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How One Knitter Makes Almost $1 Million A Year On Etsy

Discussion in 'Business & Tax Advice' started by BassTrackerBoats, Feb 12, 2015.

  1. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    This is from http://www.fastcodesign.com/3042352/how-one-knitter-makes-almost-1-million-a-year-on-etsy

    There are a lot of good points in here that can be applied to other methods beside Etsy.

    Alicia Shaffer's business, ThreeBirdNest, makes $80,000 a month selling handmade legwarmers, scarves, and headbands on Etsy. Here's how.

    Knitting socks, scarves, and headbands doesn't have much in common with performing orthopedic surgery or governing a country. But this crafty hobby earns mother-of-three Alicia Shaffer's business $80,000 a month, in part via her Etsy shop—which adds up to an annual revenue of $960,000, she claims. That's about as much as top orthopedic surgeons make, and more than twice as much as the United States president makes.

    Shaffer, based in Livermore, California, sells her knitted wares on Etsy in the online craft marketplace's second most successful handmade goods shop. (The first most successful shop sells "buttons like the ones they wear at TGI Fridays," Shaffer says.) Called ThreeBirdNest, it's named after Shaffer's bird's nest tattoo, honoring her three kids.
    Jennifer Skog

    Through its independent website and Etsy shop, ThreeBirdNest receives an average of 150 orders per day, with most orders consisting of three items. Around the holidays, that number goes up to 700 to 1,200 orders per day. This January, the business raked in a total of $128,000 in sales. In the three years since its launch, it has made 100,000 sales on Etsy alone, Shaffer says.

    The shop's 58 designs—including socks, leg warmers, boho scarves and lace headbands, as well as T-shirts that read "Feed Me And Tell Me I'm Pretty"—look like they might appeal to a certain type of kombucha-brewing earth mama, but they don't scream million-dollar business. Prices range from $4 for a fabric cuff bracelet to $38 for a floral circle scarf. Many Etsy shop owners feel lucky to sell 10 pieces a month, and 65% of Etsy sellers make less than $100 from their shops in a year. Crafters usually need day jobs to support their hobbies. What accounts for ThreeBirdNest's success? Is the shop secretly sewing methamphetamine into the seams of those lacy legwarmers?

    "Is the shop secretly sewing methamphetamine into the seams of those lacy legwarmers?"

    Shaffer attributes her success to deep-seated motivation. She launched ThreeBirdNest in 2011, when she made a few headbands for the small women's clothing boutique she ran in Livermore. They were so popular she decided to start selling them online. "I opened an Etsy shop, figuring I'd help pay for my kids' soccer and dance lessons to supplement the boutique's sales," Shaffer tells Co.Design. "I was recovering from the failure of a business I'd run selling baby products—handmade slings, carriers, and blankets." After that business tanked in the recession, "I'd lost a little bit of confidence in my ability to be an entrepreneur."
    Jennifer Skog

    In the first few weeks after its December launch, ThreeBirdNest made 90 sales. "It was absolutely mindboggling. I thought it was a complete fluke, that it would stop after the holidays were over." But when February rolled around, Shaffer found she couldn't fill all the orders herself. She hired a friend to help with shipping.

    Now, Shaffer has a team of 15 sewers—"all moms," Shaffer says—working full-time, as well as a professional photographer. Not all the items are entirely handmade by Shaffer's team—many, like the knitted legwarmers, are sourced from India. "We finish them here, adding lace trimmings," Shaffer says. The profit margin from such imported items is 65%. Shaffer's husband was able to retire early from his job as a fire chief.
    "Shaffer's husband was able to retire early from his job as a fire chief. "

    "After I lost my last business, I said, ‘I don't want that to be on my gravestone,'" Shaffer says. Shaffer's been a relentless businesswoman since high school, when she went door-to-door selling engraved nameplates and license plate frames printed with slogans ("Like, ‘Don't bother me, I'm off to Bingo,'" she says.) She took her cues from her mother, who made extra cash selling handmade items at craft fairs and owned a nameplate-engraving machine.

    But her shop's success isn't just thanks to a Tracy Flick-ish desire to succeed—it's also about aggressively helpful customer service, attention to detail, and knowledge of how e-commerce on Etsy, which has 30 million registered users, works. Here, some of Shaffer's business tips for killing it on Etsy.

    Think Like A Shopper

    "Etsy has a ton of articles and videos on secrets to shop success. I took advantage of all of those," Shaffer says. "I always ask other Etsy shop owners, ‘Would you click on your item?'" Shaffer says. "If you search ‘lace headband,' 24 headbands show up. Which do you click? You want to make sure you're looking at your shop from the shopper's perspective."
    "Shaffer envisions her shop as a more affordable Free People."

    Photography And Styling Matter

    It all comes down to photography and the way you style your items, Shaffer says. ThreeBirdNest's items are among the top hits for an Etsy search of "lace headband," and the images are among the only ones that are well-lit, featuring a professional-looking model (Shaffer's younger sister), instead of just some headbands lying on a table.

