This is a story about trying to make a living profit out of my goods. After almost a year on etsy I finaly did the math and had to re-think my pricing. I am using my catnip pillows as an example because I had to totally reprice them after much calculation.

Imagine my surprise when my catnip pillows became my best seller! I originally made them as a lark to consume the ever-growing pile of scrap materials left over from making aprons, tablecloths, pillows and all the assorted goods on my etsy site. They were fun and a kind of give-away, so I listed them for $.25 each, and sold several, charging shipping extra.

Assorted scraps to be cut into pouches and make into catnip pillows.

Then looking at my etsy bill, I realized I was paying $.20 each to list them, and 3% to sell them! I was in negative dollars - well, pennies - territory. I increased the price to $.50, but was still only making mere pennies for my labor. During Christmas I increased again, to $.75 each, with free shipping, and sold a LOT. The free shipping was a big deal, because I like to have a tracking number, which costs about $.80 on top of the actual shipping charge, so I was paying $2-$5 sometimes shipping $10 worth of catnip. After Christmas I raised the price to $1 each, which gave me about $.50 profit, before thinking about the cost of the catnip. Harumph. I increased the price to $1.50 and decided to do a scientific experiment to calculate my actual costs making and selling a 2 1/2" square catnip pillow.

First I bought the catnip:

I wanted to know exactly how many pillows I could make out of the large economy 2.50 oz size jar. I assembled the scraps and measured out 3"x6" lengths and started sewing them. Then turned them inside-out, snipping the corners, filling them up with about 1tbsp of catnip, and sewing them shut:

Finally, DONE! I honestly didn't keep real track of my time, but it did take at least 3 - 4 hours to complete all 33 pillows, from start to finish. And now I know I can get 33 pillows out of a $7 jar of catnip. Time to do the math:

At $7 for 2.5oz, divided by 33 pillows, equals $.21ea in catnip, plus $.20ea to list on etsy, plus their 3% commission to sell, another $.05, and postage, minimum $.44 to mail a single pillow in an envelope, no tracking number, total $.90. This is what they mean by the cost of doing business. My profit is $.60, x 33 = $19.80, after selling them for $1.50ea x 33 = $49.50. Hoo boy! And my work is not done. I'm taking the jar full of pillows to the post office and get an estimate to ship them all to California,, plus tracking number, for a more realistic shipping cost. Then I plan on checking out the competition. Just how much CAN I really sell them for? How much do other etsians charge for their catnip toys? How much do they retail for at the pet store? I must say, this has been a true learning experience, a real eye-opener. I hope this little blog helps you out, too, in trying to make a living selling on etsy.

Well, heck, guess what? I just read one of the comments to this blog. A woman tells me she pays $2ea for her catnip pillows from a local vendor, and she drives to pick them up. She told me to raise my price! So guess what? I'm taking her advise and raising the price to $3 each! Thank you for such good advise! Here is the link to see them in my store.

## Friday, January 15, 2010

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Wow! Well done you for doing all the maths! I hope those pillows continue to sell well.

ReplyDeleteThank you for your kind comment on my blog.

It's amazing when you add up all the time it takes to shop for supplies, make stuff, photograph it, list it and then ship it. When you add your time cost to the cost of materials, packaging, listing and commission fees, is seems impossible that you could make and sell one for $1.50! And I bet there's a lot of competition on Etsy for catnip toys.

ReplyDeleteGood for you for analyzing this whole process!

Knot-Cha-Chá!™

*****

Yep, when we break down the cold hard facts, sometimes we are working for a pittance :(

ReplyDeleteGreat food for thought, thanks, T.

Good job for having the patience to do this and for sharing your calculations! I think it will inspire fellow etsy folks to be able to do the same.

ReplyDeletewow, makes a difference to do the math. I pay a local gal $2 each for her catnip pillows, and I go to her house to get them. raise your prices :)

ReplyDeleteYou have received the Sunshine Award from us! Please visit our blog post when you have the chance so that you can claim your award and pass it on!

ReplyDelete-Karen and Syd, BZD

Cool project. Good thing my cats can't sniff the screen!

ReplyDeleteI know just what you mean! I make cat nip toys too, and started out charging a tiny amount for them. Then I figured out how much it actually was costing me and had to raise the price. I've actually sold more of them since then, so I agree that you should up the price of yours!

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