Why I Closed My Etsy Shop

From the day we decided to sell our products outside of giving them as gifts to family and friends we’ve had our own KauaiGirlSoap.com website right here. It’s a great website, it’s easy to maintain and it produces. And three of the best reasons are; we don’t get charged per listing, we don’t get charged a commission for sales and we’re in total control of everything on it.

But as a business owner, we’re always looking for MORE!!

Looking for More

Business owners are always looking for more sales which means more customers and more time spent making the products your customers desire.

Actually there comes a point where as a small and literally “mom and pop shop” you can only make enough products to go around so far. We couldn’t advertise with talk radio as 1- we couldn’t afford it and 2- we couldn’t keep up with the demand and we’d have upset customers. Nevertheless, we were not only prepared to kick it up a little more, but we were encouraged by the feedback of our family, friends and current customers encouraging us to expand and get our stuff, products that they love, into the hands of others. Word of mouth is great and serves us well, Social Media is tricky and Google is always changing. So, looking for more ways to get our wonderful products into the hands of new people we began looking and reaching out.

The Recommendation was Etsy

When we first started our Quest, Etsy was the word on the street. Etsy was everything and a bag of cookies for anyone with a quality handmade in the U.S.A. product.

Okay so Etsy was touted by family, friends, customers and fellow handmade sellers to be the End-All, Be-All place to sell handmade products. We did some research and saw people making $4,000 a week or more and that caught our attention.

Etsy had just completed is first $4M year in sales so it was to say the least, interesting to look at.

Yes, we have bought a ton of stuff from Etsy Handmade Shops and I it really looked like the perfect second home for our little handmade bath and cosmetic products business.

It was simple enough, albeit there were MORE FEES to contend with, and we had to either raise our already low prices or bite the bullet and absorb the additional Etsy fees over our own website.

We thought that Etsy would give us a greater exposure to the crowd buying handmade products…

So we opened an Etsy shop and started listing products.

Pay to Play

Once we were up and rolling, we learned that for MORE money we could promote our listings.
That sounded great. We could BUY our way onto people’s screens.

So what did we do?
We took our Google Ad Words budget and spent the money with Etsy and promoted our listings there.

Follow the Yellow Brick Road

We started our adventure putting products on our Etsy Shop. Then we read all of the Help and How To articles we could find. We watched YouTube Videos and talked to anyone with Etsy experience we could find. We’re not in those circles so finding Etsy successes was sparse. We did find a ton of people who were Etsy shoppers though and they all had ideas for us.

We learned how to use all of the space available for each product title and description. We learned how to dress up our descriptions. We learned about Etsy SEO Key Words. We already knew how to photograph and edit the pictures to make them look identical to our products as Brad used to run a multi-million dollar web shop doing that very thing for customers.

We worked long and hard to make everything perfect and follow in the tracks of successful Etsy sellers.

And what did we see?

We saw tons and tons of Favoriting on our products but we didn’t see an upswing in sales.

We believed that people were probably just favoriting our products to save them and then BUY them later.

We saw a trickle of sales but nothing exploded in comparison with the explosion of numbers favoriting our products.

We literally had THOUSANDS of favorites on our products but the only shop making money for our products was ETSY.

If each of the favorites were a sale, we would have been doing thousands per week in sales.

You’ve Got to Spend Money, to Make Money

We were spending up to 30x more than we were making in our Etsy shop, month after month after month.

Sure, it’s all a tax right off but we got into this business to SELL our products, not just pay to have them listed. We didn’t even mind that selling on Etsy was costly as Etsy charges you for the listings of each item and each auto-renewal and you want to auto-renew so that your products are always available for sale!! Etsy then charges you all of the credit card fees on each sale AND Etsy takes a commission for each sale. All in all, you don’t get it all, Etsy always gets their share.

Etsy wins at every turn and you only win if Etsy’s website provides sales.

So What’s Happening With Etsy?

