not require a monthly seller-plan choice for a standard U.S. shop.
- As of April 26, 2026, Etsy's public fee pages say a one-time non-refundable set-up fee may apply when you open the shop, the amount varies by location, the listing fee is $0.20 per listing, listings expire after 4 months, and the transaction fee is 6.5% of the total order amount including shipping and gift wrapping.
- Etsy's public Etsy Payments policy says sellers with a United States bank account pay a payment-processing fee of 3% + $0.25 per order.
- Offsite Ads are automatically enabled. Etsy's public help currently shows a 15% fee below the threshold, a 12% discounted fee at the higher tier, and a $100 per-order cap.
- Etsy's public Offsite Ads pages still mix more than $10,000 and at least $10,000 wording around the mandatory-participation edge. Re-check the live wording before assuming the exact equality case.
Step 11: Decide whether brand or IP programs belong in the initial launch
Platform step 3
What this step settles
Etsy does not require a public brand-registry-style program for a beginner launch.
- Etsy does not require a public brand-registry-style program for a beginner launch.
- What matters more at the start is that your product is actually allowed on Etsy and that you own the design rights or other rights needed to list it.
- If you are building an original brand, start the trademark-search and documentation path early, but do not treat that as a required day-one launch step.
Official links
Platform help.etsy.com
Shop opening guide
Platform help.etsy.com
Identity verification
Platform help.etsy.com
Seller fees
Platform etsy.com
Payment processing fees
Platform help.etsy.com
Offsite Ads rule
Platform help.etsy.com
Additional seller-info confirmation
Platform help.etsy.com
Allowed-item baseline
Platform etsy.com
Detailed creativity rules
Platform help.etsy.com
Reselling and drop-shipping limits
Platform help.etsy.com
Listing setup and processing profiles
Platform help.etsy.com
Shipping and order completion
Platform help.etsy.com
Customer-service standards
Platform help.etsy.com
Marketplace sales-tax collection
Platform help.etsy.com
Platform protection and shipping-risk checkpoint
Up next Ops + eligibility
Part 3 of 3
Finish operations and eligibility before scaling
Operations and eligibility checks before the business scales.
Part 3 of 3
Finish operations and eligibility before scaling
Operations and eligibility checks before the business scales.
Short answer
Close the operating branch only after the listing, trip, hosting, or operational eligibility checks are ready.- Step 13: Confirm product, service, or category eligibility before scaling.
Do next: Step 12: Complete the fulfillment or operations branch.
Step details
Step 12: Complete the fulfillment or operations branch
Platform step 4
What this step settles
For Etsy's baseline seller-managed shipping path, the public flow is:
- create the listing with accurate processing times,
- choose or create the right processing and shipping profiles,
- set shop policies,
- package items carefully,
- buy Etsy shipping labels if they fit your workflow or use your own carrier workflow,
- and mark orders shipped with valid tracking when available.
Step 13: Confirm product, service, or category eligibility before scaling
Platform step 5
What this step settles
Etsy's public help says items must be made by the seller, designed by the seller, handpicked by the seller, or sourced by the seller.
- Etsy's public help says items must be made by the seller, designed by the seller, handpicked by the seller, or sourced by the seller.
- Etsy says handmade reselling is not allowed.
- Etsy says drop shipping is not allowed except for a limited craft-and-party-supplies exception.
- Etsy says vintage items must be at least 20 years old.
- If you use a production partner for your own designs, Etsy requires that disclosure on the relevant listings.
Official links
Platform help.etsy.com
Shop opening guide
Platform help.etsy.com
Identity verification
Platform help.etsy.com
Seller fees
Platform etsy.com
Payment processing fees
Platform help.etsy.com
Offsite Ads rule
Platform help.etsy.com
Additional seller-info confirmation
Platform help.etsy.com
Allowed-item baseline
Platform etsy.com
Detailed creativity rules
Platform help.etsy.com
Reselling and drop-shipping limits
Platform help.etsy.com
Listing setup and processing profiles
Platform help.etsy.com
Shipping and order completion
Platform help.etsy.com
Customer-service standards
Platform help.etsy.com
Marketplace sales-tax collection
Platform help.etsy.com
Platform protection and shipping-risk checkpoint
04
Chapter 4 of 7
Handle the local and city-specific branches
These local facts can still change the answer even after the state and platform path looks clear.
Optional branch
What this chapter does
Local permits, local taxes, city appendices, and location-specific operating rules.How to move through it
Review chicago appendix.Only turn this chapter on if your location, city, or operating model changes the answer.
2 parts to review • 9 source touchpoints behind the drawers.
Only turn this branch on if it matches your plan
These branch questions keep the main reading path clean. If one matches your situation, the relevant detail blocks below get emphasized.
Matching branch content is now highlighted below.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 2
Local permits and location checks
Illinois pushes many permit and business-location questions down to counties and municipalities.
Part 1 of 2
Local permits and location checks
Illinois pushes many permit and business-location questions down to counties and municipalities.
Short answer
Illinois pushes many permit and business-location questions down to counties and municipalities.Do next: Review local permits and location checks.
Why this matters
Local permits and location checks
Main takeaway
Illinois pushes many permit and business-location questions down to counties and municipalities.
Watch for
- For any place where the business will operate:.
- check the state business portal,.
- contact the county clerk,.
- contact the city, town, or village office,.
- ask zoning or planning offices if the business will operate from home or store inventory.
- Typical local risk areas:.
- assumed-name filing.
- home occupation restrictions.
- zoning for inventory storage.
- carrier or truck activity at a residence.
- fire-code and occupancy limits.
Official links
Federal dceo.illinois.gov
State start-here page
Formation ilsos.gov
State business portal
Local illinois.gov
State small business support hub
Local codelibrary.amlegal.com
City tax or permit warning
Local webapps1.chicago.gov
City filing information
Local webapps1.chicago.gov
City support / clarification path
Up next Chicago appendix
Part 2 of 2
Chicago Appendix
If the business operates in Chicago, add one more review layer.
Part 2 of 2
Chicago Appendix
If the business operates in Chicago, add one more review layer.
Short answer
If the business operates in Chicago, add one more review layer.Do next: Review chicago appendix.
Why this matters
Chicago Appendix
Main takeaway
If the business operates in Chicago, add one more review layer.
Watch for
- Chicago's municipal code makes home occupation a regulated business-license category.
- Chicago's home-occupation rules require the business use to remain accessory to the residence and to comply with the zoning ordinance.
- Chicago prohibits warehousing as a licensed home occupation, prohibits tractor-trailer deliveries, and limits bulk deliveries to no more than one per day in addition to mail and common parcel carriers.
- Chicago caps the permanently occupied home-occupation area at the larger of 300 square feet or 25 percent of the dwelling unit.
- Chicago Business Direct is the city's portal for license applications, renewals, tax filings, and payments.
- This city branch is conditional, not automatic statewide. The public city sources reviewed do not identify one blanket Chicago license or tax answer for every non-home Etsy setup, so confirm the exact local path with BACP before operating from a commercial site, studio, or warehouse.
05
Chapter 5 of 7
Use the hiring and insurance branch only if it matches your plan
This branch matters when you expect to hire, scale, or need the insurance follow-up tied to the business model.
Optional branch
What this chapter does
Hiring, payroll, insurance, and scale-up risk reminders.How to move through it
Review insurance reality.Only turn this branch on when hiring, payroll, or coverage questions are close enough to matter.
2 parts to review • 5 source touchpoints behind the drawers.
Only turn this branch on if it matches your plan
These branch questions keep the main reading path clean. If one matches your situation, the relevant detail blocks below get emphasized.
Matching branch content is now highlighted below.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 2
If you hire, close the employment branch first
The employee registration, payroll, and employment-program branch.
Part 1 of 2
If you hire, close the employment branch first
The employee registration, payroll, and employment-program branch.
Short answer
Use these cards if the business will hire employees or carry payroll responsibilities soon.- Register for Illinois withholding with IDOR if you are required to or voluntarily withhold Illinois income tax.
- Illinois workers' compensation coverage generally starts with your first employee, even a part-time employee.
- No separate Illinois statewide private-employer disability insurance or paid-leave registration requirement was identified in the public sources reviewed for this pack.
Do next: Review 1. employer registration.
Why this matters
1. Employer registration
Main takeaway
Register for Illinois withholding with IDOR if you are required to or voluntarily withhold Illinois income tax.
Watch for
- Register with IDES within 30 days of start-up using MyTax Illinois or REG-UI-1.
- IDES' public employer pages also say employers must report new and rehired employees to the State Directory of New Hires within 20 days of the employee's first day on payroll.
- Register Illinois withholding with IDOR through MyTax Illinois.
- Report new and rehired employees to the Illinois State Directory of New Hires within 20 days of the employee's first day on payroll.
2. Workers' compensation
Main takeaway
Illinois workers' compensation coverage generally starts with your first employee, even a part-time employee.
Watch for
- Coverage must be obtained immediately when employees are hired unless a lawful self-insurance path applies.
- Sole proprietors, business partners, corporate officers, and LLC members may exempt themselves from coverage for themselves in ordinary cases, but that is not the same as exempting employees.
- Illinois workers' compensation coverage generally starts with your first employee, including part-time employees.
- Sole proprietors, business partners, corporate officers, and LLC members may exempt themselves from Illinois workers' compensation coverage for themselves, but that does not eliminate the duty to insure covered employees.
3. Disability, paid leave, or similar coverage
Main takeaway
No separate Illinois statewide private-employer disability insurance or paid-leave registration requirement was identified in the public sources reviewed for this pack.
Watch for
- Re-check if your workforce facts are unusual or your local jurisdiction adds a program.
4. Exemption certificate if applicable
Main takeaway
No general Illinois statewide exemption certificate comparable to a New York CE-200 was identified in the public sources reviewed.
Watch for
- The reviewed IWCC materials discuss owner exemptions and insurance requirements, but not a single statewide exemption form that replaces coverage for ordinary employees.
Official links
Up next Insurance branch
Part 2 of 2
Keep the insurance branch visible as you scale
The insurance, liability, and scale-trigger branch.
Part 2 of 2
Keep the insurance branch visible as you scale
The insurance, liability, and scale-trigger branch.
Short answer
This is the insurance and liability follow-up tied to hiring, products, services, or growth.- If you sell physical products, commercial general liability and product liability insurance become practical early even though a separate public Etsy liability-insurance mandate was not identified in the reviewed sources as of April 26, 2026.
Do next: Review insurance reality.
Why this matters
Insurance reality
Main takeaway
If you sell physical products, commercial general liability and product liability insurance become practical early even though a separate public Etsy liability-insurance mandate was not identified in the reviewed sources as of April 26, 2026.
Watch for
- Etsy's current public Purchase Protection materials say qualifying orders up to $250 may be refunded by Etsy without taking the refund from the seller, but Etsy also says the program is not insurance, not a warranty, and not a guarantee.
- Etsy's legal policy page currently says the reviewed version is effective until May 6, 2026, and Etsy's help page says updates start May 7, 2026.
- Etsy itself recommends purchasing shipping insurance for orders outside program coverage or for damaged-item situations beyond the covered first case branch.
06
Chapter 6 of 7
Keep the operating calendar and mistake list close after launch
Once you are live, use the ongoing calendar and the mistake list to keep the business on a safer path.
Core chapter
What this chapter does
The recurring compliance calendar, live-operating routine, and beginner mistakes to avoid.How to move through it
Listing mass-produced goods as handmade.Use the recurring calendar first, then keep the repeated-mistake notes close after launch.
2 parts to review • 24 source touchpoints behind the drawers.
Chapter parts
Open Part 1 when you are ready to start working through this chapter.After you start, only one part stays open at a time and the earlier ones stay easy to revisit.
Part 1 of 2
Use the ongoing compliance calendar
The recurring compliance calendar grouped by timing.
Part 1 of 2
Use the ongoing compliance calendar
The recurring compliance calendar grouped by timing.
Short answer
This groups the recurring checks by when they matter after launch.- Get EIN if applicable.
- Finish the Etsy seller-managed shipping branch.
- Confirm product eligibility.
Do next: Finish entity or assumed-name setup.
See checklist
Before first sale
Grouped so the launch order stays easier to scan.
- Finish entity or assumed-name setup.
- Get EIN if applicable.
- Open bank account.
- Register Illinois tax accounts that apply.
- Check local permits and Chicago branch rules if relevant.
- Complete Etsy verification.
Before first live launch
Grouped so the launch order stays easier to scan.
- Finish the Etsy seller-managed shipping branch.
- Confirm product eligibility.
- Build accurate listings and policies.
- Complete processing-time, shipping, and packaging setup.
Monthly
Grouped so the launch order stays easier to scan.
- Reconcile payouts, fees, refunds, and ad charges.
- Review cash reserves for taxes.
- Review margins and shipping performance.
- Check customer-service stats, cases, and listing issues.
Quarterly
Grouped so the launch order stays easier to scan.
- File ST-1, IL-941, and unemployment reports on the cadence assigned by IDOR and IDES.
- Review estimated-tax planning for federal and Illinois income taxes if profit is building.
- Review whether any marketplace-only assumptions have changed because you started making direct or off-platform sales.
Annual or periodic
Grouped so the launch order stays easier to scan.
- File the Illinois LLC annual report before the first day of the LLC's anniversary month each year. The filing fee is $75, and a $100 late penalty applies if the report is not filed within 60 days after the due date.
- Renew an Illinois LLC assumed name on the Secretary of State cycle if you use one. Renewal is tied to the first day of the company's anniversary month in the next calendar year evenly divisible by 5.
- File annual federal and Illinois income tax returns as applicable to your entity and tax election.
- Re-check county and city rules if your address, storage setup, or business activity changes.
- Re-check Etsy fees, Offsite Ads wording, and Purchase Protection rules before major pricing or scaling decisions.
