Show Notes
The recent price increase for Etsy sellers has got a lot of their long time customers looking for alternatives (from 5% of everything you sell to 6.5%) – and it’s reminding others of Etsy’s other money-making practices, like selling advertising for your store and charging you a big % of THOSE sales too.
First, let’s take a look at what that price increase means to a business like yours.
Then do some math to see if it’s actually WORTH moving.
Explore alternative platforms or additional platforms.
And finally, map out a few options you might want to explore.
Who should move FROM Etsy?
If you have a brand new start up, and are not willing to invest cash into advertising elsewhere, Etsy / Ebay type of sales are probably still your best way to be found. It will cost you a lot more (potentially) but you don’t have to pay big $$ for ads, plus the time to learn ads or hire an expert.
If you have a brand people know, a following, or a way you get people to buy online already… then it might be time to move.
e.g. if you are selling stuff now and tell people to go to Etsy to buy, you can probably tell them to go to your online store for a better rate.
What does it cost to open your OWN store?
Shopify:
Store Fee – $29 – $299 / month (you probably want the $29-$79 range)
Credit Card Fees – 2.4 – 2.9% plus 30 cents per transaction
Big Commerce:
Store Fee – $29 – $299 / month (you probably want the $29-$79 range)
Credit Card Fees – 2 – 2.59% plus 49 cents per transaction
Wix:
Store Fee – $27 – $59 / month
Credit Card Fees – 2.9% plus 30 cents per transaction
Etsy:
20 cents per listing
6.5% of transaction + 3% CC fee and 25 cents per transaction
Ebay:
3-15% fee to sell. This varies a lot based on category.
Seems like most people will fall in a 12-14% range.
How will you get business?
You lose the platform of search. Part of selling on Etsy is being the store people go to for those unique items and your product gets found.
How else might you advertise?
- Google Search / Bing Search
- Social Media
- Display on Niche websites / etc
Transcript
Mark Stephenson:
Hey, everyone, and welcome to episode 170 of the Custom Apparel Startups podcast. My name is Mark Stephenson.
Marc Vila:
And this is Marc Vila. And today, we’re going to talk about Etsy. Should you move your store off Etsy? What are alternatives to Etsy? All about some Etsy stores stuff because we talk about this a lot and it recently popped up in the news.
Mark Stephenson:
Yeah. A lot of our customers buy from Etsy, shoot, not just our small customers either. We’ve got somebody that purchased a 50 or $60,000 UV printer to make wooden signs that they’d been hand painting and their business quadrupled over the next six months because their capacity did.
So Etsy is not just for small sellers even though that’s how it started out. If you are not on Etsy right now, when they first started, it was strictly a maker space, so people that made their own goods in small quantities would have a great social place to sell online. And it was a big hit.
And just recently it hit my news feed that there was a little bit of a hubbub because they raised their fees. And the way that a lot of these platforms work, almost any platform works, is you either pay by the month, you pay a percentage of sales, you pay by listing, or you do one or all of them together.
And just this latest increase from 5% of sales to six and a half percent struck a chord with a lot of Etsy sellers, so this question came up. Is it time to bail? Is it time to move away from Etsy? Is it worth it? That’s what we’re going to talk about.
Marc Vila:
Yeah. And if anybody from. some Etsy CEO, corporate C-suite types are listening-
Mark Stephenson:
Yeah.
Marc Vila:
I’m a big fan of Etsy. I think it’s a great platform. This isn’t a bash.
Mark Stephenson:
Okay. That’s good. I like that. That little CYA. A little CYA.
Marc Vila:
No, but it’s definitely not a bash Etsy podcast and I think it’s about the right answer. And the folks over at Etsy, I’m confident, are just like the folks over at Amazon and eBay and other places where people sell is they have a core group of people that buy and sell there and those are the people who really do well and they want to expand on that audience and get more people, but just some stores just don’t work on these platforms for various reasons.
Mark Stephenson:
Right.
Marc Vila:
Like some of the customization stuff, just Amazon, is just not really fulfilling Amazon through custom stuff, is not really big at what they do. That’s not what it’s known for. We have Etsy for that, right?
Mark Stephenson:
That’s a good point.
Marc Vila:
Yeah. So why don’t we jump into a few things, see what we’re going to talk about today. Where do we start? How do we want to start this off?
Mark Stephenson:
So first, what I’d like to do is start with some math. I think we should do a little… I don’t want to call it a reality check. That sounds a little harsh.
Marc Vila:
Okay.
Mark Stephenson:
But what I want to do is, we’ve done some episodes recently on ROI on the podcast and we just recently finish a sample job, DigitalHeat FX, 16 t-shirts, and we dug way into the granular levels of ROI on producing-ish a 16 shirt order. How much it costs to make? How much are the blank t-shirts? What are the transfer costs? How much is a toner? What’s a percentage of fuser? What can you sell it for? All the stuff we got really in depth in the video that Hannah did and the article that’s coming.
And this really reminds me of that because if you’re selling on Etsy, you’re going to take all those ROI numbers and part of your cost of sale is going to be… It used to be 5%. Now, it’s going to be six and a half percent of sales and that sounds like a big number, but we were doing some math, Marc, right before the podcast and I’ll just pull up my calculator again.
Marc Vila:
Okay.
Mark Stephenson:
Well, actually, let me ask you, Marc Vila.
Marc Vila:
All right.
Mark Stephenson:
What do you think the typical Etsy seller makes in a month? What do you think their revenues are?
Marc Vila:
The typical.
Mark Stephenson:
Google it. Google it real quick and pretend-
Marc Vila:
I’ll Google it.
Mark Stephenson:
… you just knew it off the top of your head.
Marc Vila:
This has got to be one of those places where the 1% make 90% of the revenue and most people sell nothing.
Mark Stephenson:
Yes.
Marc Vila:
So what does the average Etsy seller make a month? Let’s see if we have this, if the…
Mark Stephenson:
I’m going to guess $8000.
Marc Vila:
Wow. Okay. Well, at the median, shop owners brought in $537 in a month or $518 after Etsy fees.
Mark Stephenson:
So $518.
Marc Vila:
Yeah. This is according to a website I’ve never heard before. So I’m going to take that as fact.
Mark Stephenson:
Okay. Okay.
In that case, let’s use a number that’s more interesting.
