Etsy is raising it’s fees from 3.5% to 5% on July 16th which is annoying– mostly because I’ve set my margins so low that an extra 1.5% actually matters. *sighs*
So I’m taking this opportunity to sit back and reevaluate my listings and my actual cost of ‘doing business’.
I’ve been a hobby crafter for a while now and all I was really trying to do was make art and not lose money. But over the last few months I’ve been taking another look at what not losing money really means. There’s a lot of overhead that I haven’t been accounting for and it’s time to fix that. *rolls up sleeves*
Not-so-free Shipping
Etsy has been trying to get folks to offer free shipping for a while now… and to help drive the point home, their new 5% sales fees will apply to shipping charges as well as the list price.
As everyone knows, free shipping isn’t really free, the cost just gets bundled into the list prices. I’ll have another post in a bit about how I calculated my average shipping price, but it ended up being around $5.
Since most of my items are under $10, adding on a $5-6 shipping bump is going to make them a bit ridiculous.
And by a bit, I mean a lot.
So for me to offer free shipping, I’m going to have to drastically change the way I’m selling my artwork.
$10 for a single magnet won’t fly, but $20 for three magnets or $25 for four doesn’t seem as crazy. But my magnets are meant as solo acts right now, so that means I have to redo the listings, paint new horses to match up with the existing artwork, or find a way to offer coupons for purchasing more than one.
Etsy does offer a way to set up coupons for $5 off 2 items, $10 off 3 items, etc., but most of the other folks selling magnets are just offering them as sets, so I’m torn.
I think I’m going to go the split route and do both– bundle up what I can and offer coupons to cover the outliers. Going forward I’ll focus on making sets of items instead of singletons. *makes notes*
Overhead Costing
I have done a miserable job at tracking my overhead costs this year. Website hosting, listing fees, membership dues, general office supplies– all of it just went out the door willy-nilly and I’m a little afraid to actually sit down and put things in order.
I blame it on the fact that I’m treating this like a hobby and not a proper business, but the whole point of the Etsy store was not to lose money. And I’m losing money.
Part of that is because I’m not doing proper costing when it comes to the things I make. I’m only counting the specific materials used in the creation and I’m not properly including labor or overhead at all. So even if I sold everything I listed (and I don’t), I wouldn’t break even.
True, I commit art for fun and for stress relief, but if I can’t make Etsy worth the time and energy that I’m putting into it… then I might just go back to selling things one-on-one via PayPal.
If I can’t work myself back out of the red and into the black by the end of this year, I may shut the doors on the shop for a while. Etsy’s not going anywhere, but if I’m not a good fit then there’s no point in paying them for the privilege of losing money.
But all of this depends upon numbers that I don’t have, so I’m going to get my spreadsheets in order and start posting my monthly balance sheets again. Once I have a better idea of what it’s going to cost to just exist, then I can start breaking out that cost per listing.
And if nothing else, it should give folks a laugh to see just how badly off my guesstimated math has been! 😉
Gift Me Seymore!
Looking over my old sales, most of the people who buy my stuff are buying it as gifts… and I’m not really set up for gifting. I’ve made things a little better with my handmade boxes, but I need to kick things up a notch with the holiday season incoming.
I’d like to kick my packaging up a notch– more stamps, or fancier paper? Just something to make it look handmade, but in that awesome sort of handmade that makes people impressed instead of confused as to why I bothered. (Regretsy is no more, but bad handcrafting is still a thing!)
I need to figure out which of my items would make good gift sets (like the Live Show donations) and find a way to bundle them up.
I need to give folks options to personalize the gifts– tags, notes, custom paint jobs. Things that will turn it from generic art into something specifically for them.
And I need to do figure out how long that takes and what sort of time frame I need to impose around the holidays. I have a craft fair in October and I make gifts for my family, so I need to leave time to get everything done. (Although the craft fair will benefit from the prepwork! 😉 )
Next Steps
I need to make a new copy of my General Ledger spreadsheet in Google Docs and start recording this year’s numbers.
I need to sit down and hammer out the ‘real’ cost of the items I sell.
I need to take an inventory of everything I have ready to sell (or photograph) and see what I can bundle together.
I need to start sketching out ideas (and making prototypes) of how to make gift sets for the holiday season.
I need to raise prices, make bundles, and coupons.
I need to post results to the blog so other folks can (hopefully) learn from my mistakes.
…and I need to clean off my craft desk so I have a clean place to work! 😉