When Etsy first came on the scene, their focus was on making their associates (shop owners, you and I) successful. After-all, if the sellers were making money, Etsy was making MORE money. Their focus was on “Handmade” items which made it an outlet for hard to get, personally handmade crafts. The concept was right on… as long as Etsy stuck to THAT concept.

Oh there’s a ton of speculation on what is happening on Etsy now but I can sum it up for you in one word. Take your one word choice from these two, or choose them both: MONEY or GREED.

It May Take 4 Months!

Some people said; It will probably take 4 months before you start seeing sales.

Well, now more than two years in and we’re not seeing the sales, but we really see the favorites. The problem is you can’t eat “Atta-Girls”, you need sales.

Some say; “It’s your pricing!

You need to get your pricing down!”
I would reply; Our products are handmade, with love and personal care and we can’t complete with commercial products. In fact HANDMADE never competes with commercial. It’s way better and worth way more because of it.

However, I’m never one to say something is WRONG if I don’t know it for sure so, to test the theory that our prices were too high (and they weren’t) we lowered our prices.

Did that result in a change?

After all everyone who had favorited our items would be notified immediately by Etsy’s system of the change in prices, BUT

No Change.

No upswing in sales. In fact our sales still remained at less than 5 sales per month.

So what did we do?

We adjusted our pricing to the BARE BONES.
WE CUT our profit to pennies. Way lower than our prices at craft fairs and our own website.

Did that make a change?

NOPE! Sales stayed the same.

So again, what did we do?

For ONE we continued to PAY ETSY for listings, commissions and promotions. PLUS we offered FREE GIFTS with every order, gave many of our products FREE SHIPPING and we continued to pay Etsy and pay Etsy and pay Etsy.

Did that make a change in our sales numbers?

You’ve got it…. NOPE!

It’s like a gambling addiction and the house ETSY always wins.

Was our Etsy SEO Working?

Yes, and the way to know if your Etsy SEO is working is that people are Buying or Favoriting your items. If you’re getting in front of people and they take some type of action on your item, your SEO is working. They searched for something and saw you… and took some sort of action,,, Favorite or Buy… That’s successful SEO.

Oh, yes. Up to the day we closed our shop, we were still getting an average of up to 10 new Favorites on our products everyday, seven days a week and our overall favoriting numbers continued to climb, but our sales…
Our Sales Remained BLEAK.

Yes, logically you would expect that when people Favorite one of your items, some will come back and buy.

We Did Even More Research

Okay, so I began searching for our products on Etsy to see if our products showed up. After-all, we were paying Etsy SEO to get high placement on searches.

When we didn’t see our products, we looked at the products we were shown and guess what we found.

First, we were shocked when found people selling products, like ours, for less than 1/2 what it cost us in just ingredients with no labor and we buy our supplies in bulk and get better prices than most soapers.

The next thing we found was that many products like ours, were priced even HIGHER than ours and which looked rougher (and I might even add crude looking). And worse, we saw information on those items like; 23 people have this in their cart…. Wait!

WHAT?

We’re paying for top SEO and we’re not there and the one’s that are are more expensive, less appealing and are showing that 23 people have this product in their shopping carts.

I could see if the products were LESS in cost, but we’re seeing a huge number of successful sellers, with products in many peoples shopping carts at HIGHER prices than our products… What Gives? I thought.

In a moment I’ll show you how the Etsy FIX IS IN and why we got out.

Armchair Quarterbacks

It’s humorous to me that so many people that we know and talk with have suggestions for us which all require that we KEEP PAYING ETSY but every one of these advice toting Confucius wannabe’s are Etsy Shoppers and don’t really have a booming Etsy business, so why should I believe what they tell me? I opted to do my own research and find out, if I could, what was happening in the Etsy Universe that kept our planet on the dark side of the moon.

Being Positive is one thing,
but just because someone says it’s “so”,
does not make it “so”.

