10 Tips to Build a Successful Etsy Business

etsy business

Guest post from Lauren of Funky Monkey Children

Often times when someone asks the question of how they can bring in extra income while staying home with their children, people respond with “how about setting up an Etsy shop?” While I think that is a wonderful suggestion, and one that I did myself back in 2012, it isn’t really as simple as just building a shop and having customers flow in.

Over the past 2 years of having my Etsy shop, Funky Monkey Children, I have learned some invaluable lessons about running and business. Here are a few things I wish I had known when I started mine:

1. Start by Brainstorming Ideas

What is a skill you have or a product you make that has a wide market of desirability? Are you willing to learn a new skill or craft that could someday turn into a product for sales? Do you have a side hobby that friends keep telling you to sell?

Brainstorming for a product idea is the very first step in setting up an Etsy shop. This may seem obvious, but make sure it is something you like doing. It would be unfortunate to “hit it big” with a product you really have no interest in continuing to make!

It’s also helpful to think long-term with your ideas – are there items you could add for a coordinating set down the road or ways that you could expand that product into a bigger or more complex line in the future?

2. Manage Your Inventory

When I first started Funky Monkey Children, I was open to anything people asked of me. I had no problem driving around to different fabric shops (with my two toddlers!) looking for a certain pattern that someone requested, or running out to the store to pick up a single item to monogram for a specific customer.

I quickly learned, however, that this consumed a huge amount of my time and wasn’t very profitable. I ended up with so much inventory and so many supplies that I wasn’t able to use on a continuous basis.

In order to streamline my business I decided to focus on just a few items (burp cloths, bibs, and shirts) and not expand so wide that I was drowning in inventory (and spending all my profits on more inventory!)

3. Create Specific Goals

When you start a business, it’s important to make very specific goals for the future… as well as a path to achieve those goals.

When I first started, my goal was for this to be a self-sustaining hobby. If I got busy and didn’t have more time to work, I closed my shop for a few days and never thought twice about it. As long as I could make enough money to buy more fabric to play around with in my free time, I was happy.

As time progressed, however, my goals changed in a big way. The goals that I have set for the business now are allowing us to save a 20-30% down payment in the next year to buy a house, which is something I never could have dreamed of a few years ago!

4. Pinpoint Your Market

In order to appeal to your buyer, you must know exactly WHO your buyer is. Once you know who you are appealing to, you can figure out how best to reach them and where to find them.

It is helpful to think in very specific terms; knowing that “women” are your target customers doesn’t really help. Knowing that your target customer is a 25-35 married woman who works outside of the home and lives on the West Coast is substantially more helpful.

5. Make Prototypes

You have to have something to advertise in order to get started. One of the best ways to get more traffic to an Etsy shop is to increase the number of items you have listed.

When I was starting out, I made tons of gifts for friends. Since I primarily make baby items, and I have young children myself, I had no shortage of people around me with babies.

With each and every item I made, I took a picture and listed it as a listing for sale. Eventually customers would ask for variations of the same product (different colors, fabrics, applique, etc) and each time I would take a picture of that item and list it separately.

There is a rumor around Etsy that 75 listings is the “magic number” to really increase the traffic flow to your shop. I’m not sure if that is true, but I can say that the amount of traffic to and subsequent sales in my shop increased substantially with more listings.

6. Price Your Items Appropriately

Make sure you aren’t under-pricing your items! In addition to making people think the item is less valuable than it really is (or cheaply made), if you don’t add in a profit for yourself you are doing a lot of work for no reward.

Another thing to think about is the time involved in each item. When I first started, I priced each item the same. Every shirt had a certain price, every burp cloth, etc. Now when I price something I take into account the amount of time that particular item takes to make.

Since I can only do one item at a time, it doesn’t benefit me to sell an item that takes an hour and an item that takes twenty minutes for the same price.

7. Learn about Tags and Titles

Titles and tags are huge on Etsy. Learning about the basics of SEO (particularly as it relates to Etsy’s relevancy formula) will be extremely beneficial to your shop.

While Etsy brings in a lot of traffic on its own, there are millions of Etsy shops open today, so you need to set yourself apart to see success.

8. Take Good Photos

This is something that is incredibly hard to do when you are first beginning, and something that I continue to struggle with in my own shop. Since Etsy is a very visual platform, clear and bright photographs are a must for any successful shop.

Learning the basics of a good quality camera is helpful, as is finding a consistent light source (whether that is outside or a lightbox). Amazon has some inexpensive and decent quality lightboxes that can be very helpful if you don’t live in a particularly clear climate.

Having consistent product placement and the same background in every picture also helps to build your brand and have a cohesive image of your shop as a whole.

9. Provide Excellent Customer Service

Etsy customers expect top-notch customer service. Because Etsy started as a strictly “handmade” platform for selling (it has since evolved beyond that), a typical Etsy buyer is expecting a more personal interaction than they would get from a traditional store.

This means that often times, buyers will message you for more information, ask lots of questions, and generally expect a dialogue about the product or service as they go. Providing good customer service goes a long way in developing a loyal fan base.

10. Learn Your Limits

This has been one of the toughest lessons for me as my shop has grown and sales have increased. Because Etsy provides a more personal platform for interaction between sellers and buyers, there can be some unreasonable requests at times.

It isn’t totally unheard of for people to message asking for a discount, for overnight shipping at no extra charge, to make an item and ship it out by today, or even for totally free items just because.

As someone who very much wants to make the customer happy, it is hard for me to say no. However, I also have learned to value my time and recognize that the time that I am working is time that is taken away from my family.

Through the years of doing this I have had to find a balance between providing excellent customer service and also not being “on-call” to answer messages, send emails, and jump up and make an item for a customer at all hours of the day. Learning this limit will go a long way in keeping your family on board for your new Etsy venture!

Do you (or have you) run an Etsy business? If so, do you have any other tips to add to my list?

Lauren Keplinger is a part-time working mommy of 2 young children who bring joy and chaos to her life. Her hobbies include sewing, running, cooking and reading, but she spends most of her “free” time now working on her Etsy shop, Funky Monkey Children.

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