As I mentioned earlier, my plan to double up on my passive income this year involves diversifying my income streams by starting an Etsy store. This is my 1 month report on Etsy.
First of all, the juicy results for February 2018:
What an amazing first month! I can see Etsy having a significant impact on my passive income as I learn how to use it to its full potential. Now, this is revenue, of course, so let me elaborate on my strategy before I give you a further breakdown.
How did I do it?
It’s ridiculously simple.
Printful is the only print on demand/dropshipping site to be partnered with Etsy, and I have to say it’s an absolute pleasure to use. It’s also FREE, which was a huge selling point for me because I didn’t know whether I’d make any sales at all during my first month on Etsy and therefore I didn’t want to be paying the monthly subscription cost associated with other POD sites.
What’s the catch with Printful? Well, the only one that I could find is that the cost price of products isn’t the cheapest out there, but I believe for our purposes it’s the best.
The main reason is that it saves you a ridiculous amount of time. When you list your products on Printful, it automatically integrates them in all colours, sizes and prices to Etsy. It also sets the tags, shipping options, and provides mockups for your designs. Basically, it does absolutely everything for you in just a few clicks. These things would take hours to sort out on Etsy manually, but on Printful, you just set how much profit you want to make and you’re good to go.
When you get an order on Etsy, it’s automatically picked up by Printful without you doing anything. They process it and send it out to the customer white label (without any indication it’s from Printful) and they even use your pricing rather than the cost price on the invoice.
I thought it would be too good to be true and I’d have to get involved once the order was shipped, but no. It’s ridiculously passive because they even update your Etsy and mark the item as shipped, so you truly don’t have to do anything.
You can pay for all sorts of fancy extras like custom tags in the clothing, custom packaging, etc. I didn’t do that at this stage and I’ll explain why in a moment. One thing they do offer you for free is a custom message to put on the invoice, which I thought was a nice touch.
My PROFIT from the first month on Printful
As you can see, my revenue was $252.12, but my profit was $142.27, so despite the fact that Printful isn’t the cheapest print on demand company – AND I’m pricing at rock bottom to attract customers – the opportunity to make huge profit is still there. I found it to be the most hands off out of everything I researched for my first month on Etsy.
There are a large range of products available on Printful, so it’s really up to you which you choose and how much it costs you. As I said, they’re not the cheapest, but the convenience factor does it for me, and since you set your own profit margin, you can recuperate the costs immediately if you wished. I’m making on average $10 per item sold, which seems insane if you’re used to selling on Redbubble or Merch by Amazon.
Moving on then, why didn’t I go for any fancy extras at this stage?
My Strategy for Etsy – Month 1 (Feb 2018)
As a new seller on Etsy, I felt I should be pricing competitively. When you have no sales and no reviews, you’ve got to have something to attract a customer! This isn’t like Redbubble and Merch by Amazon where there’s a huge company backing your products with guarantees. The customer has to either trust you enough to purchase, or think the product is cheap enough to risk buying from you.
Adding fancy custom labels at this stage seemed superfluous and would increase production cost or retail price, so I left it out. I might add them in at a later stage when I increase prices, but can you believe that $147.27 profit is from pricing at rock bottom? Crazy!
So my strategy was to price low. I could’ve gone lower, of course, but I needed to make some profit to cover my expenses. Expenses? What expenses? Yes, Etsy is expensive.
It’s easy to take for granted the lack of listing fees, transaction fees, and advertising costs on websites like Redbubble.
First of all, there’s a fee to list an item, which is $0.20, plus VAT of $0.04. There’s also a transaction fee for each item you sell. My transaction fees were around $0.60 each. If you’re unfortunate enough to live in the UK like me, then you’ll be dealing with conversion fees, which aren’t pretty, and I found myself paying just short of £1 ($1.40) just to get the currency converted, which as far as I’m aware seems to be unavoidable. There’s also advertising costs involved, which deserve their own section.
I have to say, Etsy advertising seems to be amazing. You just go into your settings and turn it on, set a daily limit, and they do the rest. This is literally all I did to attract all my sales this month.
You can set which products you want the site to advertise and which you don’t. Etsy shows the listing to people who are likely to click it, and then you pay per click. I set a daily budget of $5, but most of the time Etsy didn’t actually spend that much. You’re also given access to detailed analytics which helps you understand your customers and their behaviour.
As you can see, I spent $94.22 on Etsy ads in order to achieve $237.59 revenue. In other words, I got $143.37 profit out of it. A worthwhile trade, I would say. I like Etsy advertising because it’s very much ‘set it and forget it’ then watch the sales roll in, which is perfect for passive income.
My payment for February is looking healthy:
But we have to take into consideration the costs.
My Etsy bill, which is comprised of listing fees, transaction fees, conversion fees, and advertising fees, came in at $130.48
And of course, we have the cost of printing and sending products out to customers, which I’ve already listed above in the Printful section.
I got $147.27 profit from Printful, which means my total profit after all Etsy costs are taken into consideration comes to a whopping $16.79!
This is to be expected, as I’m pricing low to attract customers and I’m relying on Etsy ads for traffic. This is the first stage of a long term Etsy plan. It involves pricing low and getting sales/reviews. Once I’m reputable, I can increase the prices significantly, plus I’ll hopefully be found organically by customers, which will save me paying out for advertising.
Etsy Goals for March 2018
- Get positive reviews – I have yet to receive any reviews whatsoever and this is a concern of mine. I actually considered reaching out to customers at one point, but was too worried they’d ask for a refund if I reminded them about their purchase so I left it! Printful have produced 17 products on my behalf, which are out in the world somewhere right now hopefully being enjoyed by customers, but who knows! I just have to have faith in the service that Printful will deliver quality products. But if there are any problems, I am fully prepared to offer refunds and apologies to customers. A bad review would be very destructive at this stage. When I get 10 positive reviews, the price is going up on my products.
- Increase advertising budget – As soon as I get a positive review, I’m going to double up on advertising from $5 per day to $10 per day. If $94 in advertising gets me $140 profit, then $188 in advertsing will get me $280 in profit, right? 😉 We shall see.
- Add more products and review existing ones – More products will result in more opportunities for customers to purchase. I’ve only got around 20 uploaded right now, so I think a reasonable goal is to double that to 40. I’ll also review existing products and stop funding them with advertising money if they aren’t selling.
Will report back at the end of March and let you know how it goes! In the meantime consider joining the Passive Owls FB group as there will certainly be more Etsy discussion going on in there.