Our world today is filled with people and politicians who believe that they are just exploding with wisdom. They believe that just because they say it’s “so”,,, makes it “so”. Try telling the police officer who pulled you over for running a red light that the light wasn’t red at all, but GREEN and see what the officer says!!! I’ll tell you what the officer will say; “This is not an admission of guilt, just a promise to appear. Sign Here. Press Hard, three copies”

Yes, I do believe in the power of positive thinking and affirmations, but those are for one’s personal self betterment. Telling me that, you’re being positive and you’re having affirmations for my business, does not change the fact that people are clicking the LIKE button and not the BUY button.

So WHAT has happened to ETSY?

Something changed at Etsy that has a lot of shop owners, like me, shuttering their Etsy doors. Many people started with Etsy and saw BOOMING businesses only to see the boom quickly fade and taper off or die completely.

I’ve always had the suspicion that one of the big changes that Etsy made along the way, was that they became; All About The Money and not about their customer…. the seller, and my research has confirmed my suspicions.

As a side note, Ebay and Paypal have also gone the same direction. It’s all about the money.

Note on Paypal

Paypal used to guarantee every purchase. If you weren’t happy they’d refund your money and they would deal with the seller. If you didn’t get what you ordered but something slightly different (bait and switch) Paypal would refund your money and they would deal with the seller.

Now it’s not so. Paypay does NOT guarantee your purchases like they used to. In fact I just bought some clothing from a seller in China to give as Christmas Gifts. I ordered the items 2 months before Christmas and they showed up 1 week after I started a refund request. They showed up on Christmas Eve and worse, they were so seriously flawed that they are un-wearable, let alone gift-able.
So what happened??? Paypal said that because I got the items, their guarantee would not cover anything else… WHAT?

Word to all you who use Paypal…. Use it for the convenience not the guarantee from which they built their business.

They make their money from the sellers, not you the buyer.
They consider You, expendable.
They consider the seller, their cash cow.

Why do I talk about my Paypal experience?

For these companies, Etsy, eBay, Paypal and I’m sure there are more I don’t know about yet… for these companies, its all about getting and keeping the SELLERS who are making them money.

Etsy takes it one further, they need all of the sellers, but they only seriously protect and cater to the ones who they deem worthy of their focus to make sales. If you have the products that they deem worthy, they’ll promote you and make you successful. If you’re a second comer or don’t have the flash products that they think will really sell… you get the cheap seats in positioning.

For Etsy and Ebay then, it’s all about the listings. That is their primary money maker and they consider the profit from their commission on sales as the Cream of the Sale. The renewals of the listings are a constant “Cha-Ching” for Etsy and Ebay. So what did ETSY do that caused all of us little shops so much grief and hardship?

They allowed foreign sellers in, most of whom are not selling HANDMADE items AT ALL. It’s pretty obvious that many of the items on Etsy today are NOT HANDMADE anymore, yet “Handmade” is Etsy’s mantra!

Oh, to fix that, Etsy has created the ability for you as an “Etsy Seller” to “Partner” with a manufacturer,,, yeah, right! You can now Partner with a Commercial Manufacturer and sell it on a “Handmade” site!

The Definition of Insanity

It’s all about the number of listings that renew over and over again to the house (Etsy). I began realizing that I’m the idiot here. I’m the one described in the “Definition of Insanity” (which is; Doing the same thing over and over again and expecting a different result). Renewal after renewal, favorite after favorite, and little to no sales. And Me hoping that in all of the money spent, and all of the favorites clicked, that SALES were just around the corner… This is definitely the definition of insanity.

The FIX is in…How Does This Happen?

I was shocked when I found sellers with inferior products to mine, priced higher and having hundreds and even thousands of sales, not to mention looking at their products and seeing 21 people have this in their shopping cart. I didn’t see that with my products, that were less in price, with a free gift and free shipping… So I started searching and watching successful Etsy sellers to see what they knew that I didn’t.

