Pages

Friday, October 15, 2010

Q: How did you go full-time on Etsy?



I get a version of this question very often, so I figured I should write a post covering this topic so I can link back to it when asked again. :)

Note: I have never had the luxury of having a stable income, ever.  I don't know what it feels like to make the same paycheck every other week, so going full-time was not a tough decision for me.  Ignorance is bliss, right?

Anyway, I decided to switch from Biomedical Engineering to designing hand bags because I love fashion. Way more than medicine.  So then I thought, "If I can design medical devices, I can certainly design hand bags that are both aesthetically appealing and high in utility, right?"  I'm an engineer, afterall! :)

That leads me to my first point.


1. Be Confident (Believe in Yourself)
It's a competitive world out there. For as many people who LOVE your product, you'll run into 5X more who HATE your product, and maybe hate you, too. And hate what you stand for. And they'll tell you. Not in a tactful way, either. Develop thick skin and keep going. I have a wonderful support group (parents, brother, boyfriend, dog) who continually feed me positive energy when I run into mean/negative people.


2. Offer a High Quality Product
Starting a business from scratch is difficult when you don't have any start-up funds. I had to start with the highest quality of supplies that I could afford at the time with the money I made teaching Yoga, Pilates and doing graphic design work for start-up biotech companies while in college (and racking up tuition debt). Then I needed to make enough sales to buy higher quality supplies to make my products. It takes time, but always use the highest quality that you can afford. It will pay off in due time.

Price your product appropriately. Here's a possible formula:

(Supplies x 2) + (Hourly Wage x Hours) = Wholesale Price
Wholesale x 2 = Retail Price

To keep my products affordable, my formula is very close to the wholesale formula --which is why I don't work on wholesale or consignment basis (which is why you don't see my bags in stores or boutiques). When things get unmanageable for me to be the sole proprietor and I need to hire help and/or expand my brand, I will make improvements and adjust my prices accordingly.


3. Calculate Your Salary
 
Rent/Mortgage + Tuition + Phone + Dog_Supplies + Car + Gas + Insurance + Food + Utilities  = Basics_Year

Etsy/PayPal Fees + Product_Supplies + Shipping_Supplies + Tools + Vendor_Events + Travel + Advertising + Misc_Services = Business_Year

Basics_Year + Business_Year =  Yearly_Expenses

Yearly_Expenses/12 = Required_Monthly_Sales

Yearly_Expenses/365 = Required_Daily_Sales

Desired_Salary - Yearly_Expenses = Profit
Desired_Salary/12 = Ideal_Monthly_Sales


Knowing your required DAILY sales will make sure that you stay on track with promoting your product and will keep you from the temptation to buy more supplies than you need because it will start eating up your Profit. 

It has been 1 year since I started full-time, and since I avoided splurging on luxury items, I managed to recover my Yearly_Expenses. My next goal is to reach my Desired_Salary.

When I reach my Desired_Salary,  I can then start thinking about investing in an IRA and planning for the future. Baby steps. 


4. Take Beautiful Photos
Good advertising starts with good photography. No matter how good you think your photos are, they aren't good enough. 

I am still improving. I will always be improving.

I started with an inexpensive point-and-shoot and now use an inexpensive DSLR.  I depend on my composition to keep me from having to do anything fancy to show off my products. I try to make my products speak for themselves. I do very little manipulation to the photos, usually just adjusting brightness and saturation because my camera tends to make pictures look TOO saturated, so I end up de-saturating the photo so that it looks as true as I see it.


5. Be Honest - Use Facts
People don't like to be pressured into buying. If you have accomplished #1, #2, and #4, you can trust that your products will sell. People can see quality and will pay for it. Hard selling your product will only turn off your customer. Rather than concluding that a customer may need one of my more expensive products, I just use facts to let the customer decide which product is best for them.

For instance, if a customer asks what bag would best fit their necessities, I state the dimensions of all my products and let them decide which size will best work for them. I sell with facts, because facts don't have bias and customers do. Let the customer decide.


6. Join the Social Network
In addition to the marketing that Etsy does for their venue, I use Twitter, Facebook, and this blog to keep the world updated on my business. This also gives me the opportunity to get real-time feedback on new products, new supplies, etc. Staying in touch with your audience gives your audience a look inside your life and let them know that they are buying a product from a real person. 


7. Join a Team
I joined a treasury-making team on Etsy because I love to make treasuries (the collection of items you see on the front page of Etsy, they are curated by Etsy users and some are published to the front page). I am now one of the leaders on that team. I love it and it makes the Etsy community feel a little big smaller and more personal.

