Unlocking Profits: Your Key to Etsy Success

1. Hello & Welcome!: Pricing can be a spicy topic, and it may make you uncomfortable. In fact, raising prices can strike fear in even the most seasoned business owners. And that's why we need to talk about it. It's time to challenge those self limiting beliefs and change your mindset for pricing success. I'm Kelly Bren Burg. I started my EtS journey back in 2013 with my handmade jewelry business, Gems By Kelly. I've achieved over 14,000 sales on EtS, and I'm proud to be in the top 1% of all EC sellers. In this class, we'll dive deep into the art and science of pricing your products for profit, whether you're just starting out or looking to refine your pricing strategy. This class is part of an ongoing series, so check out my other classes on EtS as well. We'll cover essential topics such as understanding your costs, setting a profitable price point, and finding that sweet spot where your products sell and generate the profit that you deserve. Undercharging is a recipe for burnout. I didn't become self employed to become the worst boss I ever had, but that's what happened. I was overworked and underpaid, and I want to help you avoid that. By the end of this class, you'll have a clear actionable pricing strategy that will help you increase your profits and grow your business. Remember, you're not just selling products. You are sharing your creativity and passion with the world, and you deserve to be rewarded for it. The lessons in this class are intentionally bite sized, and you can finish the whole course in under 90 minutes. Ready to take control of your pricing and ensure that your hard work is truly valued. Let's get started. I can't wait to see what you achieve. 2. Class Project & Resources : You'll find resources to support you under the Class Project and Resources tab. Let's walk through them together. First, there's a Reference Guide for this class. I designed it to pull all of the pertinent information together: Etsy Fees, pricing strategies, and more. One of my favorite lessons is called The Value You Provide. There's a workbook to guide you through that exercise. But wait. There's more! You'll have Numbers sheets with pricing formulas to help you crunch your numbers. Since this class is for all levels, you're welcome to share any aspect of your Etsy journey as a class project. You could share a photo of your progress in the class workbook or a screenshot of your Etsy shop, basically anything Etsy related. Are you ready to take the first step? Download the class resources, and I will see you in the next lesson. 3. What Does Success Mean to You?: Welcome back. I love this quote by Kevin Kelly: ‘The surest way to be successful is to invent your own definition of success.” What does success on Etsy look like for you? Is it pocket money and a creative outlet? Is it a business that you plan to develop over the course of a lifetime, or something else entirely? Your definition of success will change over time. Start with small goals and reassess as you go. Be persistent, but flexible. Take some time and reflect on this. What do you really want from selling on Etsy? Journal about it, noodle on it, whatever works best for you. Let's say that you decide that you'd like to earn about $250 every month on Etsy to pay off a bill or to save for a new car. In this scenario, you don't want $250 in monthly sales on Etsy. You want $250 in monthly profit on Etsy. Let's look at a profit equation example. There's no need for you to bust out your calculator to do this math for your shop yet. This is just an example. Let's say your average price point is $25 per listing, and $15 is your total expense per listing. You're left with about $10 in profit for each item you sell. Now, let's work backwards to your goal. You'd like to earn about $250 per month or $3,000 annually, and your average profit per item is $10. If you're not sure about your average profits, no worries. We'll cover that in a later lesson. Going back to our example, let's divide $3,000 by 365. You would need to earn about $8 in profit daily or sell about one item daily. Now, let's say you either raised prices or cut expenses by $6 per listing. Yay! Your profit per item is now $16. You'd still like to earn about $250 monthly on Etsy, or $3,000 annually. Now the math looks like this: your annual sales goal is still $3,000, but your profit per listing is now $16. When we divide $3,000 by 365, you still need about $8 in profit daily, but now that means that you need to sell about one item every other day. Congrats, you now have a more profitable business! More profit means greater financial stability for you and your business, the ability to scale and grow your business, the ability to invest in better quality materials, the ability to invest in a better customer service experience. The ability to contribute more to causes that you care about. For example, you could adopt more environmentally friendly business practices. Let's wrap up our discussion about success with this quote from Maya Angelo. “Success is liking yourself, liking what you do, and liking how you do it.” Let's take a quick break. I'll see you in the next lesson where we'll talk about why it's really beneficial to have a business banking account. I will see you there. 4. Get a Business Banking Account: Welcome back. In the last lesson, we talked about your definition of success. In this lesson, let's talk about the importance of getting a separate bank account for your business. Here's an all-too common scenario. You finish your first year in business. It's tax time. You paid for business expenses using personal funds, and you didn't keep all of your receipts. Separating your business and personal finances is so important that if this was the only change you made from this class, it would be a great one to pick. This is especially effective if you only spend money on your business from the money available in your business banking account. If you do have to use credit, designate a specific credit card for business only. Here's four reasons to get a separate business bank account. One: The IRS recommends it. Two: Clarity and organization. Three: Tax compliance, and Four: Financial planning. Let's dive into each of these. Number One: The IRS recommends it. The IRS recommends that all small business owners have separate bank accounts. While a sole proprietor is not legally required to use a business checking account, it's still a good idea from a tax perspective. An audit of your business could expose your personal transactions to scrutiny if you mingle personal and business transactions within your consumer checking account. Number Two: Clarity and organization. Keeping personal and business finances separate makes it much simpler to track your business expenses, income, and tax obligations. It's like drawing a clear line between your business life and personal life. Number Three: Tax compliance. At tax time, having a separate account streamlines the process of calculating deductions and reporting income. It's like having all your receipts neatly filed away in one folder, instead of scattered around your whole house. Number Four: Financial planning. Having a separate account makes it easier to track your business's financial health and to plan for its future. Are you in? Good. Now, let's talk about banking options for small businesses. Two options for business banking would include credit unions and banks. Credit unions operate as not- for-profit organizations, so they often offer lower fees and better interest rates on saving accounts and loans compared to banks. Banks, being for- profit entities may prioritize generating profits for their shareholders. And it's story time. Years ago, my husband and I did all of our banking at Wells Fargo. He works in the medical field, so later we moved our personal funds to a healthcare credit union. The rates for loans and credit were much lower at the credit union. I stayed with Wells Fargo for my business. It was easier and I wasn't using credit. Then the COVID pandemic hit, and there was government money available for small businesses. But Wells Fargo wouldn't help me with those programs. I transferred my business accounts to a neighborhood credit union and I qualified for the Paycheck Protection Program. In my experience, credit unions are much more interested in helping me with my needs and less interested in selling me services that will help their bottom line. There are many credit unions that are open to anyone, so you don't need to be in a particular field to join a credit union. Comedian Sarah Silverman did a great video comparing credit unions and banks. If you Google "Sarah Silverman Credit Union", it should pop up. It's about 4 minutes long. Hey! It's time for a pop quiz. This one is multiple choice. Why is it a good reason to separate business and personal finances? A: The IRS recommends it, B: Clarity and organization, C: Tax compliance, D: Financial planning or E: All of the above. If you guessed E: All of the above, you are correct. Let's take a quick break. I'll see you in the next lesson where we'll discuss pricing 101. 