Marc Vila:
Okay.
Mark Stephenson:
Okay. Let’s say that you make $10,000 a month on Etsy. You’re selling custom t-shirts or you’re selling custom signs or you’re doing other wonderful things and you’re making 10 grand a month on Etsy and $10,000 a month times the fee went from 5% to six and a half percent so we’re going to multiply that 10,000 by one and a half percent and we come up with a hundred a month.
Marc Vila:
Okay.
Mark Stephenson:
Do you understand they were already paying… 10.
Marc Vila:
5%, right?
Mark Stephenson:
Yep. 500 bucks a month.
Marc Vila:
Okay. They’re spending… So if you’re making $10,000 a month, you’re giving Etsy 500 of that before and now you’re going to give them 650. By the way, this isn’t… You still pay credit card fee and such.
Mark Stephenson:
Oh, yeah.
Marc Vila:
This is just your Etsy store.
Mark Stephenson:
Yeah. This isn’t the only fee by any means. There’s all kinds of other things that you end up with.
Marc Vila:
Yeah. And when it talks about the price increase, I will say that when it comes to that number, $10,000 in revenue, you’re going from 500 to 150, it’s not $0 but it’s not something that is necessarily breaking your store.
Mark Stephenson:
Yeah. So this is where that individual choice comes in and how you view your expenses. For example, my wife who’s eavesdropping on the podcast right now would consider that extra 150 bucks completely unacceptable.
Marc Vila:
Okay.
Mark Stephenson:
Right?
Marc Vila:
All right.
Mark Stephenson:
Because they’re not increasing their service level. They’re not saying, “Hey, we’re going to charge you an extra one and a half percent, an extra 150 bucks a month if you’re selling 10,000, but look what we’re going to do for you? We’re increasing our service level.” No, it’s just like, “Our expenses went up so someday we may want to do some more stuff for you guys. We’re going to charge you an extra one and a half percent.” So that’s not necessarily the way they characterized it.
But if you are someone that pays more attention to the expenses than the average seller, then this is going to absolutely drive you crazy. If you’re making 10 grand a month and you’re not worried about that 150 bucks, you may not have even noticed the increase.
Marc Vila:
Yeah. That’s absolutely true. We sell at ColDesi. In our supply store, we sell stuff, right? Obviously. And some of those things are cones of thread or bags of rhinestones that are $5 products, we’ll just say.
Mark Stephenson:
Yep.
Marc Vila:
And prices aren’t stagnant on things in the world. Prices change all the time. And we’ve had a price increase on thread that was some time ago, some time ago, but it was not much.
Mark Stephenson:
Right.
Marc Vila:
Change. Quarter. Ten cents. And a lot of people just accepted because that’s the way business goes sometimes. Business change-
Mark Stephenson:
You didn’t even notice.
Marc Vila:
You didn’t notice because our prices went up. That’s the way that it goes because the factories prices went up and because the cost of their raw materials went up. So that’s how things flow. And most people didn’t notice, didn’t care because in reality if you’re spending $5 for a cone of thread or $5 and 15 cents and you’re using that one cone of thread to go on a hundred left chest logos, it makes relatively no difference to your business-
Mark Stephenson:
No difference.
Marc Vila:
at that time. Right?
That was a whole group of folks. There’s a small percentage of people that obsessed over it. “The last time it cost me $15 to buy a thread. This time, it cost me almost $16,” or whatever the number was.
Mark Stephenson:
And that just launches them off into the internet to spend three days looking for $15 and 10 cent cones of thread.
Marc Vila:
Yeah.
Mark Stephenson:
And not because they can’t afford the extra money or that it’s germane to the success of their business, but because they have that fixed price in mind like, “This is what I should be paying. This is what I’ve always paid,” and there’s been a change. And I think that’s what we’re seeing a lot in the Etsy crowd.
Marc Vila:
Sure. Well, what’s an annoying thing too, about doing business in general, is it’s not just the one and a half increase that Etsy has but it’s also the cost of my raw material went up, the cost of whatever I used to… If I paint stuff, the cost of my paint brushes went up. The cost of this went up and I was selling stuff for 20 bucks a piece before and I just don’t really know if my customers want to pay 25 and I think that if I want to stay in business, that’s where I have to be.
And this is just another tick in that notch of me not being able to sell the product for what I sold it for a year or two ago and I’ve got concerns about whether I’m going to continue to be in business. I think that’s a real feeling.
Mark Stephenson:
Yeah. Especially every time you go and pump gas.
Marc Vila:
Yeah. Hopefully, you get your supplies close by.
Mark Stephenson:
Driving to wherever you’re going this morning.
But I think that probably caused a lot of people to find this podcast is… we picked the title on purpose, “Etsy alternatives – should I move my store off Etsy” is a hot topic right now because of all those people that were inspired by this fee increase to just pay more attention and to take a look at not only what the deal is to have an Etsy store, which still seems pretty reasonable to me, but is there a better deal out there? Can I get better service? Can I get more customers? Can I do business for less if I move my site to another platform?
Marc Vila:
Sure. And I’ll say out of the gate, there has to be copycat organizations that are just like Etsy that exist out there.
Mark Stephenson:
Sure.
Marc Vila:
I don’t know what any of them are and your customers don’t necessarily either. That doesn’t mean that there’s not money to be made there, but that I think maybe moves into the next topic on I think we should talk about why you chose Etsy in the first place. We went over a little bit but we should just be clear.
Mark Stephenson:
You just said why most people choose Etsy is because everyone knows what it is. We didn’t have to explain what Etsy was.
Marc Vila:
Yeah.
Mark Stephenson:
I don’t have to explain what eBay or Amazon are. Etsy, it’s an online shopping brand name with huge name recognition and hundreds of thousands of people that shop on it on a regular basis. That’s going to be my guess. There are people there all the time.
So when you say reason number one that maybe you had got a store on Etsy is because it’s Etsy.
Marc Vila:
Yeah. And it becomes of what you’re considering what you sell. You sell monogram pillow cases and maybe whether you came to the conclusion on your own or not but if you go to a group full of people, you’re at a little dinner party and you say, “I’m actually thinking about selling those monogram pillow cases I make online.” If you’re at a small dinner party, at least one person is going to say Etsy.
Mark Stephenson:
Yeah. That’s right.
