Found this advice on the Etsy forums. All of it is good stuff, even if it’s in lower case. You would read most of the tips in the Simple Guide To SEO, but there are a couple Etsy specific tips in here.
* have titles that are descriptive instead of artsy and original. so instead of naming a necklace just “moon dream” i would include materials and colors if possible, without making it too long, but in a way that when you read the title you know what are the materials, basic colors and style of the item. also to keep up with relevancy its better to have the type of the item more to the beginning of the title, like i would try “necklace” not to be one of the last words but more to the begining
* first 160 characters of descriptions also function as keywords for search engines (this applies for your shop announcement as well). So if you can out more of those keywords in the beginning of your descriptions its great
*about tags- again descriptive, think of colors, styles, materials, textures when using them. Also if i used for example “hoops” in the title i wont use it again in tags, because title is already working as a tag for me. i would try to save slots for words i haven’t used in the title
*sections are your keywords too. now i am still a little lost with this because section names cant be too long and you want them to be relevant to their content, so if you sell jewelery its natural to have “earrings”, “bracelets”, etc, sections but at the same time these are very competitive, just imagine how many shops have sections like that. the key is somewhere in the middle- not that popular name for section but at the same time still descriptive enough to know approx what expect when seeing it.
* links inside the listing can be helpful too, like ones that link back to your shop or other relevant listings. some people might not be accustomed to etsy and not know exactly how to go back to your shop (if they even know they are in one)
Read the entire article at:
http://www.etsy.com/forums_thread.php?thread_id=6493401

