I have been crunching numbers. It’s my least favorite thing to do and as a creator it’s twice as painful because through the corner of my eye I can see my brushes and paints calling me. But I have no choice.
The question about dropshippers and POD companies pops up in every artist group I’m in and I usually have the impulse to immediately lecture and warn them about doing their due diligence before setting it up. It’s too easy to go on YouTube and find videos about setting your Etsy shop on autopilot. It must be possible but will you make a profit?
If you are considering starting an Etsy shop and wondering about dropshipping, I’d say, go ahead, it is the easiest way to test things and try out if your products have a market, but before you dive into all the advice in the universe, read on…
I had my own small business dream like many, but not all of us have the financial acumen to really see if your creations will turn a profit. We accidentally bump into a blog post or article about someone making six figures selling hair bows and all our brain cells explode. An idea emerges and we jump directly onto website and social media madness. We look for advice, buy courses, hire photographers and sort of calculate things. At least, that’s what I did and boy I worked hard.
Dropshipping for Etsy
In the age of POD where an artist or illustrator can create any product and put it up for sale in dozens of sites it’s easy to do things a bit chaotically. I chose to work with a POD dropshipper for my leggings and scarves. They are a local manufacturer and printer and I can drop in any time I want.
The day I sat down with a tall glass of lemonade and proceeded to make a huge spreadsheet calculating all the fees, the cost, the shipping plus the exchange rates (for me being in Canada) and sales tax I found out in horror that I was basically working for Etsy and for my Dropshipper.
A dropshipper might say: a print costs $10 and you can sell it for $20! But it’s not accurate. You have to add shipping, plus taxes, plus fees so if you want to make a profit you have to inflate the price. A quick search on Etsy and you’ll quickly realize you fall outside the acceptable price range.
I was making the art, doing hours of Photoshop work, uploading into the dropshipper platform, ordering samples, taking photos, creating mockups when needed, retouching and optimizing the photos, writing the listings, promoting and all the rest for so little money that it would have been easier just to set up a Society6 shop and just promote that. I was making basically no profit. At least things paid for themselves but all my work was unpaid.
No matter how you turn your numbers, Etsy’s fees are onerous. Now, if you are in the US you might have other issues but you have the advantage of having an affordable postal system.
In Canada, our postal system is among the most expensive in the world. So when Etsy started pushing for Free shipping, things got worse. Listings that had free shipping tended to appear first in search results. It’s understandable, I’m not moaning about that, we all like free shipping but then they added a fee to the shipping cost on top of that.
I’m not anti-Etsy
Etsy is a good platform, it has everything you need to sell online. It’s the easiest entry point. You don’t have hosting fees or need tech expertise to get a shop running. It’s a great showcase for your product so if you already have a shop on Etsy keep it and use it as a testing ground. But I think it works best if you make products yourself, not if you’re dropshipping.
After testing POD and dropshipping I’ve come to the conclusion that it’s essential to have full control of production, cost, shipping, packaging and customer service. Of course, having an excellent product is essential.
- Production: You built your process and workflow and streamline it as much as possible which will reflect directly on how much profit you will make.
- Cost: By choosing the materials, the packaging, shipping company, employees etc. you can fine tune and optimize.
- Shipping: You can find the best option and adjust shipping to maybe even offset the cost and offer “pretend free shipping”.
- Packaging: Most dropshippers or POD will send simple packaging. Etsy shoppers especially, expect the packaging to be part of the experience.
- Customer Service: You know how you made your product and if something is wrong, you can fix it and make sure your customer is happy, while with POD or dropshipping you can’t do anything. You either replace the product and absorb the cost, refund or risk a bad review.
So should I create my own shop?
I would encourage it, but as with Etsy you need to crunch the numbers. A quick example:
If you build a WordPress site you will pay approximately $8.30 USD per month for hosting if you buy over a 36 month period. The first year is only $3.95. I use Siteground*. You can add WooCommerce for to build your shop and build from there. The payment gateway I use is Stripe
Or you can try Shopify, Squarespace or Big Cartel (if you are in a country other than the US you have to check if you can set your sales taxes correctly) but bear in mind that you have a $29 – $40 monthly subscription plus fees.
Driving traffic to your own shop is a huge challenge and you need to be super strategic. It’s a hefty job which probably will take a lot of time away from your art making. Think about this when deciding Etsy vs. your own shop.
So then what?
My conclusion is: dropshipping is good as an income stream but not for building a business and on Etsy it’s a bit more challenging.
If your focus is on building a brand, putting your name on a product you don’t control and passing it as your own is not the best option.
Some situations I encountered were:
- Printing my hand-painted patterns on to notebooks and a customer contacting me saying all the pages fell out.
- Selling an XXL pair of leggings and the customer saying that I was selling misleading sizes.
- A scarf that came out washed out.
- My artist card that went out with an order and which costs $1 each was blurry and unreadable
Since other options are not available to me at the moment (buying my own printer, printing in large quantities, having a shipping station) I’m currently reorganizing my business and found a few workarounds to continue working with a dropshipper that is a good compromise.
I continue my search for that company that will be a good compromise between cost, ethical practices, work and profit.
What do you think? Do you use POD or dropshipping? Does it work for you?
Stay tuned for my post on how to choose a dropshipper that works for you.
*Sketches are from a project that fell through :(