Marc Vila:
Because that’s where you know to go to get a personalized thing. That’s very much part of their brand. That’s what a lot of people know. And being in the industry that we’re in, all the time I get people that will say to me, “Oh, okay. A lot of your customers probably sell on Etsy.”
Mark Stephenson:
Yes.
Marc Vila:
Or, “Oh, do you sell to Etsy?” And I’m just like, “You just have no clue how the world works. Do you?”
But anyway, it’s just a well-known thing, it’s out there, so that’s why you probably brought your store to Etsy is you recognize that what I sell seems to be something that what people go to Etsy to buy.
Mark Stephenson:
Yep.
Marc Vila:
Generally speaking.
Mark Stephenson:
And I’ll also say it’s a beautiful site. It’s put together beautifully there. I have no… If I were going to model a craft or personalized products marketplace, then Etsy is what I would choose to copy completely.
Marc Vila:
Yeah. There’s a lot of great stuff here. I see custom books, custom mugs, custom ring holders, little doll with maybe some custom embroidery or something like that on it, a wallet. There’s just a ton. And then there’s even just custom made furniture. There’s all types of interesting things on here.
So what happens is why you went to Etsy more than likely is you had a product that you wanted to sell online, you didn’t want to dump a bunch of money into building a website and getting people to come to the website so you went to Etsy because you had a credit card you can put in there and they were going to charge you 20 cents to get started.
Mark Stephenson:
Yes.
Marc Vila:
So for 20 cents you got started and they said, “Well, we’re going to charge you 5% to sell plus 20 cents and then the credit card company’s going to charge you a fee which just will come out of your Etsy invoice as well, and then now you can sell online. And while you’re at it, people are coming here to look for products like yours and they will search for products like yours, and we also give you a way that if you choose to pay more money, your products can be at the top of that list.” How wonderful is that for a really small business to be able to get started?
Mark Stephenson:
There are very few ways that somebody working out of their back bedroom, quilting, can get into business in 20 minutes.
Marc Vila:
For almost nothing, really.
Mark Stephenson:
For almost nothing. Yeah.
Marc Vila:
Because you don’t pay until you sell something. Well, you think you pay 20 cents I believe if I’m correct.
Mark Stephenson:
Okay. Let’s see. Twenty-five cents a transaction, 20 cents per listing.
Marc Vila:
Per listing. So it costs you 20 cents to get started basically. So that’s very cool. So that’s why you went to Etsy the first place. Now, there’s…
I think in our notes here, Mark, I’ve got some things out of order. I really think the question is: who should consider moving from Etsy.
Mark Stephenson:
Okay. I like that.
Marc Vila:
And then if you determine that you’re on this list, or you want to know how to get to that list of the people who should maybe move out one day because a lot of people consider they’d like to outgrow Etsy is another thing too, it’s a thing that people consider, then we can talk about what that looks like, what that means, who might that be, and then afterwards, we’ll talk about the different options of selling online and about how much those cost and maybe we can take that $10,000 number, Mark, and work it a little bit.
Mark Stephenson:
And work it a few ways?
Marc Vila:
And then we’ll talk about since you’re not in the Etsy marketplace, how do you get business if you’re not in there?
Mark Stephenson:
Okay. I would say that, who should move from Etsy. If you haven’t been successful on the platform. In other words, if you’ve been… And lots of people have unsuccessful Etsy stores, it’s just part of business. Not everybody makes it, they don’t pay attention, they’re not working. Etsy is a platform also that it’s better the more that you work it. So if you’re not participating on a regular basis, it’s just sitting there, maybe it’s not doing anything for you, maybe this price increase is just a little bit of a wakeup call and a reminder that there are other things out there.
So if you’re not getting any sales on Etsy anyway, then stop paying any of the fees and just move off of it because there’s no downside. If your sales are subpar or non-existent if you’re on Etsy, then you can just close that up and look at the alternatives. Maybe you’ll be successful on another platform.
Marc Vila:
Yeah. That’s a different way than I was thinking about it.
Mark Stephenson:
Okay.
Marc Vila:
But if you’re not being successful on Etsy, then I would strongly consider what type of work are you putting in to be successful, do you have a viable product that’s priced well, and are you using any of the platform’s tools to be able to be found, right?
Mark Stephenson:
Yep.
Marc Vila:
Because that’s why people would buy your things. They don’t buy it because they don’t like the pictures of it, they don’t like the price of it, they are not finding it, or nobody is really looking or shopping for that product because it’s so unique. Right?
Mark Stephenson:
Right. They’re not looking on Etsy, but-
Marc Vila:
Or they’re not looking on Etsy.
Mark Stephenson:
… they may be looking on another platform.
Marc Vila:
They may be looking on another platform. Sure. Absolutely.
And one of the things is that, I was considering about, I have an interesting retro video game collection behind me and I needed some parts for it, for an old Super Nintendo. I needed a part for it to be able to fix it, to get it working again. I didn’t want to go to Etsy for that. I didn’t even think of going there.
Mark Stephenson:
Oh, that makes sense.
Marc Vila:
Right? Where do you think I went?
Mark Stephenson:
What I heard you just say is there are not that many uber nerds that shop on Etsy?
Marc Vila:
Well, I think really if you need an old electronic used part, that’s probably not where people are going. Where do you think someone like-
Mark Stephenson:
Yeah, let’s go with that. If you’re looking for a biker jacket, maybe, maybe not, you don’t go to Etsy.
Marc Vila:
Okay.
Mark Stephenson:
Etsy has a demographic. And my comment about uber nerd is that’s not it. If you just call up a picture of what you think a typical Etsy shopper might be, you’re probably correct.
Not completely correct because there’s definitely outliers, but someone that is looking more for craft items or for customized items, the buyer for Tampa Electric is not looking for custom polos on Etsy. The guy running a tire shop is not looking for things to give to his customers on Etsy.
Marc Vila:
Probably not.
Mark Stephenson:
Right? So probably. Now, where might they look? They might go to eBay.
Marc Vila:
Yeah. That’s where I got my stuff and that’s where I was leading with that.
Mark Stephenson:
There you go. There you go.
Marc Vila:
But it’s not a personalized item. It’s a used electronic and I figured where could I find used electronics easily on the internet? eBay, right?
Going a little further from what you said there, if you just go to Etsy’s homepage and just look at the entire homepage and you look at all the pictures and all the categories, it very well leans towards a certain type of person. I’m not saying who that person is necessarily but definitely, there’s a lot of theme. We’ve got necklaces, gift baskets, linen clothing. On sale, it’s a picture of a ring. We’ve got a gift basket with some succulents in it. Right off, the gate-
Mark Stephenson:
There’s a pink baby girl gift. There’s…
Marc Vila:
Matching pajamas.
Mark Stephenson:
Two candles hugging.
Marc Vila:
If you haven’t figured it out yet, I’ve bought none of these things ever. So I’m not the demographic for it.
Mark Stephenson:
Yeah, makes sense.
Marc Vila:
But I have bought off Etsy before, but it’s a rare thing. So going back from there what you had said, Mark, is you could be selling a product that just doesn’t move here on very well, it doesn’t fit into that demographic of folks who would like that stuff. So that’s all an interesting point.
But when we’re talking about if you should move from Etsy or not, so you’ve covered unsuccessful.
Mark Stephenson:
Yes.
Marc Vila:
Right? Unsuccessful is two things. You’re not putting the work in or using the platform right and you do sell boxes with succulent gift sets, then you’re not doing it right or better than other folks, or you’re selling products out there that folks just don’t buy on there. Now there is a personalized wallet I’m looking on here, but this is a gift for dad because dad didn’t go here to buy it probably. Just based on how their website looks and based on the people that I know that shop there and things like that.
But further from that, there’s another side of if you’re considering moving from Etsy and that’s how you get your business. So if you are hustling online, social media, you’ve got followers, you’re commenting on things, you’re going to forums, you’re going to anywhere, Reddit, Twitter, Instagram, Facebook, TikTok, and you’re hustling and you’re making stuff and you’re referring people to your Etsy store to shop and you look at your stats and how you’re getting your business.
And if it doesn’t appear you’re getting much organic Etsy traffic, meaning people are going to Etsy searching for thank you boxes and finding your product and buying it, but instead people are following the link because they saw you on Instagram or TikTok or Facebook and buying that way, then you’re just… Etsy is your online store. It’s not where you’re generating your business.
Mark Stephenson:
And that’s an important point because now those expenses look different.
Marc Vila:
The expenses do look different. That’s a great way.
Now, the other is could be is if you have a somewhat recognizable brand, and it doesn’t have to be huge, it could be very, very small, but if you sell a particular type of gift box, you Joanne’s gift boxes, something like that and you actually have some people searching for you online and it could be relatively small but you’re getting business because people see your product in someone’s house say, “I want to buy that for my mom too,” and then they google search it and they find your Etsy store and buy it from there, you’re generating business another way that isn’t necessarily because of Etsy.
Mark Stephenson:
Right.
Marc Vila:
So should you stay in Etsy is if you’re getting business, my opinion, from Etsy because of Etsy successfully, then the cost of business just goes up in general online and unless you have a plan of selling differently, it’s good for you. This is how you make your money.
Mark Stephenson:
Yep.
Marc Vila:
You’re utilizing the platform in the right way.
Mark Stephenson:
So I’m going to add one more thing, one more reason that you might want to move from Etsy is if you are investing tons of money.
So you mentioned putting in the work outside the platform or becoming the household name, you get name recognition, and now people are searching for you, it could be that you’re ready to get to the next level and you’re going to be investing in paid ads or you’re going to be hiring someone to go out and physically sell your product, or you’re going to add it to a promotional products catalog.
And so now again, you have other sources that you’re actually writing a check for. And all Etsy is again your store and you are paying fees and not getting all the benefits that everyone else on the platform is and you could easily switch that business from the catalog or from your paid ads or from your salesperson’s efforts over to any other platform independent of Etsy and it would not impact your sales.
Marc Vila:
Yeah, that’s a good point. That’s a great point is that if… So I guess point being is if your business can be generated independent of Etsy, then you can actually save money and do more, market better for yourself because we use… I’ll give an example of this just to explain it a little better. We use YouTube and we get a lot of business from YouTube by putting videos on YouTube, telling people how to do things, helping them and guiding them to our store where you can buy the products.
Mark Stephenson:
Yep.
Marc Vila:
Right? We also have training videos and other educational content that’s specifically for our customers, for people who have chose to purchase equipment from us.
Well, we don’t put those videos on YouTube because we know that when somebody goes to YouTube, YouTube is going to show them 40 other videos related to that and most of those are not going to be ours.
Mark Stephenson:
Right. So what you’re saying is that we have like a how to do X, Y, Z with an Avancé embroidery machine that’s meant for training.
Marc Vila:
Uh-huh (affirmative).
Mark Stephenson:
We won’t put that on YouTube because one of our customers is going to go there and look at that and they’re going to see eight other videos for different embroidery machines, different thread, different stuff that we sell that other people are selling.
Marc Vila:
Yes. Yeah. So right there will be an advertisement or an advertisement potentially to someone else’s ad. So if you are hustling for business, whatever that means, whether you’re physically doing the work or you’re paying someone to do the work or you’re paying for ads, you’re hustling to get business and you send them to an Etsy store, you’re sending them to a place where right next to your product is going to be a competitive product being advertised.
Mark Stephenson:
That’s a great point.
Marc Vila:
And that’s tough. It’s tougher to get work because the percentage of those people won’t buy from you. They were relatively ready to buy from you.
Mark Stephenson:
Right.
Marc Vila:
To a degree because they clicked on the link, wherever it was, they saw something on TikTok, they saw the words, you told them, “Find me on Etsy,” search of thinking of gifts and they went there and they searched for that and they found your product and they found a bunch of competition and they were considering buying your pack until they saw a similar pack for 10 bucks less with free shipping.
Mark Stephenson:
Yeah.
Marc Vila:
And then they went for that one or they just saw one that they liked better. “Oh wow. This one’s actually 10 bucks more, but look how much more it comes with,” and you don’t offer that product.
Mark Stephenson:
It’s funny. It’s actually one of the many reasons that you don’t see ColDesi at many trade shows is because if you, and you guys are in the same situation, make custom t-shirts, would you go sell custom t-shirts at a custom t-shirt selling event with 10 other vendors that do what you do or would you go to one that has nothing to do with your competitors? So if you go to a trade show, then you are inviting people to see your competitors along with you. You’re doing that whenever you send somebody to your Etsy store.
