How do they make a profit?

[Former_Member]

You know when you see a shop, that is in the same category as you, and they have sold loads more items. Then you realise they are selling themselves very cheap. How do they make a profit from that??

Or am i just being grumpy tonight. :(

[VintageCarolina]

are you sure they aren't selling cheap knock-offs from China? Sometimes I see that people are reselling destash just to raise some money.

[Former_Member]

I sell cup cozies for $ 6, which I think is a good price...I actually bought one here for $ 3, I wanted to see how in the world they did it. Same coition yarn, same size as mine. She must be an extremely fast crocheter, I am fast, but $ 3 wouldn't be worth my time, and not really paying for much more than the yarn. She has sold 100' s, though. I value my time a little higher.

[TOMgirlApparel]

Yes, it's crazy! Not so much here on Etsy, but when I am in a store and see undergarments for like $5.99, I am thinking, how is that even possible?

[Former_Member]

One shop I found, won't mention any names, supposedly make them all by hand, use fresh water pearls and sterling silver and have sold hundreds for about £3 each. That's ridiculous. They cannot be real.

[DawnedOnMeDesigns]

Some shops may be getting a lot of sales because they sell at low prices, but might not be making a profit at all. They also might just want to earn enough money to buy more supplies because their shop is more of a hobby than a business.

[Former_Member]

Eh. Maybe. I have some old pearl necklaces that have come apart that I'm using to make knitting markers...the cost to me is nothing, I got them from my mother in law, so I am not charging much. Its possible. Maybe not probable, but possible...

[Former_Member]

I have wondered the same thing, Katie. It seems like some people are selling themselves short in order to sell more; I don't know. It doesn't make sense though, that is not a sustainable business model.
Some people might have a really good whole-sale shop, but for some of us, there isn't much we can do. I always use high quality art supplies and printers. So far I haven't found a way to cut down on my cost in order to lower my prices. I certainly won't sacrifice the quality- it's too important to me and my customers.

[Former_Member]

Different shops have different situations. I'm listing my items at very low prices because I recycled most of my materials (including my shipping envelopes) from friends and local shops. I started the Etsy store 2 weeks ago so my current goal is not making money but to get more sales and more feedbacks first. Plus it makes me really happy when people appreciate and buy the stuff I made :)

[Former_Member]

@Michelle, yes, but your shop (which is lovely) is reasonable and you can make some money out of it. I have literally seem shops on here that are selling incredibly low. Stupidly low. There is even one shop I have seem who have all there items all over ebay too... they certainly didn't make them by hand.

[Former_Member]

Are you sure they are making a profit? Some people just chase that "Sales High". Where they don't actually make much money or forget to factor in their time.

[Former_Member]

I admit I think I have some of my prices low (especially since I'm offering free shipping within the US, but my thought was to get some sales then raise them. Is this a really really bad idea? I have a hard time when I talk to friends and when they ask how much something is there's sometimes a look of, "yeah right, nobody's gonna pay that". Set me straight here, please.

[Former_Member]

I mainly sell log candle holders and have noticed that there are some shops that sell them for just a few dollars each. I know logs are inexpensive, but my time is worth more than a few dollars just for the cutting, the sanding, the dremmeling, the clear coating.....I don't know how they make any money. Good question. :)

[Former_Member]

Yes, very good question, indeed. I see it all the time - when I compare my prices with others I am much more expensive. But I am not trying to have a hobby but a business....I really have a feeling that for many of us on Etsy, it is all about hobby.....

[Former_Member]

@ Kari, it is all about your target market. I sometimes think I am a little sheepish at pricing my items, I know that in my social world, they think it is expensive, but my target market don't at all!

Price your items acordingly, don't sell yourself short.

[ComfortAndGrins]

Karen your tutus are darling and reasonably priced.

[Former_Member]

Katie, Thank you. I've been thinking about my target market today as far as what I should even be offering in my shop. I raised a few items.

[Former_Member]

I always wonder how some people who are in my line of items make money. I know crochet and knit accessories just don't get thrown together! Yes I have some items that are "low priced". But I just don't get it.

[Former_Member]

I have always wondered the same thing. I don't sell too cheaply and make a small profit. When I someday buy wholesale I think it will pick up.

[Former_Member]

Katie, I accept grumpy.

Try not to judge your work against others. Its not fair to you. They may have cornered the market on the latest Lucky Elephant charm, or maybe they have no over -head........OR maybe they are SAHM with a very rich partner who allows them the opportunity to buy all the damn trinkets they want.

Feel better now?

[QuirkyUniverse]

I think there are quire a few people who haven't bothered to sit down and really look at how much it costs to run a business. They think they can barely go over supply costs and make a profit and that just isn't the case.

[Former_Member]

I won't mention shop names but there's one particular jewelry seller than sells earrings for less than a dollar. She might as well set up a jewelry stand in her driveway and give them away for free because that's what she's doing here. After all the fees she can't have anything left to even pay for supplies. My guess is they're not handmade (if you look at her sold items there are many duplicates) but regardless, she still had to buy them from somewhere.

[TinTeddy]

There are some people who don't do this for profit at all.

[Former_Member]

I sell in retail stores, and price my items as they sell out in the retail market, and have even lowered a few prices on Etsy out of sheer frustration. I have seen some sites comparable to mine in materials that sell at my prices, but most of them have been around for at least 4 years and have built clientele.

I get so frustrated because I buy sterling silver wholesale and I know what it costs, and i see products selling for less than the wholesale cost of the materials it takes to make these items.......Even pieces I know are handmade.
Etsy suggests this is a retail site...IT IS NOT!!!!!!!!!!!!!!!!!! It is chaos, and I think there is a lot of slave labour going on and that really gets to me. The shops that import from China and other slavers.

As far as the people who just like the sales and don't make $...do they ever think of how they are destroying the market place here on Etsy for those of us who are in this as a business. I could pull my hair out!!!!!! It makes me doubt myself....but my customers who buy from the stores I sell through have no problem with the prices, and often those stores are even marking up more than twice my wholesale.

I use the formula that the industry uses to price my items....the one every accountant suggests....but alas....my Etsy experience has not been a good one and I know one of the factors is price.

[Former_Member]

@ Eli - I agree with everything you just said....I am getting frustrated with that too, it is only ruining business for everyone else.....