Here from the podcast and looking for your Calculator? Go here: https://omniprofitcalculator.com/etsy-fee-calculator/
Here is what SUCKS about Etsy. You are in a SEA of people who don't know how to price. Because of this - you pay for it.
You're competing against a lot of people who will not be in the business long term because of their pricing. Here is what you need to know about pricing.
You are valuable. I’m not normally mushy-gushy, but you need to know that you can charge for your time. Here is a quick way to know that you are not priced properly.
-Can you run a sale and be profitable?
If the answer is no, you are not priced right.
So lets talk about HOW to price right. Here are the core things you need to know.
How much does it cost to make your product? We are talking about EVERY part of it. Down to the thread, the tag, and even the packaging! Knowing this number makes it fun when you get a sale. Because you know exactly how much of that sale goes directly into your pocket. This makes planning to grow your business, bring in new products, update your tools or workplace, etc so much easier because you know your profit and what you can invest.
If we just buy in bulk or don't actually count the cost of each product, then we make the mistake that every sale is profit. We look at the whole number and think we just made xx amount of dollars. This can lead you to believe you are more profitable than you are. So if you ever had a big week, and your bank account doesn't match what you think, you might have fallen victim to this.
You need to have a base of what you pay yourself in labor time. This.. is where things can get sticky. Because if we leave this part out, we can just take from our profits and put that into our own pocket and call it good. THe benefit is you can have your product be a bit cheaper, but here is where it can get you. WHEN YOU TRY AND GROW. If you own a shop where you are giving a lot of time to the product then as you grow, you will have to take a SERIOUS pay cut to outsource any of your work. If you hire someone and pay by the hour that is a whole new expensive you take on. So unless hiring someone frees you up to double your sales, having an hourly rate of your time built in will help transition when you reach a point where help is needed. Even if it's below minimum wage, it's still will lessen the blow.
Plus.. you’re working hard! Pay yourself! That hourly rate can be what you pocket, and the rest of the profit goes towards the business growth.
So other spots online will tell you to include your overhead and the time it takes to take the pictures and the time it takes to post your stuff.etc.
I’m going to say this rather blunt, but don't be stingy. You are growing a business, how many start up are paying themselves full salaries, there is a difference between start up and growing your business, and its important to know what stage you are in. When coaching, i look at how many positive reviews the store has. If they are less then 100 they are in start up mode. More than 100 (and some other things) then i move them to grow mode.
If you are in start-up mode , you are not in the business of major profits. You are in the business of getting great reviews. You are in the business of getting visitors. You are in the business of creating your starting lineup (which is talked about in this podcast) Because you cant grow without a foundation. Without deep roots. And reviews, visitors and a solid product is the root.
So how do you get great reviews, visitors to your store, and a great product line?
You provide MORE value than they are paying. Now I'm not saying lose money. I'm just saying your mindset cant be around profit.. Yet.. Having a lower-priced item will help you stand out in search, people will give you great reviews because they got more than what they paid for, and you will get better at making the product and adjusting because you're actively making it as you collect feedback. I would even be so bold to place in your description that you are offering your product for less than normal because you want feedback and are looking to grow.
Once you hit 100 positive reviews (or if you are already there) this is a testament that your product is saleable and you are READY to grow.
This is where you can start to raise your prices.
Your goal is to work up that you are getting at least 50% profit from each sale.
Now you may be thinking.. How on earth can I continue to grow if I am raising my prices (when my competitors are not). This is why you cannot just rely on etsy SEO alone. You need to have other sources of traffic bringing your customers to you. These customers will land in your store and not in the sea of listing trying to win them over. I like to see 30%-50% of your traffic being from other sources! If this isn't the case, then you will be stuck in “start up mode” till you eventually burn out.
Here is a great calculator on that will show you what your profit is, and if you are above 50% (my guess is most of us are not) - https://omniprofitcalculator.com/etsy-fee-calculator/
But here is the thing, If you are getting above 50% profit margins, then when i ask the question,
Can you afford to have a sale? Your answer will be, YES!
Bonus questions - can you afford marketing? YES!
Room to invest in growth - Yes!
What's the best way to raise your prices?
What are the best techniques when raising prices on Etsy?
You don't do this all at once you raise a couple of listing a small bump (anything on the Etsy front page, or gets lots of traffic, keep at the same price. Don't change the pricing till it ran its course.)
But what if you are FAR overdue to raising your prices and you have a solid following? This makes it that if you secretly raise your prices, returning customers will see you sneaky and stingy.
So a good way to work around this is to have a count-down event. Announce to all your followers that prices will be increasing on a certain date, and if they want to jump in and take advantage before the price rise, that they have until (blank date) to do so.
Send out reminders along the way and count down the days so no one is blindsided when you raise your prices.
This will not only give you a nice bump in sales, but your following will appreciate your transparency and will most likely understand that you are needing to up your prices.
I'm scared! Did it work?
What's great about raising prices is that you don't raise your costs. You can raise your price 1 dollar and guess what.. You just increased your profit by 1 dollar! Your costs don't go up when you raise your price, just your profit! So if you raise it $3 you are making $3 extra dollars at no extra cost! So 2 sales, you have 6, 3, 9, 4 12, that will add up!
I advise keeping an eye on your conversion rate (month to month not day to day) just to make sure you stay pretty constant during your price changes (most do)
Ok, hopefully, this helps! If you haven't yet, join my FB group (grow my Etsy shop) to get even more support for your shop as you grow!
https://www.facebook.com/groups/723917178191483
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