Great article with so much important information. As crafty people, it's hard for us to know all about business too, but it is a must to make your business successful. It's a good idea to see if your community sponsors any small business classes.

what an awesome article! thank you for posting this...concise, yet it touches nicely upon the key factors of the business-ey aspect of what we do. a timely piece to say the least, since i for one am struggling to have hazelnut cottage help support my family!!! thanks again :). ~jan, hazelnutcottage

Excellent article! The advice about pricing items right so that your wholesale price is roughly 50% of your retail price is something that a lot of people forget to consider. If you set your retail price too low, you'll be kicking yourself when someone asks you about wholesaling. Trust me, I've been there!

hmmm would love to support myself with my art...hats off to those who do!

This is great info! Thank you very much for sharing, I'm off to think... :)

Amazing advice! There is a learning curve going from hobby to full time business. Thank you for making me take a closer look at my own business practice.

Loved this article! I'll start attacking points one by one right now! It's so true that creative people often lose sight of real, tangible objectives. Happens to me all the time, and I have a Business degree. But then, also a family, mortgage, schools,.... thank you, great article! Carla

Great advice & I would love to support myself on Etsy sales alone. TY for the information.

this is the best article i've read here on etsy! plus it's great visualization to see all that 'money'! thank you.

Great info! Thanks for sharing :)

Great article pricing is always very tricky but hopefully this'll help me be more business minded

Great info

Great article. I will pass this along to my mother in law, who is just starting up her own etsy page and already manages her own home business.

Mmm. Tough, straightforward thinking. To the point. Very handy! Thanks so much for this informative read. My daydreams always carry me off into "creative land" when I need to keep my feet on the floor sometimes and nail down the nitty gritty. Much obliged!

It would be a dream come true for every crafter/artisan to be able to earn a sustaining income here. I would be interested to know how many sellers here pay their mortgage, car payment and all living expenses from selling here....please post if you do as I would love to hear if this is realistic. Everything mentioned seems to apply and is most feasible for sellers who sell in bulk. But for artists who handmake items one by one...is it realistic unless they can price point to sustain a solid profit margin, or hire people to create in mass quantities? Has ETSY's demographic changed in that the majority of sellers are no longer selling art, or handmade, but selling large amounts, e.g., supplies?

Thank you so much for this. Just in time for me to consider these points, as I am currently working on a new business plan.

Good article going to bookmark this one.

What an informative post! Thanks for sharing!

Great article, very informative...thanks!

this is really great advice. Thank you!

You had me at "turn off twitter , and lean in closer" Thanks. Your points are clear and realistic for those of us who run viable businesses.

Great article, thanks so much for sharing...I always wondered at how to price items without feeling like I am over charging. Thanks!

SO HELPFUL! Thank you for this!

Wonderful article! I probably need to raise some of my prices.

Very valuable information! Thanks!

this article is something every etsy seller who is even remotely serious should read. thanks for putting this info out there.

Thank you for the free information. I feel pretty stupid, because I'm not sure I'm doing any of these. Just winging it, you know. I'm going to make some real changes and set some real goals.

Great article and wonderful advice! Thank you!

Great insight and well written! Thanks!

Good reminder to keep a log on how much time I spend getting new customers.

Sound advice. I will read this one again!

A great, clear-cut read. Thanks.

interesting! I'm really interesting on how can I make better my business and calculate a fair wholesale price for my products.. p.s: thanks for featuring my wooden brooches :)

This advice was sorely needed on Etsy. We believe many sellers are underpricing their wares here. It could be because many sellers are crafters just indulging in their enjoyable hobbies but we suspect for others it might just have more to do with a lack of old fashioned business know-how. We personally can't imagine how someone selling hundreds of pairs of $8 earrings even finds the time to make all those pieces if they have another job for income. Unfortunately, the underpricing hurts the sellers trying to make a real go at it. We've had our business going for years before we joined Etsy this spring so we've been pricing for wholesale from the beginning. Etsy has been a great way to increase brand awareness and attract the attention of bloggers and websites. We'd love a sale or two but are thankful for what we see as essentially free advertising!

Excellent article, thank you so much!!! It is so important to keep track of what our little businesses actually cost and how much profit they give. Time to re-evaluate those goals!

this is a great article-- a lot to consider. i would love to see a follow-up article on how knitters can make a profit! i know a lot of knitters struggle with this as well--working in a craft that is so undervalued yet so time consuming. it seems impossible to keep prices reasonable and still pay yourself fairly for your time. i once did the math on what it would take to make a reasonable (but still pretty low) salary knitting full time. unfortunately, my math led to the conclusion that i would have to literally knit while i was sleeping.

Thanks for all the info!

Haven't yet put anything "out there" for sale, but have been thinking about it. Thank you for some real, concrete advice on how to price it, even if it is a "hobby." Will bookmark this for future reference!

Turn off twitter? whaaaaat?? :) Thanks for the info - great advice for those of us paying the bills from our crafts! Or, 'trying' to pay the bills rather :)

Great advice!! I really need to sit down and calculate everything.

Nesta -- hahaha. I was going to say that too. All very good advice! Thanks

This article is terrific! Thanks for sharing.

Absolutely fantastic, Thank you!!!

Also helpful eye opening Etsy Fee Calculator: http://www.rolbe.com/etsy.htm Only missing hourly wages.

thanks for the reminders. as a vintage seller i don't have cost of supplies, but I have to consider the gasoline, mileage and time it takes to find my wares. i think time gets overlooked the most, especially for vintage sellers.

Thank you for this important information. Your article provides the answer to the price range for similar items. Some crafters haven't done the math and are probably outselling the ones who have - until they burn up or go broke. I think that the key to getting sales for right-priced product is 'wow factor'. If you want to get a decent price for your creations, you have to make things so desirable that the price becomes reasonable and payable. When a crafter starts getting sales at a price which matches your formula, they've added that important 'wow' element to business savvy.

Thanks for this great article. It provides the answer to the price disparity between similar items. Some crafters/artists haven't done the math and are underselling those who have. To compete successfully AND get the price we need to survive and grow, we need to add 'wow factor' to your business equation. If we can create items with that 'must have' quality, buyers will see the price as payable regardless of the competition. I'm working on my wow factor.

this might be the best article I've read on etsy...loved it! really enjoyed the writing style as well - thank you!

Fantastic! Thank you so much! This is just the sort of thing we (and other etsy business people) need to think about. Thanks for laying out a complex concept so neatly...a great place to start!

great article, it's given me alot to think about. Thanks!

great article! i totally agree with JoshUrsoDesign - i believe a lot of the items sold here on etsy are under-priced, making those of us with higher prices seem over-priced. i have been accused of having 'expensive' items, and it's something i really struggle with. when i calculate the time spent knitting, or sewing, i feel that i still am not making what i need to be making to cover supplies and the time spent creating...

Thanks for this article !

Great pointers! I never could understand why people give their art away, of course there's always family & friends, charity too, thats fine. Do people think because they enjoy what their doing they shouldn't get paid! These people hurt everyone who are trying to make a living or subsidize their income.

Wow.... I've never calculated the cost of acquiring a new customer before, so I did. Twenty minutes later I've discovered, I need more customers, lol. The article states the profit margin should be at least 3X the acquisition amount, ack!! Thank you for this article - it's opened my eyes wide. Unfortunately, I also live in the real world with places like big box & outlet stores, and like it or not, we compete every day with those stores for our Buyers' hard earned dollars. And don't even get me started on mass produced imported goods! To price an item that high (In my case, $72 for a handmade pouch) is simply not realistic and narrows the Buyer demographic significantly. Would anyone in this thread buy one at that price? If so, step right this way! :-) I can't lower insertion, final value, PayPal & web hosting fees, nor can I lower the cost of my supplies. It's not often I pay for advertising, so I can't see any corners to cut to widen that margin. I'm just sayin'.

I really enjoyed this article. Thanks for the pointers on pricing.

Great article. Making good design, creating lovely crafts are never enough. Ability of design is just one wing, and to fly properly, you need the other wing of business skill.

Terrific article that really gave me something to think about.

I found this article helpful, but so very, very challenging. I've been limiting what I do to keep my costs down. Maybe I should let the genie out of the bottle and price accordingly. My current profit isn't horrible, but it's not great either.

Absolute gold this article, and straight to the point. It's very easy to get swallowed by doing all you can around your business then forgetting to get down to the actual business itself by giving yourself a strong backbone. Without knowing the ins and outs of your goals, it's not possible to be realistic about them as they do require planning and robust management. It's always good to be reminded of that. I do fall short of remembering this kind of thing sometimes!

Thank you for article!

Great info!

Fantastic article. Thank you!

Thank-you for your informative article. It is refreshing to see this type of business sense content here on etsy. We can always learn more and it is good to have some 'straight talk' about ideas vs business plans etc.

Amanda! Thank you so much for reinforcing this information. I always hear that I should charge more for my custom work, but it's very difficult to figure out the right balance. I want people to buy and become successful, but I don't want to overindulge into the "greed" of money. Again, thank you for reminding me why the right price is so important.

A very important article for people to review, even if they knew it at one time....thank you!

This *is* a great article! Thanks so much for it.

Great article !! Thank you so much for sharing with us that important knowledge !!

great info

Pricing is difficult when you look a world market. Thank you for sharing.

Amazing information. Thanks!

Thank you for this vital information. Attracting customers willing to pay for hand-made original craftmansip in such an economy is extremely difficult so pricing items according to their worth becomes almost impossible. Any advice? Take care

Really fab info...I think it's great how Etsy is evolving! Motivation is key.

Signed up. Thanks and look forward learning from you. :)

This article is so very important and should be a must read for anyone on etsy trying to make a go of their business. My husband and I run our lampwork business full time and have found etsy to be a viable source for income-but not a sole source of income. We have to do promoting, advertising, wholesale, consignment and shows off etsy to make our business viable. We can't rely on etsy for our business to succeed, but it is about 15% of our business's total income and we are proud of that! If any artist wants to make it with their business they may have to consider not only running their etsy shop, but getting out into the real world as well to promote and sell their products. The pricing calculations in this article are right on and could really slap some people in the face. I know that it is hard to price products for an online market, but it is worth it to price your items at what they are worth otherwise you will just be giving your stuff away. Wow! Great work Amanda and Etsy for this article!

great article, i have considered and calculated many of your points but the cost of a new customer is something i haven't put a dollar number on. i also find that the curve/costs on some of these various points can change dramatically over time and need to be revisited at least annually.

very very thanks so much ! this great information i quite understand them how to make it more well . keeping my feet forward ....

Phew - that's a lot to think about! Thank you.

Phew! That's a lot to think about. Thank you!

thank you, thank you, Etsy for pushing more articles recently that talk about how artists and crafters should price their work. Some are seriously undercutting the value of what they make, while making it hard for others to compete. great work!

Excellent information. Thank you so much!

A well-stated concise article - very helpful. I recently had a man tell me that he felt artists were greedy if they wanted to make money. Needless to say I didn't respond favorably to that. I find that selling my photographs is really tough and unless I am shooting that ethereal image I'm not noticed so am putting myself out there in other ways. My vintage shop does better. Thank you much for the great info.

Thank you for the excellent article. Having recently returned to the 'paid' work-force (relying on Etsy as a sole source of income would definitely not have paid the bills or fed the kids) and even though I fall in to the *hobby* category (especially in relation to time spent on the business at the moment) I still see myself as running as small business. That said, I agree with a number of the comments above. As handmade artisans we really need to value our work - not cut prices just for the sake of a sale. If you intend to grow your business, you really need to set the ground work early on, and build on it from there. Thanks again, Cheers, Tasha

You are absolutely right. When I charge what my time is worth--cleaning, researching, designing, shopping, garage sale-ing, assembling, re-assembling, reading, writing, business end, it adds up to more per necklace than most customers seem willing to pay. Any ideas anyone? I keep prices low low low and people seem to buy.

When put in print it sounds so basic. But how many of us really consider each individual cost, including our labor? Too often we let the thrill of a sale cloud our business judgment. Thanks for reminding us to keep perspective.

Seller JoshUrsoDesign brings up very valid points. It appears many sellers aren't taking true stock of materials, costs to produce including photographing, marketing, shipping, Etsy fees, pay pal fees, fixed costs such as internet, electricity and a percentage for profits. When I calculated this out my pricing would be even higher then it is now. I like my products to go out nicely presented that in itself is not just a materials cost but a time cost. I truly do not know how others can sell their items for so much less. I'm just about breaking even. Sure they have 3-10 times the sales but I wonder how their margins are.

Oops one thing I forgot to clarify was the "break even" that is on the product itself. I still have not made back the investment on costs of tools.

we all need that kick in the arse to get us to really think deeply about the business plan rather then getting all exciting about setting up a shop. Great tips. Thank you!!!!

The hardest part for me is the wholesale versus retail pricing. My prices are below retail and this is why I haven't tried to wholesale my jewelry. If I raised the prices, I'm worried I'll never sell another item. The pricing issue has really held me back. It's keeping me from making this a real business. If anyone else is having this problem, convo me and let's figure it out.

The cost of 'acquiring customers' seems hard to define, given the season of the year, and even with google analytics -- not knowing which visits from which advertising efforts, led to actual sales. Great article however, and lots food for thought!

Really excellent advice for anyone starting out in business for the first time. I found it very useful.... thank you! So glad I stumbled across this article.

Great info, thanks for sharing!

Thanks for explaining wholesale and retail sale. I have a personal rule-price while making and then after completion. I find that helps me make sure that I have met my costs.

Thank you for the great article! As "newbie" Etsy-ers, we're struggling with our pricing as well, and as some of the others have mentioned, one worries that if you price your items as they *should* be priced, you may lose a customer base. Your article will help reinforce a sensible pricing model for us as we work our way through this...thank you so much!

Thanks for this - pricing has been a struggle, and this was most helpful :-)

this is a gret article...thank u so much

great great tips. i never thought about measuring customer growth cost even tho i have been doing correct pricing for a while now.

What a great and very needed article. Thanks so much.

Good article.

Wow, what a helpful article! Where it says that most people take into account only 3 out of the four factors to calculate wholesale price, I realized I am only covering maybe 2 of those! And then charging that for my retail price. Wow, very eye opening...

What a great article! Simple and to the point! Thanks...

Thanks Amanda - exactly what I need right now to keep me on track.

quite helpful, thank you

Really good article, thank you. It's so important for crafters and artists to take charge of the business side of their work and not be intimidated or afraid of the basics their economics.

I need to revise my costings and prices, this is a difficult thing, because I know I have to put my process up at some point soon and don't know where to start!! Thanks for this useful links and words, so much appreciate it. Regards from London Marga http://chocolatecreative.blogspot.com/

oh my goodness - this is in an incredible article... I had never even thought of the concept of the "cost of acquiring a customer"... and the margins - wow. Amanda's insight is incredibly valuable - and I always look forward to her articles. Thanks for giving me some new angles to ponder. :)

So much terrific and helpful information! Opened my eyes to a few things. We are going to put some of these ideas to work for us and rethink a few things we have been doing. Thank you so much, this kind of information can help many from making costly and time consuming mistakes in their business.

We have lots of different jewellery pieces that we make but haven't listed on etsy because of the low priced competition. The prices for fused glass is especially low. Over the years, we have learned a few things that help us keep our costs down, to raise our profit margin. Finding ways to work more efficiently does help keep your labour costs down. Whenever possible, work like an assembly line, do one task on multiple items, then move onto the next task, it's surprising how much time you save. Also keep your material costs down whenever possible and plan your orders (do group buying with other crafters, plan ahead so you don't pay higher shipping costs on "rush" orders, buy in bulk when it makes good financial sense if you will really use these items). Also whenever possible, design with profit in mind, many crafters I know have developed simplier products that they are able to price reasonably. The pieces that are more elaborate or time consuming do often have a "wow" factor, but may be priced beyond many peoples means, but once drawn to their website or booth, they often will then purchase the simplier pieces.

This is an excellent article and should be read by all Etsians! Thanks very much!

very good article. A little common sense goes a long, long way.

Superb info! Thanks so much for writing it all up and making our lives easier! Now to execute it all! ;) Thanks for adding my piggybank to this article! :)

Excellent article! Thank you so much for writing this wonderful piece! I hope all Etsy sellers read this article because it really gives you a better understanding of how to plan and make your business for you.

I agree! I could have written what Nomadcraftsetc said EXACTLY!

Very good advice. I see too many artisans devaluing their work by charging too little... We must remember all that goes into it. All the little pieces contribute to the larger Whole! www.sassmama.com

Fabulous article. As much as I love hearing "if you can dream it, you can do it" the kick in the pants know-how articles like these are the ones that actually provide realistic, feasible, plan-able things that I can use to get there. THANKS!

great article!

Great article and full of good sound advice. Thanks!

Excellent article!

Thank you so much for this article. This information is what I needed to make business decisions as opposed to hobby decisions. Definitely going in my "to be referred to often" file.

Bahhh I love reading these.

Thanks a lot! Very good information here.

Great information. Thanks so much!

...much to be learned with this article...setting and calculating the price is not easy to do and this article clarifies all the points to keep in mind that we sometimes overlook ....thanks

yikes, lots of stuff to learn...i bet get goin' now!

Great article and it is coming at a perfect time for me! Thanks so much

I am not competing with big box stores. Big box stores can't make what I make. And I do make a living off of my work. This article is fabulous, and etsy is an amazing marketplace. Thanks for all the valuable assistance to supporting arts and artists♥

Awesome article -- I had to sign up for the emails. Etsy you are the greatest!!!

very good article, thank you! we need this kind of help!

Make, test, listen & adjust - there's no other way to succeed.

Very helpful, thank you!

Thx for sharing!

Thanks for reminding me that the same general principles apply to doing business on the internet as doing business in a brick and mortar establishment. I do agree, however, with those who felt that many crafters who are underpricing are unintentionally adversely affecting those of us with higher prices on a similar craft. How DO they make a profit?!

Very good article.

Great advice. Bookmarking this article and will be working to implement the 'earnings target' for sure...one thing that seems so daunting to me, but just the kick up the backside I needed! Thank you Etsy and Amanda.

Very good information! Thanks.

love it!

Wonderful, informative article.

Thank you Amanda, we- crafters- need always advices from someone who is walking on earth...

Great article. Thanks

Like a lot of others here, there's no way for me to price my clothing for what it should be when I take all the factors Amanda mentioned into account. (Labor, really.) There's just so much a person can spend for an item of clothing that their child will outgrow in six months. Still, it's helpful to see articles like this. Might have to make slight changes to what I offer for sale, especially things that take longer to sew than I thought they would!

great writing! Informative, easy to understand, and right to the point. thanks!

This is a great treasure! Thank you so much for the precious suggestions.

Thanks Amanda! I really needed to stop for a while and hear the reality about making good business instead of giving all the energy, time and other things into creativity..!

Very very helpful! Thank you!

Thank you, this article inqurage me to stay with my Pricing!!!

This is great to have. I only ever thought about half of these things. Now I can go through and work everything out.

Putting a price tag on one's work truly is the hardest part of a home craft business. These basic rules are wonderfuly logic in theory, but reality and people's capacity to buy things that are not vital to everyday life is another... The hardest part I find in the calculation is how much your own personal labour is worth - as part of the whole concept of this kind of business and why a lot of people choose to go down this path is for the pleasure of making what you do. Is that priceable? :) Good luck to all!

It's not just the time invested producing the product but also the time it takes to get it market ready (photos, listing, blogging). But ...that's what competition is all about. Hustle Hustle!!! Great information. Thank you.

just what I needed to read about, thank you:)

Great tips. Aside from my own business, I also manage a bead store. People are always asking me how much to sell their stuff for. I often tell them the same things you mention here. I say, "don't sell yourself short." People don't always think about charging for their time, labor and design. They often are only thinking about their cost of supplies. Keep up the good work!

Amanda, thank you for this article. I already knew most of what you talked about, but knowing and doing are totally different things. I am going to take a look at my shops and websites and see what I can do to improve my business.

this is why I designed a wholesale specific line.... it allows me the creativity to experiment with more time consuming designs on Etsy and still have a similar product available to retailers that earn me a nice profit. It is possible to do both, but very important to have a goal in mind when producing products for resale.

Great information. Thank you :)

Great article! I am wondering though when calculating wholesale price using that rule of thumb, what folks use for a "markup for profit?" Is this generally an additional 20%? Less than that? More? I have no idea what a reasonable amount of profit really is. I'd love some advice!

This article put some things into perspective for me. These questions are exactly what I needed to nail down my long term plans. Thanks!

that is such awesome advice...it's like the perfect timing too! Thanks!!!

Wonderful article, thank you! ♥

OK, i get the wholesale equation, but if I charge my pieces for all those thing, I'll never sell them! Just the materials can be quite expensive, sometimes I rule out the labor, cuz I do it for the fun of it, but when I add the expenses, everything just goes straight to hell! then what?

great advice, want to read more! Thanks!

Oh boy I could only get through about half before my daughter started crying so I'm coming back to finish later! Sounds so true and helpful!

The article is great, but the comments are even better. We can see here the same we see in regular stores. For those who think that some sellers are hurting them with their low prices, let us remember that all of us are not in the same market area. By this I mean, you have to factor in how much people are willing to pay for your wonderful items. Shimmeringsky's comment sounds very realistic to me. Out of Etsy, in the real (!) world, there is Walmart (yep, even if nobody likes it, it is full of people buying), Macy's, Nordstrom, the little delicatessen shop, and all kinds of businesses competing with one another. Here, in Etsy, it is the same. I am astounded at how afraid of the competition people are. We all think competition is good until we quit being only consumers and start our own business. At that point, it looks like competition hurts a little. Well, not everybody in this world makes $20 per hour, to say an amount. Here, were I live, $10 per hour is a blast, and $5.50 is pretty common. Also, there is one more thing to consider. Many of us say Etsy is not our first income source, that means we are selling more at the local level. I have the same prices for local shows as for Etsy, and somebody may think they are too low. Should I charge more on Etsy to meet other sellers' ideas or should I keep my prices the same? What would one of my local customers think when seeing a different price on Etsy? This is a free market, isn't it? In my opinion, the main thing is to think of your business as a business and be serious about it. And if somebody wants to have a hobby, that is fine, too.

This article is fabulous, I have a brother who is a very successful business man and he would ask me, how much did you pay for the beads, how many beads do you use per piece, how long does it take you to make the piece, he would go on and on. Your article is just that, we need to think the whole thing thru, write the numbers down and work and make it work for a great profit. I am new to etsy and I read everything I can, everybody is very generous with their tips and information, wonderful sharing. Thanks everybody!!!

Perfect timing! I needed the reminder on most of these things!

Great article.Great advise,I will read and read again.Thank you

A truly great post! Thank you!

Thank you, these are great points to consider!

Thank you, thank you. It is hard to step away from the crafting we love, to doing the business that is necessary. This article helps make it a bit easier.

Really excellent article, thank you! www.jennypresent.com

Wonderful article!

Great article! Thank you!

Great article, very concise. Thanks for the advise.

Thanks for posting this eye opening Info from a business context angle.

I'd like to share the calculation I use to create my pricing and see what you all think. $$$= (cost of materials for item + cost of packaging and business card + etsy fee + time to make @ $10/hour) x2 then add 20% then round up to the next price point as a way to factor in things like shopping and such that are hard to quantify If posting on etsy I add a few extra dollars to account for time taking photos and writing descriptions. I think that gives me my retail pricing. What do you think?

great article- pricing is really hard for me and this article did help give me some more ideas on how better to do that.

Great Article! Thanks for the great advise! Love that money clip...

Great article (and so is the blog). I think it's so important for any artisan to read your blog and/or visit the closest college that has a school of business and offers free business advice to anyone who needs help with business planning.

Thanks to the author, Amanda Daily Worth and stringbeanstudios post advice too. Now that's a lesson learned.

Food for thought. Thank you.

great article...the thing I find hardest is pricing...or rather accounting for my time and value as an artist in that pricing. it's a hard thing to put a number on! I like what stringbean had to add about that though! Thanks for the tips!!

Thank you! I have a lot to think about!

Such great advice! This was a great reminder that in order to make profit, you shouldn't sell yourself, or your product short.

