I have an Etsy shop, opened in April. There are LOTS of sellers on Etsy, but then there are also a lot of shoppers on Etsy. You do have to promote your shop though, just as you would any bricks and mortar business. The more you put into it, the more you get out of it. I had only had two sales after being open 7 months, then started linking with my facebook page, pinterest, etc, and learning how to "tag" my items so I would get found in searches.
I also happened to hit on an item that sold well (personalized Christmas stockings) and had 13 sales in the last 4 weeks. I hope I can find something that does well for the new year since I can't imagine I'll sell any more stockings till next year.
It is very easy to open a shop on Etsy, no charge for the account. They charge 20 cents for each listing for four months. They take 3.5 % of every sale. There are other fees if you use direct check-out, Paypal, etc. I would suggest opening an account and hanging out in the forums for a while. You can learn all kinds of things from the threads there.