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You’ve decided on an original product. You’ve polished and refined your creative techniques. Are you ready to open an Etsy shop yet? Make sure you’ve followed these steps to get organized to open an Etsy shop! Even if you’ve already gotten started, you might find some of this information helpful to keep you organized.
The Cost of An Etsy Shop
Etsy makes setting up a shop easy and provides its sellers with a ton of different resources to help them be successful on Etsy. There is a lot to learn, but it’s simple to get started. First of all, if you know someone with an Etsy shop (like me!) you can get 40 free listings to start with! The listings on Etsy are normally $0.20 apiece and stay active for 4 months. When you make a sale, Etsy will take a fee (currently 3.5% of the purchase price. Depending on the way the item is purchased, either Paypal or Direct Checkout will take an additional fee for processing. Be aware of these fees when you calculate how much you want to charge for your items.
Etsy also provides shipping options through USPS. These are discounted prices, so I definitely recommend purchasing your shipping through them. You can get a cheap postage scale like this one, print labels at home (I use this Brother printer because of its toner efficiency and these labels) and you can ship items directly from your home either through your mailbox if it fits, or by requesting a package pickup on the USPS website.
Opening an Etsy shop means opening a business, and there are a lot of steps you’ll have to follow and hoops to jump through to do this correctly. More confusingly, it varies from country to country, state to state, and even city to city. Do a quick Google search for opening a business in the city you live in to begin researching what you will need. In the US you will want to apply for a tax id number which you can use to avoid paying taxes on store-bought items and collect appropriate sales tax to pay to your state. Etsy makes it easy to set up your shop to collect sales tax in your state. You’ll want to be in contact with your city as well about restrictions for businesses. For example, I can sell items online from my home, but I can’t sell items directly from my home to customers. I recommend setting up a small business account at a bank as well as a separate paypal account to keep all of your money separate. You can deduct money from this to pay yourself, but keeping personal and business expenses separate will save you a big headache come tax time. You’ll also want to determine how you’re going to keep track of your expenses and income. When I started my Etsy shop I used an Excel spreadsheet and just made sure that I kept all of my receipts. Now I use Go Daddy Bookkeeping, which automatically imports all of my income and expenses through Etsy, Paypal, and my bank account, sorts them based on category (like shipping, supplies, or Etsy fees) and generates the paperwork to give to my accountant to prepare taxes. I definitely recommend hiring an accountant to help you with your taxes. He or she will be able to help you find the appropriate deductions (you can deduct an area of your home for home businesses, gas for travel to the post office or store to purchase items, etc.) and will let you know at what point you no longer have a hobby but a business you have to pay income taxes on.
Setting Business Goals
Decide on an initial goal for your Etsy business. Your goals will change and grow as your shop changes and grows, but having an initial goal will help you get started. Be sure that this is an achievable goal. When I first opened my shop, I was spending about $300-400 a year on craft supplies. My goal for my first year was to simply be able to support my crafting habit. Another goal I have had in the past was to pay for a family vacation. If you want to try to replace a full-time income in another job, be aware that this may take several years to get your shop to this level, and very few shop owners become this successful.
As well as goals for income, set goals for time management as well. How much of your life do you want to dedicate to having a successful Etsy shop? I see so many shop owners in my various Facebook groups who want to stay home with their young children and replace a full time income right when they get started. This is ambitious not just financially, but time wise as well. I’ve stayed home with my kids for almost 8 years now and had an Etsy shop for 4 of those years. Even though my children are 4 and 7 now, I am very rarely able to get any Etsy work accomplished when I am their only caregiver. I do most of my work when they are at school, in bed, or being cared for by my husband. As strange as it sounds to tell others this, I have had to purposely limit my business growth during this time in my life to be sure that I could juggle all of my obligations. I hear of Etsy sellers all the time who work full days taking care of children or at jobs and then come home and sacrifice sleep for crafting. Other Etsy sellers have found success but only by working 80 hours a week. You can only sustain this lifestyle for so long. Other things in your life will be sacrificed. For some people that may be acceptable, but I recommend deciding before you get too far in how much of a space in your life you want your shop to take.
Many Etsy sellers go into business because they love making things. As you plan and get organized for opening your Etsy shop, be aware that only part of your time will be spent making the items you sell. You will also need to spend time:
- Writing listings
- Photographing items
- Talking with customers
- Shipping items
- Handling problems (lost or damaged shipments, dissatisfied customers)
- Marketing items on social media
- Purchasing supplies
- Researching trends
- Designing marketing materials (business cards, packaging inserts)
- Developing new product ideas
- Improving product listings (SEO, etc.)
It’s easy to get carried away and spend a day researching trends or spend an entire morning just trying to design a business card. There is always more that you can do to improve your shop. You need to decide how much time you’re going to dedicate to these things, because these are really the “unpaid” part of your job. I would recommend scheduling your working hours and sticking to them. Also, use your time wisely. If you’re going on social media for work purposes, don’t allow yourself to get distracted by personal business. When trying to manage your time, also take into consideration when you work the most efficiently. If you have good energy first thing in the morning, maybe use this as the time you actually create your products rather than starting the day with convos or social media. Use the time you spend waiting in line at the grocery store to renew listings or respond to comments on social media, since those things don’t require as much focus or time. But don’t try to do things that require more focused attention, like answering customer convos, while walking the dog or feeding your kids lunch. Sort your responsibilities and tasks for efficiency and you’ll be able to best take advantage of the time you have and provide the quality customer service Etsy customers have come to expect.
I hope that some of these ways to help you get organized in your Etsy business will be helpful to you. If you have any hints or organizational tips that I didn’t include, please include them in the comments below. I’d love to hear what you do to stay organized!
For more Etsy tips, check out my other blog posts: