JJMFinance, a Certified Public Accountant, sees the world through green-tinted glasses and he's out to help Etsy sellers with their businesses. He looks at Etsy site features and sees economic case studies. And we love it! Below you'll find his useful interpretation of Alchemy.

Do you remember your economics teacher and the way he could put you to sleep after lunch showing your graphs and blabbing about supply and demand? Maybe he could have kept your attention if he was talking about Etsy’s new system for requesting custom-made items — Alchemy. Alchemy is a great example to see a simple economic principal observed — supply and demand. Keep reading to learn more! Not only will you get a quick refresher course in economics, but you will also learn a few ways you can apply these principals to the way you run your Etsy shop.

Supply
Supply is what everyone offers for sale. These are the thousands of items listed on Etsy. There are over 14,000 different red earrings currently listed on Etsy — different varieties for different people. This is the supply of red earrings.

Demand
Right now there are many buyers surfing the pages of Etsy looking to make purchases. A few of those are actually looking for red earrings right now. They are browsing through the currently listed supply seeing if their demands have a matching supply in both design and price. This is the demand for red earrings.

Where Supply Meets Demand
There are a couple of options that can happen at this point. First, the buyer could find a pair of red earrings that are currently listed that meet their stylistic and price demands and a complete transaction could occur. The second option is where Alchemy makes its appearance.

Alchemy is just another point in the marketplace where supply and demand can meet and fall in love getting married in something called a transaction. This is really a new way for crafters and customers to meet in harmony — creating a more efficient marketplace where more buyers and sellers are both happy.

Application For Your Shop
You can actually look at the current requests and bids in Alchemy to get a mini picture of how supply and demand are interacting on Etsy.

You can use this to:
1. See potential market niches that you could fill with your business. If you consistently see people requesting yellow sweaters with green pickles appliquéd on the back, you can probably assume that if you started making these, you would pick up some of these sales before they reached Alchemy.
2. If you see no one bidding on a really low priced request, you can probably assume that this price is way under the true market price. You can then compare this price to your similar items.
3. If you see people consistently requesting a product for a much higher price than you offer it for — you can probably assume that your prices might be too low.

So the next time you browse through Alchemy, don’t just see what items you could bid on, but look for opportunities to learn about the Etsy market. Use these observations to then help you decide on new products to expand in your own Etsy shop and your current pricing strategies.

Learn more about Alchemy here.