5. Pricing 101: Welcome back. In the last lesson, we discuss the importance of getting a separate business banking account. In this lesson, let's cover pricing 101. But before we get started: the advice shared in my Etsy courses is educational in nature. It does not take into account your individual circumstances and should not be used to make financial decisions. If you're anything like me, you may be tempted to watch half of the class and then go set your prices. Sometimes that approach works, but you really need all of the information here. Hold tight. Feel free to gather receipts, start crunching numbers, open a separate business banking account if you want. But you'll really want all of this information before you set or change your prices. And if this doesn't all make sense quite yet, we're going to pull it all together at the end. All right. Here's an all-too-common scenario: You finish your first year in business. It's tax time. After paying taxes, you learn that you essentially worked for free all year. Thinking you know your numbers and knowing your real numbers can be two very different things. Knowing your numbers is key to having a profitable business. One difference between businesses that succeed and businesses that fail is that the businesses who succeeded figured out how to make money. Unprofitable businesses will eventually close, unless you have endless time and money to put into one. So that's why it's important to "Follow the green, not the dream," as Mark Cuban said on Shark Tank. I took the liberty of rewording his quote a bit. "Follow the green while you're following the dream." Now, let's start with the standard accounting equation for profit. Total revenue minus total expenses equals net profit. This is my mental image of net profit. Net profit is what you have left after you throw all of your revenue in the net and your expenses slip through the holes in the net. The money that escapes the net could be going to a number of things, including income taxes, art supplies, and Etsy fees. Let's go through this equation using an Etsy shop as an example. Let's say your Etsy shop makes $500 per month in sales revenue. Now, let's subtract your expenses. We'll subtract $100 in craft supplies, $50 in packaging and shipping, $60 in Etsy fees. That leaves $290 in profit before income taxes. Federal income taxes in the US vary, but let's assume you're taxed at 15%. In that case, $217 would be your net income after paying 15% in income taxes. You may also be responsible for paying state income taxes. Now, let's assume that you worked on your shop 15 hours a week or 60 hours a month for $217 net. $217 divided by 60 hours equals an hourly wage of $3.62 And you know what? That's not bad, really. I probably made less when I started my jewelry business over ten years ago. When you start a business, it's typically less profitable. Most businesses are less profitable in the beginning due to start up costs for inventory, equipment, et cetera. No or low brand awareness, lack of eligibility for volume discounts, lack of efficiency, and more trial and error. All of those things were true for me in the beginning. Hey, it's time for another pop quiz. This one's a fill-in-the-blanks. "Blank" is what remains after you subtract your total expenses from your sales revenue. And if you guessed, "Net profit", you are correct. Net profit is what remains after you subtract your total expenses from your sales revenue. Spoiler alert: there are actually two different types of expenses in accounting, but you're going to have to wait until the next lesson to hear all about it. I will see you in the next lesson. 6. Two Types of Expenses: Welcome back. In the last lesson, we reviewed pricing 101. In this lesson, we're going to talk about the two types of business expenses. Let's revisit this pricing equation. Total revenue minus total expenses equals net profit. Although you can impact your total revenue by making smart business decisions, you can't control your total revenue. Sales ebb and flow in business. While sales are important in business, profit is more important. You can have a business that has six figures in sales revenue, and you can be absolutely broke and or deeply in debt. That's why understanding your business expenses is so important. The number one way to control your profit is to control your expenses. Let's break down the two types of expenses in business. Operating expenses are the cost of doing business. For an Etsy seller, operating expenses might include a Dymo label printer and a paid Canva membership to create graphics for your shop and social media. The Cost of Goods Sold directly relates to the products that are sold, like the supplies that go into your product. A good way to remember the difference is to focus on the S of COGs, cost of goods sold. You have operating expenses for a business, whether or not you're selling anything. You have COGs when you sell something. Here's some more examples of operating expenses for an Etsy seller. They include listing and advertising fees, a printer for receipts, tax prep fees, office supplies, and a Skillshare membership for continuing education. COGs are consumable or direct expenses. If you send an item to a customer, it's a COG. It's everything in the box. Most businesses shipping to customers would also consider all packaging materials COGs, including the box, the adhesive label, and the postage. Let's look at COGs for a handmade frame business that ships directly to customers. COGs include the wood, the glass, the mat, and the hanging hardware on the back of the frame. COGs also include the bubble wrap, the shipping box, the adhesive label, and postage. Including shipping and packaging costs in the COGs helps accurately calculate the profit margin, which is important for understanding the profitability of each sale. Let's take a quick break and we'll continue this conversation in the next lesson. 7. Operating Expenses: Welcome back. It's story time. I was talking with a friend. She's a hair stylist who has her own business. She decided that $75 an hour was a good wage. So she set her prices for her services accordingly. I was working on this class, so I immediately thought about her operating expenses. I asked her if she paid herself for her time while she was scheduling appointments, ordering products, bookkeeping, doing classes for continuing education or cleaning and maintaining the salon. Like many business owners, she wasn't taking her operating expenses into account, even though it added up to a substantial amount of time. She decided to raise her prices. Remember, you don't need to be overly concerned whether an expense is a COG or an operating expense. Just make sure that you're accounting for all expenses in your pricing. An informal way of doing this is by rounding up COGs. I'll explain one way I do this in a moment. Rounding up your COGs is not the most accurate way of covering your operating expenses, but it's much better than not accounting for your operating expenses at all. You could also try to figure out all of your operating expenses and then figure out a way to disperse them equally across your products, but that would be really time consuming. Let's go back to an example of how I round up my COGs. I offer free shipping in my jewelry business. We'll talk more about free