Are people making money on Etsy?
With all the under-priced handmade items and stats about shops with tens of thousands of sales of really low priced items, a common question is: Does anyone really make money on Etsy?
If others are making money, how can you do the same?
There are different levels of success – Would you consider your shop successful if you made enough extra money to cover your food expenses for the month or are you selling your handmade items full time and they need to cover all the bills? There are a lot of sellers, especially new ones, that really just want to sell Something. There are also the sellers that were doing it for fun as a hobby until they lost their job, and now they are trying to ramp things up. Others started as a hobby on the side and have now quit their day job so they can sell their items full time. Each seller you look at could be meeting their particular goals, but each is going to measure their success differently.
What if your goal is to make money? - There is no reason why you cannot derive all your income from selling your crafts on Etsy. That doesn’t always mean that you do it the same way as others do though. You could just use Etsy as your shop where people can make purchases and view feedback, but your marketing could extend much further.
Rather than relying on Etsy for traffic, you could set up multiple different sites that bring in organic search engine traffic and then send customers to your Etsy shop for making transactions. A lot of successful sellers do play a big role in bringing in their own traffic to their shop. Because of their marketing efforts they could be successful selling just about anywhere, but just happen to like the Etsy platform.
You will probably not find too many successful sellers that did not invest an enormous amount of time to build their business. They did far more than list a couple items and wait for sales to roll in. It is all in what you make it.
Some sellers are more business minded than others – It’s not how much money you make, it’s how much you keep that matters. Massive numbers of feedback and number of sales are really impressive, but unless you really know the costs of running a particular shop, you cannot really tell if any profit is being made.
Underpricing of handmade items is prevalent among new and established sellers. Accounting practices also play a big role. Not everyone itemizes and knows what all their expenses are. Without knowing all the numbers and tallying everything up, it is very easy to mistake big revenues for big profits. Sometimes you really do have to “run the numbers” to see if you are actually making money.
Even “successful” sellers may not have it right – Just that a seller sells 1000 items per month doesn’t mean that they have much profit to show. They could be selling that many items simply because they sell them for less than anyone else. Sometimes you can be really busy and see a lot of money changing hands, without realizing that there really isn’t any left at the end of the day.
Some businesses are larger than they seem – An Etsy shop to certain sellers is simply just another venue that they want to have a presence in. You could very well be looking at a seller with hundreds of sales of low priced items, but not realize that they are simply getting rid of excess inventory from years spent successfully selling locally.
For some sellers, Etsy could just be the tip of the iceberg. You will never know just how many sites a person owns unless they mention them. Some could be side projects while others pay the bills. A lot of sellers do not talk about sales and profit or how much they really have going on. The shops that make the most profit per month are not necessarily the ones that people ever hear about and there is really not a good way to find out who they are.
You cannot see the big picture from the outside – How much information really is there about the successful sellers on Etsy? You can find success articles by searching online, but for the most part, the only thing you can really go on is the total number of sales that a seller has. You can look through a site like Craftcount and see the sellers with the most sales. When you go to each seller’s shop you can see their total number of sales, how much they ask for each item, and can look through a list of recent sales. You can probably add everything up and get a pretty good guesstimate of what their revenues are each month. What you will not know though is their expenses and cost of materials so all you can predict is a gross revenue figure.
Go a step further by doing your own homework – Browsing through Etsy and seeing what other sellers are doing can give a good indication of what price-points lead to sales as well as what the trends are and what types of items are popular. Finding a seller with hundreds or even thousands of sales in your particular niche can also show you what is possible. If they can do it, you can do it. Even though it may look like you can aspire to do the same thing, you should still run your own numbers and see if things make sense.
You could do a quick calculation based just off the price of the items for instance. Decide how much money you desire to make per month for instance, divide that by the average price of each item, and see how many items it ends up being. Can you make that many items in a month’s time? Do you have enough time to devote to it and do you really want to?
Once you know about how many items you would need to make, run the numbers on the hours. How long does it take to make each one? Also add in some time for wrapping and shipping. Are there enough hours in the week to make and ship that number of items by yourself? You’ll have to see if it is humanly possible.
You can also check in to see what the materials cost and how much will go in to making each item. Based off your calculations, how much profit is there in each item? Do you think that is enough based on how many you can actually make per week, per month? Would that particular item help you meet your specific needs and goals?
Look at different options for things you can make. Each one will have its pros and cons. Higher priced items do not always use very expensive materials or always take an enormous amount of time to make. You do not necessarily have to make hundreds of items per month. You may just need to make and sell a few if they command high enough prices and have good enough margins. With so many possibilities out there you can find that one type of item that makes the most sense for you to make that also helps you meet your financial goals.