Thank you for a great article. I just signed up for your newsletter. I know many of these things, but it is helpful to hear them over, and over and over ...

Thank you for sharing!

Excellent article, lots to think about, thank you

wonderful article! probably one of the best I've seen here! thank you

Practical advice. Thanks.

Awesome article! Just subsribed to Daily Worth, thanks so much! :D

Thanks for the article. I think distinction between a hobby and a business is a point well made. I think lots of crafters struggle to develop a business model - myself included but this offers a really clear set of decisions to help in that process.

Great article and great advice! Thanks for sharing!

Amazing article! I know I'm guilty of letting the "business" part of my business fall into the abyss.

Thank you! I am going to go through each question in detail and get this all figured out now...

excellent article. love the wet match and cushiony nest egg imagery :)

Well done article. As a "newbie" here at Etsy, I appreciate all the support and valuable information.

Great info, thank you! I learned a great deal by attending an SBA (Small Business Administration) lecture on this exact topic. It's all about calculating your bottom line. Most large cities have an SBA office and they offer lots of free or minimal cost classes on a variety of subjects relating to business, a great resource that we should take advantage of!

Thank's for the great article. it is really good sound advice I can use.

It's great to see Etsy present an article with such excellent advice. So many sellers are unfamiliar with the big picture of managing a business for the long term, and this poses a problem for buyers who come to Etsy looking for quality sellers. Articles like this will help this marketplace, for both sellers and buyers. Thank you!

Excellent. Have to review my pricing, again. :)

FINALLY SOMEONE SAYS TO SHUT OFF TWITTER!! I knew that wasn't for me and it was great to hear that. Thank you

terrific article, thank you so much for sharing and being honest about the business world.

Best article I've read on Storque.

Excellent points!

Although this is geared toward a crafter/producer, the same questions are true in running an antiques business. Friends often say - "Oh did you collect that stuff? I have a houseful and I'm thinking of opening a shop" - Wrong! I have never been a collector - I have always been a business! Big difference - and these kinds of tough questions explain why! Great article.

This is awesome! Thanks.

I love this article. Pricing is so tricky. You want to be paid for your time, but you also want your items to sell. When sales are slow, it is so tempting to discount your prices. Thanks for the reminder that our time in making a handcrafted item is worth more!

Oh thank you for such - a right to the point article. I really, really needed to read this. I'm starting out slowing and learning so many things in a very short amount of time. Sometimes I just need to step back and digest all of the info in order to move forward. I know I need to create more product. I'm tryin. I haven't sold from my shop yet so I haven't experienced the other side of the business. I am constantly tweeking my shop and slowly adding new product. I am going to put everything you wrote into action. Thank you. Sharonlee

Just super information here! Thanks so much for sharing!

Amanda, thanks so much for such a well-written, concise rundown on basic business practice. You pretty much summed up a semester's worth of a beginning business course for us here in one fell swoop. This info is invaluable to me as I piece together my own business (not launched yet, still doing prelim research). I am SO impressed by the nurturing spirit here on Etsy, it gives me hope, and lots of warm fuzzies. But back to brass tacks, now!

Thanks for the tips!!

Thanks for the info. Striving to maintain that magic formula is great however, I think the problem arises when the cost of supplies for a very small business that is purchasing smaller quantities is vastly different than that of a large store purchasing thousands of supplies at a time. It makes the final price comparison difficult. Handmade or not, customers do compare!!

Great points, and it makes me glad to have +30 years of painting, prints and drawings as 'inventory'. We fine artists have always had profits of 50% in most gallery settings, so we know all about markup. I use an Excel spreadsheet to figure out profits and costs, but I also recently worked out a 4 year projection based on my online sales of 16 months. It was pretty cool to see origins, my profit margin and have hopes for a solid future. That said, if Bill Gates and Steve Jobs hadn't rushed in blindly to create new business models with fantastic ideas, they wouldn't be where they are today.

This article should be required reading for every new seller that signs up! And for those already selling who seem to think that recovering your costs, paying yourself a salary and running your business on a profit after all of that is 'not cool'. And then, maybe prices will reach a true market level that workmanship and creativity of the artist/craftsman.

. . . that reflects the workmanship . . .

Love the "turn off Twitter" part! Great article! Will read it again!

One issue I see with charging for your time, is that if I did, my products would be so expensive that no one would ever buy them! What's the solution to that??

Great thought provoking article! Thank you for sharing!~

Lots of good information. I am curious about Megan Auman, you refer to her and the CEO. Does she report to a board of directors? Why do you call her a CEO.

awesome post. thank you for continuing to clarify all of these nuances with business! I had no idea it was all so fascinating...I never thought I would hear myself say that.

marking

Great article! I'm certain it is "right on", but would be interested in some feedback on adelle's question "One issue I see with charging for your time, is that if I did, my products would be so expensive that no one would ever buy them! What's the solution to that??".

Enjoyed the refresher course. I subsribe to Daily Worth, and enjoy reading it! Thanks Etsy for sharing...

Thanks so much for this practical article, Amanda. So important to be sensible about the time investment and possible returns, yet also factoring in how much quality of life and satisfaction add to the rewards side of the equation.

Well stated and backed up by some cold hard facts of business! Very educating to those who've never thought on it before-a welcome article indeed! Kudos on the responses!

"One issue I see with charging for your time, is that if I did, my products would be so expensive that no one would ever buy them! What's the solution to that??". ============ 1. you are not selling to the right market 2. your costs are too high - are raw materials being purchase wholesale, quantity discounts? 3. you are not using your time efficiently 4. your 'manufacturing' operations need to be streamlined 5. you are spending too much time doing unproductive 'work'. Is the time spent on facebook/twitter/forums/etc etc etc generating sales. and one no one likes to face - your product is really not marketable and needs a redisgn, or a change of focus for the shop.

Thanks for the info. I find it really difficult to figure out how much I make and need to sell when your shop has various items at different price points. It doesn't feel like I can average the sales either because of shifts in what people are interested in. Also, I'm confused about whether shipping costs should factor in to the wholesale price. If it does that I'd be doubling shipping and handling costs to get my retail price (which in my case-selling heavy steel sculptures-amounts to a lot!)