shipping later. But for now, this is how I fold in the shipping and packaging costs into the price of each item, and I round up while I'm doing it. The real cost for my postage is $4.19, so I round that up to $5. The real cost for the gift box, ribbon, and business card is $0.90. I round that up to $1. The real cost for the padded mailer and the adhesive label is $0.28. I round that up to $1. Based on these numbers, I add $7 to each item's price to cover packaging and postage. Hey. It's time for another pop quiz. Multiple choice. Which of the following are examples of COGs or direct expenses for an artist that ships art directly to her customers? Is it A: The Canvas, B: The paint on the Canvas, C: The box used to ship the art or D: All of the above? If you chose D: All of the above, you are correct. Next one. Which of the following are examples of operating expenses or indirect expenses for an artist that ships orders directly to customers? Is it A: A paid class about social media marketing, B: Photography lights for the product photos, C: Graphic design software or D, all of the above? If you guess D: All of the above, you are correct. Let's take a quick break. In the next lesson, we'll talk about Etsy fees. I'll see you there. 8. Etsy Listing Fees: Welcome back. In the last lesson, we discussed the two types of business expenses.o In this lesson, we're going to review Etsy fees. "Etsy fees are too expensive." I bet you've heard that before, but are they? Let's talk about it. In my first class of this series, I discussed the pros and cons of selling on Etsy. Here's a quick reminder from that class. There is one big pro for selling on Etsy. There are 95.1 million active buyers on Etsy. The annual gross merchandise sales on Etsy are $13.3 billion. This is the benefit of being on Etsy, and it's a big one. If you're selling on your own website, it would be nearly impossible to attract 95 million active buyers willing to spend $13 billion. In my opinion, Etsy fees are worth it, but let's break them down in the next lessons. But first, here's another all-too-common scenario. You finish your first year in business. It's tax time. You forgot to include Etsy fees in your pricing, and you realize you were under charging all year long. This is why understanding your Etsy fees is important for pricing. Let's talk about Etsy fees. There are four different Etsy fees. The first three fees take place when a listing sells. First, there's the 6.5% Transaction Fee, and then there's two Payment Processing fees, a 3% fee, and a 25 cent fee. Then there's the fourth fee. The 20 cent Listing Fee that's valid for three months. Keep in mind, the Etsy fees we're discussing in this lesson don't include ad fees. We'll discuss Ety ads in another lesson. But honestly, this all sounds pretty complicated, right? But no worries, we're going to break it down and simplify it. Let's start by talking about the listing fee. Etsy charges $0.20 per listing. That 20 cent listing fee is valid for three months. If the listing doesn't sell, it will cost another $0.20 for another three months and so on. That's the cost of having a listing available on Etsy. That cost applies whether or not the item ever sells. The listing fee is the unpredictable part of your Etsy fees. Because when you first list an item, you don't know if the item will sell within the first three months for a fee of $0.20 or a year or more after listing, which would cost $0.80 and up. For example, you list a new item on May 2, 2024. You pay a listing fee of $0.20. Three months go by. It's August 2, 2024. Your item hasn't sold, but it's set to automatically renew. You're charged another 20 cent listing fee for another three months. Cha Ching! You sell one of this item on September 15, 2024. You'll be charged another $0.20 to relist your item if you had more than a quantity of one listed, and then the cycle starts again. And about expiring listings: new listings are set to renew automatically when they expire. You can choose to turn off automatic renewals so your listings can be renewed manually when they expire, but then you might forget to relist it. I prefer automatic renewal. So now that we've discussed Listing Fees, let's take a quick break. I'll see you in the next lesson where we talk about the other three fees. 9. Estimating Etsy Fees: Welcome back. In the last lesson, we discussed Etsy Listing Fee of $0.20 every three months. Let's review the other three Etsy fees. The first three fees take place when a listing sells, the 6.5% transaction fee, and then two payment processing fees, a 3% fee and a 25 cent fee. Keep in mind, the Etsy fees that we're discussing in this lesson don't include ad fees. We'll discuss them in another lesson. And yeah, I know. That's a lot of numbers to remember when you're trying to price a listing. When I'm pricing, I like to estimate the Etsy fees, so I'm only doing one math equation. Sound good? So I choose a specific percentage to subtract from the price to cover the four Etsy fees, and then I'm done. Let me break it down. Here are our fees again. I'm going to call the two percentage fees "percentage fees". They total 9.5%. I'm going to call the other two fees "cent fees" as in C-E-N-T fees since they total $0.45. For simplicity, we're assuming the listing sell within three months, so the listing fee is just $0.20. Let's look at the Etsy fees for a $10 item. $10 minus 9.5% equals $9.05. Those are the two percentage fees, and $905 minus $0.45 equals $8.60. And again, the $0.45 are the "cent fees." Therefore, Etsy fees for a $10 listing are $1.40 or 14%. Instead of doing that math, we could estimate the Etsy fees. Since the Etsy fees for a $10 listing are $1.40 or 14%, we can simplify the math. $10 minus 14% equals $8.60. $10 minus 860 equals $1.40 in Etsy fees. This is exactly the same number in the prior equation. Here's the only catch. The estimated percentage fees vary a bit based on price point. Let me walk you through that. If we look at price points $10 and $100, the estimated Etsy fees range from 14% to 10%. The $10 item has a 14% Etsy fee, and the $100 item has a 10% Etsy fee. So, the higher the price point, the lower the estimated percentage of fees. But let's keep doing the math for three more price points. It was fun the first time, right? Okay, Let's look at Etsy fees for a $25 item. $25 minus 9.5% equals $22.63, and $22.63 minus $0.45 equals $22.18. And again, the 9.5% are the two percentage fees, and the $0.45 are the two "cent fees." Therefore, Etsy fees for a $25 listing are $2.85 or just under 12%. So I would use 12% to estimate fees for a $25 item. In my book, overestimating the fees is a good thing. It covers expenses you may not be thinking of. In case this is helpful, here's how the math looks on a calculator. Also, when I'm talking through these numbers as in $25 minus 9.5%, that's exactly how I would do it on a calculator. Okay. Let's keep estimating EtS fees for two more price points. Etsy fees for a $50 item, $50 minus 9.5% equals $45.25. $45.25 minus $0.45 equals $44.80. Therefore, Etsy fees for $50 listing are $5.20 or just under 11%. And finally, let's look at the fees for a $100 item. $100 minus 9.5% equals $90.50. $90.50 minus $0.45 equals $90.05. Therefore, Etsy fees for a $100 listing are $9.95 or just under 10%. Now, let's set an Etsy fee percentage estimate for your shop. I know this has been a lot, but this is where it gets easier. The estimated fee percentage for a shop with $25 as the lowest price point is 12%. So I would set the estimated percentage at 12% for every item. Again, I'm a fan of overestimating my costs so I can cover the operating expenses that aren't factored into pricing. Of course, you can choose any estimated percentage you'd like, or you could do the math in multiple steps using the exact Etsy fees. But here's the beauty of setting an estimated Etsy fee percentage for your shop. You can forget those other numbers and just use that percentage estimate. Hey. It's time for a pop quiz. Let's talk about Etsy fees. In this case, the Etsy fees are not the estimated fees, they're the exact fees. So first fill in the blank, the percentage fees for each Etsy sale total what percent/ And next, what do the "cent fees" for each Etsy sale total? Okay, if you guessed 9.5% for the percentage fees and $0.45 for the "cent fees," you are correct. Next, a True or False question. If your shop prices range from $25 and up, you could confidently choose to estimate 12% in ts fees for the entire shop. If you guessed True for that one, as well, you are correct. You could confidently choose to estimate 12% in Etsy fees for your entire shop. Okay. Let's take a quick break. In the next lesson, we are going to talk about how Etsy loves free shipping. I'll see in the next lesson. 