Money Sense

hehe... silly dog

 So, I've noticed a small increase on views in my Etsy Shop since starting this blog, but no sales. Hmmm... Could it be my prices are too high? I have raised them but that was because after doing some math I realized I wasn't making enough, I was in the hole after paying myself. I think it's important for consumer's to know just what goes into what they are buying, some companies totally rip you off by having their products manufactured outside of the country for $0.25 a unit and then selling it to you $200 a unit. I'm not trying to rip you off, many of us on Etsy work really hard at what we do. So, I'm going to show just what goes into my work.

First thing's first, the obvious. C.O.G.S. also known as "cost of goods sold." Meaning the cost of my supplies that went into that stationery set; the paper, the ink, the glue, those foamy things that create a 3D effect, embossing powder... It all adds up.

But lets look at my most basic, basic design I have available, and one of the least expensive per unit (one card, one envelope)

Doily Thank you Notes - $20.40

This is one of my favorites, it turned out better than it did in my head. Anyway...

The paper itself .....................................................$0.06
Use of ink, which I don't even bother trying to calculate.....$0.00
Oh, and the envelope...............................................$0.06

That comes to a total of ..........................................$0.12

That's for the C.O.G.S. of one card. For this particular set, there are 20 units, 20 cards, 20 envelopes. The listing price I have for it is $20.40

Listing price (AKA gross profit)..................................... $20.40

Now, COGS comes to $2.40, but I calculate 25% of the gross profit. For this particular set; that comes to...................................$5.10
Then subtract COGS..................................................-$2.40
And I get net profit....................................................$2.70

So, that 25% is just enough to cover my COGS so that I can replenish my supplies, what is left over is so I can grow my business.

So we still have the listing price.....................................................................$20.40
Here's that 25%........................................................-$5.10
Which gives us.........................................................$15.30

But that's not all, there are also fees I have to pay with each transaction. See, each unit for this particular set costs the consumer $1.00 each. But, there's a listing fee from Etsy that I have to pay every month, $0.20, and since I renewed this particular listing because it had expired, I was charged another $0.20, so that's where that $0.40 comes from

So, here's where we left off.........................................$15.30
Here are the listing fees............................................-  $0.40
And that gives us......................................................$14.90

Etsy also charges a transaction fee of 3.5% based off of my revenue...................................................................$0.71
PayPal also charges my revenue a fee of 6.4% + $0.30..........- $1.61
Giving us whats left over of..........................................$12.58

And that's not even all the fees. If someone purchases an item with a credit card or gift card, I get charged another fee.

So, after all the fee's, COGS, and that 25%, I will end up paying myself $12.58

Now, lets look at what the labor of $12.58 pays for. It doesn't just pay for my time making the set, it also pays for my time listing the item (loading photos, categorizing it correctly, writing the description, coming up with tags so that potential buyers can find my item... same goes for the title, too), photographing the items, taking the time to put it on Pinterest, Wanelo, Twitter and my Facebook account, and figuring out the finances for that sale. I also have to take the time to package and process the order.

I hope you found this post informative and enjoyed the little (ok big) peak into what I do. Please feel free to comment below or if you have questions, please email me! You can find my email on the contact page.