Thursday, August 28, 2008

Let's Talk PROFITS!!

I'm taking a short break from the 6-part series and will get back to that this weekend or early next week.

Let's talk PROFIT!!

There's an interesting thread on Etsy right now about the percentile of sales $$'s that go to fees. I thought you might like to see how it works for both hand crafted items as well as eBooks /ePatterns that I market which are in my MKDesigner store on Etsy:

First, an eBook ...
Craft Fair Survival Guide: $ 4.00
40% Ad Budget: - $ 1.60
Base Profit: $ 2.40

Listing Fee: $ .20
Etsy Transaction Fee: $ .14
PayPal Transaction Fee: $ .42
Base Fees: $ .76

40% Ad Budget: $1.60
Less Base Fees: - $ .76
Additional Ad Budget $ .84

For each sale of 1 Craft Fair Survival Guide, I can renew it 4 times on Etsy at $.20cents per renewal. If there are special promotions going on at Etsy, I may renew more than that. At times, I've offered my Craft Fair Survival Guide as an SNS Secret (Saturday Night Special) either totally free or maybe for 50% off. Granted, I don't make as much, if any, profit on that, but usually other sales accompany or follow closely to that special.

Now for Hand Crafted items like I have in my KnitsNMore Etsy store:
Water Bottle Cozy: $5.00
25% Ad Budget: - $1.25
Gross Profit: $3.75
Materials: - $ .45 (minimum 10 out of 1 extra lg ball yarn - on sale)
Misc. Supplies & Expenses: - $ .65 (average per 1 machine knit item)
Net Profit Per Cozy: $2.65

Listing Fee: $ .20
Etsy Transaction Fee: $ .18
PayPal Transaction Fee: $ .45
Base Fees: $ .83

25% Ad Budget: $1.25
Less Base Fees: - $ .83
Additional Ad Budget: $ .42

I can renew this item 2 times per single sale. Granted, there's not as much in the ad buget for a hand crafted item since it's at 25% as opposed to the 40% for ebooks. BUT, I do more aggressively market the hand crafted items on other venues to drive traffic to either my KnitsNMore Etsy Store or my website where I have an Etsy Mini with these items in my Gift Shop.

Some might think ... "YIKES! That's an awfully small profit for all your work." Not really.

On the eBooks/ePatterns, it took me hours & hours & hours to do all those patterns up and write those ebooks. Granted. BUT, in just 2008, I've already sold 103 of my Craft Fair Survival Guide through various online venues, so that's $247.20 in profit (103 x $2.40) for that ebook alone. Sales of that eBook, which I update on a regular basis, have consistently averaged around 100-125 per year. I can live with that.

What about the Bottle Cozy? I machine knit those using my Brother 390 in Bulky Mode. I can easily knit up 8 in one hour with minimal interruptions (our cats love to watch me knit - and ~'help'~) so that would come to $21.20 per hour (8 x $2.65 profit potential each). Not bad. I can live with that, too.

I normally knit 12 with NO interruptions - 12 x $2.65 = $31.80 per hr -- I can definitely live with that!

I don't count the final sewing time since I take those along with me to appointments so I've got something to do in waiting room.

I sell my items on numerous online venues, (as well as locally/regionally) many of which do not have a listing fee nor final transaction fee. Free is good. :-) Etsy's a tremendous place, but it's not the only game in town. Expand your profit potential by exploring other venues.


earmark said...

this is a fantastic write up!! Great details and outlook!

~Marge~ said...

Thank you! I think folks need to see it down in black & white with actual figures to see how to adjust their own.