Tuesday, October 27, 2009

To Etsy or Not to Etsy - My Experiment

First & Foremost let me begin by saying this is not intended to be an Etsy bash posting, I love the Etsy community and love the concept behind Etsy, and were it not for Etsy I may not have decided to go back into business this last year.

***Also this is my personal experience, not to say it is the same for everyone***

That said, however, I have done some experiments these last few months and sadly my findings may lead me to focusing efforts on my own website (this is completly factual- not due to any personal reasons or vigilant stance on etsy changes etc).

While Southern Alchemy is new to Etsy, I am not. I used to buy and sell on Etsy back in 2006, similar products as what I offer today (candles, bath & body). Even back then it felt like Etsy was this huge sea and that as a new shop you had to struggle to be seen. But in the six months or so that I had my shop I did relatively well (interestingly enough I sold way more bath & body back then where as today my candles are my top sellers - different story, different day). Then I landed a new job and decided to close my Etsy store.

This past year when I decided to focus on my business full time, it seemed only natural to go back to where I had seen original success - Etsy. Why not? It's cheap (20 cent per item listing fee plus a transaction fee), they have millions of users (tap into an existing market), it's easy (not nearly as complicated as setting up your own website), so Southern Alchemy on Etsy was born.

But this time it was different, it used to be that I would list a new item and that same day have hundreds of views for the item- now if I renew an item I maybe get 5-6 views (if I don't promote it myself off site). First time around I could purchase additional exposure on the site (a showcase for $7) and not only get a ton of views but also a sale or two from it- these days I purchase a showcase and I get nothing (no views, no sales, zilch). The first time around my items managed to make it to the front page maybe 5 or 6 times in a three month period, this time I have made it there once (which I am thankful for) - even though I feel my pictures and products are much stonger now then they were back in 2006. Interestingly enough (and I am not the first Etsian to notice this) you have some shops that end up featured on the front page mutiple times in one week (sometimes in one day).

Since I added my first products to my Etsy shop in May of this year, I have sold a little over 400 items - some would say that is proof Etsy is working for me. I beg to differ, and will explain why. Let's take a look at how I have handled my shop/advertising my shop since May:

-May 2009 Launch- My Etsy bill came to $152 this month (not billed until June but for May activity). This included initial listing fee's for 50 items, paying to renew/relist items 3-4 times a day (many times this is the only way to stay high enough up in their search categories) and multiple showcase purchases (both main showcase and category showcase). I did not do any paid advertising outside of Etsy in May, my Etsy sales total for the month was $489, my website sales from my own website were 5 times that amount (no advertising paid, repeat customers, wholesale etc). So my cost associated with my Etsy sales (not even taking into consideration my supply costs) was roughly 30%. On the other hand my site did cost me only $12/month in hosting and brought in a higher amount of sales at a higher profit margin. At the time (before crunching my numbers) I thought my first month on Etsy was succesful, looking back, not so much.

June 2009- this month I stepped away from promoting both my Etsy site and website and focused more on local sales (shows/markets/home parties etc.) My advertising cost for the month was $100 (for a small ad in a local mommy print magazine- which brought me zero sales). I did very little renewing on Etsy this month, did not purchase any showcases etc and started the month off with a trickling of sales. My Etsy bill was only $21.81, and my Etsy sales were $289 (most of that came from a wholesale order). My website still only cost me $12 for the month and brought in 3 times the amount in sales.

July 2009- I continued working some markets (but put some on hold due to the heat), towards the end of July I started refocusing my efforts on promoting my Etsy shop (did not put any focus on my website). My Etsy bill was only $9.67, did not purchase any showcases, renewed and listed a few items and by the end of the month sales started coming back in, my Etsy sales were roughly $276. My website still beat that number (even though by this point I had completely stopped promoting it).

I am not going to bore you with details for the next few months of Aug, Sept. & October, but needless to say I have been primarily advertising my Etsy shop, my bill has increasingly gone up each month ($62, $99, $131). Seeing that Etsy also charges you a transaction fee for each sale (and they don't have any way to apply discount codes), they actually made more money off of me than they should have in September and October due to sales that I ran (seeing as they base their percentage on my sales amount and not my adjusted/discounted amount).

As my bill went up, did my sales increase? Yes, they did. But I do not think it was due to Etsy or their "built in market of buyers" that woo's so many sellers initially, and here is why:

I am spending more money (and time) advertising my shop now then I have ever before. When I noticed that views were slowing down and sales were coming to a halt, I decided to take charge and reached into my wallet for advertising bucks. I am spending on average $200-$300 per month advertising my shop (I will have a second part to this story later this week that covers what I did for advertising and my results). Am I profitable? Yes. Have my sales increased? Yes. But this is my full time business, I saw that I was not going to be able to rely on organic traffic from Etsy and bit the bullet and paid for advertising. Had I not done that my sales would have been dead in the water. I did not start off paying $200-$300/month for ads, I gradually grew to that over a couple months by monitoring my conversion rates. And I only advertise now on places that I can change my ad & budget at any given time (like google or facebook).

