The million dollar question is how do I make a profit on Etsy? Handmade is wonderful, makers are passionate about their craft. Etsy hosts some of the world’s most diverse and skilled artisans. There’s one thing though, most of these makers did not go to business school. The business side of making can be foreign. It takes time and knowledge to really understand how to effectively run a business in order to make a profit. Makers are passionate about their craft. Most would rather lean in to the creative aspect of being an entrepreneur, not the business side. This is why simple is always better when it comes to understanding the business side of making. 

PROFITABILITY

The one metric you need to understand is your profitability. I like to start by calculating the profit of an individual item. Meaning, if you sold jewelry you would calculate your profit on one piece of jewelry you have for sale, let’s say earrings. Your profit is calculated by taking the money that you receive from your customer minus the costs to produce the item. If you are selling on Etsy I dedicated an entire blog post to understanding Etsy Fees. Once you’ve calculated your profit you can see what you are taking home.

What if you are not happy with your profit? What can you do about it? Here are five things you can adjust in your business to increase your profit. 

1. INCREASE YOUR PRICES

First things first, what are you charging? Pricing choices are often driven out of emotion and mindset. Have you found yourself saying, “I’m just starting out, I’ll charge X for now.” “I want people to buy my product over my competitor, so I’ll price it lower.” It’s so easy to convince yourself to charge lower than you should. I challenge you to first increase your prices. I’ll tell you why… Etsy is not Walmart, or even Target. Etsy is a place where millions of buyers come looking for an alternative—something special with a human touch, for those moments in life that deserve imagination. Often times, buyers correlate price with value. The higher the price the higher the value. You should feel much better about charging a premium price for your handcrafted goods, they are extra ordinary. 

2. USE A PRODUCTION PARTNER

Using a production partner is not frowned upon… Etsy understands that “handcrafted,” means multiple things, you don’t need to produce every single part of your product. For example, if you sell jewelry, can you purchase your jewelry partially complete? If you sell art work, can you work with a production partner to print and ship your products? Production partners save precious time. You may shy away from working with a production partner at first because you initially see a decrease in your profit. Remember how much time it’s taking you to produce your item. That time could be spent elsewhere, designing new products, listing new products, etc. Your time should be spent on tasks that impact the growth of the business. Your overall profit could increase when you decrease the time you are spending producing your product

3. HIRE A CONTRACTOR 

If you are spending more time than you like operating in your business it’s time to consider hiring a contractor. Start writing down the things that you wish someone else could do for you. You could be freed up to work on growing your business or spend more time outside of your business. When you get out of operating in your business you will start to have time to grow and scale your business. Your overall profit could increase when you decrease the time you are spending on producing your craft and on operational tasks. Hiring a contractor could allow you to make a profit on Etsy more easily.

4. DECREASE COSTS OF MATERIALS

When you are working out your profitability it’s easy to see how much your materials really play in to your profitability. When I first started my Etsy shop, I received complaints about the material I used, a “standout.” It was a light weight foam board that my art work was adhered to. Most customers had never seen a print mounted to a thick foam board before. They were often surprised when they received the product. The material just wasn’t what they had anticipated. I decided to look at other materials and found that www.cgproprints.com offered a canvas wrap pro that was superior in quality and cost me 50% less than the standout foam board material. Game changer! I dramatically increased my profitability and eliminated the negative reviews about the foam board. Win-Win! Can you change your material to increase your profit?

4. DECREASE COST OF SHIPPING MATERIALS

Now, I will caution you about decreasing the cost of shipping materials. This is one area where I have actually purchased premium shipping materials to ensure my product arrives safely. I can’t stand the anxiety of wondering if my product was damaged during shipping. What you can do is buy in bulk to decrease your cost. For example, these are the two products I buy in bulk to ship my 11×14 fine art prints:  hard envelopes and backing board. It took me years to find the perfect shipping materials for my small prints and these are amazing. Can you buy premium shipping materials in bulk to decrease your shipping costs? 

I know the business side of making can be difficult. It takes time and knowledge to really understand how to effectively run a business in order to make a profit. The goal is to make a profit on Etsy. There are many things you can do to increase your profit. Today we covered five of them. I encourage you to learn from those who have gone before you! Lean in to the guidance of others who are passionate about the business of creative entrepreneurship and they can help you make a profit on Etsy. I’ve put together free content to help you! Check out the free resources and join my email tribe to keep up to date on how to be a successful creative entrepreneur. Let’s do this!