I've often felt like Etsy is more a photography site than anything else. It's so amazing the impact that a good photo vs. a bad photo can have on if an item sells or not.
And it's understandable!
Anytime you're buying something online that you can't physically touch ... feel ... turn over in your hand .... you definitely want to see it represented as truly and accurately as possible.
But dang, it can be frustrating!! (see photo above taken by Richard for details.)
Normally, I take photos in early daylight for the most natural lighting.
If I've got the boyfriend handy and willing to take some shots, we can be a little more open with the lighting. (He has a much nicer camera!)
Anyway, I think the key to a good Etsy photo is going back and editing the heck out of it. I always add a bit of sharpness ... plus lighten them some. But you have to be careful not to make the item look "too good" and different from what it really is!!
Sometimes I wish I could just sell items in a real shop so I wouldn't even have to deal with taking pictures ... but it is good to help tell a story and have the potential buyer picture themselves wearing the item.