Updated: Mar 17, 2020
If you've been interested in creating a shop on Etsy, you've undoubtedly seen the numerous rants on facebook, instagram and youtube regarding the "forced" free shipping policy Etsy recently introduced. I've been off and on Etsy for the past 2 years with limited success. Admittedly, my last lack luster attempts were because of a lack of effort on my part. However, this past February I decided to give Etsy my all and a test to see if it really is a viable marketplace for a small handmade maker like myself. I handcraft dog collars for large and x-large breed dogs.
What follows are my experiences and my results as a small handmade Etsy shop. I emphasize the word MY. These are my results; however, I believe they are typical for any small artist or maker.
I began by reading the Etsy handbook cover to cover (no daunting task) and looking at news worthy business articles about Etsy. Notably, Etsy is now a publicly traded company and Josh Silverman (former CEO at Ebay) is now at the helm. I also listened to the Etsy earnings call in April of 2019. Of interest, Etsy has begun migrating to the Google Cloud and is testing Google's AI (artificial intelligence) on Etsy Search. As a retired software engineer who worked for the largest global data management company for 20 years which is the back end of Google Cloud, this peaked my interest knowing what cloud contracts cost a company. For Etsy, this would be a major multi-million dollar investment.
I created my shop, listed 30 items, and also at Etsy's recommendation did the following:
1) Enrolled in Etsy Plus at a cost of $10.00 per month.
2) Used Promoted Listings for all 30 listings with a budget of $5.00 per day and set a maximum CPC (cost per click) of $.20.
3) I turned Google Ads On with a budget of $1.00
4) Tweaked my titles and tags incorporating "long tailed keywords" in both.
5) Posted professional photos in my listings on white backgrounds.
6) Purchased Marmalead ($170.00/year) to evaluate and grade my listings as they pertained to Etsy Search.
7) I offered free shipping as my item is small and light and priority shipping is not cost prohibitive to absorb myself.
I immediately started to receive favorites and a trickling of orders....1 or 2 a week. As the months went on I noticed a pattern....my shop appeared to only be "active" at certain times of the day AND my purchases were only made on the weekend. It appeared to me (given my software background) that Etsy was swapping shops in and out of Google Cloud as it pertained to Etsy Search. My shop was live for purchases all the time (likely on in house Etsy servers); however, my shop was only available in Etsy search when it was swapped back into Google Cloud. This swapping in and out of the cloud is largely done as a cost saving mechanism and many companies do this. Again, I was okay and firmly using the hope strategy that more orders and favorable reviews would increase sales.
From the beginning, Etsy constantly tested on their "live" site. This gave me pause. I've worked with hundreds of companies in my 20 years of software engineering and I've NEVER seen a company test on their live site to the peril of their customers, in Etsy's case, both buyers and sellers. Reports of customers not being able to complete transactions, shops going dark, shop layouts constantly rearranged, search results not yielding results based on search criteria, were just a few of the reported issues and complaints that run rampant in Etsy forums by both buyers and sellers. If your considering starting a shop on Etsy take a look at the forums....search them for "sales have stopped", "free shipping", "promoted listings do they work".....etc. You will find 100's of pages of disenchanted shop owners trying to figure out what is going on and buyers complaining about their difficulties in finding items. You will also find some comments by several that tell bewildered shop owners that they need to tweak their SEO, tags and titles or that it is the economy that is the reason for the slow sales or their shops going dark. However, if you research these responders 9 times out of 10 they are selling some kind of SEO e-book on Etsy. So take their advice with a bit of caution.
By now it is May and I'm still plugging along and at this point have decided Etsy has become, for me at least, an expensive branding tool. My sales are still at 1-2 sales a week on average; but, I am making enough to pay all of the fees associated with my shop. I have also noticed that the number of listings for mass produced (Aliexpress) type items is on the increase, some masquerading as "handmade", and are ranking way ahead of true artisans and makers. This I find disturbing because Etsy's claim to fame has always been handmade and vintage. If I want cheap mass produced items there are plenty of other sites I can visit at a cheaper price point.
