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5 Things I Wish I Knew Before Starting an Etsy Shop

I have been running two Etsy shops and a Handmade at Amazon store for a little over a year now with almost 2000 individual sales. Before my "successes," there was the first listing, the first sale, and every bump on the road in between. I've compiled this list of lessons I've largely had to learn the hard way, in the hope that it will help other aspiring etsians and handmade craft sellers.


1. Streamline Your Product Line

When starting an Etsy shop, try to resist the urge to offer everything to everyone. Customers will come to your shop for your style and eye for design so have faith that they will love your favorite colors and materials.

Try to stick to no more than 12 different colors and materials. This will insure that you will be able to stay organized and keep up an adequate stock of supplies around the holidays or when your shop really takes off. For me this was 6 colors in 2 different materials. This may seem limiting but us makers can create a zillion different products from 12 material and color combinations.

This doesn't mean you can't try to throw new things at the wall to see what sticks but make sure you ditch a color or material that isn't selling before you add a new one. Your storage space and sanity will thank you later!

2. Every Ounce Counts!

Shipping your products is going to be a huge part of your business if everything goes according to plan. Most of us don't have a ton of experience shipping things other than gifts around the holidays and the occasional birthday present so realizing how high shipping gets can be a big surprise.

Try to keep your items under 15 ounces INCLUDING all of your packing and shipping materials. If you want to sell heavier items (2lbs and above) make sure you're selling a high enough value item to warrant the added shipping. A $10 shipping price tag for a $15 item might scare away potential customers.

Get a postal scale, do a mock-up shipment, and try to find ways to decrease weight. Use the lightest weight shipping materials whenever possible. If you sell soft products like clothing and blankets, opt for thin poly mailer bags over heavy boxes. Use business-card-style thank-yous instead of large bi-fold cards. Tissue paper is a stylish weight-saver and craft paper bags can save you both ounces and time when packaging your products.

If you nail down your products' weight and size when they're packed and ready to ship, you will be better able to utilize the shipping calculator feature from your post office's website. This way, you can be prepared to estimate the shipping cost to any destination your products may have (my shop's first order was to Switzerland!).

3. Don't Undervalue Your Time

Pricing your products on Etsy can be a daunting task. The formula I use is to multiply 3x the cost of materials and pay myself $20/hr for my time. The multiplier on materials helps cover overhead costs you may take for granted like travel time to the craft store or wear on your knitting needles. Take one of my scarves for example:

$6 materials x3 = $18

18+30= 48

1.5 hours of work = $30

So I would charge about $50 for this item. You can always lower your prices by lowering your material cost or finding ways to work more efficiently and cut down on production time. Just be sure to be honest with yourself about how much time you are putting into your process.

This is your business and businesses need money to survive! This pricing method insures you are compensated for your time and that your business can cover its costs and still profit.

4. Keep a Record of Your Spending

Tracking expenses is a good habit for anyone who wants to make sure they are making more money than they are spending. This will make your life a great deal easier come tax season.

Keep an Excel spreadsheet of the following monthly numbers:

  • Cost of goods sold: the actual materials you put into your finished products and sell to customers. This expense probably won't be tax deductible for you unless you keep track of the value of a substantial inventory.

  • Business expenses: paper, postage, Etsy fees, printer ink, packing materials, even your mileage from driving to the craft store! These are tax deductible and can off-set your gross profits so you don't owe too much in taxes.

  • Gross sales: The total for each sale with shipping, before Etsy fees (which are a business expense, remember?). This, minus the first two is the profit for your business.

The best way to keep this straight is to have a dedicated business checking account and credit card so finding and organizing these transactions will be a breeze at the end of the month.

5. Friends and Family Will Think it's a Cute Little Hobby

My immediate family was very supportive since I come from a long line of entrepreneurs. My husband also could see how hard I was working to get my shops off the ground and was a great support. But from friends, other family and acquaintances, I didn't always feel the love.

You may feel the shade in a variety of ways. Friends can pat you on the head with a sarcastic tone, ask when you're going to get a "real job," or just give a blank stare after you answer the tireless question, "and what do you do?"

Don't let the doubt discourage you. It's natural for people to be skeptical that your "work from home" business venture is going to pan out. Also, the notion that you craft things by hand can have a juvenile vibe to some people (finger painting and macaroni posters, anyone?). Blow the haters away with your stylish product photos, glowing reviews from customers, and holiday sales boost, and in about 6 months' time, you'll start getting taken more seriously.

Armed with these tips, you're already a step ahead in your quest to work in your pajamas and make things people love! If you found these things I wish I knew before I started an Etsy shop helpful or have some tidbits of your own to share, tell me in the comments below!




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