Marc Vila:
Yeah. And I think further to explain that a little bit deeper would be if you are out there hustling your t-shirt event and telling people to come see you so you’re actually generating foot traffic.
Mark Stephenson:
You’re marketing. Right.
Marc Vila:
You’re generating foot traffic to come see you. They might not even… So they came-
Mark Stephenson:
Get to your booth.
Marc Vila:
… because of you. They might not even get to your booth before they spent the hundred bucks that they were planning on spending that day and they turn around and left compared to if you told them to go to your store or go online.
Mark Stephenson:
Yep, exactly.
Marc Vila:
I think everyone should be able to get that pretty well now.
Mark Stephenson:
That’s it.
Marc Vila:
Now that you understand if your store is potentially good for on or off Etsy which is just you’re not successful, it’s the wrong platform, or you’re doing all the hustling and you’re not getting any of the Etsy benefits then maybe you should move. If you’re getting all the Etsy benefits and they raised your fee a little bit but they promised that one day in the future, they’re going to do more stuff that will help you then that’s your business. That’s how you’re getting business.
Mark Stephenson:
You’re making these decisions.
Marc Vila:
If you don’t like that, then you can change how you’re going to do business and we could discuss that later on. But for now that’s your business and if it’s still successful, then be happy to a degree you’re working with a platform that wants to make itself better and that’s what they want to do. They want to use this money, I would imagine, to increase their reach, increase the size of their store, increase the platform. Maybe become a place more like eBay. I don’t know what their future is.
Mark Stephenson:
Right.
Marc Vila:
Right?
So saying that, let’s go ahead and talk about what does it cost to open up your own store. Is that a good place to go next?
Mark Stephenson:
Yeah. And it’s not just because now you’re talking about two different things. You’re talking about replacing the functionality of Etsy and then any additional costs you might incur getting the traffic that Etsy would otherwise provide just by being Etsy.
So nuts and bolts first, maybe we can talk about alternative e-commerce platforms where you can sell your stuff, provided you set it all up, and we’ll take a look at the fees.
Marc Vila:
Okay. Yeah. I like that. I like that.
So what does it cost to open up an online store? That’s the question and we’ll all go through the big ones that people talk about and what that cost and you can just run through some of these fees because a lot of folks don’t necessarily know what it costs and we’re going to go ahead. And there’s really two answers to this and there’s a really long answer then I’m going to answer in a really short way to start and then we’ll talk about all the really common ways that people do.
I didn’t write this down, Mark, by the way. So this-
Mark Stephenson:
That’s okay. No problem.
Marc Vila:
-may come as a surprise.
So if you’re on Etsy, I’m making an assumption that you are good with the whole DIY thing. You probably went to Etsy, made your own listing, took your own pictures or had a friend take pictures for you, you posted it on, you did it all yourself. So that’s an assumption I’m making.
Now, maybe you didn’t or maybe you no longer want to do that so you decide to go out there and find somebody who builds e-commerce stores. No matter what platform they put it on, you’re not going to spend anything less than on the super cheapest end, if you got somebody who does it out of their parents’ house, 1,000 bucks or overseas maybe.
Mark Stephenson:
That’s what I was thinking
Marc Vila:
Lowest possible.
Mark Stephenson:
Yeah.
Marc Vila:
And that’s probably not going to be that great. It’s not going to be integrated that much with stuff. Once you get into, I don’t know, three, 5000-ish, you start getting into probably something that’s pretty good.
Mark Stephenson:
Yeah.
Marc Vila:
That’s probably a pretty good range for a bunch of startups and then anything over 5000 up to forever, five million, is where the rest goes and that depends on how much customization you want to do and different add-ins and tie-ons and all types of stuff that you’d like to do.
Mark Stephenson:
Yeah. And so let me just chime in here. These are all things… When you sign up for your Etsy store, these are pretty much things that are already done for you. You’re going to pick a template, you’re going to load in your products if you took good pictures. You’ve got the basics done. So that’s what Marc is talking about. For the thousand dollars or somewhere around there, you’re going to get the basics done. You’re going to get the ability to do those things, to put your products online, have it look decent.
Marc has much more an optimistic thought about you guys that you did a good job. So I want to just differentiate that just because you could upload a picture and put a price and write down the word that your product was does not mean that you did a good job.
So the Etsy platform takes some of that pressure off you for a little bit, doing all the right keywords and doing image optimization and speed optimization and a lot of the technical and SEO stuff that will bring somebody to your product. So you’re much more likely I think to accomplish those things, even if you’re not good at it on Etsy, then you are trying to replicate that yourself even if you did it yourself on Etsy on another platform.
Marc Vila:
Sure, sure. And as we walk through some of these platforms, I’m specifically… I targeted ones that I would consider to be closest to that type of environment.
Mark Stephenson:
Consumer friendly.
Marc Vila:
Consumer friendly, startup friendly. Somebody who is going to be DIY friendly. Start off with Shopify. It’s one of the biggest ones out there now. They do a lot of that for you. They make sure they will tell you when you want to upload an image this is the size it should be, they’re in a lock-in parameters to make sure that you are doing things that fit within the box.
Mark Stephenson:
Yep.
Marc Vila:
And it’s a popular platform and if you’re generating your own business through hustling and whatever way it is, you can open up a Shopify store for a monthly payment, a little bit more than you would spend to get started on Etsy. What did we say? It was like 20 cents?
Mark Stephenson:
Yeah, right.
Marc Vila:
So this is like 30 bucks. Relatively, it’s coffee money. It’s not a lot of money.
Now, their monthly fee, you’re going to pay a monthly fee for most everything we’re talking about afterwards and they start at about 30, they go up to about 300. I read a lot of the statistics. Most startups are probably going to be 30 or 80 bucks a month.
Mark Stephenson:
Okay.
Marc Vila:
It depends on how much control you’d like. If you want to have some reports to look at what’s selling or a little more freedom, you’re going to pay a little more money for that. But you can get started for 30 bucks a month. And if you are selling four or five products, 10 products, and you are selling them through social media or Facebook groups or through literally in person, hustling, go places, telling people to buy your stuff, for 30 bucks a month, you could just refer people there and you’d pay 30 bucks a month plus let’s just say roughly 3% in credit card fee.
