It’s been a little quiet round these parts, due mostly to the fact that we are now homeowners! It’s been exciting, scary, liberating and stressful all at the same time, but more than that it’s been taking up all my attention and so my to-do list has been getting longer and longer.
One thing that I managed to tackle once we finally unpacked and got our electrics/cooker/heating/water sorted (I will save this for another blog post, another day!) was to finally update my Etsy!
Whilst all the craziness of the house move was going on, Etsy had been going through some changes as well, changes that meant I needed to do some serious housekeeping on my prices.
To start, they had decided to shut down the wholesale side to the Etsy business, something that I was a part of. This didn’t upset me much at all, partly due to the fact that I didn’t get many wholesale orders through it, but mainly because this meant I could finally put my shop back into GBP.
You see, the main stipulation for being able to take part in the Etsy Wholesale program was that you had to convert your shop into USD. This meant that my UK based shop would then convert the USD into GBP and so create annoying prices like £3.78 instead of £3.50. I put up with it for the whole 3 years I had it because, as with anything in business, I had invested money into it and I had to see it through to get that money back. That’s just how stubborn I am!
However I am now so happy to say that my shop is finally back into whole rounded numbers, which makes shopping so much easier for you guys. There’s nothing I find more annoying, and also a bit suspicious, about a shop who has strangely priced items – it almost gives off a whiff of not knowing how to price your items, and even like you’re just throwing any old number out there to see if it sticks!
Which leads me nicely onto the second massive Etsy update that happened whilst I was polyfillering my bathroom; Etsy now offer sellers subscription platforms which offer different incentives to help grow their business.
As with being frustratingly stubborn, I’m also happy to jump onto any new bandwagon to give it a go. I knew that Etsy were going to be increasing their commission percentage for their sellers, so had prepared myself for having to rework my pricing and figures.
In taking on a paid monthly subscription to help my business along I also knew this cost would had to be covered so I did the math, crunched the numbers, and fretted a lot to get to the point where I went and increased some of the prices on my site.
It’s hard for me to sit and type this to you because I feel like I must justify myself for my decision, however, I realised that in doing this exercise I was not being fair to myself. I am CRAZILY going to attached a screenshot of how I calculate my prices to show you, for transparency:
So this example is for my A6 notebooks which are now £6.50 up from £5.
This section shows how much each element of making my notebooks costs me + the Etsy transaction/sellers fees + overheads. This is then divided by the number of items I make approximately each year…
Next, I then calculate how much I’ll get paid an hour (note, my wage is the standard Living Wage for outside London). These two sets of figures then create my breakeven price – this is the price I would have to sell at just cover the bare minimums, and this doesn’t even cover my mortgage, or profit in order to invest in new business.
Hope you’re following me so far! So now here’s the nitty gritty because this is where I get my grubby greedy paws to put on profit. This profit is what is going to help keep the lights on, feed and clothe my kid, pay my mortgage and most importantly keep my business running.
Now as you can see, I’ve only gone for a 130% profit margin to see to you guys – why? Because I want to make sure that I can offer not only a good price to everyone, but also a fair price to my wholesalers. I’m not even getting 130% profit from my wholesalers, as from them I would only get 115%. That’s not a lot really, when you think there are huge companies who manufacture abroad and have 800 – 1000% mark ups!
Pricing is a tricky thing right? I want to make you guys happy, and to respect your wallet. And I also want to make my wholesalers happy, and respect that they too have a shop and a dream they want to keep running. I want to give everyone the best chance at winning. But I also have a home to run, a child to care for, and bills that stack up.
Sorry, I need to do some winning too!
I wish I didn’t have to justify my prices to those mean customers who seem to think that what I offer isn’t good value (erm, hello?! They’re custom illustrated!) and obviously that’s not you guys (I love you guys!) but I thought it would be somewhat cathartic and terribly open to just show exactly what goes in to pricing every little thing in my Etsy shop, even those tiny products that you wouldn’t even think would be a bother.
It’s hard. Really hard. And I still cringe every time someone asks how much something is at one of my craft stalls! So I hope that by showing you this very private thing that no one likes to talk about (people don’t like to talk about money do they?!) it may give you guys an understanding on where, how and why I have come to increase some of my prices.
Feel free to head to my shop and take a look, and by all means I totally appreciate your feedback on this very sensitive subject. I love running my business, and of course creating on a daily basis so I hope that this little increase will not deter you all from stopping by and having a shop.
Much love on this rainy sunday,
P.s. If you have found the spreadsheet I used enlightening for sorting your prices, then check out the Etsy handbook which is where I downloaded an old template from. It’s easy and straightforward to use, and has really helped me get my head around pricing and overheads!