Etsy Shop Owner’s Guide: How to Run a Profitable Business
Etsy.com is a marketplace for handcrafted products. Here you will find a host of varying products and services. Many of the wonderful shop owners are artists that create custom orders, as well as offer their own original designs. Etsy charges a small percentage of each sale, and a few cents (about $.20) to list each item. One neat feature that differs etsy from other marketplaces is that shop owners have an online shop where they can list their products, gather reviews, favorite items, and network with sellers directly.
As Etsy shop owners, Raquel and I have learned the ropes and run a profitable business through Etsy. In an effort to assist other owners (or those aspiring to open their own shop) in remaining profitable, we have written this article as part of a detailed series showcasing some of the industry leading practices to help you achieve continued success.
Lets get down to brass tacks!
In order to run a profitable business I find it very important to 
establish a plan. The depth of said plan will vary in scope and size based on a wide number of factors. The important point is to have a plan, establish measurable goals and to take action towards reaching those goals.
So with all that said, here’s a quick how-to on making a successful plan:
- Plan Outline. This is nothing more than an outline, a skeleton, a top level plan that includes a goal (to earn 10 sales per month for example), and a few steps to get there. Here’s some examples of outline bullet points:
- goal
- start a blog and use social media to drive site traffic (check out this one-page Social Media Checklist here)
- set up a pricing strategy
- products/services
- Make a Draft of Sub Categories. Now that you’ve completed a plan outline, lets fill-in some subcategories and steps to reach the larger goal.
- goal is to make 10 sales per month
- start a blog and use social media to drive site traffic. Post a DIY once a month, share on social media daily
- set up a sustainable pricing strategy
- offer tiered products/services
- Assign Responsibilities and Policies. Begin adding names and faces to the various facets of your etsy shop.
- Complete planning by instituting some shop procedures (returns, warranty, shipping, etc.), guidelines and goals that define “success.”
- Execute the plan! The plan is worth nothing if you fail to take action towards accomplishing the goals set. A plan is nothing more than a roadmap helping you along the way.
Additional Tips
Define your market
- Who are you selling to?
- What are the demographics?
- Who is your customer?
Positioning
Positioning is the place the product or service will occupy in the hearts or minds f 
the customers in relation to your competitors.
Do you want your product to be known for its Lowest Price, Uniqueness, Industry Leading, Best Value, etc. By understanding your target market, your customers, you can better identify your price points.
How do you want your product to be viewed?
Develop New Products and Services
Develop new products or services based on innovations. Etsy and users enjoy seeing an active shop site. I suggest that instead of uploading numerous products at one sitting, upload items a few times a week/month.
Offer complementary products to your customers. For example, if you are selling soaps, consider offering a personalized soap holder as an add-on. Another option may be a package deal, which includes a soap, a soap holder, and a how-to guide/ebook describing some of your personal skin care tips. Offering several options will allow you to increase your product lines and increase your earning potential.
Building and Sustaining your Brand
Branding helps customers identify, relate to and make assumptions about your shop. An effective brand communicates the distinctive value you wish to offer the customer. Your brand should:
- be “relevant” to the customer. What’s in it for the customer?
- reinforce the company’s intended positioning in the marketplace
- be consistent and unifying. Your growing product(s) should complement one another.
- serve as an umbrella/future brands in your portfolio
- can be sustained over time
Develop a Sustainable Pricing Strategy
Sadly, I have witnessed shop owners lose time/money because they 
failed to adopt a sustainable pricing strategy. There are numerous ways to establish prices, and they vary based on your specialization, your experience, quality of the product or service, price consumers are willing to pay, etc. Some of the most popular and sustainable pricing strategies are listed below:
- Cost based
- Competition based
- Customer based
For more information on how to price your products view my article series by clicking here.
Please feel free to share your thoughts, comments and/or suggestions. Click on the links below and leave a comment here or on social media. I’d love to hear your .02 cents.