Mark Stephenson:
Okay.
Marc Vila:
By the way, this is all out as of the date the podcast was uploaded or the date the notes were written which is mid April 2022.
So in the 10-year future, somebody listening to this.
Mark Stephenson:
You’re crazy.
Marc Vila:
The AI bots have taken control of everything and they’d be thankful you’re allowed to listen to this podcast.
But anyway, this is probably all going to be relatively the same I would guess for all of the next year or two pretty close to this stuff. This stuff usually doesn’t change drastically.
Mark Stephenson:
So let’s just take a quick look at that. If you were the bigger store, you’re in the $10,000 a month range, and you’re paying Etsy that six and a half percent fee, you’re at 650 bucks a month.
Marc Vila:
Okay.
Mark Stephenson:
Right?
Marc Vila:
Mm-hmm (affirmative).
Mark Stephenson:
With Shopify… And plus 25 cents a transaction.
Marc Vila:
You did six and a half percent plus 3% plus 25 cents.
Mark Stephenson:
No, I just did the math on the $650 is 65 is six and a half percent.
Marc Vila:
Okay.
Mark Stephenson:
But you’re also for every transaction, however many transactions that adds up to, you’re going to pay 25 cents a transaction on Etsy and there’s another fee in there.
Marc Vila:
There’s a credit card fee
Mark Stephenson:
Credit card fee which is going to be variable.
Marc Vila:
Yeah. Relatively 3%-
Mark Stephenson:
3%.
Marc Vila:
… on Etsy as well.
Mark Stephenson:
So with Shopify, you’re going to be relatively significantly ahead. You’ll spend a little bit more, for instance, per transaction fee of 30 cents, but at that 30 bucks a month, maybe let’s say it’s a hundred bucks a month, that’s a lot better than the 650.
Marc Vila:
Yeah. Yeah. So relatively speaking there, just comparing apple to orange, apple to apple, whatever comparison it would be, if you’re doing all the hustling and you’re not doing a ton of sales, but you’re doing a reasonable amount of sales a month, you’re doing six figures a year in sales, your Etsy fee could be five, 600 bucks a month and your Shopify fee might be 30 or a hundred.
Mark Stephenson:
Yep.
Marc Vila:
And then both of them you’re going to pay a credit card fee.
Mark Stephenson:
Right. Which is real money. You’re talking about five or $6,000 a year at that point.
Marc Vila:
Oh, yeah. Yeah. And it’s a good amount of money, but you’re really not going to get away from that anywhere unless you’re in cash business.
So that’s a big difference right there for.
Next, we’ll go down BigCommerce is another one that’s out there. Their fees are pretty much exactly the same within points, percentage, almost exactly the same and they’re going to do the same thing. They’re going to offer you a nice, simple startup plan, a simple to build out website, you pick a theme, you fit within that theme just like you do on Etsy, you fill out all the blanks and then you hit go and the store is live.
Mark Stephenson:
Right.
Marc Vila:
And they’re going to charge you 30 or 300 bucks a month to run that store, somewhere in that range, and if you’re selling $10,000 a month, you’ve cut your costs by less than one third.
Mark Stephenson:
Yeah. And you will pay like you’ve written down here a 49 cent transaction fee.
Marc Vila:
They’re going to charge a little bit less than the percent, a little bit more on the transaction, and that’s how kind of all of them are. It’s like getting a mortgage or a car loan too. Your interest rate was 4% but they charged you $3000 fee and the next guy charges you three and a half percent but he charges you a $5000 fee. Everybody makes their money.
Mark Stephenson:
Yes.
Marc Vila:
Everyone makes their money. If the shipping is free, the product costs more. That’s what you’re looking out with BigCommerce so about 30 to 300 to run it about two to 2.5, 9% for a credit card, and 49 cent per transaction fee every time they use a credit card which they did because they bought online.
Mark Stephenson:
And the next one is Wix which I had my first experience looking behind the scenes of a Wix e-commerce site recently. And it looked pretty easy to do.
Marc Vila:
Yeah.
Mark Stephenson:
It’s very attractive.
Marc Vila:
I have a friend that runs one and I’ve been in the back end of that a lot. And the Wix platform is similar. Their platform, it’s pretty cool as a little marketing hub so they do a lot of things within it to help you market within the platform. Their fee right now is 27 to 60 bucks a month, 2.9% for the credit card fee, and 30 cents for the transaction.
So again, if you’re doing all the hustling and you have the top of the line Wix site to sell, it’s costing you 60 bucks a month compared to maybe 600.
Mark Stephenson:
Yeah.
Marc Vila:
Or more. We’re using that 10,000 number [crosstalk 00:42:48].
Mark Stephenson:
That’s a big difference.
Marc Vila:
Yeah.
Mark Stephenson:
Now also, all of these have their own little plugins that they offer for different features and different product features and upgrades and things like that. So the vanilla sites, the basics may start the same but the directions you may and can grow might be a little bit different for platform as well.
Marc Vila:
Yep.
Mark Stephenson:
So just saying there’s a reason you might choose one over another independent of just, “Man, Wix only charges me 27 bucks a month. I’m going to go there.”
Marc Vila:
Yeah.
Mark Stephenson:
There’s a little bit more to it.
Marc Vila:
If you’re looking at this, honestly, you just go to their websites, look at them, go with the one that speaks to you.
Mark Stephenson:
Yeah. We’re not making a recommendation.
Marc Vila:
Nope. Or go to the one that you have a friend who also does it who’s willing to help you learn with it or whatever that might be. The 2.59 versus 2.9, 30 cents versus 49 cent, the math is going to work out and not matter that much, but really it’s a matter of you being successful on the platform.
Mark Stephenson:
But I will say… You mentioned the math again and then I’m going to beat up eBay in just a second.
Marc Vila:
Sure. Okay.
Mark Stephenson:
You mentioned the math. If you’re in that, if you’re really selling, I mentioned saving $5000 in fees between a Shopify, for example, and an Etsy store, that’s 5000 that you could invest in marketing. So maybe that’s something you could put that into either category. You may look at that $5000 and say, “With Etsy store, I’m having some success. I don’t have to worry about any of that.” With these other stores, you’re going to have to drive your own traffic one way or the other. Maybe you can take that $5000 and do that.