Shipping is shipping, separate and apart from the price you ask for your items. Shipping, whether one likes it or not, is IN ADDITION to the price of the item.

This article made me think long and hard about my business. Thanks for being so direct.

I heart daily worth!

A lot of things to think about, thank you for sharing.

Great article. Easy to read and understand, and extremely straight to the point. Glad my business mentor is my Mom and she had me check this list off before I stepped into my very first selling venue.

What a great read!..Back to the drawing board for me!!

All this help, this information, what a great thing ETSY!!!!!

nice! very well written and good advice

Thank you for telling the truth.

Thank you, this was very helpful and straightforward. I would have never thought about including profit on top of labor and materials/expenses. I guess I should start pretending like I'm needing to pay myself as an employee AND make a profit instead of just trying to pay myself with the profit. I'll have to think about how to make a business model for expected earnings over time; I know I can't make this a full time gig overnight (or at least it is unlikely to happen quickly).

thanks SO much for sharing this practical advice! it really helps to know there's a system in place to make a success of a small business.

fabulous article! so eye-opening. off to think about it all now... =)

Thank you so much for this important information! I have only had my jewelry business for a year and thought I had learned a lot, yet your article really hit home! I just sold 50 pieces of jewelry to a tourist gift store over the weekend and had all my jewelry priced wholesale and inventoried before going into the owner. He loved my jewelry designs and bought them all! I am so glad I did my home work before hand, my wholesale prices are 3 times what it cost to manufacture!

Sound advice indeed.

Thanks for this article Amanda. It reflects the reality of pricing and the value of handmade design. In the short time that I've been with Etsy I've come to realise that the experience you offer, the value proposition of your shop together with realistic pricing are all tremendously important and a lot more difficult than making for the love of it! Look forward to hearing more!

Great article with so much important information, Thank you very much for sharing!

Brilliant article with lots to consider! Thank you!

Hardhittin' and real! This is a reality call that all Etsy sellers need. This reminds us that we need to be good with our figures as well as our fingers =)

Wow!! This is a beautiful gem. Thank you for such article! Very timely for me.

So interesting!! I need to learn a lot about these problems!Thanks so much!

Thank you for sharing this interesting and practical information! Straight to the point and easy to understand. :)

"...we often get so caught up in our craft that we lose sight of managing our businesses...". Yes, that's right. Great article.

Thanks for this article!

Great article, as are all of Amanda's contributions to etsy! I've said this before, I highly suggest signing up for DailyWorth for regular "kicks in the pants" (or skirt) followed by practical advice on what to do next.

YES YES YES! This is so important, even for those of us working with vintage. Thanks!

Great tips! I reduced the price in my shop, but I think still have to upload more products. Thanks!

Great tips. I think another point to evaluate is as you peruse your competitors on Etsy....what is their pricing? If your pricing is WAY off from some competitors, you may need to scrutinize the efficiencies of your process? OR at least make sure that the product you offer has an edge that your closest competitors do not to account for a difference in price.

TAHNK YOU Amanda. I signed up for DailyWorth also. I love my craft, but the business end I have to brush up on! :)

Thank you- very helpful reminders.

This was a fantastic article..very insightful!

Thank you, very interesting and helpful! :-)

This article came at a great time. I'm starting to pay close attention to margins and need to make a firm goal in mind. Thanks!

Wonderful article! I am in the process of preparing for wholesale and will certainly be taking into account all that you shared.

Holy Wow I am not pricing anything in my shop like this. I've been guessing at a "magic" number that people will be likely to pay. Thanks for the education!

Wow, thank you for your wealth of information. A kick in the pants, a reality check, and confidence to push forward.

Now THIS was an understandable article. Usually I get lost trying to figure out the terminology but in this article the terms were clearly defined. Thank you so much for the good solid information!

Fascinating article and discussion - very very useful! Thanks

Amazing article, thanks so much for taking the time to share this information.

great article!

Very practical information and well written. Thanks!

Etsytastic!

Wow! This is such a great article, especially for those of us that want to transition from hobby to career! So much to consider. It is so good to hear a perspective that is so objective. Thanks so much!

Thank you for this - its my least favourite topic - and probably my most necessary!!

WOW - good left-brained information for us creative, right-brained types. I'd like to move past hobby and into more part-time at least and this is good solid info to use as guideline.

Thanks for the informative article. Gotta put this information to work... :)

Super-great article and I totally agree (crafting & designing is my full-time career and whether I realized it or not, I asked myself these questions when I was starting out...and still do)! Celeste (Crickets)

Very helpful!!!

This is a great article, but I have a question (assuming anyone will ever read it, of course). How do we balance pricing according to materials, labor, expenses, and markup with how much people are willing to spend - of course taking into account that we are competing against conglomerates as well as handcrafters that range from self-satisfaction-sellers (who are willing to lose money just to know their items are being used) to full-time craft business people (who buy materials wholesale, etc.)? If I priced according to that, my crochet items would be priced much higher, but people don't pay such prices. It's nice to challenge people with exciting ideas and formulas, but down to business, people are only willing to pay so much. If the author should get around to reading this, I would really appreciate her thoughts.

All-natural acrylic? Hahaha. Good article. Its easy to dream about selling your creations to avoid a real job, but you need to have some business smarts for it to actually work!

Good article. I like the quote by yoda in the first photo.

Thank you so much! This info is so very helpfull!

This is a well written article, plain and to the point (bottom line). Business is factual unlike the emotional issues involved with the creative part of crafting. If you want to stay in business, this article will tell you how to use your talents wisely. One thing more I may factor in to pricing is fair market value. I may not change what I planned to charge, but it keeps me current with what things cost. I enjoyed the comments too! LG

Wow, I'm printing this off and posting it in my sewing room. I need these reminders - especially the formula for calculating my prices. Thank you!

Very sage advice. It's good to step back and run the numbers and ask yourself some critical questions. Thank you for the well-written article!

Thank you, thank you for this. I am in the process of actively starting a business. This information really helped me with a pricing strategy. We can't undervalue our hard work and talent!

Wonderful advice! Thank you!

Thanks for the helpful advice!

Very informative, thanks. I've signed up with Daily Worth too.

Awesome advice! Thanks for the blog.

Very good article. Makes me stop and think and evaluate my business plan. Thank you.