    Follow Etsy's Advice Religiously

    Another basic piece of advice Shaffer has is to consistently dot the i's and cross the t's on all of Etsy's online paperwork: "Do you have all tags completed? Have you written a full description of the shop? Do you tell your story in the 'about us' page?" All of these seemingly negligible details affect how shoppers perceive your digital storefront.

    Don't Give Your Products Stupid Names


    Making sure items show up in Etsy's searches is also crucial: "A huge mistake I see is lots of shop owners list products by the name they've given it, like ‘Juicy Frutti Tutti Garland.' No one's going to search for that." Instead, Shaffer usually opts for something more general, like "floral garland," or "tassle birthday party decoration."
    Jennifer Skog

    Kill Customers With Kindness

    Without an advertising budget, ThreeBirdNest promotes instead through social media and word-of-mouth. "We reach out to customers, asking them what they want. We add inserts into each order with coupon codes, giving them $5 off their next purchase. We ask our customers with blogs to tell their friends about ThreeBirdNest." Shaffer's customer service ethic is strong: "Pre-make your items whenever you can so you can ship them to customers before the one- to two-week lead time. Respond to their emails immediately. Make sure they come back."

    Despite the hype about her business's astounding revenue, Shaffer insists she pours most of it back into ThreeBirdNest in hopes of expanding. Shaffer herself takes a salary of $55,000 a year. This year, she's adding a children's line, called FeatherWeight, to the shop. "I want ThreeBirdNest to become a household name," she says, something no Etsy shop has done so far. She envisions it as a more affordable Free People.

    "People say, ‘look at all this money,' but I'm not on a cruise," Shaffer says. "I'm working my butt off for it. I'm not just sitting here pointing my finger at people and telling them to get to work. I get home, put my kids to bed, and keep working. It's a 24/7 operation."
     
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  2. Avid Learner

    Avid Learner Regular Member

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    $1M sales a year in that seems incredible for that merch, at first glance... obviously some lessons to be learned on marketing and product selection. It looks like her core talent is in design (and "common sense" marketing), and she should hire talent for the rest. Interesting read, thanks!
     
  3. Deestroyer

    Deestroyer Newbie

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    Good read, my girl wants to sell her stuff on etsy
     
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  4. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    Good read, for some it may be possible.
     
  5. avilux

    avilux Power Member

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    I liked it.. just... nearly $1M and she's only making $55k? Either she's just trying to seem humble or she really doesn't care about the money.. She's working way too hard for a meager $55K. If her revenue's 960K, and all of her materials and the little marketing she probably does (if it is supposedly mostly word of mouth) is even an astounding 50% of that.. then there's still nearly half a million. Most clothing companies probably spend 10%-25% on materials. I just don't see how she can only take in like 1/17th of her revenue. If she's reinvesting tens of thousands or hundreds of thousands into her shop.. then I'm not sure what she's reinvesting into if she doesn't buy much ads. She should just get a team of workers for her for the whole year and should focus on making an etsy empire.
     
  6. terrycody

    terrycody Elite Member

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    Another Epic share from you BTB!



    Thanks very much!

    Me myself is Watching Etsy for a very long time and this should be a very valuable reading, i keep thinking bring our country's goods onto Etsy, you know China has a tons of handmade goods haha, definitely will try etsy in the near future, like handmade wooden lighters, etc etc.


    Terry
     
  7. picas

    picas Junior Member

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    I know the working day of a sewer ..hardworking and at the end of day, she can not stand up because her back and legs get stiffness
     
  8. Mr Jack

    Mr Jack Junior Member

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    Nice read. Unexpected though
     
  9. Banker1984

    Banker1984 Newbie

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    Thanks for this info... will apply it my self...
     
  10. denial

    denial Newbie

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    really inspirational !!! figure just not show her talent but it shows her hard work too. heads off to the lady !!
     
  11. MonsterMag

    MonsterMag Power Member

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    Read up here... its a 'scam' those US handmade products are shipped from India or ordered from Alibaba in bulk...
    Does no one investigate anything anymore? Just read and believe?
    http://howetsyrapedamerica.com/
     
  12. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Sure, there are some people that sell on Etsy and use commercial outsourced labor but that is not everyone on the site at all.

    If you think that EVERYONE on that site is using Alibaba or 3rd world country labor you are mistaken as that is just not the case.

    This one, according to that site you shared, may be one that is not complying with Etsy's policy but who knows for sure and it is making bank.
     
    Last edited: Jul 15, 2015
  13. MonsterMag

    MonsterMag Power Member

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    I don't judge it - but specifically this one (plus a few others) have been outed by this blog. Of course it doesn't change anything because etsy had an IPO and needs to make as much money for the shareholders as possible - so they shit on their own rules. Negative comments on those shops that don't comply with the etsy policy have been deleted by the etsy team to protect the sellers reputation.
    In the end it's BH at its finest ;)
     
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  14. Nerzhul

    Nerzhul Newbie

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    Good read, but I heard that lots of the products on etsy aren't hand made. I mean they are, but it's outsourced workers, right?
     
  15. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Monstermag just pointed that out a few posts above.

    I don't sell there nor do I have an interest in that medium; the point of the article to me was that one can do a lot with a little if they use their head.
     
  16. Mart668

    Mart668 Newbie

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    A very interesting read! :)