3 Things You Must Know Before You Start Your Etsy Business
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The following excerpt is from the Staff at Entrepreneur Media Inc. and Jason R. Rich’s book Start Your Own Etsy Business. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound or click here to buy it directly from us and SAVE 60% on this book when you use code SIDEHUSTLE2021 through 6/20/21.If you decide to become a seller and create your own Etsy shop, the following are three key concepts you need to understand right from the start:
1. No online business is a get-rich-quick scheme. It will likely take weeks or months before you get your first sales and even longer before your business generates a profit. How long it will take to generate a steady profit is different for every Etsy seller.
2. When you create and launch an Etsy shop, you’re launching a legitimate business and need to run it as such, even if you’re doing this as a hobby on a part-time basis to make money. Start with a strong business foundation on which you can more easily build.
3. To be successful, you need to develop a thorough understanding of your product(s) and why customers will want or need what you’re selling. It’s equally essential that you develop a good understanding of your niche target audience.
Now let’s dig into these three concepts in a little more detail.
Develop realistic expectations
First, operating an Etsy business is not a get-rich-quick scheme. While you can establish your online business in a few hours, realistically, it could take weeks or even months before you make your first sale and even longer to begin generating a steady profit.
The majority of Etsy sellers start their online business on a part-time basis. Over time, however, some develop the ability to grow their business and make it a full-time career that becomes extremely profitable. It’s absolutely essential that you begin this journey with realistic expectations, which you must establish right from the start.
Related: 12 Ways to Increase Online Sales
Establish your business correctly from day one
The second concept you need to understand right from the start is that as a business operator, it’s important that you establish your business correctly and understand what this entails. As a business operator, you are responsible to register your business with the local, state, and/or federal government and establish it as a legal entity.
It’s then your responsibility to do proper bookkeeping (on an ongoing basis), keep track of all your income and expenses, manage your inventory, communicate in a positive and professional way with your potential and existing customers, take steps to earn a profit and pay taxes on your income. However, this is just the beginning.
As a business owner, you will be continuously juggling many different responsibilities, so it’s important that you understand what these responsibilities are and set everything up correctly from day one so the foundation for your business is strong. With a strong foundation, you’ll face fewer obstacles and challenges caused by common mistakes that first-time business operators often make, such as incorrectly filing state and federal tax returns or neglecting to file in a timely manner.
Being a detail-oriented and well-organized person who is good at multitasking and managing your time will also serve you well once you become an Etsy seller and start operating your online business.
According to Etsy’s research published online in 2016, approximately 46 percent of all Etsy sellers have applied for and acquired a business tax ID, and 41 percent have opened a business bank account. Theoretically, these percentages should both be 100 percent, which is why webook highly recommend that you establish and manage your Etsy business as a legitimate and legal business entity to avoid tax or financial complications in the future.
Know your products and your niche target audience
The third essential concept you need to understand is that you, as the business operator, need to sell items that people want or need. If no demand exists, and you can’t create a demand, you won’t generate any sales. So, in addition to understanding your product(s) and knowing how to differentiate them in the competitive marketplace, you also must understand who your target audience is and create a plan to successfully reach this audience and drive them to your shop.
The more you know and understand about your target audience and their habits, the easier it will be to sell your products to them, reach them with your marketing message and develop an online presence on Etsy that caters to this audience.
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