Is Etsy Stealing Your Money?

Etsy results for the term "jewelry"

You know, this whole Handmade Results things really came about because I kept getting questions about how to start a jewelry business. It's been the most commonly asked question on my website How-to-Make-Jewelry.com.

The only reason I even tried to answer the question in the first place was that I promised my "I'm Making Jewelry in My Jam Jams" newsletter readers in August that I would answer a question on the next newsletter in September. Of course, being the last minute girl I am, I was stuck looking for what to answer. So I thought I would just answer whatever was the most common. Hence the big "idea".

So here's the newsletter article that started it all, and the followup newsletter where I respond to someone who takes issue with many of my wild claims.

Now before you read it, I just want you to know I fully agree that I jumped the gun on a couple of points. I correct these in the followup email I sent out shortly afterwards so don't get your smalls in a knot.

From : I'M MAKING JEWELRY IN MY JAM JAMS, ISSUE 5, SEPTEMBER 2009
The Issue Where Christine Says Etsy is Stealing Your Money

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Article 2 : How Etsy is STEALING from You.
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This one is sort of an article/ special report in the works.

Here's the scoop. I was doing some research this morning on Etsy,
Artfire, Dawanda, Lov.li, Rubylane, etc. etc. If you've never
heard of these websites, they are online selling venues for
crafters, artists, and other artisan types.

Remember that survey I asked you to do? It was related to that.
The survey by the way - if you filled it out already thanks so
much!!! If you haven't, and you're interested in online selling at
all, even just thinking about it, I'd love to get your feedback.
The survey is here:
http://www.how-to-make-jewelry.com/survey

So I was looking for a site that showed the top sellers, the top
items, etc., etc. I've seen these tools before and I was going to
show you how to choose products that actually sell. That would be
really cool right? What better way to find buyers than to research
what is already selling?

But you know what I found?

Every single tool that used to be out there has been shut down by
Etsy. The only one left is the heart-o-matic where you can see who
hearts you.

But what's that good for? I always hearted stuff that I liked to
try to figure out how to make myself. And I bet most of you do the
same.

So there is absolutely no way to see what's selling any longer.

Etsy does NOT want sellers to have any real clue about how to
become profitable.

Sure, you say, but you can look at any seller and see how many
sales they made.

Sure, you can see total sales. But that tells you nothing! It
doesn't tell you how many sales per month, or the average sale
price, or whether they sell enough to make money, or even if they
sell enough to break even with listing fees. Sure, it's only $0.20
a day, but one of the tips for sellers is to re-list everything
everyday so you keep showing up in the new item feeds.

Here's what else I found: According to Fortune Small Business as
reported on this really cool article on CNN, Etsy reported over
155,000 ACTIVE users (out of the 2.4 million listed users), and $58
million in sales the first five months of 2009. Those months, by
the way, include the two most active jewelry sales times of the
year: Valentines and Mother's Day).

You can read that article online here: (but be sure to come back
and read the rest of MY article because there's more stuff I
figured out)
http://money.cnn.com/2009/07/13/smallbusiness/etsy_wars.fsb/index.htm

So, if you calculate that out, and assume that an active user is
someone that has listed something in the past year, then for every
active user, there's been $374.19 in sales for the five month
period.

So that is about $74.84 in sales per month per active user before
fees. Since Etsy takes 3.5% of the sale, and the main processor is
Paypal and they take a minimum 2.5% per transaction, then 6% of
those are sales fees.

So after sales fees (and not including listing fees) each active
user is generating less than $70 a month in sales.

And that's before listing fees!

Let's be generous. Let's assume that only about half the "active
user" (whatever that means - logged on in the past year? Past
month? Bought something ever? Listed something?) is actually a
seller. Some of these users have to be buyers right?

So woohoo! We get to double that number. $140 in sales per month
before materials and other overhead costs like advertising,
marketing materials like business cards, etc. etc.

Makes you want to quit your day job and become an Etsian doesn't
it? (not.)

Wait! It gets even better. Ever heard of the 80/20 rule? This
rule states that 80% of the revenue is generated by 20% of the
products. Or less. You can argue with this rule, but I defy you
to show me a case in which this isn't true.

It's a marketing fact. 80% of any companies sales (or more!) will
come from only 20% or less of it's customer base. 80% of a
companies product sales will come from a select top 20% of their
items.

So if we assume that only 20% of the sellers are making 80% of the
revenue, then the other 80% must be making only 20% of the revenue.

