Why Etsy Sucks

*** DISCLAIMER: I tried and left Etsy some time ago. The recent experiences speak not to Etsy, but to the dynamics and shortcomings of Etsy's model ***
Thanks Canada Post
I fight crickets. Crickets are that sound you hear when nothing else happens. Comedians hear it when they suck. I hear it when I put something out there and no one notices it. For example, over a year ago, I began re-imagining lawn ornaments as zombies. I dislike lawn ornaments, so I thought it was a befitting response to give the critters an undead patina. In the last year, I sold one, gave one away and then a month or so ago, I got a request to send out another one-- for cash! I mailed it. Supposedly, the address was incorrect, so it meandered back. Canada Post wanted to charge me to send the item, and they wanted to charge me to get it back. I sent it under a rate to be delivered in 5 business days. It took 15 business days to wander back. I was able to argue into not paying to get back what Canada Post failed to deliver. I heard a rattle when I obtained the package. One side was caved in. It was clear that a 2:1 ratio of packing peanuts to goods was not good enough. The gnome was smashed up. The sloppy handling of packages benefits Canada Post: the way to ensure that your package arrives safe is to really overpack it and up its gross weight. I packaged up an alternative gnome for my understanding customer and sent off of. The first time, it cost $26.20, didn't get delivered and did return busted. This time, I added a lot more packaging (including an additional layer of cardboard). To deliver this new package would cost $44+. Thanks, Canada Post!

Either we suck at shipping or shipping sucks. When we sold alot of stuff via eBay, shipping was our Achilles Heel. A $10 book cost the buyer $20 ($10 for the book, $10 for the postage). The math doesn't work. When it's mailed there is a chance it won't arrive because of the delivery chimps (I worked in Canada Post-- there is total disregard for the packages). This is why I have not embraced Etsy. My items at Etsy never sold. Items that hit the front page moved. Items that got attention through outside means sold. It you listed an item Etsy all you accomplished was wasting some time and funding Etsy. Some people sell stuff via Etsy. When I do the math, I shake my head. A great mentor, Richard Tucholka from Tri-Tac Games gave me some insight in the formula for manufacturing. Your manufacturing cost has to 20% of your intended retail price. He wasn't trying to rip people off-- to the contrary, he nailed it. Let's take one of his cool books (eg. a Fringeworthy supplement):

$2.00 - Printing
$2.50 - Royalties, profit, Michigan yacht tax, etc.
$1.00 - Distributor cut
$4.50 - Retailer mark-up
------
$10 - Retail price

If you handcraft an item for Etsy, it's manufacturing cost needs to look something like this:

$2.00 - Supplies (rafia, wool, glue, etc.)
$20.00 - Construction labour (1 hr. @ $20/hr.)
$10.00 - Listing time (photography and copywriting) - 0.5 hrs. @ $20/hr.
$0.55 - Etsy listing and comission, if sold.
------
$32.55 - Retail price

As a customer, would you pay $32.55 for an item that had $2.00 in supplies???

For me and my lawn ornaments, I cheated the curve. I figured that a $30 lawn ornament-- after I do my handiwork-- is worth $35. I could have delusions that I've made it become a $100 artifact, but that's a demented fantasy. So, I widen that gap of $35 retail vs. $30 market baseline by buying the lawn ornaments off season. These bunnies and gnomes are plastic gold in May, but come August, they're the ugly girls at the prom. I buy them cheap, doctor them and let them linger for 9 months listening to the sound of the crickets.

Buying them cheap doesn't get past the Postal problem (no wonder people go Postal). This isn't the problem we see in retail. I've worked retail, I've seen the shipping costs. The cost per item drops because of the items are bundled by the distributor. There is a baseline expense per package. Ramping up the size of the package and its weight doesn't make an exponential expense: it levels the curve. But that theory can't work. The market is made of individual crafts sold to individual people. You can't make someone buy multiple items.
So, in a market where unique creations go to individual buyers, how can you beat the curve?

Some thoughts:

Sell the idea, not the product. I can't work a craft show because of how many people walk by items and say, "oh-- I could make those." Yes you could, Brainiac. Thanks for the demoralization. Martha Stewart has founded an empire (its appropriate theme song is the Imperial March) by showing people how to fashion things out of craft supplies (ah, what a lovely coffee table you made out of ribbon and polymer clay). Make videos and photo essays on how you did it. Then, monetize the how-to with Google Adsense.