10. Etsy Loves Free Shipping: Welcome back. In the last lesson, we reviewed Etsy fees and how to estimate those fees quickly. In this lesson, we're going to talk about Etsy's love for free shipping. I'll refer to two resources within Etsy for this lesson and throughout the class. The first is the Etsy Seller Handbook at Etsy.com/seller-handbook The second is Help Center at help.etsy.com. You can find both at the bottom of the Etsy marketplace homepage on a browser or by Googling them. Regardless of how you feel about offering free shipping, Etsy is all about Etsy Sellers offering free shipping. How do I know this? Etsy tells us in the Etsy Seller Handbook. As of July 30, 2019, items that ship free and shops that guarantee free shipping to buyers in the US on orders of $35 and above, will get priority placement in US search results. We know that shoppers on Etsy are 20% more likely to complete their purchase when the item is marked as shipping for free. Here's the deal. Etsy loves free shipping because customers love free shipping, and customers are more likely to purchase an item if it ships free. And I know you might feel some kind of way about free shipping. I used to, too, but I do offer free shipping now. Well, it's not free. It's included in the price of the item. This tactic is also what Etsy recommends. This info is from Etsy's Help Center. The simplest way to make free shipping work for your shop is to price your items to include the shipping cost in your item list price. You can choose to offer free shipping to buyers only located in your country or to all buyers around the world based on your shop's needs. Offering free domestic shipping for a jewelry business is pretty easy. I mostly use 6.5 by 10 inch padded mailers. Most of my orders are under 4 ounces, so USPS ground postage costs under $5 within the US. When you ship large items and the postage varies more based on the shipping zone, that's more challenging. So look at your competition. Do they offer free shipping? I did some quick market research for dining room tables, since they're large and heavy. When I do market research on Etsy, I use private browsing, so my search results aren't influenced by my history. Roughly half of the dining room tables on the first page of search offered free shipping. So it is possible to get on the first page of search for dining room tables without offering free shipping. Anyway, obviously, it's totally up to you. You get to decide what to do in your shop. But because you're essentially renting your space on Etsy, there are real benefits to adopting policies that Etsy prioritizes. And Etsy prefers to feature shops that have what Etsy calls a free shipping guarantee. It's a bit of a misnomer because what it really means is free shipping guarantee for orders over $35 within the US. Etsy conducted a study, and this is what they learned. "We learned that buyers who were shopping for items below the $35 minimum order were more likely to add on items to their purchase to qualify for free shipping. Meaning, they were willing to spend more to have their order shipped free." This is how you set a Free Shipping Guarantee in your shop on a browser. Within Shop Manager, on the left, you scroll down to Settings, and then you choose Shipping Settings. And then on the Shipping Settings page, there is a Free Shipping Guarantee tab. Here's how I include shipping and packaging. As I mentioned throughout the class, I round up to cover my operating expenses or my indirect expenses. The real cost of my postage is about $4.19, so I round that up to $5. The real cost of my gift box, ribbon, and business card is $0.90. I round that up to $1. And the real cost of my padded mailer and label is $0.28. I round that up to $1. So I add $7 to each item's price to cover packaging and postage. I keep mentioning rounding up to cover operating expenses because it is so easy to forget to cover your operating expenses in your pricing. Here's a list of operating expenses I've incurred for my jewelry shop. They include my time, my husband's time, a bookkeeper, an accountant, listing and advertising fees, mastermind groups, a creative community membership, Canva graphic design membership, Skillshare membership, shipping costs for anything business related shipped to me. A printer in inc for receipts, a Dymo label printer, Cloud storage, mileage for trips to the post office, credit card fees, desks, desk chairs, Wi Fi, photographer, and model. All of these operating expenses add up. So don't forget to separate your personal and your business finances to help you keep track of them. We're going to wrap up this lesson by looking at another way Etsy prioritizes listings with free shipping. Free Shipping is among Etsy special offers at the top of the search filter. The other two On Sale and Personalized are important to Etsy too. We'll talk about Etsy and discounts in the next lesson. I will see you there. 11. Halfway: Yay! You are halfway done with this class. I wanted to take a moment and celebrate... Drum roll, please... You! You are halfway through this class. Congrats on investing your time into expanding your knowledge. Way to go! I will see you in the next lesson. 12. Etsy Also Likes Discounts: Welcome back. In the last lesson, we talked about offering free shipping on Etsy and how to include that in your pricing. In this lesson, we're going to talk about how Etsy showcases listings with deep discounts. Etsy has this disclaimer before every pricing article I saw in the Etsy Seller Handbook. It reads, "You are responsible for making your own pricing decisions and are free to set prices as you wish. That said, remember there are also legal considerations to be aware of around pricing and discounting. Sellers cannot mislead consumers on discounted prices.” The disclaimer continues: “The original price must be a true price that was in practice for a substantial amount of time. So for example, you can't artificially increase a price and cut it down just to make it look like you're running a sale." And yes, this is good legal advice. At the same time, Etsy shows a strong preference for products that are at least 30% off. We can see it here on Etsy's homepage. Since Mother's Day is around the corner, the main banner says “Up to 30% off presents - last chance to wowMom.” If it was another gift giving holiday - for example, Father's Day - it would be similar in the fact that Etsy is consistently featuring products that are up to 30% off. When we scroll down the page, there's some curated options, including another selection of items that are up to 30% off. Next, we'll see a selection of popular gifts right now. If we look at that row, they are discounted at 75% off, 40% off, 50% off, 50% off, and 40% off. Let's do a quick search on Etsy and see what pops up there. I'm going to search for handmade jewelry. First, there's a row of most loved items, and these are discounted 25 to 60% off, with 60% off being the most common discount in this row. Let's look at the next row. The next row is also all discounted, and these discounts range between 20% off and 70% off. The next two rows are also discounted. The next row has discounts been 50 and 60% off. So every featured listing we looked at in our browsing so far, we have not seen one listing that hasn't been discounted, and most of them have deep discounts of up to 60% off. Etsy also nudges sellers to make deep discounts within the Shop Manager when a shop is setting up a sale. Let's take a look. We're in the Sales and Discount section under the Marketing tab within the Shop Manager. Let's tap on Run a Sale and see what happens. If we look at this first row here, it offers percentage off options. If we tap