For instance, if I search "navy blue dress" - the first page of results, I get in the top 2 rows:
Lirola, an established seller with lots of sales/reviews/etc.
suertedia, who has 2 reviews
Lizardqueen, who has no reviews
memetik, who has 73 reviews and is semi-established
ediedylan, who has 3 reviews
OsEstorninhos, who has 314 reviews and is fairly established
the rest of the page is more or less the same way - some sellers with 1 review, no reviews, 20 reviews, 1500+ reviews, 200 reviews, etc.
All items are tagged and titled "navy blue dress"
eta: coldfish, who has approx. as many reviews as lirola, has an item on the second page but nothing on the first page; if Etsy preferred established shops surely she'd be on the first page? It is tagged and titled correctly for the search. Also on the first page are many vintage dresses (it is a search that combines handmade and vintage, I think) - why would they have good search standing if previous sales of an item were a factor? (as you can't generally sell the same vintage item twice)