The Prize
You need to pick a good prize, with a good photo, if you want people to enter. The more expensive the prize or the more prizes to win, the more people will enter. Choose something that represents your shop and your best work and is popular (something you sell a lot of or something that people search for often--review your shop stats). Also, choose something versatile: a hairbow and onesie will only get people with baby girls, so use a gender-neutral item or offer the choice of a boy onesie instead. You can also let the winner choose anything from your shop (with or without a price limit) instead of you choosing a specific one.
The Entries
All giveaways need a mandatory entry. The mandatory entry should benefit you without being too demanding. For example, the best is to ask people to browse your shop and leave a comment of what they like. That takes them to your shop, which they hopefully will remember in the future, but does not require any commitment, as would hearting your shop (especially if they don't have an Etsy account) or following your blog.
You can include optional entries that benefit you (heart shop, follow blog, like FB page, etc) and they can be worth a different number of entries. If you have a good prize, most people will do one or two of the additional entries to increase their chances of winning.
The Format
You can have people leave a comment on your blog or FB page or use Rafflecopter. In your blog post, make the prize, entries, and rules clear. The giveaway should be open 1-2 weeks. Decide if it is open to the U.S. only, U.S. and Canada, or worldwide. Ask for an email address so you can contact the winner (unless you are doing it on your FB page) and make clear the window of time they have to respond before another winner is chosen. When the giveaway ends, choose the winner through random.org, announce it on your blog and/or FB page, and contact the winner.
Advertising
Post the giveaway in appropriate threads in your Etsy teams. Post it on your FB page (or blog if you're doing it on your FB page). Post it in your shop announcement. But most important, post it to the following websites:
Etsy Giveaways: Most of my giveaway traffic comes from here.
By Hand Giveaways: Another good one.
Contest Girl: Super easy to submit.
Tightwad in Utah & Oh So Savvy Mom: Item doesn't have to be handmade.
Mom Bloggers Club: Sign up and join the groups for promoting giveaways. The one I get the most traffic from is Low Entry Giveaways: Under 100.
Extra Tips
- If you make the prize a gift certificate to your shop, the amount should cover at least one item in your shop. It is illegal to make someone spend money (thus the "No purchase necessary" you always see in small print); otherwise, the prize is really just a discount.
- Whether the prize is a certificate or a specific object, the shipping must also be included for the same reason previously stated.
- Including a coupon code in the blog post will encourage people to buy from your shop if they don't win.
- When stating the deadline, include the time zone. Avoid using midnight, as this can cause confusion.
- If hosting the giveaway on your blog, turn off word verification. It is a huge turn off for people, especially when they want to do a lot of entries.
- Introduce your giveaway with a little bit about yourself and your shop and why you are doing the giveaway. Avoid long Q&A.
- If another blogger wants to host a giveaway for your shop, make sure the mandatory entry benefits you, not them. A good blogger will try to help you and make any entries beneficial to them optional ones.
For some examples of giveaways, check out my blog. Good luck with your next giveaway!