Thanks for sharing .....

Great article, thanks!

great points. but where are the photos of slipper socks?! :)

Thank you so much for your tips and the resource you provide. Running a Etsy business or any business is certainly a learning curve. Thank god we can still create while running a business:)

this is a great article, thanks. so much to consider....

Well said! I am thankful for the refresher, I am already doing some of those, but it is nice to see where I am missing opportunities to grow my business. Thank you for the Blog!

thank you for this! I am scheduling time for this as we speak! I love dailyworth and crafting an MBA! keep it coming!

Excellent article & discussion. Many of us don't factor in even 3 out the 4 components listed, let alone adding in more for retail. Thanks for the advice!

I have seen a few comments in reference to etsy sellers already reflecting their pricing on a wholesale scale. I am pondering as to why. Realistically this is a nice model in theory, but the wholesale formula in itself reflects a more realism to pricing to actually sell. After the cost of materials is added to the expenses outlined which are unrealistic in itself, than labor is barely even compensated majority of the time. On average it seems that labor is mostly where the margin of profit comes from for many crafters. To even consider doubling that for a retail price is far reached.

Great articel and you are pointing out the truth - most etsy sellers are underpricing their articels big time. Thanks

Thanks for the great article! It's time to re-evaluate my buisness plan

I am the hobby on Etsy turning into maybe a quit-my-day-job hopeful! I love to create but do not have the business plan expertise. I love all of this new info because it really makes you think differently about your purpose. It is all good stuff to read, think and act on. Thank you!

extremely well written :)

I'll echo what was said above: If you sell vintage, factor in your time that you spend "searching".I know for most of us "The Search" is our passion, but it can certainly consume vast amounts of work/business hours! (not to mention gas!!)

Awesome article! Now to prep for inflation.

Thanks for the article. Would anyone know a good way to estimate overhead costs?? I'm having difficulty with that. Thanks in advance for your replies! :)

Thanks for some sound advice.

Thanks for advice.

Loved the article especially revelant for those of us who intend to build a business. Thanks again : )

Thank You for showing me that labour and profit are two different things!

Terrific article & much needed. Thanks!!!!

Thanks for the article, it's concise and straight to the point.

The concept of the cost of acquire each new customer is important. For me, not just "new" but "Loyal" customer counts!

wow! so interesting! thank you

Like so many others have commented, this was a well timed article for us since we've just started a new business and neither one of us has any experience in running a business. While it has been discouraging to learn all the things we don't know, it has been a thrill as well considering the more mistakes you make, the more you learn. Now we just need to find the ways of taking those mistakes from just learning to succeeding. Articles like this are exactly what people like us need! Thanks again!

Food for thought. I agree it is easy to get caught up in the creative aspects of the business and over look the very important financial details.

Good informaion. It is easy to get caught up with focusing on the creative aspects of the business. Food for thought!

My favorite piece of advice was that ALL sellers should really start with a wholesale pricing scheme and THEN adjust their prices to retail when they sell directly to customers. It really devalues handmade work if items are too cheap. I love that Etsy sellers want to make things affordable, but you have to be realistic and business-minded as well. Thank you for this article!!!

Helpful. I like your no-nonsense approach to making money.

Thank you so much for this article. I am really wanting to learn more and this is a wonderful start. I especially loved the part where you said take on each of these questions one by one when you are starting out. I love it because in the past I have been so overwhelmed with stuff I did not know where to begin. And along with crafting, it takes the fun out of it when you are trying to do this as a part-time/full-time job. So I will give this a go and see how we do. You never know this business of mine will be something someday. Thanks so much :)

Thank you for the article. And the comments also had alot of good information as well. Robin (grannygrant)

Thank you for such great advice! I currently work in Beverly Hills with a Private Label Designer who employs these concepts so successfully! It's been so valuable for me to learn from her business experience, and this article really hit the nail on the head!

Thank you, great advice. I have sold both and know there is a big difference. Also, time is money. If it takes more time for wholesale then retail, and profits are less, you need to think about that as a factor. Less time, more profits equal better focus on products and customers.

great info:) Thank you for sharing:)

Thank you for the really good pricing info! With all the competition out there, it seems like we have to always worry only about being close to the low end, and we end up creating problems for ourselves- especially with wholesale pricing. thanks!

Great article. As someone who makes very expensive time consuming items, pricing is a great struggle.

thank you! so appreciate this sound reminder to "act like a business" — so often the artist in me runs my business... NOT a good idea! heh heh :D

A great article outlining some of the upcoming trends, which is really useful to us. Will be great to incorporate international holidays as Australia doesn't celebrate Father's Day until September :)

Is it cold out there? Just get out there and find out!!

This article packs the punch. Loads of important information for pricing your handmade items. Thank you.

This is wonderful! Thank you! I've always been afraid to make "goals." This article has encouraged me to be braver in that area!

Excellent, excellent, excellent!!! I have figured most but not margins or new customer acquisitions which definitely will be added to the spread sheet.

So much great information in this article! Thanks!

Great article!

Wow! a lot of great information. I have some thinking to do.

Thank you for sharing your thoughts and keeping us all in check! I would love it one day if Etsy provided a great internal tool to help us calculate our bottom line. Microsoft Excel just isn't as pretty to look at :)

This article is great and it gives me a lot to think about.

I am a little confused about including labour and markup for profit as two seperate amounts when calculating a wholesale price. It seems to me that a final price should cover actual expenses incurred (material costs, % of electricty, rent etc, advertising, % of equipment acquisition and maintenance costs, listing fees) and what you earn for making the item. If you set yourself an hourly rate and then calculate how long it takes to make, list and package, surely this is enough. If you want to earn more money or if you have particular expertise, why not increase your hourly rate instead of adding a markup for profit? And how do you determine what the markup for profit should be? Is it the difference between what you are earning and what you wish you were earning? I think that if you are making goods yourself rather than outsourcing labour, what you earn for your own labour is your profit.

Great info, thanks.

Thanks so much!! Great info:)

Really great article, with lots of helpful advice. Thank you for taking the time to write and share it!

Thank you for sharing your advice and wisdom.

All of the advice is pertinent to us all, but the advise regarding pricing was eye opening! Thanks so much for the great article.

