Watermarking is essentially a hold-over from when artists used to sign their paintings. Watermarking, like signing your name, was supposed to be a method of making your images more secure and less susceptible to copying. In truth there are so many techniques using image editing software that are available to a would-be image thief. I started to watermark mine but quickly gave it up.
You have to ask yourself: At a small physical size (less than 800px), 72dpi (far from print quality resolution) and using a JPG format (not forgetting that the JPG compression standard is 'lossy', meaning that it throws out a lot of useful image information to save file size)...it turns out that an image isn't very useful at all. Nobody else is going to make any money out of it.
If you were displaying a MASSIVE image then maybe you'd think about watermarking but it's not really necessary for a smaller preview-style image.
You also have to think about what potential applications the image could be used for. Could someone enter your images in a competition? Doubtful at the resolution and size typical of Etsy images. Besides, most competitions ask for a print-resolution version too, which an image thief wouldn't have.
There are more advanced techniques out there to protect your images. I would direct you to a watermarking technique based on a sudoku puzzle. You can learn more about the technique at
http://www.amateurphotographer.co.uk/photo-news/540031/sudoku-saves-photographers-from-rights-theftGood luck out there.
Adam.