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What It Costs to Run A Shop

prettypiecesjewelry avatar
prettypiecesjewelry from prettypiecesjewelry 7:19 am Jan 8, 2013 EST
So I just closed the books on 2012. Looking at the numbers I realized it's a consideration of so much more than just pricing items. One has to take into account all the listing/relisting and transaction fees, especially if you have alot of items and do alot of listing/relisting. Then there is the time it takes to make your items then photograph them and write descriptions. The time to find materials and packaging supplies. And the bookkeeping, ugh! I don't look at my shop on a per sale basis but rather as a whole shop.

25 Responses

Beth and Mark avatar
Beth and Mark from CherokeeLodge 7:22 am Jan 8, 2013 EST
I'm lucky because I have help running my shop. Hubby does the manual labor, and I do the logistical/paperwork type end. It balances out pretty good where neither of us feels overwhelmed.
Sherry Morgan avatar
Sherry Morgan from TreasuresFromTexas 7:22 am Jan 8, 2013 EST
I'm afraid to look at my tax records too closely! Because of all the new equipment we bought this year, I'm going to show a tremendous loss! But I realize that it will take some time to get to the point where I'm actually making a profit-just like any other business. If it's important to you, just keep plugging away at it until it starts to make a profit.
Tara avatar
Tara from WaterwaifSupplies 7:23 am Jan 8, 2013 EST
you absolutely have to look at all of those things! when you pay yourself an hourly wage, those are all things that need to be accounted for, too, on your "time sheets"!
Allyn avatar
Allyn from knitwit4ever 7:24 am Jan 8, 2013 EST
And don't forget all the supplies it takes to run the shop: printer ink and paper, mailing supplies, business cards and/or advertising, pens, staples....the list is pretty long. Add in the vehicle expenses to run shop errands, too.
Mandy avatar
Mandy from ThePillowPeople 7:27 am Jan 8, 2013 EST edited
Driving to the post office and supply stores should be figured in, as well as the cost of equipment (I bought three sewing machines and one serger this past year on top of what I already had). It is crazy when you think about it and the reason I'm relatively unyielding when asked for discounts. There is so much more than just the cost of materials involved.

Our job descriptions are insane as well...if I worked for someone else, they would have to pay me huge money to be:
Designer
Seamstress
Quality Control Manager
Purchaser
Customer Service Rep
Customer Service Manager
Accountant
Human Resources Manager (if you have family/friends/staff help)
Photographer
Marketer
Personal Assistant
Owner
Picker/packer
Cleaning Service
IT


It goes on and on.
ElectronicGirl avatar
ElectronicGirl from ElectronicGirl 7:36 am Jan 8, 2013 EST
yep. its always a hard hit of reality to look at the numbers. but it's part of running a small business...and the risk in it.
i still think the 3-5 year rule works.
many small businesses don't turn real profits until the 3rd-5th year in business. and its a whole heck of a lot of work we put into it from 1 - 3 years too!
but i am still happy doing my own business..so i'm gonna find a way to make it work. ;)
prettypiecesjewelry avatar
prettypiecesjewelry from prettypiecesjewelry 7:59 am Jan 8, 2013 EST
Allyn and Mandy...........yes, more costs to add into the mix.

Electronic - I love having a shop on etsy. I've learned so much about how this business works from doing my own bookkeeping. For two years I've shown profit, the first year was small, I mean teansy, but a profit nonetheless. Of course I didn't have any super expensive expenses this last year.

Seeing the financial framework helps put pricing into perspective.
Mary Richmond avatar
Mary Richmond from maryrichmonddesign 8:11 am Jan 8, 2013 EST
keeping track of the bottom line is important for all businesses, no matter how small they are....if you aren't making money, you're losing money....it's that simple. most beginning businesses lose money in the beginning but it is good to know what your threshold for losing money is. also, to be honest about what all the expenses are. i think a lot of people gloss over some expenses so they feel like they are making money when they are, in fact, losing money....

jill avatar
jill from jill2day 8:12 am Jan 8, 2013 EST
This is why the many threads about how many sales (vs. how much profit) and 'should I lower my prices to get more sales' are so frustrating. The devil is in the details... and those details mean a lot!!

While I do hate doing taxes, it is a great once a year big picture look at your situation!

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