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Starting Your Own Etsy Business: Part 3

by Grace Bonney

As a follow up to the two great interviews yesterday, I thought today I’d share some both some “big picture” lessons I’ve learned about starting a business as well as some really practical tools, like the excel file I use to track sales and inventory.

I’ll say from the outset that this is a lot of common sense and I offer it in hopes that someone who is dreaming of starting a business on Etsy will be emboldened to take the plunge. Rocket science it may not be, but it is heartfelt!

(Part I and Part II)

Originality is Overrated
A lot of people who talk about starting their own businesses say things like “well, {insert their business idea} has been done before…” They use this as a reason not to start a venture. I totally understand this feeling, since it can be overwhelming to see how many people are doing creative amazing things everyday; however, I realized something very simple in the year before I started Abigail Vintage: Everything has been done before . I didn’t have to wait until I had the perfect idea or product. There were lots of vintage sellers on Etsy when I started and there are even more now. I suddenly understood that the way differentiate yourself is in how you execute your version of an idea .

Keeping it Low Risk is Underrated
Something I love about Etsy is that it is incredibly low cost and low risk to start a business. I started my business with under $100 of inventory and $5 of start up costs. I think there are very few low cost ways to test the waters of running your own business – most flea markets or craft fairs have higher initial “table” costs and for that you only get one weekend and the exposure of the couple of hundred people who will walk by. I was able to find out that I love running a business online, away from the challenges of retail, for literally peanuts. So, if you’ve been thinking about starting an Etsy business, I say GO FOR IT!

The cliché is true: do what you love :
For me, I was already going to flea markets, trolling eBay, haunting antiques stores. I had a good sense of the market and a pretty developed eye for pricing and value. This was a HUGE asset to me. For some friends who’ve started Etsy businesses, this passion was for vintage clothes, independent art, or knitting. But in each case, they came to the business with a solid background in whatever it was they were selling, which helped enormously with both buying inventory and pricing it appropriately.

Remember it is a business first
Even if you don’t consider yourself “business minded” there are ways to make sure you are actually making a profit on each sale. Common sense says that you need to factor the cost of listing an item on Etsy (currently 20 cents), the fees Etsy and Paypal will take once you sell that item, the cost of mailing it and then – this is important – the cost of your own time. My general rule: I try to make the tangible profit on each item (selling price minus my cost, fees and shipping) at least equal minimum wage.

As an example: I figure it takes me an hour for every item that I post on Etsy — 15 minutes to source (I usually do big buying trips where I buy multiple items, which then breaks down to about 15 minutes an item) 15 minutes to photograph the item and post it to Etsy, 15 minutes to process the order once it has been placed (print the order, find the object, pack it) and 15 minutes to mail it.

I think a lot of sellers make the mistake of not “paying themselves” and accordingly price their items too low. I think the conventional wisdom in retail is that it is a lot easier to lower prices than to raise them. I’ve found this to be true. So, when you are pricing, do research on what other Etsy sellers are charging and what something might go for on eBay and be realistic. If other people are selling it for $15 dollars, you aren’t going to be able to sell it for $25.

Here is the spreadsheet I use to track my inventory and sales. I made it, so of course there are more sophisticated methods, but this is as simple as it gets and even if you don’t use it I hope it will give you a sense of what are some of the variables to think about. Note that the column “actual packing cost” refers to the cost of my packing materials (about .32 cents for a padded mailer). I bought them in bulk at Uline.com.

Take yourself seriously
Even though my business is small I treat it the way I would a much larger business because some day I want to run a larger business. I keep close track of everything I buy for the business (from inventory to packing supplies to the cost of buying trips).

Devil is in the details
Again, this is common sense, but I’ve found details like photography, packaging and customer service make all the difference. I try to take great photographs of my product, in a somewhat stylized setting, with great light. There are sellers who make an art form of this, but I just try for the best photographs I can. Check out the Etsy tutorial on photography here.

