This will be my 11th year of putting together a holiday sale for my Etsy Shop. I’ve learned that during the holiday season people are shopping online and they are shopping quickly. If they see something they want on Etsy they will buy it and they aren’t going to shop around at different stores to find the same thing for a lower price. This may be hard to digest as an Etsy seller because we think of people wanting something like AirPods for example and the buyer is going to look at different locations because they can buy the EXACT same product at different shops for a cheaper price. This is NOT the case on Etsy. When people search and fall in love with something they’ve found on Etsy they normally go ahead and buy it, they won’t shop around for a cheaper price. We have to keep this buyers frame of mine at the forefront when creating our holiday sales strategy.
BUYERS ACTIONS:
Buyers will normally do three things after they have searched on Etsy and found an item that they would like to buy, these are in the order of likelihood:
- Buy the item straight away, if you are lucky they will ready some of the description
- Look for a coupon in the description and maybe the store front for a coupon
- Message the seller and ask if they have a coupon they could use
MY STRATEGY:
Knowing this about the buyers on Etsy helps with my strategy. The Black Friday – Cyber Monday sale that works best for me is to offer a 15% off coupon. I put this coupon in all my item’s descriptions, my shop announcement and also promote on social media and send to my email list. I DO NOT automatically put my entire shop on sale. I’ve done experiments and I haven’t sold more during the Black Friday – Cyber Monday when I discount my entire store by a certain percent. When I’ve done this I’ve just made less on each item because those people who would have bought the item full price are receiving a discount… truth is they would have purchased anyway. This has been proven to me in following years where I’ve made just as many sales when I’ve offered the coupon to the people who are looking for a deal.
PROFIT MARGIN:
You should know how much profit you have in each item you are selling. The worst thing you can do is make sales and lose money on each item! The somewhat tricky part of expenses is to figure out what your exact Etsy fees are per item. If you want to ensure you know this read this blog post.
Let’s go through an exercise to make sure the sale you are thinking of makes financial sense.
The Profit formula:
ITEM REVENUE – ITEM EXPENSES = PROFIT
How much profit do you have after all your expenses? If you ran a 25% off sale you would do the following to calculate your new profit. Let’s walk through an example where you sell an item for $30 and you are planning to give a 25% off coupon to shoppers. you could just plug in your item revenue times .25 and then subtract that from your item revenue to get your new profit.
Without a sale your $30 item gives you a ten dollar profit because you have $20 in expenses.
Item Revenue: $30 – Item Expense: $20 = Profit $10
Now let’s calculate what profit you would have with a 25% off sale:
Sale: $30 x .25 = $7.50, take this off the original price $30 – $7.50 = $22.50
Item Revenue: $22.50 – Item Expense: $20 = Profit $2.50
A 25% off sale in this scenario may be too big of a discount because you only end up making $2.50 in profit. Play with this calculation to find the sweet spot for your sale!
Now we’ve covered how Etsy shopper habits differ from shoppers of big box stores like Target, it will be easier to formulate a holiday sale, one that will bring you the most revenue. It’s so important to know what profit you make on individual items within your store so you know what kind of sale you can host and still make a fair profit. Remember the goal is to increase sales and still make a sizable profit! The holidays are an exciting time for Etsy sellers, let’s capitalize on the increase in shoppers and offer a sale to the shoppers that really want a sale! Both parties win here!
