Etsy is another avenue which I’m going to try out this year to generate extra passive income. My passive income success thus far has been hands off in the sense that the Print On Demand websites manage everything for me.
The POD sites I’m accustomed to using all offer to print, package, ship, and most importantly: handle customer service. It’s something which I elaborate on in my first YouTube video when describing how Redbubble works – check it out if you want to know more about the process:
It’s easy with these websites to have a ‘set it and forget it‘ mentality. It’s for that reason why Etsy is a bit scary. It involves doing more work yourself, and therefore accepting more risk, which can easily be taken for granted because POD websites take care of that for you.
However, the extra work provides opportunity for huge profit. Costs are kept down, which means it’s possible to make a hell of a lot more passive income for what is essentially the same product, even if you allow the customer to pay less. Here’s an example:
Redbubble T-Shirt (20% markup)
Customer pays $19.05 – your profit is $2.72
Etsy T-Shirt via fulfillment company
Customer pays $19.05 – your profit is $7.10
You can see that even if you price competitively with Redbubble, you’ll be making a lot more money, so you can afford to lower the price. This is just one example. The t-shirt I selected was one of the cheapest available by one of the most expensive companies, but there are loads of fulfillment companies with various products and prices.
The idea is that you create a listing on Etsy, and then either set the listing to automatically be fulfilled by a dropshipping company, or manually fulfill the order yourself. There are many options available to you.
I’ve gone for the most passive option, which involves using a fulfillment company to automatically collect orders from my Etsy and send them out to the customer as/when I make a sale. This isn’t the cheapest route. There are much cheaper alternatives, but for this project, I value my time more than saving an few extra dollars.
I’ve been on Etsy 3 weeks now and have already made sales amounting to $134.65 revenue (£95.99). Now remember, this is revenue, not profit.
I’ve definitely made a profit, but I don’t know the final figures yet as I’ve got to pay:
- Product fees
- Shipping fees
- Etsy listing fees
- Manufacturer fees
- Product advertising fees
- Currency conversion fees
- Possibly other things which I’m not even aware of
I also have no idea whether the product that I’m selling is any good because I’ve never used the fulfillment company before, so this could blow up in my face and I may end up having to give out refunds to customers.
I’m fortunate enough to be in a position where I can handle that, so please bear with me while I test the waters. I will be giving a more detailed breakdown of how I did this and how you can replicate the success, but first I need time to make sure it’s a good course of action. What I don’t want to do is recommend something and influence people to give it a go if it’s no good. Things are looking promising, though. A full report will follow.
In the meantime, I urge you to focus on Redbubble or a similar POD websites which are free (list available in the description of this video) so the worst case scenario is that you don’t make a sale rather than actually losing money. Check out my YouTube channel or the FB group so you can set yourself up for success, and when you’ve got designs which you know will sell, you’ll be able to see in my follow up post(s) whether doing this would be a good idea for you too.