Commerce and handcrafts are among the principal economic activities of the Otavalos, who enjoy a higher standard of living than most indigenous groups in Ecuador and many mestizos of their area.

[6] Prior to the Incas, the Otavalo apparently did not possess domesticated llamas and alpacas as did Andean peoples further south in Peru and Bolivia.

Contrary to Incan practice, few if any mitma (people forcibly resettled outside their homelands by the Incas) were moved into the Otavalo region.

Also contrary to the Incas who used the vertical archipelago to exchange goods among regions, a class of long-range traders called mindaláes continued to operate among the Otavalo.

They carried on trade with the people living in lower elevations on the western slopes of the Andes, especially in the Mira River valley, about 75 kilometres (47 mi) north of the city of Otavalo.

[9] Unlike many others the Otavalo survived as a distinct ethnic group, but sometime after the 16th century they lost their original language and henceforth spoke Kichwa, the Quechua dialect spoken in Ecuador, and Spanish.