the options, Etsy suggests discounts of 25-50% off. If a seller wants to do a discount lower than that, they need to choose Custom. Let's tap Custom and see what happens. I typed in 15% off for my sale amount and a pop up comes up that says, "Set a discount of at least 20% off to give your orders a boost." Since Etsy heavily features listings with a discount of 30% or greater, let's look at how this will affect your net profit on a transaction. Here's a slide from our Etsy fees listing. We'll use this to estimate our Etsy fees. It won't give us the exact fees, but it's much quicker than doing the four separate transactions. So we'll use 14% to estimate our fees on an item that's under $10, 12% to estimate our fees on a $25 item, and so on. In these examples, let's assume we're offering free shipping and that we added $7 in postage and packaging fees to each price. Of course, you'll want to figure out your own shipping costs, and we'll talk about that more in a later lesson. And remember, Etsy does suggest that sellers include the shipping cost into each item's price. Okay, let's go. Let's look at the net loss on a $10 item discounted at 30% off. Yes, in this case, it's a net loss, not a net profit. Okay, we're going to start at the listing being listed at $10. We're going to subtract 30%, and so now the new price is $7. $7 minus 14% off equals $6.02. And that 14%, again, is the estimated Etsy fees. $6.02 minus $7 for postage and packaging equals negative $0.98. In this case, you lose $0.98 on a $10 listing after Etsy fees. This loss doesn't include supplies, your time, Etsy ads, or income taxes. L et's break down the net profit on a $25 item. $25 minus 30% equals $17.50. That's a discount of $7.50. $17.50 minus 12% equals $15.40. and that's the estimated Etsy fees. $15.40 minus $7 for postage and packaging equals $8.40. In this case, $8.40 is your net profit on a $25 item. It does not include supplies, your time, Etsy ads, or income taxes. Okay, one more equation here. Here's the net profit on a $50 item at 30% off. $50 minus 30% equals $35, $35 -11% equals $31.15, $31.15 minus $7 is $24.15. In this case, $24.15 is your net profit on a $50 item. Again, broken record here, it doesn't include supplies, your time, Etsy ads or income taxes. As you can see, offering a 30% discount really eats into your profits. I want to come back to this point about pricing that Etsy makes before every pricing article in the seller handbook. “The original price must be a true price that was in practice for a substantial amount of time. So, for example, you can't artificially increase a price and cut it down just to make it look like you're running a sale.” Let's review the three main points from this lesson. First, it's illegal to artificially raise prices before running a sale. Second, Etsy shows a strong preference for showcasing deeply discounted items. And third, deeply discounted items cut into a seller's profit margins unless they are built into the price. And look, I know this is confusing and contradictory information. I can't advise you how to handle it in your own shop, but I do understand why shops consistently run sales with deep discounts. Let's wrap up this lesson and take a quick break. Next, we'll talk about Offsite Ads on Etsy. I will see you in the next lesson. 13. Offsite Ads: 00 Welcome back. In the last lesson, we discussed Etsy's preference for showcasing listings with discounts. In this lesson, we'll look at Offsite Ads. Here's info about Offsite Ads, paraphrased from help.etsy.com. Etsy purchases off site advertising from social networks and search engines. Under the Offsite Ads program, Etsy pays all of the upfront costs of advertising with these providers. Here's an example of an Etsy Offsite Ad on Google. Sellers are charged for Offsite Ads when 1: Your listing is advertised on Offsite Ads. 2: A buyer clicks on the ad, and 3: That buyer orders from your shop within 30 days of that click. When all of this happens, the advertising fee is 15% for most shops. This fee is in addition to the Etsy fees we discussed in earlier lessons. Shops have very little control over offsite ads. First, some shops are required to participate in offsite ads, but others may opt out. Higher volume stores are required and the lower volume stores may opt out. Offsite Ad requirements are based on your shop's sales in the last 365 days. If your Etsy shop has made more than $10,000 USD in the past 365 days, you'll be required to participate for the lifetime of your shop and you'll get a discounted advertising fee. That fee is currently 12%. If you're not already required to participate in Offsite Ads and your Etsy shop has made less than $10,000 USD in the past 365 days, you may opt out of Offsite Ads. If you're not sure whether your shop has made over $10,000 in the last 365 days, here's another way to look at it. Your shop would need to average about $833 in sales every month. Shops have no control over whether their listings are chosen for Offsite Ads. Etsy chooses listings based on what performs best in each channel. The Offsite Ad stats are tucked away on Etsy. I'll walk you through them. I'm in Shop Manager on a browser. To find Offsite Ad stats, click on detailed stats right above your Stats Overview on the Dashboard. When you scroll down, you'll see Traffic and Sales from Offsite Ads. If we click on that, we see this page. Mine says: "You're getting a discounted fee for the lifetime of your shop since you made $10,000 USD or more in sales in the 12 months before 2/19÷2020." Again, most sellers will pay a 15% fee. In the last 30 days, Offsite Ads bought me $511 in sales. I paid $61.33 in ad fees or 12%. Let's look at an example of how Offsite Ads affect your profit margin. Here's our old friend, the Estimated Percentage of Etsy Fees for each price point. Since the Offsite Ad fee is 15% for most shops, let's look at how that 15% ad fee affects your profit along with a standard Etsy fees and free shipping. Here's how Offsite Ads affect your profit margin on a $25 item. $25 times 15% is $3.75. That's the Offsite Ad fee. $25 times 12% is $3. That's the Etsy fees. If we take the $25 price and subtract $3.75 and then another $3 in Etsy fees, and then $7 in postage and packaging, that leaves us with $11.25. In this case, $11.25 is your net profit on a $25 item after Etsy fees and Ad fees. It doesn't include supplies, your time, any discount or income taxes. So should you opt out of Offsite Ads if you have the option? If you don't have enough profit margins to cover the additional fees, you may want to. If you're a new shop without a lot of best selling items, Offsite Ads probably won't affect you much. But here to wrap up are some best practices for Offsite ads. First, ensure your markup is enough to cover these unpredictable fees. And second, check your Offsite Ad status monthly to see if you are incurring Offsite Ad fees. I know I keep saying this, but it's one of the main things I want you to take away from this class. There are so many elements that go into pricing beyond supplies. If you're not aware of them, you won't price high enough to cover them and you'll end up selling with very little profit or at a loss. Hey. It's time for another pop quiz. Let's start with fill in the blanks. The offsite ad fee percentage for most shops is Blank. if you guess 15%, you are correct. Let's do two True or False questions. First: "As a seller, you have control over what listings are selected for Offsite Ads." If you guess false, you are correct. You do not have control over what listings are selected for Offsite Ads. That being said, high quality listings that sell well will be more likely to be selected for Offsite Ads. One last true or false. True or false: Offsite Ad fees are predictable and easy to work into your pricing strategy. If you guessed false, that is correct. It's actually the opposite. They are not easy to work into your pricing strategy, since they are so unpredictable. All right. It's time for a quick break. In the next lesson, we will talk about a different type of Etsy ads. I'll see you in the next lesson. 