What I found is not that they knew anymore than I did, I saw that they had thousands of sales and I realized that Etsy is actually giving sellers preferred PREFERENCE. People who have made Etsy MORE money than we had paid in, got preferential SEO placement. Preference so that they were actually converting Fav clicks to Sales.

This became extremely evident when I started paying attention to the number of people with products in their carts with sellers who had hundreds and moreover thousands of sales, versus sellers starting out with none to just a few sales. What I saw was the price didn’t matter. Free Shipping didn’t matter. Free Gifts with every order DIDN’T MATTER. So I began to search the web and found quite a few people who had uncovered the same shocking stats that I had just uncovered.

My theory of “It’s all about the Money” seemed to be right on “Money”,,, wink…wink!

My Observation of Favorites

So as I said above, we’ve watched the number of people favoriting our products growing daily. But I believe this is false misleading information from Etsy.
No, I DO believe that people are actually favoriting our products, I favorite other people’s products that I am interested in so I can go back and buy… and I do go back and buy. But if I don’t go back and buy, I usually UN-FAV the item.

My observation is that I NEVER get notifications when people UN-FAVORITE one of my items, nor do I see my totals of favorites get less.

This is mis-leading information.
It leads me to believe that all of these people still have my products in their favorites list and that leads me to FEAR closing my Etsy shop because I might KILL potential sales. It leads me to FEAR letting one of my “Favorited” items expire as I might miss a potential sale. So I let them keep auto-renewing… “cha-ching, cha-ching, cha-ching” for Etsy.

The problem with all of this is that those sales are still POTENTIAL and have never materialized. It they were going to materialize, logic says that there would be a conversion rate from FAV to SALE. A percentage, if you will of Favorited items would actually sell over a month or two…

Prolog

If you’re an Etsy Seller and you’re actually making sales CONGRATULATIONS. You did something right to get their (or their algorithms) attention.

If you’re thinking about opening an Etsy Shop for your products. Do more research. Don’t take my word for it on a global aspect. What happened to me has happened to many others but there are a few who are making money with Etsy. I believe there are more people paying fees and seeing few to no sales over those who are successfully making a living, or even good extra money.

I also believe that Etsy is over booked. They have too many shops making similar items and not enough customers to go around.

I also believe that people are now BARGAIN shopping, versus QUALITY shopping. There are so many foreign sellers cutting prices that true U.S.A. Handmade items are not so prized by buyers. When the market floods with cheaper goods (cheaper in price, also means cheaper in quality) a different clientele starts shopping on Etsy and I believe this cheaper clientele is more price conscious versus made in the USA quality.

Foreign Sellers are Subsidized

I’ve bought items that come from China and I was shocked when I saw what they pay for postage to get it from there to me in the U.S.

I started researching and found that WE all pay for their postage…

WHAT again??

The U.S. Postal service subsidizes a huge amount of foreign postage coming into the U.S. I don’t really understand why and how but a seller in China can send me an item for TWELVE CENTS and it comes 9,796 km (6,087 miles). Most packages come via air too. Okay, I can’t send the same package from Duchesne, Utah to Beijing for twelve cents. So I asked my postmaster how that happens. He said the U.S. Post Office subsidizes it.

No wonder our postage rates are going up and they’re going bankrupt.

Even more, it’s no wonder Etsy an eBay are swamped with foreign sellers offering FREE SHIPPING… U.S. Handmade business can not compete.

Part of the problem is also the growing numbers of people who are willing to buy from foreign sellers and take a lesser quality item with free shipping, all for a price I can’t even make my version of the product for, and WITHOUT even accounting for a small labor cost or profit margin.

To each his/her own.

I’m too old and now too tired to keep trying to play by Etsy’s unpublished rule book.

So, this is where insanity stopped.

We Closed Our Etsy Shop and consequently stopped hemorrhaging money.

We’ve now got a small budget to do something else with. I’ll keep you posted when I find something that works like a normal person would expect.

Thanks for reading…