Official links
Platform help.etsy.com
Platform protection and shipping-risk checkpoint
Federal irs.gov
EIN overview and online application
Federal irs.gov
EIN paper form
Tax tax.illinois.gov
State tax registration
Formation dceo.illinois.gov
Compare business types
Platform help.etsy.com
Shop opening guide
Platform help.etsy.com
Allowed-item baseline
Federal dceo.illinois.gov
State start-here page
Up next Common mistakes
Part 2 of 2
Common Mistakes New Operators Make
The most common mistakes from the research pack plus the first-launch recommendation.
Part 2 of 2
Common Mistakes New Operators Make
The most common mistakes from the research pack plus the first-launch recommendation.
Short answer
These are the repeated errors called out in the research pack.- Using a brand name or DBA without the right county or Secretary of State filing.
- Mixing personal and business money.
- Assuming "Etsy handles tax" means all Illinois tax-registration questions disappear.
Do next: Listing mass-produced goods as handmade.
Why this matters
Practical first-launch recommendation
- If you are testing casually with minimal risk, sole proprietor can work.
- If you intend to build a real Etsy business, single-member LLC is usually the better long-term path.
Key detail
Listing mass-produced goods as handmade
Keep in mind
- Using a brand name or DBA without the right county or Secretary of State filing
- Mixing personal and business money
- Assuming "Etsy handles tax" means all Illinois tax-registration questions disappear
- Using CRT-61 resale assumptions without verifying what IDOR expects for your exact marketplace-only fact pattern
- Launching from a Chicago home without checking the city's home-occupation restrictions
- Keeping weak design, sourcing, or production-partner documentation
- Missing the Illinois LLC anniversary-month annual report
Official links
Formation dceo.illinois.gov
Compare business types
Formation ilsos.gov
Formation hub
Formation ilsos.gov
Default entity formation filing
Formation ilsos.gov
Immediate post-filing requirement
Formation ilsos.gov
Ongoing entity maintenance
Federal irs.gov
EIN overview and online application
Federal irs.gov
EIN paper form
Tax tax.illinois.gov
State tax registration
Tax tax.illinois.gov
Registration instructions
Platform tax.illinois.gov
Marketplace or platform tax rule
Tax tax.illinois.gov
Resale or exemption certificate
Tax tax.illinois.gov
Recordkeeping guidance
Platform help.etsy.com
Platform protection and shipping-risk checkpoint
Local codelibrary.amlegal.com
City tax or permit warning
Local webapps1.chicago.gov
City filing information
Local webapps1.chicago.gov
City support / clarification path
07
Chapter 7 of 7
Review your selected steps and open the packet PDF
Use the review screen to decide what belongs in the packet, then open a real PDF preview in a new tab.
Finish
Review and print
Review the chapters you kept and make sure the right reminders stay visible.
Use this step to keep only the chapters that match the launch plan now, then keep the local and city reminders close before you treat the packet as final.
Saved setup choice
single-member LLCThat choice stays visible while the rest of the journey gets lighter.
Packet count
4 chapters selectedOptional branches can stay out of the packet until they match the real launch plan.
Still verify locally
6 remindersLocal tax, zoning, insurance, and platform policy changes still need the official check.
Open the working launch packet with fillable tracker rows, then print or download it from the PDF tab.
Choose what stays in the packet
Selected chapters
- Choose setup
Your setup choice, the short safe path, and the money realities that matter before spending deeply. - Illinois registrations
The Illinois and federal registration sequence, tax setup, and state-maintenance checks. - Etsy setup
Etsy account setup, operations, and pre-launch readiness. - Local and city checks
Local permits, local taxes, city appendices, and location-specific operating rules. - Hiring and insurance
Hiring, payroll, insurance, and scale-up risk reminders. - Ongoing calendar and mistakes
The recurring compliance calendar, live-operating routine, and beginner mistakes to avoid.
See local verification reminders
- State start-up guide covering structure choice, assumed names, EIN, taxes, and licensing.
- Secretary of State hub for LLC formation, annual reports, searches, assumed names, and related filings.
- Public state handbook explaining structure choices, county-clerk assumed names, taxes, and local license research.
- Chicago treats home occupations as regulated business licenses, prohibits warehousing, prohibits tractor-trailer deliveries, limits bulk deliveries, and caps permanently occupied space at the larger of 300 square feet or 25 percent of the dwelling unit.
- City portal for license applications, renewals, tax returns, and tax payments.
- Public contact path for business-license and general questions at (312) 744-6249 and tax questions at (312) 747-4747.
Change your path
Need a different route into this answer?
Use one of these links if you landed in the wrong platform, wrong state, or want the state-only baseline before you keep reading.
Choose another platform Switch away from Etsy without losing the state-first flow. Choose another state for Etsy Stay on Etsy and reopen the state picker for Illinois alternatives. Open the Illinois state guide Compare the platform-specific path with the state-only baseline. Open official sources Jump straight to the official source directory if you want agency links first.