I have an Etsy shop and it takes a lot of networking, promotion, advertising and time, but I don't find it too bad. There is a huge spread in costs of similar items and there are plenty of people charging £3.50 for mugs etc. Customers also can expect the earth, overnight, but generally, I prefer it to Ebay.
If you are thinking of setting one up please use this link, it will give us both 40 free listings, so you can try it out without cost (unless you sell something)
http://etsy.me/1okyxvo