Customer service is also really important – I make sure to respond quickly to questions or shipping problems. I often give small extras as a gift, often vintage matchboxes since I have hundreds and they cost me about .19 cents and make my customers happy. I also give 25% discount coupons on a next order to anyone who orders over $50 dollars worth of product. Since I love beautiful opening packages, I use colorful tissue paper and satin ribbon to make the objects I send to customers fun to open (I bought 1,000 sheets of gorgeous colorful tissue paper at Costco for under $20 and navy satin ribbon from papermart.com.

I am blessed to have a husband who is also an amazing graphic designer – he made me my Abigail Vintage logo (which I love) and also designed some simple Avery mailing labels and little cards (really business cards) with the Abigail Vintage logo that I put into every package.

There is so much out there on marketing that I won’t even try to summarize it all here. All I’ll say is that doing blog outreach and posting items to Etsy regularly are all important to establishing your business. I’ve also found that sending emails whenever I have a shop update to former customers and a few targeted bloggers who are “friends of the business” is a good idea. Be sure to check out the resources on Etsy: their Shop 101 series is packed with information.

As a final note, I’ll say that I know some people who started out selling on Etsy have migrated to Big Cartel, it seems for two reasons: lower fees on sales and more control over the look and feel of your store. There are pros and cons to both sites, so check them both out and pick the one that works for you.

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  • All of the Etsy postings have been so informative and inspiring. Thanks! I’d love to hear from someone outside of the vintage scouring world, as well.

  • Great post, I have been selling my letterpress posters and art prints on etsy for about 6 weeks and have pretty much followed the model you posted about…..good photographs, fun packaging, great communication with customers and following the vision.Lots of people sell beautiful letterpress things on etsy, especially cards and stationary, I wanted to sell posters etc… wanted to work a little larger and have been happy with the sales. Not huge , but a good solid start. I have also have been on the poppytalkhandmade market and have been lucky to have been featured on a few blogs……..That helps!

  • Great series! I’m in the process of designing my logo, business cards, etc so I can get a shop up and running. I never realized that running an official business would take so much legwork (I’m an MBA!), but I think in the end it’ll all be worth it since I’ll be doing what I love…even if it is part-time after I finish my full-time at 5! :)

  • Thank you so much for all these posts with advice for new people on etsy! As a new etsian, I’ve learned a lot, and I can’t wait to apply these to my shop.

  • Thanks so much for these tips. I’ve been thinking about starting an etsy shop, and I’m sure these will be very helpful.

  • I love all the great tips! I have been rolling around the idea of starting a small Etsy business for the past year, but never had the guts to actually try it. I think you’ve finally pushed me over the edge! Keep the great ideas rolling! Your site is so inspiring – one of my weekly must-reads.

  • YAY on this series, it’s been FAB!! I would LOVE LOVE LOVE to see an overview, simplified, on how to handle the whole taxes/license issues involved with selling one’s wares. I’ve been sifting around the Forums over at Etsy and they are freakishly confusing!! I’m super close to opening an Etsy shop, but this whole tax thing is messing me up. Esp since I’m an ex-pat living abroad. ugh ugh ugh

  • juliette

    we have a lot of information saved on the d*s biz lady site here:

    http://www.designspongeonline.com/bizladies (scroll down)

    but honestly, it’s worth the consultation fee to work with a local accountant to get things straight. it’s the best investment you’ll make. i wish i’d done that 4 years ago and literally paid for it when i made a bunch of mistakes.

  • I really enjoy this series! I’ve been working on my Etsy shop for a few months now and all these great tips and advice will be going to good use! I do find it hard to be “business-minded” even though that seems to be the most common advice I hear. I’ll just have to keep working at it!

  • I was wondering if you could answer a question: I thought etsy was to sell handmade goods, but a lot of people seem to sell other types of things. Is that right?

  • Juliette, I second Grace’s suggestion — a good accountant is the best investment you’ll make in your business. I have a great accountant who i pay about $250 a year to do my taxes. I file as a sole proprietor and she makes it easy to navigate the taxes pitfalls.

  • PS one more thing about taxes — even if you have already started your business, the first thing any tax preparer is going to ask you for records — so keep detailed accounts of what you spend on the business (your costs!) and any revenue you make (sales).

