Breathe. I know it’s been hard. The bottom dropped out in 2016 and things haven’t gotten much better with the same slow Etsy sales in 2017. You’ve probably seen the same mantra over & over again in forums or on “expert blogs”:
“Better Keywords, Better Photos, More Listings”
That’s not the full story.
A different angle on why my Etsy sales may be down & actual data to back it up?!
First, 5 Interesting Etsy Facts
– As of December 31, 2016, 45.5% of Active Sellers used Direct Checkout which processed 78% of Gross Merchandise Sales. What makes this extra interesting is that everyone is being forced to use Direct Checkout, soon to be renamed “Etsy Payments”, by May 17, 2017 or their shop will be suspended. That’s nearly 1 million shops being threatened with suspension!
– Only 26.3% of Active Sellers use Shipping Labels, which includes USPS, FedEx, & Canada Post. I expect this to go up once Etsy Payments is implemented in May.
– Mobile visits make up 64% of total visits to Etsy but only 48% of sales are made from mobile devices. This means customers are finding you on their phones but making final purchases on their computers.
– 87% of sellers are women
– For every hour she spends making her product, she spends another hour on business related tasks like customer service, accounting, inventory, marketing, and shipping. You need to take this into account when pricing your products!
Etsy Market Analysis
Data pulled from public documents available here.
Gross Merchandise Sales (GMS)
The dollar value of items sold on Etsy markets within the applicable period, excluding shipping fees and net of refunds associated with canceled transactions.
An active buyer is an Etsy buyer who has made at least one purchase in the last 12 months.
As you can see, there have been increases in every category since 2014. It looks amazing at face value, but let’s dig deeper.
The number of Active Buyers has increased by 44% from 2014 to 2016.
Active Sellers increased by 21% in the same time period.
The ratio of Active Buyers to Active Sellers has also increased year over year.
With the number of Active Buyers increasing at 2x’s the rate of Active Sellers, you would think money is falling from the skies.
Not so fast.
Etsy Sales Analysis
To find how much each buyer is spending per year on average, we need to take GMS and divide it by the number of Active Buyers
Etsy Buyers are spending 2.9% LESS each per year
A massive drop when we are talking about millions of shoppers.
The same analysis can not be done for Active Sellers as Etsy’s definition is too broad. It could only be done if Etsy’s definition of an Active Seller was exclusively defined as a seller who has made a sale or incurred transaction fee charges.
Finding the Average Order Price and Average Number of Items Ordered gets a little more complicated but it can be done using Etsy’s Yearly Market Revenue
Primarily made up of the 3.5% transaction fee that an Etsy seller pays for each completed transaction on Etsy.com (excluding shipping) and the $0.20 listing fee she pays for each item she lists on Etsy.com.
As you can see the Average Price per Item matches the same trend in the amount of money spent per Active Buyer annually.
It also shows us that though Active Buyers are buying more, they are spending less per order.
What does this mean?
Even though Etsy is attracting more customers, they are less valuable customers. This is a big deal for higher priced sellers. Though GMS is trending up, buyers purchasing lower priced items. This is great for Etsy because they take flat fees + commission for each transaction and it’s better for them to have lots of little sales instead of a fewer large sales.
This trend is also seen in the wider retail market.
Consumers, though in much better shape financially than they have been in many years, are getting increasingly bargain-hungry. Fortune
Consumers are also less willing to wait for goods. Think fast fashion. They want to be able to see it, buy it, have it immediately in the least amount of clicks. With Etsy taking away Variation Bulk Edit, the ability to offer customers more options within a single listing & change those options in step with trends has been drastically stunted.
The trend in lower annual amount spent per buyer/year may also point to a consequence of allowing cheap mass produced, goods on the platform.
How do I turn around my slow Etsy sales?
Look at offering less expensive, ready to ship options in conjunction with your usual line. This does not mean lower quality, but instead, offer items that are less expensive to make but still has your style.
Ex: If you make custom items, look at making something that is non-customizable with mass market appeal and takes less time or money to make that you can sell at a price inline with the average listing in your target market.
How do you find the average listing price? Research keywords in EtsyRank that already bring you traffic
Are you thinking about collaborating with someone on Instagram to drive traffic & help boost your slow Etsy sales? Read this post before you do anything.
Genevieve Tucci Raised in Baton Rouge as part of an entrepreneurial and artistic family, my passion for creating began at a very early age in my mother’s art studio where I would sit every evening watching her paint, sculpt and design. I was extremely fortunate to attend Baton Rouge Magnet High School which offered stagecraft as an elective. Mrs. Ory, a saint in her own right, gave me confidence and the foundation to safely use powerful saws and tools while my mother gave me the confidence to learn any skill. After graduating LSU with a degree in Arts Administration, I strived for daily creative outlets in order the escape the 9-to-5 and this was also the time my husband and I bought our first home. It meant all the home projects I had been looking forward to could finally happen! It also meant my husband could get me power tools for Christmas, and I would be okay with it.
-Reprinted with permission from AllProjectsGreatandSmall.com