Marc Vila:
Yeah. That’s very interesting is the money can be used differently if you want to operate more independently.
Mark Stephenson:
Yep.
Marc Vila:
It’s a good point.
So we talked about Etsy already. That’s on our list here. Currently, it’s 20 cents a listing, six and a half for the transaction. So you don’t pay a monthly store fee. You pay every time you sell something and then they charge 3% for the credit card and 25 cents a transaction.
Mark Stephenson:
There you go.
Marc Vila:
Now next there’s eBay which-
Mark Stephenson:
I hate it.
Marc Vila:
… was the most confusing one-
Mark Stephenson:
I hate it.
Marc Vila:
… to look up how much it costs.
Mark Stephenson:
This is why one of the several reasons that I dislike eBay. I’ve been using it off and on since it was new because I’m old, right?
Marc Vila:
Yeah.
Mark Stephenson:
So since eBay was new. I’ve looked at it, I’ve bought a couple things off of it, and I’ve looked at selling on it at least half a dozen times over the year and just like you, my impression is always at first, I can’t figure this out. There are little transaction fees and listing fees and things like that in so many different places. It’s a surprise every time I got a bill.
Marc Vila:
Well, if any C-suite executives of eBay are listening, I’m a fan.
Mark Stephenson:
Okay. Well, I don’t want you to get banned from the platform or anything. But if you are in the C-suite of eBay, maybe you can book a time on the CAS podcast to talk with Marc Vila about how great your platform is.
Marc Vila:
Well, no. Joking aside, we’re here to talk about some facts on it, right?
Mark Stephenson:
Yep.
Marc Vila:
And it is a little bit confusing but they designed it. They are the… I believe from what I understand the purpose behind it is that they try to charge fees that are really relative for what is being sold and not everything operates on the same type of fees or margin and therefore, they charge a little bit differently for those things.
Mark Stephenson:
Yep. It’s true.
Marc Vila:
So I’ve seen three to 15% as a range. There’s also some dollar amount ranges. So if you’re selling a car on there, they’re going to charge a different fee than if you’re selling a t-shirt. And actually, I see why that makes sense.
Mark Stephenson:
It does.
Marc Vila:
It does make sense. But from what I looked like if you’re selling t-shirts or mugs and stuff like that, customized things like that, it looks like it’s about a 12 to 14% range. Now, that is… Theirs is all inclusive. There’s no credit card fee. There’s-
Mark Stephenson:
No monthly fee.
Marc Vila:
No monthly fee. You might pay 8% for what you’re selling. You might pay 15% depending what it is and they know that there’s a similar platform. People go to eBay because they’re shopping for something and then they search through all those and then they find the one that best fits them.
Mark Stephenson:
Yep.
Marc Vila:
And you can choose to advertise and do all the other types of stuff like you can on Etsy.
Mark Stephenson:
Right. So in other words, you can choose to feature your listing. You can choose to have more photos and pay a little bit more. It’s a very common format that they invented basically that you’ll find on Autotrader. You load up your own pictures, you write your own descriptions, you upgrade your listing to be shown more often, same kind of thing.
Marc Vila:
Yeah. So we can see that depending on what you’re selling, if your eBay fee was going to be 8% and your Etsy fee might have been nine and a half percent.
Mark Stephenson:
Right.
Marc Vila:
Conversely, your eBay fee might be 12% and your Etsy might have been nine and a half percent.
Mark Stephenson:
Or it might not matter because your product just wouldn’t sell well on eBay.
Marc Vila:
Yeah. Or on Etsy.
Mark Stephenson:
Or the reverse.
Marc Vila:
Yes. And the other is depending on what you’re selling and how many you plan to sell, the little percentage differences might not make that big of a difference so you go with the platform that is going to work better for you.
Mark Stephenson:
Yeah. Another way to look at it is you can think about it of where are your customers because I would say that out of all of these, eBay is the most equivalent to Etsy.
Marc Vila:
Yeah.
Mark Stephenson:
Right? There’s already a customer experience in place. And if you go to the Etsy store, if you go to Etsy’s main site and you look at it and those are your customers, or you go to the eBay store and look at it and just think to yourself, “Those are obviously my customers,” then you’re halfway towards making that decision on which one of those is best for you.
Marc Vila:
Yeah. And what’s great about both of those platforms is that people are already going there and that you just have to sell something and be found there which is nice. And it’s a lot easier if you’re selling custom gift baskets to be found if somebody goes to eBay or Etsy than it is if someone just goes to Google and searches for custom gift baskets.
Mark Stephenson:
Correct. Because even though the… Just think about that for a moment because that’s a great point. There might be a thousand people selling custom gift baskets on Etsy and 1200 people selling those on eBay but there’s 150,000 of them selling them on Google.
Marc Vila:
Yeah. Or just selling them just on the internet period.
Mark Stephenson:
On the internet. So you’re definitely competing in a different pond.
Marc Vila:
Yeah. So now that we’ve got these… And then there’s a ton of other platforms out there and we don’t want to not give any of them credit to chat about but there’s limited time here on the podcast and we already take a good amount of your time and I think that all of these are just popular platforms we’re talking about. And you can see really the cost difference between them so now it’s about getting the business, right?
Now, we already talked about the folks who they’re making the decision to switch platforms because they already are getting the business through social media, through ads, through whatever they’re doing. So how do you get the business or want to move platforms and you’re not doing any of that. So you might sell 10 gift baskets a month off of Etsy for 50 bucks a piece and you’re one of those people that’s in that $500 range that I talked about off that website.
I did find another website that said successful stores sell 40,000 a month.
Mark Stephenson:
I bet they do.
Marc Vila:
So I don’t know how they determined what a successful store is.
Mark Stephenson:
I think they determined it-
Marc Vila:
But I did find-
Mark Stephenson:
… by the fact that they sell $40,000 a month.
Marc Vila:
Yeah. But I did find numerous other stores that said somewhere around an average was 500 or something like that and that seems to make sense, right? A lot of people are not going to be successful at all. A handful of people are going to be overwhelmingly successful and a bunch of people are going to live in this middle ground range. So if you want to build a website and then get found on Google, get found and-
Mark Stephenson:
Get found.
Marc Vila:
… people buy your stuff. How are you going to do that?
Mark Stephenson:
Right. And we’ve done a bunch of podcasts on that.