  • As an etsy seller and ‘brick and morter’ shop owner, I want to add:

    BE LEGAL in your state.
    For California, this means getting your seller’s permit, city business permit, incorportate, legalize your business name etc. You also need to remember to charge sales tax where required.

    This whole process was not only expensive, but took me alot longer than I originally anticipated (it may be your first plunge into a true bureaucracy–so frustrating!), so do this stuff FIRST, before your shop opens.

    In additioni to that accountant, you may need legal advice, or try ‘legalzoom’ for your filing issues. Some cities have a ‘small business assn.’ consultant that can help you get on the right track with your new business questions.

  • this is awesome! i would love there to be a similar post on professional blogging and blogging as a career….!!!!!!! grace you could write it and talk about your experiences!!! :)

  • Thanks for the great article! Pricing is such an important part of being successful. It is also, I think ,the most difficult. Making sure costs are covered and that you are being properly compensated is a challenge.
    I also like the part about packaging. I too love to open fun and colorful packages. There is a special excitement in unfolding and unwrapping something that has been packaged with care and attention to detail. I want my customers to feel that too when they recieve a package from my etsy store, so I am always interested in new ideas. Thanks!

  • Thank you, thank you. So great – uplifting, too.

    I wanted to bring up passive income – making prints of your originals, for example, as a way of making a little more money off completed work – earnings that aren’t dependent on the project you’re currently creating.

    Also, Priority Shipping online is a lifesaver – free packaging, you can send everything without leaving your house. The shipping is a little more, so I don’t use it for in-country paper items, but it’s fantastic for overseas. Plus, US customers like getting their things so quickly. I often roll part of the shipping cost into the item cost (my items aren’t very expensive) – I think that buyers are willing to pay a little more for something they love but are quick to balk at expensive shipping.

    I also want to mention Blist.com – a place where you can make Excel-like spreadsheets (lists). I use it to track every supply purchase, every pending order (I do a lot of customs) and sale. I also like to track time – I crochet, so I won’t see a good return on it, but I still like to know.

    Again so much thanks for all of these. DS got me started a year ago thinking about how I could work for myself and I’m slowly evolving into a full-time indie entrepreneur – thanks!

  • Greetings!
    I have started a new etsy store recently, sort of by jumping in! It is really nice to have these articles to get organized and be efficient on the business end as well as promote your product beautifully. I am very impressed with the etsy marketplace. I appreciate the support and the low cost to sell. It is both customer and seller friendly. Thanks for the great article, you have provided a variety of great tips all in one article. PS thanks for the excel example – most helpful!
    Warm Regards,
    Laurie Klaue
    astory on etsy

  • girlfriend! What an awesome blog! Lovin’ it! Thanks sooo much for confirming what I already knew and giving me resourceful info for how to find out what I didn’t! Thumbs up! You rock kiddo!

  • THANK YOU THANK YOU THANK YOU! This is such valuable information and I truely appreciate your sharing your spreadsheet. I am just starting out and have not listed any items but I am moving forward slowly but surley!

  • Great article. Pricing is such a tricky thing when starting your etsy shop and a year later, I still find it no easier. When you put so much into a product it is hard to put a price to it that feels justified and/or fair to yourself.

  • Nicely written and very well rounded! I really agree with your first point – and love how you tell people to just go for it!
    As far as taxes – you can set up in Paypal to charge the appropriate taxes in your province or state / country. I only recently found that out!

  • abbey..thank you so much for this series. it is certainly well-timed for me. i opened my etsy shop about a month ago and am just now putting the finishing touches on things.

    i found that in the beginning i was feeling overwhelmed by all there was to do, and that was stopping me from moving forward. i guess my piece of advice would be to start small. don’t feel like you have to perfect everything within the first few days. i finally set up my shop, shot just a few well-styled photos and posted them. i worried about shipping supplies in the days following the launch. i made more art, and continued to post a little at a time after that. seeing myself ‘out there’ was all the motivation i needed to overcome the anxiety i had with starting the shop in the first place.

    i also can’t stress enough the importance of making online friends and ‘contacts’ to both bounce around ideas with and gain inspiration from. it really validates the online business experience.

