Definition of SEO
SEO stands for Search Engine Optimization, makign your website attractive to search engines so they will rank you highly in search results. Search engines account for a tremendous amount of traffic online so if your shop isn't ranking on search engines you're missing out on a lot of visitors who may become customers. The two sides of SEO to focus on are on site and off site.
This post is just going to focus on on site optimization of your Etsy shop. Off site will have to wait for a later post.
On Site Optimization
On site optimization is creating your site's content in a way that makes it clear to the search engines what your site is about and what keywords are important so you'll show up in search results for those keywords (on Etsy tags are the Etsy search keywords). Since I'm talking about optimizing an Etsy shop the options for optimization are limited. You only have what text you can edit to use in optimization.
It is possible to optimize a site for search engines and lose customers. User friendliness and content has to come first and then SEO but the good thing is a lot of SEO changes can also help user friendliness if done right.
Keywords are the words that people use to find your site when they use a search engine. You want to try and target keywords that you want people to find your shop using. The obvious ones are the type of product you make, subject matter, or materials, less obvious ones can often be things like occasions people would buy your product for, wider categories of products, etc. Google has a great keyword research tool that can give you suggestions based on a sample of keywords you give them.
Make a list of the keywords you would like to target to use while editing your shop. Keep these keywords on hand for Part II on off site optimization.
It's a good idea to use keywords in your title, but not at the expense of making the title informative. So something like "Blue Sparkle Earrings" is informative but few keywords "Blue Sparkle Earrings, Handmade Lampwork Glass Jewelry" is both informative and has several keywords. Keyword stuffing is loading a title with a list of keywords and while it may help your search engine ranking it will be a turn off for customers, an example would be "handmade earrings lampwork glass gift etsy blue bead crafts". You must balance SEO with user friendliness.
Your descriptions first and foremost must inform a potential customer about your products. The good thing about this is the more you tell your customers the more there is for the search engines to pick up on. Make sure you work in your keywords where you can. As an example I make jewelry based on cuttlefish so my descriptions all contain this paragraph after the description of the piece of jewelry:
Cuttlefish are not fish at all but are cephalopods, their closest relatives are squid and octopus. These amazing sea creatures have eight arms and two tentacles with suckers that they use to capture their prey. Some cuttlefish are brightly colored and many can change the color and the texture of their skin as camouflage, mating display, or warning.It gives from background on cuttlefish which help customers who may not be familiar with these cool animals but it also includes many of my keywords such as: cuttlefish, fish, squid, cephalopods, tentacles, sea, etc.
Make the first few sentences of your description count the most, Etsy pulls the first 240 characters for the meta description tag. How much this tag matters anymore is debatable but some search engines pull this info for their results display. So you want to make sure it's clear in those first few words exactly what your item is.
Since tags are text on the listing page google will see them but you should be focussing them for Etsy search because that's where they will do the most good. List type of product, subject matter, materials, colors, etc. then if you have some tag spaces left over throw in some of your keywords. The tags also show up in the keywords meta tag but most search engines no longer give those much weight so Etsy search first then what might help with Google.
Your shop announcement is the only solid piece of text on your gallery page. Use it to introduce you and your products while working in your keywords. Like your item description the first 240 characters of your announcement are pulled for the meta description tag so describe your business first before any other announcements (including sales).
Also don't forget your shop title, you have about 55 characters to work with so instead of just your shop name include a little more info and keywords. As an example instead of just using "Noadi's Art" I use "Noadi's Art on Etsy, Polymer Clay Jewelry & Sculpture". It doesn't just show up in bold at the top of my shop annoucnement but is also used in the title tag, the title tag shows the title in the top of the browser (or on tabs) but search engines also factor it into your rankings.
Shop sections need to be clear to your customers what they include, but they are also text so search engines see them (also along with your user name they are pulled into the meta keywords). Instead of for example listing "Hats" be more specific and put "Fleece Women's Hats".
Off Site Optimization
Off site optimization boils down to one basic thing: backlinks. Backlinks are links on other sites that lead to your shop. You want to have links from many other sites, but not just any site. Sites with content related to your shop will have more effect than a totally unrelated site and some sites have more weight with search engines than others (google pagerank is often used a measurement of this).
Not every link will help your search engine rankings. The nofollow attribute tells search engines not to count a link, blog often have these on the comments and all paid links (like ads) are also supposed to be nofollow. These links might bring traffic so they aren't useless but won't help you with search engines.
So where to start building backlinks? If you have a blog, twitter account, flickr account, etc. add a link to your shop. Then you can start searching for free directories to add your site to, here's a big list of free directories and you definitely should get added to the Handmade Product Directory. Other things you can do are start a blog just for your shop, create Squidoo lenses for your products, email other blogs about featuring your shop, most Etsy teams have a blog that lists member shops so that's yet another great reason to join a team (among many including meeting cool fellow Etsy users). If you have great products and good promotion other people will do some of the work for you by linking to your shop themselves.
Another way to build backlinks is to use the RSS feed that every Etsy shop has. has a great list of places to submit RSS feeds.
While not directly related to the normal google results you deifnitely want to sign up for an submit your products to Google Base so they will show up in the product search. Let's Ets is a great tool for getting the bulk file to upload.
Linking to Your Shop
You can't control all links to your shop just those you create yourself. This is where your keyword list comes back out. You want to create links to your shop that use not just your shop name (you do want a number of those) but also your keywords.
If you are using images to link to your shop the best option is to also have a text link below it or near it to the same page. However you can also use the alt and title tags for images in the format <img src="http://yourlink.com/image.jpg" alt="Your shop name" title="Your shop name"> and the search engines will read that text for the image.
Hiring Out your SEO
There are many companies online that will do your SEO for you. If you find this all overwhelming you may decide to hire someone else to do it for you, however be very careful. There are some shady SEO companies out there that may want to scam you or who use unethical practices that could end up getting you punished by the search engines by being blacklisted. Always do your research before hiring anyone.