14. Etsy Ads: Welcome back. In the last lesson, we discussed Offsite Ads on Etsy. and this lesson we'll talk about Etsy Ads. In addition to Offsite Ads, there's another type of advertising you can do on Etsy. These are simply called Etsy Ads. Unlike Offsite Ads, they are ads within the Etsy Marketplace, and they are optional. Here's what Etsy Ads look like in search. The top row is typically Etsy's Picks. The next row is ads. Ads are always labeled Ad by Etsy Seller. The next row is listings that aren't ads. You may also see rows of ads alternating with non-advertised listings as we do in the search for scented candles. I'll cut to the chase here. I don't use the optional Etsy Ads. I've been on Etsy for over ten years and I've tried Etsy ads multiple times. The result is usually very high fees in exchange for the sales. I haven't advertised on Etsy in many years, so I don't have stats to share with you. However, I saw these ad stats on a Subreddit for Etsy Sellers. My experience was similar to this seller's experience. If you look at the sub redit, she spent $71 for revenue of $125. So let's break this down. They spent $71 in ad fees for $125 in sales, and that is 56% of her total sales. This 56% ad fee does not include any other Etsy fees, postage, supplies, your time, income taxes, etc. Now, let's look at their profit after the Etsy fees. Their revenue was $125.40. The ads cost them $70.77 or 56%. We'll estimate their standard Etsy fees at 11%, so that's $13.80. Then we're left with $40.53 in profit on a revenue of $125 before supplies, postage, packaging, labor, and income taxes. This shop may have been running a sale as well. Unfortunately, that seller's experience with Etsy Ads is not unique. There are people who say they're successful with Etsy Ads, and they may have techniques I'm not aware of. But here's my recommendations. Before trying Etsy Ads, first, ensure your listings are high quality in terms of photography, SEO, etc. Quick note here, this class is part of a series on Etsy, and I will cover photography and SEO later. One indication of quality listings would be the Etsy labels on the upper left corner of a listing photo that say things like Etsy's Pick and Bestseller. My second recommendation if you want to try Etsy Ads is ensure you're ready to absorb the loss in profit that will occur. Because if you do sell products using Etsy Ads, you will have a loss in profit. Last, if you do decide to run Etsy ads, monitor them daily. These ad fees can add up really quickly. I'm going to say this again because it bears repeating. Sales don't equal profit. You can have a six- figure business and be broke and or deeply in debt. If you do want to run Etsy Ads, this is how you do it. I'm on a browser here in the Shop Manager, and to the left is the Marketing Tab that we've been looking at throughout this series. Click on that, and then you'll see an option for Etsy Ads. Click on that, and that is how you set up your Etsy Ad budget. All right. It's time for another pop quiz before we wrap up this lesson. Okay. Here's a multiple choice question. These are my recommendations for using Etsy ads. Is it A: Ensure your listings are high quality in terms of photography, SEO, etc. B: Ensure you're ready to absorb the loss in profit that will occur. C: Monitor Etsy ads daily or D: All of the above. If you guessed D: all of the above, you are absolutely correct. I thought it might be refreshing to talk about a way that you can save money on Etsy fees. Let's do that in the next lesson. I'll see you there. 15. Save Money on Etsy Fees: Welcome back. In the last lesson, we discussed Etsy Ads. In this lesson, we'll talk about how to save money on Etsy fees. You can save on Etsy fees with a program called Share and Save. You need to opt into this program. You're not automatically enrolled. Here's details about the Share and Save program from the Seller Handbook. When you share unique trackable links to your shop or listings and make a sale. We'll take 4% of the order total off your Etsy fee. Etsy gives this example in the Seller Handbook. Let's say you get a $100 order from a buyer who clicked on your Share and Save link from your Instagram Bio. Your Share and Save refund will be 4% of this order value. For this order, you'll save $4. Here's how you opt in to Share and Save. Let's navigate to that tab and take a peek. Starting in Shop Manager, click on Marketing on the right hand menu, then click on Share and Save. I am already enrolled in this program. If you're not, there should be a Join Now option. You'll see your Share and Save Shop link at the top, and when you're logged into Etsy, you can see the Share and Save Tool menu above your listing pages. You can use these links for social media sharing, business cards, email lists. Hey. It's time for another pop quiz. Here's a quick True or false question. True or false: "Shops need to opt in to share and save." If you guess true, you are correct. Let's take a break. We'll discuss pricing strategies in the next lesson. I'll see you there. 16. Bargain, Mid-range & Premium Pricing Strategies: Welcome back. In the last lesson, we discussed Etsy's Share and Save program. In this lesson, we'll talk about pricing strategies. But first, let's pretend. Let's pretend we're at a wine vineyard. They sell bottled wine at three price points: $15, $30 and $50. You're not knowledgeable about wine. Which would you pick and why? Now, let's pretend you need a new phone. Do you look for the lowest priced phone on the market regardless of brand, or do you restrict your search to iPhones, even though you know there are lower priced phones? And why? I would choose a $25 bottle at the winery and the iPhone. You may have chose differently, but both of our answers are related to our perceived value of the products. As a shopper, I rarely pick the lowest priced item unless it's something I don't care much about. And I find money for an Apple Product every time. You may have heard this phrase: "There's a lid for every pot." It's usually about romantic relationships, but it's also true for pricing strategies. There is a customer for every price point. There are three different pricing strategies that will appeal to different target markets: Bargain, Mid-range, and Premium. Each pricing strategy has its own advantages and challenges. Let's talk about them. Let's start with Bargain pricing. The benefit of Bargain pricing is that it can increase sales volume. There's some negatives to Bargain pricing as well. It may signal lower quality to customers. It can lead to lower profit margins, and it may be difficult to sustain this business over time. In the middle, we have Mid-range pricing. The pros of Mid-range pricing include allows for decent profit margins while still being competitive, perceived as offering good value for money. For a con, it can be challenging to differentiate from your competitors. The last pricing strategy is Premium pricing. The pros of Premium pricing include higher profit margins. And Premium pricing conveys exclusivity, quality, and/or luxury. The con is that it requires delivering on the promised quality. When you're shopping, which pricing strategy appeals to the most? Or does it vary? Maybe you dislike spending money on clothes, so you shop at thrift stores. But you buy your groceries at Whole Foods. If you're a bargain shopper, you may assume your customers are too. To further complicate things, one person's very expensive item might look suspiciously cheap to another. Here's an example of that. My pearl necklaces range from $144 to $238, depending on length and metal choice. By Etsy jewelry standards, this is a high price point. But to this customer, it seemed suspiciously cheap. He said, "I've shopped around at some jewelers and they run around $600. I'm curious if your necklace has real pearls because that is a significant difference in price." And despite my assurance of quality freshwater pearls and my positive reviews, he didn't place an order. Check out the last review too. This person says "Definitely got more than I paid for." To this person, too, my pearl necklace was underpriced. Maybe it's time I raise my prices again. One of the ways I provide value in my jewelry business is complimentary gift packaging, which customers appreciate. The cost of the jewelry box and ribbon are rolled into my postage and packaging fees. Pricing and perceived value go hand in hand. In the next lesson, we will clarify the value that you offer your customers, whether you have customers yet or not. That will help you identify your target market. Hey. It's time for another pop quiz. One quick True or false question. True or false: Budget pricing is always the way to go on Etsy. And if you guessed false, you are correct. Etsy is actually flooded with inexpensive items. And catering to customers who are looking for a Premium price point can be a way to stand out. Let's take a quick break. We'll talk about the value you offer your customers or your customers-to-be in the next lesson. I will see you there. 