  • Thanks so much for this article. I’ve had my shop on Etsy since the end of January, and it has had a slow start, only two sales so far….but I’m trying to post to my blog a little more often and get on the forums as often as I can to help promote my shop. It is a challenge, but so much fun so far. I’m a graphic designer as well as a watercolorist, so I’m able to design my own banner, avatar, and promotional materials,etc. And thanks so much for the spreadsheet…oh so valuable to stay organized! Good luck to all in their businesses, online and otherwise.

  • Thank you very much for taking the time to write this! I know you put a great deal of thought into it and it is a really helpful piece.
    I wish you success!

  • Thanks for the info, I seem to be spending a great deal of time on the computer, instead of making things. Your article really helped me on the pricing I have alot of trouble pricing things everyone says I don’t charge enough.

  • Thank you for writing this article. I recently opened a shop on Etsy. I love having a shop but find myself discouraged sometimes wondering how to proceed now that it’s open. Articles like this really help. Thank you again!

  • Thank so much for writing this. I’ve just opened my store of cut paper Aceo’s and hope to make it a success. The Etsy community of helpful artists looks to be a good one.
    Thanks again…now I’ll go check out your shop!

  • It’s so easy to forget to keep track of all the little incidentals. Thanks for the reminder. It’s so important to get paid for what we do especially when someone else is selling for so much less and making little money. It makes us who charge correctly look overpriced.

  • This is a lot of great info. There is so much to keeping up an Etsy shop, and the tiniest details can make the biggest difference. My shop is constantly evolving, and a lot of these tips will go right into use. Thanks so much!

  • Wonderful and inspiring information! I sell prints and originals and found promoting an online presence is so overwhelming at first, but I’m not getting a grasp on it all. It just takes time and perseverance like all things do! Thanks for the tips abigail vintage, off to find your shop!

  • Great suggestions. I too absolutely love Uline! They have blank price tags, and resealable cello bags in a multitude of sizes. I use the 4×6 cello bag to put fiber freebies in from my http://atomicblue.etsy.com shop customers. I also have freebie fun bagde pins and more I include. I love freebies myself. Sending them is even more fun.

    Also matching all your stuff, like business cards, notecards and more helps alot. Repeat familiarity, and logos. Design a brand…and run with it!

  • thanks you, this 3 last posts help me a lot and give loads informations.
    I think I can jump in tne great world of Etsy!

  • Thanks so much. I’m trying to soak up as much advise as possible for getting my Etsy and blog going, always great to here from those who have been doing it a while. Now I must just keep my fingers crossed for those sales.

  • Oh no, the wonderful link to the Etsy Excel Tracker file no longer works! Is there any way to fix it? Or does it live in another place? Help! Thanks so much! :)

  • Where can I find parts 1 & 2 of starting an etsy business, please.
    I loved part 3 but would like to read parts 1 & 2 as well. Thanks so much.

  • That’s it, I’m going to start my Etsy store. I’ve been procrastinating long enough. I’ve sold my quilts and crafts in stores and shows in the past and really want to get back to it. Thanks for the info and push.

  • I’m having troubles locating your spreadhseet…. could you help me find where it might be? The link above takes me to another site but no download attached.

    Thanks for all the amazing tips! I cannot wait to start my business!

  • I can’t find the link on biz Ladies to part 1 or 2! Please could you post the direct link? Would love to read them!

    • Hey Emma –
      Just tried to dig these up and it looks like Part I and II were interviews. I’ve added links above.

  • An outstanding share! I’ve just forwarded this onto a friend who was conducting a little homework on this. And he actually ordered me lunch because I stumbled upon it for him… lol. So allow me to reword this…. Thank YOU for the meal!! But yeah, thanx for spending some time to talk about this issue here on your web site.

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  • Hi, thanks for the info! Very helpful!! Is there any way you can provide the link to your spreadsheet? Thanks!

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