And we know that must be true, because a handful of sellers do make
over 6 figures a year. And if there are a few sellers (like Black
Apple) who make over $100,000 a year in sales, well that takes up a
chunk of the pie too, right?

So number minded me says 20% of 58 million is 11.6 million. Divided
up by 80% of the active users (124,000) would make that $93.55 per
user for five months.

That's $18.71 per active user per month.

Even if we decided that only half the active users are sellers,
then that's still the underwhelming revenue of $37.42 per month
before fees and materials.

Let me repeat that. $37.42 per month. Per average seller if we
are feeling generous.

I know, they suck you in. I was sucked in too! I sold stuff on
Etsy. I went on the forums and tried to figure out what I was
doing wrong. I spent hours and hours following their tips, taking
pictures, listing things, and I might have even made $37.42 a month
before materials. But the hours it took to even get my measly
$37.42 before materials!

You know I even went on an Etsy forum to ask people about this way
back in 2007. And people YELLED at me. They told me if I wasn't
willing to spend the 60 to 80 hours a week they were spending on
their business, then maybe Etsy just wasn't for me.

And I agreed. That's pretty much when I went cold on Etsy and
started building a website that makes me much more than $37.42 a
day let alone a month.

Yes my friends. It's true. I know Etsy has a real cult going and
what I'm saying is controversial. But Etsy is stealing from you.
They fill your mind with propaganda like their "quit your day job"
campaign and seem to be super helpful with their forum and blog and
tips...

Well, do what you want. I want to spend time with my kids, enjoy
what I do, and not be taken in by scammers that say they serve my
best interest.

My advice is to look for other ways to spend your time and selling
budget elsewhere. Somewhere that actually focuses on results and
not hype. And gives you tools for testing tracking and researching
rather than some airy fairy pie in the sky venue for posting things.

Even blogger gives you a spot for Google Analytics code for
chrissakes.

Oh yes. One more thing. Did you know that Etsy raked in over 12
million dollars in fees in 2008? And they expect to double it this
year and Etsy is valued as a company at over $100 million dollars.
Who's cheating who?

Do you want my full report on "What they don't want you to know
about selling handmade online (and how to actually sell online at a
profit) when I get it done? This is a working title by the way.

To get on my notification list for this free report, go to
http://www.how-to-make-jewelry.com/survey, fill out the survey,
and that will take you to a page where you can add your name and
email address to my "Handmade Results" mailing list.

Hope you enjoyed my rant. Sorry if it hurt in all the right places.

I expect some people will be unsubscribing after this....

Have a great week!
I plan on sending you some new tips next week so look out for them.
I'll keep them clean and non-ranty.

Best,
Christine Gierer
~how-to-make-jewelry

P.S. I'm not charging any fees at all for this report. Not even
$0.20 for you to read it for four months. Etsy should be ashamed
at themselves, building up peoples hopes like that and telling them
to just follow their yellow brick road.

I'll even show you how to test out what I tell you. I don't expect
you to believe me without seeing results for yourself, for real.

Don't want to do the survey? Here's a direct link to sign up for
the report: http://www.how-to-make-jewelry.com/getinfo.html

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P.S.S. My E-book is getting great feedback!

Here's some feedback that's so brand spanking new that I haven't
had time to post it yet:

First email from customer Liz Jaffe, Jewelry Artist, Atlanta
Georgia:

"I happened upon your site when I googled "how to make jewelry
findings" and downloaded your earring how-to instructions. YOU ARE
INCREDIBLE. I've been making jewelry for six+ years and have NEVER
made a wire earring that is so strong AND beautiful! I figured if
you could teach me how to make - by hand - 36 pairs of earring
wires in an hour than your book would be worth the $$$.

It is printing as I type and CANNOT WAIT to get my hands on it! I
have every book, article - you name it tutorial and NOTHING has
been as easy, consistent, concise and beautiful than your earring
instructions.

It's done printing. I truly can't wait to put it in a binder!

I'll let you know how it goes - THANK YOU."

Second email from Liz:
"I've read the tutorial from front to back, and already think I've
saved our business at least three feet of silver. Thank you!"

Click here to download Wire Work Secrets for Jewelry Makers now.

http://budurl.com/wws1

Go ahead. Click the link.

http://budurl.com/wws1

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I know, I'm shameless. Gotta keep my babies in peanut butter
though. Maybe I should sell my e-book on Etsy?