17. The Value You Provide: Welcome back. In the last lesson, we discussed pricing strategies. In this lesson, we're going to talk about the value you provide to your customers. No customers yet? No worries. This applies to you, too. Pricing and perceived value go hand in hand. Pricing is the exchange rate you put on all the tangible and intangible aspects of your business. Value for cash. Here are five benefits of getting clear on the value that you provide to your customers. 1: Confident pricing 2: Better communication. 3: Customer trust 4: Targeted marketing, and 5: Increased sales. Let's break them down, starting with confident pricing. Let's look at handmade jewelry as an example. Due to your unique designs and quality materials, you can price your pieces higher than mass produced alternatives. Better communication. You'll articulate the value of your products more effectively in your listings and promotions. For example, if you sell art, you can highlight the originality, the time spent creating each piece, and the exclusive nature of your designs, making it clear why they're worth the price. Customers will trust your brand more because they understand what they're paying for. For example, if you offer custom portraits, showcasing your artistic process and the level of detail that goes into each piece can justify a higher price point and build trust with potential buyers. You'll attract the right customers who appreciate and are willing to pay for the value you offer. For example, if you sell beeswax candles, emphasizing the natural materials in your marketing can attract health conscious consumers who value these aspects and are ready to pay a premium. Finally, clear value propositions can lead to more sales. For example, if you make personalized gifts, explaining how your products can create memorable experiences and emotional connections can persuade customers to purchase them as special presents, leading to increased sales. Understanding and communicating your value not only helps in setting the right prices, but also enhances the overall customer experience and loyalty. So what to Etsy customers in your niche value? Looking at competitors' reviews will give you some great insights. I'm going to walk you through how I do market research for a specific niche on Etsy by reading customers reviews. We're on Etsy's homepage, let's search "pottery mug". I often like to filter my search by Star Sellers for market research. Star Sellers consistently earn five star reviews, ship orders on time, and reply quickly to customers. Once I'm browsing the Star Sellers mugs, I'll click on one and take a peek at their reviews. This shop has over 1,900 reviews for this item and over 4,000 reviews for this shop. This is a very popular item within this shop. Glancing at the first page of these reviews, I can see that one customer thought that the mug was larger than she expected. Another customer gifted it to her mother. Another customer appreciated the outstanding customer service, and another customer commented that the shipping was incredibly fast. Rather than just looking at one shop's reviews, I looked at a number of shops reviews for pottery mugs, and here are some things that customers mentioned in their reviews. "The mug was packaged very well to prevent any shipping damage." "It keeps my coffee warmer than glass mugs." "The owner was quick to fix a shipping error." "The mug doesn't collect water on the bottom when washed in the dishwasher." "Every piece is different and that's what's so fun." "My custom order was just what I wanted made so well, no scratchy bits or bumps." "Perfect weight and size." In other words, we learn that the shop takes custom orders and that the customers appreciate that each piece is organic and different. We learn that the owner gives good customer service and that the mugs are dishwasher safe. I also did market research on the niche of custom home portraits on Etsy. Here's insight from customers' reviews in that niche. "Looks just like my childhood home, the artist even added a rose bush that was not pictured." "I had a very detailed wish list for the painting and she exceeded my expectations." "She combined garden elements from two different seasons, spring and summer." "The artist was extremely responsive and always kept me posted on the status." Finally, "She shared the drafted painting with me before finalizing." I created a market research values worksheet for you. It's in the class project and resources area. The first sheet provides examples of value from Etsy customers' reviews. No need to embrace all of them for your shop. Just choose ones that resonate with you and your target market. The next page is for your notes when you're looking through competitors' reviews to see what their customers value. Finally, here's a place for you to brainstorm on what value you provide or would like to provide for your Etsy customers. I love this quote on pricing by Seth Godin: "The reason it seems that prices all your customers care about is that you haven't given them anything else to care about." Hey. It's time for another pop quiz. One multiple choice question here. What are the benefits of getting clear on the value that you provide to your customers? Is it A: Confident pricing B: Better communication C: Customer trust D: Targeted marketing, E: Increased sales or F: All of the above. And if you guessed F: All of the above, you are absolutely correct. Let's take a quick break. And up next, it's time to start pricing your offerings. I will see you in the next lesson. 18. Market-based & Cost-plus pricing: Welcome back. In the last lesson, we discussed the value that you provide to your customers. In this lesson - drum roll, please - It's time to price your offerings. We've covered a lot of ground in this class, I wanted to remind you of the reference guide that's under the Class Project and Resources. It's designed as a reminder of all the factors that go into pricing, fees, operating expenses, etc. On to pricing. Here are three common ways to approach pricing. The first is market- based pricing. The second is cost plus pricing. Another way of saying that would be cost-based pricing, and the third way is a combination of market-based and cost plus pricing. If you use market-based pricing, you base your price on your competitors' pricing. The problem with this approach is that it doesn't take your costs into account, so you may not make a profit. On the other hand, cost plus pricing ensures you make a profit. However, if your price is well above the market and the value proposition isn't clear, your customers may not be willing to pay that price. The best approach may be a combination of market-based and cost plus pricing to start. In my opinion, Etsy products are mostly underpriced. If you're going for a premium pricing strategy, you may want to look at prices for local boutiques instead. Okay. Here's how I would approach market based pricing on Etsy. I have a Numbers sheet to help you with this. We'll review that in a minute. Okay, I'm on Etsy. I'm searching "candle". I am in a private browser. I'm going to use filters to narrow my search by first, Free Shipping, Physical Items, so, and One Wick. I'm simply scrolling down the page and writing down prices for comparable listings. One problem with this approach is that Etsy sometimes disregards the search filters to show you a variety of listings you might like. For example, I filtered by one wick and there are options with many wicks. Here's the worksheet you can use for market-based pricing. What I'm doing here is