I'm in the jewelry category also and it's tough competition, especially with all the resellers out there. When I started in July of 2011, I had 5 sales in the first month and I had no idea what I was doing. It was painfully slow for a long time and from Thanksgiving to December 16 of last year, I had only 2 sales. This year for the same time period, I've had 37 sales but that is nothing compared to some jewelers and I still have more work to do on SEO, promoting outside of Etsy, and marketing, marketing, marketing. Even though I'm grateful for the sales I made, I'm already starting to panic because it's slowed down to nothing again and I have this sick feeling in the pit of my stomach that I'll go without sales again for the next few months.
IMO it's a fine line between creating what you love to make and have the skills for and compromising your art by making what people will buy. If you have to pay bills, as I do, you end up doing the latter.