Keeping in mind the business aspect of creativity is so important....and so easy to forget!! Great article.

Thank you!!!! Absolutely great advice!

wonderful advice. Going to rework my plan now. Thank you!

Great Amanda

Great advice! Glad I found this :)

i have to say this has been one of the most profound articles we have read as a business! we followed all your advice! thank you so much! xoxo

great advice! thank you so much!

Thanks for the informative article!

Thanks so much for such an informative article. My goal is to be able to bring in a good income for my family and still be home with my kids. Thanks again for the great advice.

Great article, great, thank you for sharing.

great article, and very helpful tips. Thanks for sharing.

Thank you so much for great article! : )

What a great article. THANK YOU! :-)

I should have this article tattooed on my forehead. In the end if I do not make money, what is the point?

Great article!

Great info, thanks

Thank you for the great informationand recomending DailyWorth.com. Great site!

~ Very Helpful! ~

Great article! Thank you so much for sharing! Best wishes!

I believe that the points stated in the article are valid, and should be considered in pricing. However, we also live in "the real world" where there is a maximum the average person will pay and competition from others who will charge less for the same item. At a recent craft fair I saw a scroll saw clock for $35. It took me 8 hours to cut the same pattern. At the same fair, vendors were selling beaded earrings for $2, which wouldn't even cover my material costs. Needless to say, I had very few sales. Unless you are able to sell something that can be assembled in a short period of time (forget crochet, quilting, knitting, sewing), using inexpensive materials, it is going to be hard to find enough buyers willing to pay the higher price reflecting the true value of a piece. The biggest obstacle on Etsy is the sheer volume of items available. It is easy for your item to become lost to sight within a matter of days. More potential profit is lost if you have to constantly relist or pay to feature. That said, I admire those of you who have found the way to make it work for you.

I am taking notes on this for sure! Thanks for all your valuable information.

Very useful information, specially for beginners like me. Thank you.

Love the article. Thanks for being honest and bringing the dreamy crafter back to earth! It's hard, but needs to be done.

Thank you very much, great information.

Thanks for saying it like it is, we are all so busy social networking that we can lose sight of th real aspect of the bottom line. >many smiles beaming at you > ))))))))))) Thanks, Dabanga

Fantastic article with lots to think about as I've just been sitting working the numbers out.

Very realistic and good information.

Thanks for the info, was just what I was looking for!Makes you stop and think.Hope to really make a go of this, it's soooooo good for the soul!!!Thanks again:)

Thanks heaps, was just what I was looking for. I really love creating my art and it's so satisfying when complete strangers appreciate it. I really want to make a go of it and your advice points me in the right direction. Joining Etsy has been sooooo good for my soul, helps me believe in myself!Thanks for the tips!!!:)

The majority of my time is spent painting or thinking of my next project. These business facts shed light on the reality of our work. Thanks for the info.

Excellent article. At first I was just thinking of breaking even, but now I'm thinking of creating profit so I can keep creating.

Great info for new business owners! This will come in very useful. Thanks for the article!

Wonderful advice. Thanks for taking the time to share your expertise.

There is an old Chinese saying: Outsider sees it wiser. It works perfect here: as a craft person, we are insiders and may addicted to our hobby. So we need someone as a outsider to remind us about all these key points as for running a business. Thank you, the outsider!

This is my first info read as I just signed up today. Very good, very true stuff. I had all my beaded beautys listed at wholesale price(now I know) at the local bead store. I sold one item over the period of 18 mos. Very diapointing. But after seeing some of the beautiful work posted on this site and reading this article, I now feel more confident in asking for a price that is respectable for the amount of time,expense of materials and overhead that goes into making the jewelry that I make. Thank You.

This article is awesome! Thank you so much for sharing!

Yes, this is a very useful "kick in the butt". Thank you!

Great business fundementals. I was fortunate to learn strategies to help me grow Indigofera in my MBA program. Just trying to get my Etsy sales to catch up to on online volume. Try SCORE.org, for free business counseling anywhere in the US. It had made a world of difference for me. Thanks for sharing

Great thanks Amanda

Wow, finally an article about creating a business model I can understand. Thank you!!!! Bookmarking and spending time on it THIS WEEK!

Great article but.. i think there is another important thing: sometimes you can't see so clear the reason why a person become a buyer. Maybe is the product, or the picture, or the way it's described ... or just the emotional connect with all these things :)

Wow! Just learning! Thanks!

Thanks for sharing.

Really interesting thank you. I think I might have to redo my maths. I guess, nobody is buying my stuff already so I might as well be more expensive. hahah.

Just finished reading and answering the questions. Without a customer base and being new, it's hard to answer questions 6 and 7. But with a projection of 20 sales and figuring all numbers based on that, it was fairly simple to backwards calculate the advertising cost of acquiring those 20 customers. I definitely needed this break down to make my next move. Thank you for making it easy to understand.

Great advice, I will read more and get an understand of this. Thanks a lot. Joyce

What a wonderful article! Thank you for posting it!

I am very new in the online business word, and I really appreciated this type of articles an advise! Thank you very much

I need to hear and read this alot :) thanks.

Really great article. Thank you so much for the advice.

Marking

very good article very informative. Tahnks for posting.

Great article. Good points worth following through.

Thank you helpful info, the stuff that is hard for me!

Thank you for the article I just started on Etsy and have actually asked myself a few of the questions mentioned here.

Thanks so much for all the advice. I just started my etsy and I want to do things right!

This article is very helpful. Thanks so much!

As a newbie to etsy, I found this article to be very helpful! Thanks so much.

Amanda, great article. Time to get real! Thank you.

Good advice!!

Thanks for the fantastic article :) Saving to re-invest my ideas later!

Extremely enlightening. Brings to focus what needs to be factored into running a business. Thanks!

Really great article, thank you for sharing!

Thank you for a great and educational article. Pricing my work was always a struggle for me. I will try to follow your advise in the future. Thanks again and best wishes.

Amazing article! Thanks so much! *grabs her notebook and starts calculating figures*

Great article and thank you everyone for sharing any tips on Business savvy here at Etsy!

I just started here on Etsy, and I sure appreciate the opportunity to learn from those with experience and a good business sense. Thanks!