Give up on Etsy. Unique handicrafts and the Internet mail order don't mix. Maybe that's true. When you weigh how much you would get paid slinging slurpees, maybe the handicraft thing isn't cost effective. Sell your items at craft fairs. Market them yourself for the rules you decide to practice.

Distribute. If you could get your items to a shop that people could walk into, you could follow the traditional distribution and retail model. The problem with brick-and-mortar is that they are fixed in one spot. The Internet beats storefronts in that a website is every and nowhere so it fits better. This is especially true in that your unique item cannot appear in two stores at the same time.

Distribution Hubs. Ship all of your items to a more central location then sell the items for there. It doesn't get past the gnome smashers, but it means that your items could be shipped from a cheaper jurisdiction (eg. bulk ship away from Canada Post and to the US where shipping is much cheaper). This approach has a long list of downsides. So much so, it's a near total fail.

Wait for Transporters. The Internet can transmit photos of cool items, but you still have to physically move the items themselves. Fablabs-- or 3D printers-- are still fringe items. You can buy them, but they are expensive, slow and few people have them. So, the only way to get a good distribution model for unique is wait for science fiction to become science fact and just beam your handicrafts to waiting customers. Yes, that idea is crazy but so is the idea that you can get rich from Etsy.

So? What do you think? Do you make money through mail order? Are your customers happy? What's working for you?

Comments

Ted Godwin said…
I think you missed an option: Sell appropriate products.

The successful sellers on Etsy are selling jewelry, paper products and soap. All items small enough to be sent easily through the mail and to produce a profit:cost ratio that makes sense.

As cool as your zombie lawn ornaments are, there is a reason they are sold in brick and mortar stores. I bet anyone selling them online charges extra shipping and/or uses freight companies not the Postal service.

I think your Zombie ornaments are something people need to see, touch and take home in their car. Maybe craft fairs closer to Halloween?
Mike DeWolfe said…
I agree, Ted. There is a level where Etsy can work, but Cheryl and I aren't working at that level. Jewelry is fine (small and light). My lawn ornaments and polymer clay items are too big, too heavy or both. Cheryl's plush creations are too big.
Ted Godwin said…
You could just start marketing them as art and selling for $200-$500 per. At that price $50-$60 for shipping seems reasonable. :)
G33K GODDESS said…
Your Zombie Gnomes are AWESOME!!! I totally love the concept and the execution!

But Etsy sucks for a whoooole lot more reasons than stated here, m'dear!! (google Etsy + Coralgate) JUST for starters...
blueditty said…
The very best option is to give Etsy a complete pass.
As you pointed out, sellers who hit the front page sell, and they are Etsy favourites.
The rest spend their household budget constantly renewing and forever praying they will be the one that Etsy favorites, while Etsy mines their email contacts list for information.
Etsy has a laundry list of problems. Yes, the favorites are the ones who are making real profits, as well as Etsy themselves. Fees, time and hoping you make enough money to consider worthy of your efforts is more like a wishful thought. Skip Etsy altogether I say. aside from the fees and lack of real success for un-favorites they have become what they were against to begin with... no explanation needed.
DaniaO said…
Love this Blog post! couldn't agree with you more I sling handmade bows and Etsy and I am about over it! I love the crafting world and how fantastic would it be to do it for a good living, but who am I kidding. Etsy is way to saturated with the same things and not only that they seem to favor certain sellers.
gaugedear said…
I have been off Etsy for a few months now, I use an E-Commerce website now to sell my Excentrix stud earrings, the online catalog has already made me more money than Etsy did, especially since I am not paying them anymore. I also noticed that I am not the only one who left and is selling online, but I am glad to be ahead of the curb and even happier that people are still stuck in that Etsy mudd.
nyarlathotep said…
I'd agree Etsy sucks but for different reasons. Etsy stupidly shows you every product listed anywhere in the world. Very very dumb idea! Customs commonly destroys or massively inflates the final price.

Ebay addresses this by making it harder to find stuff that's listed across a customs barrier. I'd agree that Etsy should simply be avoided.
nyarlathotep said…
I'd agree Etsy sucks but for different reasons. Etsy stupidly shows you every product listed anywhere in the world. Very very dumb idea! Customs commonly destroys or massively inflates the final price.

Ebay addresses this by making it harder to find stuff that's listed across a customs barrier. I'd agree that Etsy should simply be avoided.

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