In July of this year (2019), Etsy sent every shop an e-mail that stated: ....."Starting on July 30, 2019, we’ll give priority placement in US search results to items that ship free and to shops that guarantee free shipping to US buyers on orders of $35 or more." Since I already offered free shipping I figured I was okay. However, Silverman went on to suggest...."Offering free shipping doesn’t mean you have to pay for it yourself. No delivery service will ship a package for free, but, just like the cost of your materials and other business expenses, it’s a cost you need to consider when setting the price of your item. Our data also shows that Etsy buyers will spend more to have their order shipped free. So, offering a free shipping guarantee could mean you’ll make more per sale, helping to offset your shipping costs" C'mon....of course we are paying for it ourselves, and NO, I at least was not making more per sale, because I was "eating" the shipping.
Anyway, I digress...
In August, without making any changes to my current listings and adding listings using the same format (i.e. promoted listings, google ads, free shipping...etc), I had exactly 4 sales. The last two weeks of August I have had no sales and favorites are at a minimum. I thought there may have been an "algorithm" change in Etsy Search so I tweaked every listing, ran them through Marmalead until they had at least a B+ rating....and still "crickets". For the first time since I started, I owed and paid Etsy $50.00. At that point, I turned off promoted listings and google search.
Here is an accounting of my Etsy Experience since my shop inception in February of 2019 through today (8/27/19)
So as you can see, I had total sales of $1,695.04 and Expenses of $1,149.34. A net of $545.70. My total orders = 61. That is an average profit of $8.94 per order. If I add my cost to produce my dog collars, it is barely a "break-even" on all orders. Then I must also take into account the $170.00 expense that I paid for Marmalead to help me tweak my Etsy SEO. Taking that into account, I'm in the red.
Oddly enough, since I quit paying for promoted listings and google search with Etsy, I still show up on page 5 of search and my sales have actually increased. This is likely due to Etsy showing other shop listings under a "You may also like" banner when an ad is clicked on. I'll take that to save $575.52 AND increase my sales. But fair warning, If you are a brand new shop, you will be buried in search without any sales or reviews without paying for promoted listings, google ads and offering free shipping.
In the meantime while my "Etsy Test" was taking place, I also created a website, am fairly active on Facebook, Instagram and Pinterest and have always directed those pages to my website NOT Etsy. I also participate in juried art fairs and my local farmer's market when time permits. AND from the beginning of my Etsy journey, I have always included my business card and a 15% off coupon redeemable on my website with every Etsy order.
So you decide....is Etsy a good venue for you? Maybe; but, I think the moral of this story is don't put all your eggs in one basket.....Especially a basket that you don't own or control. I look at Etsy as one of several advertising/distribution channels for my business rather than my main storefront. Rarely does any successful company have only one distribution channel....you shouldn't either.
On February 26th, Etsy announced a new spin on Etsy Advertising. This program will divide Etsy Advertising (Ads in Etsy Search) and Off-Site Ads (Google and Social Media Advertising). Shops with gross sales of $10K or more will be required to participate in Off-Site Ads and will be charged a 12% commission fee on the sales proceeds for a sale that occurs within 30 days of the initial ad click. For shops earning < than $10K in gross sales off-site ads (for now) will be voluntary and sellers participating will be charged a 15% commission fee on the sales proceeds for a sale that occurs within 30 days of the initial ad click. When you combine this new advertising commission with current Etsy fees, the total Etsy commission is 20%-22% of sales proceeds depending on a shop's gross Etsy sales plus shipping costs. When you add shipping costs the gross commission goes up to 25%-30% depending on the item. Many shops abandoned Etsy advertising in August of last year when all seller control over CPC (cost per click) was removed by Etsy. The current temperature in the seller forums regarding this latest Etsy announcement is "red hot" to put it mildly and for good reason. We will see how this plays out on Etsy moving forward; however, if I am going to spend 12%-15% of my gross sales on advertising, it certainly will not be in the promotion of a marketplace like Etsy. For buyers, I believe you will see an increase in price across the board for Etsy purchases. If you see a listing on Etsy you are interested in, It may be a good idea to check the "About" section of the shop's page to see if they have their own website. The "About" section is the only place that a seller can "legally" link their website. The price on their website will likely be cheaper.