Most importantly I know my customers (90% of them anyways) are coming from my advertising efforts vs. Etsy because of a coupon code I gave them (so I can track where my orders are coming from). Which means if I was not paying for my ads and utilizing social networking my sales would only be about 10% of what they are now.

Do I appreciate Etsy and all the hard work they have put into building the site? Yes. Do I enjoy the community? Yes. But is it worth ot for me as a business owner? I'm not so sure.

If I were to take the additional money that I pay monthly to Etsy for my shop (another $60-$130) and add that to my ad budget, my sales would increase even more.

Right now my husband is in the process of redesigning/redeveloping my site. Once that is done I am going to put my Etsy site on hiatus and experiment with running my sales (focusing my advertising) on that site alone. If I see a decrease in sales then I will know I need to balance both, but we'll see.

Will it be hard for me to walk away from Etsy (if and when that time comes), YES!! It is like an addiction. Crack for crafters.

But it's not personal, it's business. To be continued...


  1. Nice post. I appreciate your honesty. Promoting is costly and it's good to figure out alternative methods for making a profit. Even though I will continue to keep my etsy shop I will definitely work on getting a new website and promoting there without the extra added commission fees. Thanks so much for sharing.

  2. Wow, Thanks, M !!! I look forward to part 2. We really appreciate you sharing this experiment with us. We know that you are bound for greatness !

  3. I am SO grateful for your honesty and detailed experience with ETSY. I myself am torn. I was getting fed up with the other "e" auction site, and thought I'd focus on Etsy. I listed almost 200 items. Got sales and then it died. I'm figuring out one gets pushed down to the bottom of the pile, and I am right now trying to decide how to promote my shop on ETSY. I had given up on them last year, as sales were so slow, and it seemed to me it was nothing more than a big cyber mall that people peruse and steal ideas from one another. I love that the fees are low and they don't patrol and monitor and scare you like the other site, but it is frustrating to not get constant sales. I too will be redoing my website this week. Again, many thanks for your insight and certainly help

  4. What a refreshing post! I've never said this publicly, but in addition to the complaints you have with Etsy I also find it very 'cliquey', which is off-putting and intimidating for a newbie like me. (I recently joined a newbie chat and did my best to strike up a conversation with people, to no avail - it was like they all knew each other and weren't interested in making a REAL newbie feel welcome...)

    I also can't stand how Etsy returns search results based on when items were listed, rather than by relevance. OK, I guess not everyone can be Google, but I still find it frustrating!

    So, I'm doing a little experiment of my own: I'm trying Zibbet, which is $7 a month. It's based in Australia and is new, so isn't as saturated as Etsy. I also might focus on my own site, as most of my sales have been through word of mouth. In fact, none of my 7 Etsy sales have been from a stranger, they've all been word of mouth - I just used it as a way to process payments via PayPal.

    Thanks for posting your opinion! I do share in your frustration...

    BTW, I want to buy one of your Bamboo Hemp candles (it will be featured in this week's Shotgun Shopping Guide on Handmade Highway) so should I go through Etsy or your site? Which do you prefer?

  5. Thanks everyone for your input! I'm glad to see you guys enjoyed my post. I was afraid some would view me as being anti-etsy and I can assure you that is not the case.

    But they have grown and exposure is not what it used to be. Also they continue to change the way their search works and honestly as a seller is gets quite frustrating. If the orders I have coming in now were coming from Etsy then I would totally stay. But they're not, so if I am going to pay to promote then it only makes sense (for me) to move to my own site (fully).

    And really aside from the money perpsective, it's an ease of use issue for me as well - not everyone that comes to my shop from my ads or facebook is familiar with shopping on Etsy- the fact that they have not implemented tools such as coupon codes and shipping calculators (after numerous requests over the years) makes it confusing for buyers (and inefficient for sellers).

    I agree that Etsy can be confusing for new sellers. There can be great information in the forums , but as you stated LaurenX there is also a level of cliquiness (sp?) that takes place.

    I have heard of Zibbet (but not yet tried), I signed up for the $12 account at Artfire last May or June and have gotten only one sale from it , so I guess I have been hesitant to invest my time in other venues. But I would love to see a great site similar to what Etsy started out as really take off.

    I think with the rise of social networking and small handmade groups that have taken shape, that is possible to be a handmade artist and connect with your audience without having to have your shop in a particular place. I care about buying "handmade" not necessarily buying "etsy" or "artfire" , if that's where your shop is cool, but if not it is certainly not going to prevent me from buying :)

    Lauren, you can certainly still place orders through etsy :), I'll let everyone know once we're ready to roll out the new site (and even then I will "keep" my shop on Etsy, I just won't be adding new items or listings).