looking at the first page of search results, noting the prices, and averaging them. You can choose to disregard items that are not comparable, like the many wicked candle. There are additional columns that you can use for your own market research. If you are just using market based pricing, you might use $24 as your price for a soy candle with one wick. That price includes free shipping. The problem with that is that you have no idea what the other businesses costs are or whether the businesses are profitable. Now, let's talk about how I do cost plus pricing. This is the formula I actually use. When I was new on Etsy, I just made up my prices based on what other people were charging and now I do it this way. It's handy to have an Etsy calculator for cost plus pricing. There are lots of free ones online and I created one for you, too. Everyone has a different way of approaching this. It's best to find a way that works for you. Here's a peek at some of the free Etsy calculators online. I like Craft Kit's free Etsy calculator, but there are also two resources within Etsy for pricing. You can access both through the Listings tab under Shop Manager. Click on the Price and Inventory tab within the Listings Manager. You can do a quick calculation with the price, your cost in Etsy fees. Then there's a more involved pricing worksheet that wasn't helpful to me as a handmade jewelry seller. It may work for you, though. But I prefer the one I created. It works well for my purposes as a handmade jewelry seller. Hey! It's time for another pop quiz. Fill in the blanks. We discussed three common approaches to pricing in this lesson. Can you name them? Okay. If your answers were market- based, cost based or cost plus, and a combo of market based and cost plus, you are correct. 19. Time To Crunch Your Numbers!: Okay. Let's take a peek at the numbers sheets I created for pricing. The first sheet is the one we looked at earlier. It's for market-based pricing research. The bottom row in green will calculate the average prices for you. If you'll remember, $24 was the average cost for the first page of our candle results. Okay, here's the second sheet. Let's look at the color key first. The blue cells are where you would enter the values. The gray cells are the calculated values, and the green cells are the profit. Let's start at the top. The first table has clasp material cost. When I am making jewelry, my clasps have five different parts, including jump rings and crimps, and so on. For simplicity, I just labeled them Materials 1 through 5. For material 1, the package costs $6 and there are 20 items per package. This next gray column will divide six by 20 to show you how much an individual piece costs. In the next column, you enter how many pieces you need per clasp. I need either one or two pieces of each material for a clasp. In the last row for Material 1, it says $0.30. That's because I use one piece per bracelet. When you add up all of these, my clasp cost per bracelet is $2.21. Earlier in the class, we talked about how I round my postage costs up to $7. And rather than breaking down each item, I just pulled the numbers I used earlier when I was combining things. Rounding up my postage costs $5, my padded mailer and adhesive label costs $1, and then the gift box ribbon and business card cost $1. And so I add $7 to each price and offer free shipping. And again, I round up as much as possible to make sure that all of my costs are covered. Let's look at the strand cost here. In this case, I'm talking about a strand of beads, and let's look again at Bead 1. This type of bead, it costs $18 for a strand, and the strand has 15 to 16 inches according to my vendor. I entered 15 in this case because beads aren't always great quality and I don't end up using all of them. The next column is figuring out what each inch costs per strand. In this case, it's $1.20. I offer bracelets in sizes between 6 inches and 9 inches long. However, I only charge one price. I use 7 inch per piece to cover my costs. That would be how much I would need for an eight inch bracelet. It covers me for eight inch bracelets and then I make up the difference on the bracelets that are smaller than that. Looking at the last column, that will calculate the cost of a seven inch strand. It's column D multiplied by column E. That's my bead costs for a seven inch bracelet. Just two more tables to look at here. These rows are pulling in information from the previous rows. Before we established that a clasp cost $2.21 and that was the number entered into that cell. The same goes with the strands. Now we are adding the strand cost with the clasp cost, and there's a formula there as well. If you're adding $2.21 plus $8.40, you get $10.61, and here you can enter your desired markup. I used a five time markup. A four time markup is pretty common for retail, but I don't add my working hours in there. I just increase my markup. Once we've multiplied column D by the markup, which is five in this case, and round up, we get $54 in this case, and we add $7 for postage and packaging, and again, that's pulled from another cell, and then we get the price of $61. If you want to offer a discount, you can also see what that would do to your profit margin. You can enter any discount you want and see what your profit is after discount. If you want to run sales on Etsy, it's a good idea to have enough margin to cover those sales. The price our customer would pay for a $61 bracelet at 15% off is $51.85. Here's our last table, and it's almost all gray because it's pulling formulas from the previous cells. This is the profit after discount and fees. Looking again at Bead 1, we have our price minus 15%, that's $51.85. We have a payment processing fee of 3% and that's calculated for you. The transaction fee of 6.5%. This column is our Etsy listing fee times four. $0.20 is the Etsy listing fee for three months. In this case, we're multiplying it to cover a year of a listing being on Etsy, just because we don't know when the item will sell. The payment processing fee is $0.25. And the next column calculates the total fees. In this case, it's $5.98. Our profit after fees is $45.87. The next two columns are our costs and they're pulled from other cells. $10.61 is the materials cost, and $7 is the packaging costs. The next column, the second to the last column adds those two costs, the materials and the packaging, and we get $17.61. The very last column is the profit after fees materials and packaging. It's column H minus column K for Bead 1, our profit on that is $34.24. That doesn't include ad fees, and it is your total profit for this item. It covers your payroll and anything that's not calculated here. You could do it a different way and have an hourly wage that you calculate. But rather than doing that, I simply do a markup that's big enough to cover my costs and to leave me with profit in the end. You can see here that my profit on these five different bracelets ranges from $32 to $53. I hope these calculators are helpful. There are lots of different options out there if these don't work for you and your products. You are almost done with this class. Congrats and well done. There's just one more quick lesson ahead. 20. Congrats! And Your Next Steps . . .: We covered a lot of ground in this course. If you haven't reevaluated your pricing strategy yet, I encourage you to do so. Just get started. There's no need to get a perfect right away. Pricing is an ongoing process in business, and it's good to reevaluate your pricing on a regular basis. If you'd like to start with a smaller profit margin in the beginning, that's fine. But do raise your prices as your business grows. Every cha ching should make you happy. If it doesn't, figure out the price that would make you happy. Hey! It's time for the last pop quiz of this course. It's a multiple choice. What are the next steps to take? Is it A: Get more free resources at kelleybrenburke.com B: Check out my other Etsy courses within the series. C: Rate and review this class or D: All of the above. If you guess D: All of the above, that is the best answer. But any of those things would be the right answer. I'm rooting for you and I cannot wait to see what you achieve. I'll see you soon.