Hey everyone, thinking about starting an Etsy print on demand side hustle.
We're doing a deep dive today into what it's really like on Etsy.
Right.
We're going way beyond those like super hyped up Instagram posts, you know.
Yeah, yeah, for sure.
And we've got an awesome guide.
Oh yeah.
William Lee.
Okay.
He's a CFO.
Wow.
And has an MBA.
Okay.
So he knows his numbers.
Right.
And he actually tried Etsy print on demand himself.
Interesting.
He made the super honest YouTube video about his experience.
Cool.
So we're going to break it all down.
Love it.
Not just the how to stuff.
Right.
But like the real truth about Etsy.
Yeah, I think that's what people really need.
Yeah, because we all want to avoid those like, you know, information overload pitfalls.
We want to cut to the chase.
Absolutely.
And I think you'll be surprised by some of the stuff we found.
Oh yeah, like what?
Like how Etsy defines an active seller.
Okay.
And all the hidden costs you might not even realize.
Interesting.
But first, you know, we've got to acknowledge the appeal.
Oh, for sure.
Like why is Etsy so attractive in the first place?
Yeah.
It's massive, right?
Oh yeah.
Those numbers are kind of mind blowing.
Yeah, tell me about it.
Over 460 million visits every month.
Wow.
Almost 90 million buyers.
That's incredible.
And it's global.
So that reach.
Yeah.
It's huge.
E.
Makes sense what people want to sell there.
Yeah.
I mean, who wouldn't want a piece of that pie?
Right.
It seems like the ultimate passive income dream.
Yeah.
Like reach tons of customers effortlessly.
Yeah, it's definitely tempting.
Totally.
But you know, success isn't just handed to you
on a silver platter.
Of course not.
You've got to put in the work.
And this is where we start diving into the reality.
Okay, wait on me.
So Etsy reported 5.4 million active sellers in 2022.
That's a lot.
It is.
But here's the catch.
Okay.
Their definition of active is kind of sneaky.
Really?
How so?
Well, it includes anyone who sold anything or just got
billed in the last 12 months.
Huh.
So even if you just paid a listing fee but didn't actually
sell anything, you're still considered active.
So it's kind of misleading.
It is.
Right.
It doesn't really tell the whole story.
No, not at all.
Of who's actually making it on Etsy.
Right.
And then, you know, when you dig a little deeper,
yeah, the average gross merchandise sales.
Uh-huh.
Per active seller.
Yeah.
In 2022 was only $2,169, which like when you think about it,
yeah.
All the time and effort that goes into running an Etsy shop.
Right.
Even with print on demand.
Exactly.
Even with print on demand, it's like not that much.
At a huge amount.
And that's just sales, right?
Yeah.
We haven't even touched on the fees.
Ugh, the fees.
And those can really eat into your earnings.
For sure.
So that $2,169 average.
Yeah.
It really makes you wonder how many sellers are actually
making decent money.
Yeah.
A good point.
Right.
But before we even get to the profit part.
OK.
We got to talk about the elephant in the room.
What's that?
Competition.
Oh, yeah.
Like, think about it.
Yeah.
There are millions of items listed on Etsy.
I know.
It's crazy.
So you're not just competing with a few other sellers.
Right.
You're up against this, like, global marketplace.
Oh.
I hadn't thought about it like that.
Yeah.
So it's fierce.
Definitely fierce.
So I've got fierce competition.
Lower than expected average sales.
Right.
But there's even more to consider the fees.
Everyone's favorite.
Let's dive into those.
OK.
I'm ready.
So first up, the listing fee.
Right.
$0.20 per item.
OK.
Doesn't sound too bad.
No.
Not bad.
But it only lasts for four months.
So if you have 100 active listings.
OK.
That's $20 every four months.
Just to have them up there.
Yeah.
Even if you don't sell a single thing.
Wow.
So you're paying just to list them.
You are.
Whether they sell or not.
Yep.
That's crazy.
And then, of course, there's the transaction fee.
Right.
6.5% of the sale price.
OK.
Then payment processing.
Usually around 3% plus $0.25 per transaction.
OK.
And then, oh yeah.
There's more.
Don't forget the potential advertising fees.
Oh, right.
If someone buys through an offsite Etsy ad.
Yeah.
You could be paying another 15%.
On top of everything else.
Oof.
That adds up quickly.
It does.
And that's why it's so important to understand profit margins.
Yeah, for sure.
You can't just look at your sales
and think that's what you're taking home.
No.
Definitely not.
William Lee had this great example in his video.
OK.
Imagine you make $5,000 in sales.
Ooh.
That sounds nice.
Great.
Sounds amazing.
But if your profit margin is only 20%,
oh.
after all those fees and expenses,
yeah.
you're only actually pocketing $1,000.
Wow.
That's a huge difference.
It is.
Right.
It really highlights the importance of focusing on profit.
Not just sales.
Exactly.
It's what you keep.
Not just the initial excitement of a sale.
But you know, there are even more costs.
Seriously.
Yeah.
Like hidden costs.
Like what?
That people often overlook.
OK.
Sales tax, for example.
Oh yeah.
It can be a real headache.
I bet.
Depending on where you live.
Uh-huh.
And where your suppliers are.
OK.
You might need a resale certificate.
To avoid paying sales tax on your supplies.
Exactly.
And even then, you could still need to file sales tax returns.
Even if you don't owe anything.
Yeah.
It's an administrative burden.
Wow.
And takes a valuable time.
So it's not just about listing and watching the money roll in.
There's a lot going on behind the scenes.
There is.
Stuff that can really impact your earnings.
Absolutely.
And we haven't even factored in the time it
takes to actually manage your shop.
Oh yeah.
That's a whole other thing.
Which is exactly what we'll be diving into next.
Can't wait.
OK.
So last time, we really dug into those claims
of easy passive income.
Right.
And we saw the reality of Etsy.
Yeah.
The fees, the competition, and all those sneaky hidden costs.
Yeah.
There are a lot.
But let's be real.
OK.
Time is money.
Right?
Absolutely.
So how much time are we actually talking about here?
That's a great question.
And it's something William Lee really emphasized in his video.
Oh yeah.
Yeah.
He was like, running an Etsy shop, even a print on demand one.
Yeah.
It's not passive.
Right.
It's a real business.
OK.
It needs your time and energy.
You're not just like uploading designs and then sitting back?
No, no, no.
You're creating those listings.
Uh-huh.
You're researching suppliers.
You're managing orders, handling customer service,
marketing your products.
Yeah.
It's a lot.
It all adds up.
It sounds like it could easily become a full-time gig.
It can?
Especially if you're juggling other stuff.
Absolutely.
Like a job or family.
Or just life.
Exactly.
Life happens.
And that's where that whole hourly wage
calculation comes in.
Right.
Remember that $1,000 profit example?
Yeah.
William Lee figured it took him about 100 hours to make that.
100 hours of work.
Yeah.
So you're spending 100 hours to make $1,000.
OK.
That's basically an hourly wage of $10.
It's just suddenly those make money in your sleep claims
don't sound so dreamy.
Right.
It's like, whoa, hold on a second.
Yeah.
It's a wake-up call.
It is.
And it's not just about making money.
Uh-huh.
It's about making sure your time is being used well.
Right.
And this isn't just a nepsy thing.
No.
It's any side hustle.
Yeah.
Any business venture.
You've got to be realistic.
Oh.
This reminds me of when we tried selling thoseables a few years ago.
Oh, yeah.
We were like, this will be fun, easy money.
Uh-huh.
But we ended up spending every weekend
pouring wax and packaging orders.
Yeah.