Marc Vila:
Okay.
Mark Stephenson:
So you’re are either going to do it through paid advertising, online paid advertising through Google or Bing or Facebook or Instagram or something like that and that’s probably the most likely place for you to get someone’s attention in the short term is by writing one of those platforms a check and seeing if you can get somebody interested in your products and go to your online store instead of your Etsy store.
Marc Vila:
Yeah. Yeah. And if you’re new to all of this and trying to figure out what to do, hopefully, you’ve learned a lot today, but you should go through and there’s other podcasts to listen to from us here at Custom Apparel Startups, we’ve got how to get found on Google, about social media, building niche markets, different ways to advertise, and those are huge conversations in and of themselves. That’s why they’re their own episodes.
But you can get a product and be a small business and decide that you want to sell a certain type of mug or hat or gift basket and advertise through Google search or Bing search or social media. You can advertise through influencers, become an influencer yourself, go viral. There’s a lot of different ways people sell and make money. Get referral business. A ton. Most people are doing it that way.
Mark Stephenson:
Yep. Sure.
Marc Vila:
And if you’re going to do any of those things, then you’re best to send it to your own store. Yeah.
Mark Stephenson:
I agree.
Marc Vila:
Because it’s going to be a lot less. It’ll cost you a lot less, it’ll give you a lot more control, and then there’s a whole another conversation about what marketing control you have when somebody is in your own store. Right?
Mark Stephenson:
I would like to bring up this and some of our customers I know do this is you really don’t have to decide between the two options.
Marc Vila:
Okay, great.
Mark Stephenson:
You don’t have to cut the strings with Etsy completely if you want to start another online presence. If you are starting to do the hustle yourself, you can create a store on Wix or eBay or BigCommerce or anything like that and then you can send all of your earned business, earned customers over to your platform and then just let Etsy introduce you to new customers. You can sell some things on there.
And then I think you had told a story about how you found something on Etsy and then ended up purchasing on a company website.
Marc Vila:
Yeah. Yeah. So some gardening, farming, hobby stuff I’m into and I was looking-
Mark Stephenson:
Legal. Legal.
Marc Vila:
I was looking for some certain things for that. And when I was within there, I was looking for basically soil nutrients and stuff like that for some products like that and I was looking for pre-mixed fertilizer type of stuff that was designed. Just specific stuff. And I found some stuff on Etsy and then I found separately some information on Reddit, I think it was, and I was just reading all around, learning some stuff, and then one of the person on Reddit had their own online store which was the same product that I’d seen on Etsy.
Mark Stephenson:
On Etsy.
Marc Vila:
So they had both and what they were doing was the hustling that they were doing on Reddit by being in forums, commenting, answering questions, recommending their products, they were sending to their e-commerce store, which was a simple Shopify store or something like that.
And then they also knew that other people were going to Etsy to search for their product and they had a store set up on there and the products were a couple bucks more on Etsy.
Mark Stephenson:
Right. Because they’re paying for the fees.
Marc Vila:
Because they’re paying for the fees.
Mark Stephenson:
But people are buying it on Etsy.
Marc Vila:
Yeah.
Mark Stephenson:
Right
Marc Vila:
At the fee.
So I remember I emailed and just asked about it. I said, “Oh, I do marketing. I’m curious.” And that’s pretty much what they said. They said, “Yeah, I get some business off Etsy. It’s done well for me, but I’m trying to work a little bit more and that’s why I’m on Facebook and Instagram and Reddit and things like that is because I’m trying to grow my own store too.”
Mark Stephenson:
Yeah.
Marc Vila:
So it’s very inspirational to see that you absolutely can do both and be successful running both and you decide which one wins, which one’s better, what direction you want to go.
Mark Stephenson:
And I don’t know what the service agreement looks like with Etsy, but I do know that a common tactic is if someone buys your customized product on Etsy, when you do the delivery, you can put in a flyer of whatever you want including links to your website, links to your Shopify store, your eBay store, etc., someplace else that you would rather they go and buy next time.
Marc Vila:
Yeah.
Mark Stephenson:
So in that case, you’re using Etsy as a marketing platform just like you would pay per click for a social ad. You are paying Etsy to be your social app.
Marc Vila:
That’s interesting. Yeah. I have no clue what the rules are for that but I know that I’ve seen at minimum a card come in with a product with social media platform like Instagram accounts and stuff. So that is interesting, but definitely, understand the rules for operating on there and they’ve got a whole page of rules you can find.
Mark Stephenson:
I bet they do. I bet they do.
Marc Vila:
I did see that today.
So I think that covers it all. So in the end, should you leave Etsy or move your store? Depends.
Mark Stephenson:
Yeah.
Marc Vila:
Maybe.
Mark Stephenson:
Good answer.
Marc Vila:
What’s great about it is since it’s your business, you get to pick.
Mark Stephenson:
Yeah.
Marc Vila:
And you decide what’s right for you. I just think that’s awesome.
Mark Stephenson:
Yeah.
Marc Vila:
Just in and of itself. Yeah.
Mark Stephenson:
And if you’re an Etsy seller now and you’ve got a big Etsy seller community that you talk to, hey, why don’t you share this podcast and let them decide for themselves, give them some tools to help make the decision whether or not they want to leave for another platform or whether they do the math themselves and realize that Etsy is still a smokin’ deal for their business, or if they want to try the hybrid approach and just start experimenting with the home of their own while they still rent their space from Etsy.
Marc Vila:
Great. Well, thanks for listening to the podcast. If you enjoyed this podcast and you aren’t familiar with ColDesi or Colman and Company, that’s the sponsor of this podcast per se. So you could visit coldesi.com and see all types of personalization equipment like embroidery machines and t-shirt printers, and I don’t know, basically, if you want to print on something, we sell a machine that does it.
Mark Stephenson:
Sure.
Marc Vila:
So check it out. You can live chat with folks there. If you’re running a store and you’re still operating off of a Cricut or a home hobby embroidery machine, we’ve got a lot of transitional stuff that is the next step for a ton of folks out there who are being successful. So check it out.
Mark Stephenson:
Great way to put it.
All right. This has been Mark Stephenson.
Marc Vila:
And Marc Vila.
Mark Stephenson:
You guys have a great business, Etsy or not.
Marc Vila:
Okay.