It's good to find support outside of your direct friends and family. A group who understands the nature of your business. They will end up being some of your closest friends. :)


8. Invest in Advertising
This requires research and is completely optional. It's a good supplement for slow months.  Make sure the blog/website reaches your target audience and is in your budget. A graphic that is simple, appealing, and makes people go, "Hmmm... ::click!::" is your key to success. 


9. Participate in Vendor Events
I just recently started doing this because I can finally afford traveling to sell my products in person.  I receive very few sales from Texas, so my instincts tell me that I may not find a lot of success selling in person in Texas.  Though I do get many orders from Chicago, so I participated in Renegade Chicago and sold half of my inventory (25 bags). I went against my instincts and tried an event in Austin two weeks later and sold 2 of my 50 pieces of inventory. I didn't even break even with the event cost after 1 week of non-stop sewing + 22 hours of sitting at the 2-day event.  I cried.  But then I remembered #1 and #2 and just filed that experience under "Hard Lessons Learned" and now fully understand the quote, "Go with your gut."

Follow your historical sales. Mine are in SF, LA, Chicago and NY. So you'll find me at more shows in those areas in the future!


10. It's OK to Say No
I get a lot of questions to participate in this vendor event, sponsor that blog, modify my bags this way, and trade with that seller.  If you don't want to do it, say no. Nicely, of course.

Remember: Time is money. If you spend your time doing things that don't pay off, you've lost money. Spend your time and money wisely!


11. Why Etsy?
I chose Etsy because it is the best market for selling handmade products. Period. Nothing can compete with the marketing and networking that Etsy invests in their venue. 



This is not, by all means, an all-inclusive formula to going full-time, but some of the items that I felt should be in the Top 10 (well, 11) for turning your hobby into your full-time job. If you have anything that you'd like to add or any questions, please feel free to post them in the comments section.


p.s. I only have 2 more of the Traveler in Orange/Brown Plaid left (pictured above).  If I can't find more of that fabric, it'll be sold out! :D

19 comments:

  1. thanks for this info! i've been thinking about setting up an etsy shop myself, but haven't quite figured out everything. this is very helpful

    ReplyDelete
  2. i really hope NY renegade is still in your future!! would love to meetcha.

    btw, my apt is a perpetual mess since i've started working full time+ the shop. your magazine is somewhere beneath piles of clothes and will be sent once found. promise.

    xo m.

    ReplyDelete
  3. Anyone with a BS in Biomedical engineering knows it's useless by itself. I switched out of BME as well, but working hard comes with any field you get into. Good luck with your design; no great thing has been done without passion! =)

    ReplyDelete
  4. Michelle! I do plan on coming to NY in the very near future. We shall meet up for sure.

    Sam, it's true. The good thing is that my degree didn't totally go to waste - I still use the design principles. And there's tons of inspiration from our classes. I'm pretty sure my Baby Ruche bag somewhat resembles something from engineering physiology...

    ReplyDelete
  5. As a former mathematician, I think it's a great article! :)

    ReplyDelete
  6. Thank you for sharing this information!! I'm just getting started with opening up my etsy shop and this is so helpful!

    Jen
    www.JennieClaire.com

    ReplyDelete
  7. Very interesting post. Thanks for sharing.

    ReplyDelete
  8. Great information! I love your handbags, they are so beautiful!

    ReplyDelete
  9. cool! thanks for this list. i especially like the formula for expenses, profit, salary, etc.

    ReplyDelete
  10. I came across your bags a few days ago, and I really really love them.
    And now, I'm glad I came across this blog post.
    As a college senior, I'm starting to realize that nothing besides writing fiction, making things out of felt, and watching films holds my interest for very long. Great advice. I hope to implement it somehow. :)

    ReplyDelete
  11. Very helpful and well written! Sounds like you have a good head on your shoulders. Continued success!

    ReplyDelete
  12. i am in love with your bags!

    ♥ lillith

    http://www.lillith.etsy.com

    ReplyDelete
  13. congrats on your success, and thanks for sharing your wisdom!

    ReplyDelete
  14. What a tremendous help! Thanks for putting this all down.

    Kelly

    http://www.lambsears.etsy.com

    ReplyDelete
  15. thanks so much for a great article!

    ReplyDelete
  16. hey, thank you for this! Practical, motivating advice. I am posting a link on my blog that nobody reads (cause I haven't told anyone about it--not sure I will stick to it yet!) and also sending this to a few creative friends.
    found you from the ohhellofriend blog.

    ReplyDelete
  17. Congrats on your success. I think lesson #1 is the most important and can never be overlooked.

    Nikki
    nkhenrylifestyle.blogspot.com

    ReplyDelete
  18. Thank you so much for writing this great article and publishing it for anyone to see, for free. There's gotta be heaps of good karma coming your way! The "calculate your salary" part is especially helpful.

    ReplyDelete