I know I blog on here about photo tips, listing titles, promotion opportunities, but I just realized that when my real-life friends tell me they're about to start selling on Etsy and ask me for my first most important piece of advice, what I tell them is very simple:
1) Don't sell jewelry
Why do I say this? Because you can post in every team, spend hours on your photos and tags, rent a billboard... but if you're competing with a zillion other people on Etsy in the most saturated category they have, your odds of sales are very low.
Time and time again in my teams I see desperate people asking us for advice on their first sale, and sometimes their shop does need a little help. But frequently, they're just selling something that everyone else is selling. Competition is stiff. It takes a lot more work to get a sale, and odds of selling anything are low.
In fact, I would take my advice a step further and tell you to stay away from any of these categories:
2) Digital downloads
3) Hair accessories - ESPECIALLY kids bows
6) Bath & Body
Now, there's an upside to all this - if you're a buyer, Etsy is a great place to go for great deals on these items. I've bought several handmade scarves for really low prices, and get most of my soaps now for free on the trade teams! But if you're looking to start a business you don't want people like me saying that, you want to make a profit and have a steady stream of inventory LEAVING your house.
Go visit Etsy's teams. Check around for "promotion" threads where people are spamming "post your items here"-type threads. Those people are desperate. They're willing to waste time posting in useless threads, because making things isn't getting them any money. Make a mental note of what they're selling, and know that it doesn't sell on its own. Don't copy them.
Maybe what you make is special and different and has a "niche". If you're not sure, list it. Every listing is an experiment. If it doesn't sell, correct your course and try another idea.
So what should you sell?
I love the Seller Opportunity Tools prototype team. Once you join, there's a link on the left that says "Find Inspiration", where you can see search terms that are getting put in by shoppers, but buyers aren't filling all the needs.
Check out Craft Count to see what the highest selling shops are selling. In general, what are they doing that you are not?
Browse around Etsy from the main page. Read shop announcements. Shops who use their announcement space to advertise deep discounts are probably in a market you should avoid. Shops who have things like "we're so behind if you want your item in time for Christmas you'd better order in October!" obviously have more demand for what they're selling.
Consider barrier-to-entry markets. That means that any guy on the street can't just start making what you're making. Things like stained glass and woodworking require tools that not everyone has in their house - so those markets aren't as saturated.
Obviously you have to love what you're making, stay in markets you "know", and be true to yourself. But you probably want to have some sales, too! So find a product line that fills a void. It'll practically sell itself!