Have you ever wanted to participate in Etsy promos but don’t want to take a huge hit in your profits? We might just have a solution for you on this episode of the Jam!
What you might think we’re saying vs what we’re actually saying
Today, we’re talking about running Etsy promos in your shop! Now, “Hold on!,” you say, “I thought you guys always tell us not to run sales in our shop and that it’s better to offer some kind of add-on instead of just decreasing the value of our products?!” You’ll want to keep reading because that’s not what we’re trying to tell you to do. We’re not just telling you to drop your prices here. We’ve got a little bit of a formula going on for you to try in your shops.
Raise prices, create Etsy promos
It is no secret that running Etsy promos can be a good way to draw new customers into your listings. As far as running a promo, what we’re suggesting you do is raise prices and then put them on sale. The reason is that the Etsy game is this: if you want to show up as something that is for sale in the Etsy sales, you have to actually have something going on for sale.
Pricing sets expectations
You’ve come up with these margins that are good for you and your business, and we don’t want you to just go ahead and throw those out the window either. We want you to price where your products are worth. Pricing is where the rubber meets the road. You’ve done a lot of hard work setting up your shop and your listings, so of course, it’s tempting to throw a price on that and call it a day.
Pricing is possibly the most important thing of your listings and we’ve talked about that a lot. You can have everything else set up properly, but if you don’t have a good price, it’s going to make people decide one way or the other. We’ve got a lot of content as far as how that works. Price too low buyers could think something is wrong. Price too high and they can’t afford it.
Expectations and feeling good
You want to be where buyers are expecting you to be for your products. Having your buyers see the value in what you’re selling while tolerating your prices and wanting to buy at that price, is the goal. You want buyers to feel good, but you need to feel good about your pricing as well. Otherwise, this will be a huge source of frustration for you and you’re not going to enjoy doing what you’re doing.
Etsy promos create urgency
Etsy promos work hand-in-hand with your pricing. Pricing sets the expectation of the shopper, where promotions establish a sense of urgency that makes the shopper want to buy sooner rather than later.
They don’t necessarily know when that sale is going to end. They might if it’s part of an Etsy sale where Etsy publishes those certain products from certain sellers are on sale until this certain date. Even then, there’s still a sense of urgency. They only have so much time before they can’t purchase this product at this price anymore. It’s going to be full price again soon.
If there are sales going on all around you, it’s very tempting to get that one product that’s on sale. Now, if nothing is on sale, you get what’s priced best.
A race you don’t want to compete in
We’re going to also assume that your prices are not already as high as they possibly should be. We’ve seen that complaint way too many times. You know that feeling that you can’t make any money at this price. If this is the case, you’re in a race to the bottom and you don’t want to be in a race to the bottom. You want to charge what you’re worth and that goes for anything you’re doing.
So you really get two benefits at the same time here. You get in on a sale to be able to call out your listing (that’s extra promotion because now you’re in those sale categories) and you get your pricing up to the market where it should be.
But what about these questions for Etsy promos?
How do you actually do this? How do you go through the process of figuring out what your sale price should be so that it’s competitive? Then, what does that mean your new regular price should be so that when you add your 25% (or whatever percentage you chose) discount, your original price is showing correctly?
Make use of the Marmalead tools for Etsy promos
The first thing you must do is figure out what your sale price should be. You can use Marmalead for this! It’s a fantastic tool for exploring the pricing landscape of different keywords. What you’re going to want to do is, go through, find your most popular keywords in your Etsy stats (or just by the ones that you use the most) and throw those keywords into Marmalead. Take note of how that pricing breaks down for those keywords.
Filter them down
If you can, filter listings so that it’s limiting the results even more to the things that are like yours. That’s what your customers are really comparing you against. You want to eliminate the things that aren’t really your competition because they’re going to pull the pricing numbers in different directions. They could also skew the results that you’re seeing. If something is showing up and you’re thinking, “Yeah, my customers really aren’t going to be comparing me against this other thing,” try to filter that out so it’s not being considered.
Sensing where your pricing should be for Etsy promos
Run a bunch of different keywords through there because they’re all going to be different. They’re all going to have different price spreads. Once you do that enough and you filter things down, you’ll start to get a sense of where your pricing should be for your listing.
Also, keep in mind that when you do this inside of Marmalead, we break down budget pricing, average price, and high-end pricing (like if you’re selling a premium product). Depending on where your product fits, you can look at just that pricing point for those different segments of the market.
The secret formula
We’re going to run you through a quick example to (hopefully) make it all a bit easier. In this example, you have a $25.00 market price. That’s your price today. You want to put it on sale to be in a 15% sale category. Not too big, not too small. It’s not a “going out of business” sale. You’re not giving away the farm here. It seems like a good number to help your customers make the decision now rather than later. Timing is everything.
What you want to do is this: take your $25.00 standard price and divide it by 0.85 (this is the number we’re choosing to reflect the 15% sale price). This gives you your original price of $29.41 (“original price” meaning your new adjusted price prior to the sale). Since we’re running a 15% sale, your original price minus 15% is now $25.00, your new sale price.
Competitive price + promotional draw
So when it’s on sale, it’s going to be $25.00, which is exactly where you started. Now it’s going to be in line with the market (assuming this is with the market price) and yours looks even better because it’s on sale.
Who doesn’t love to pay $25.00 for something that used to be $30.00? It looks better than a $25.00 not on sale product. Mentally it just helps.
You can use a price that’s most comfortable to you
Keep in mind when you discover what that dollar amount is (like in our above example it’s $29.41), you don’t have to use that exact dollar amount. You could come up with a price that looks pricier. Also doing a flat $29.00 is an option. You could do $29.90, $29.95 or $29.99, whatever you want to land at there. Then you know that your sale price is going to be around $25.00, which might look more realistic to shoppers, to see that the original price was $29.95 and not $29.41.
What looks better to the buyer
When people are seeing this and they’re comparing your listing against other listings, they might see other listings that are $25.00 not on sale versus your $25.00 listing that is on sale where the original price is $30.00. In their mind, for $25.00 would they rather get a $25.00 product or a $30.00 product? There’s this sense of implied value a lot of times when you see something that’s more expensive, you will often think that product is better.
It’s a psychological thing
We often assume that a product is more expensive because it’s a more quality product. There have been studies done on this with wines and water where people correlate higher pricing to more quality. Especially if you’re in the premium end of the market for things, this could work very well for pulling people in.
Follow the industry’s lead
You do have to go with what works in the industry. That’s why we’ve talked about discounting before and doing bonuses as opposed to sales, which is our preference. But you must go along with what works in the industry and retail is big on sales. It’s just a fact of the industry. For example, you’ll often hear people say they’ll never pay sticker price for a car.
Another example is the hot tub industry. It’s always on sale! This hot tub is normally $7000 but we sell it to you for $4000. No one is ever paying that MSRP of $7000. Ever. Everyone is always paying $4000, but they feel great because they got this hot tub for half off.
Playing the game
You’ve just got to play the game. If you don’t play the game and are like, “Hey, we’re the hot tub shop that is selling $4000 MSRP hot tubs for $4000, because we don’t discount or haggle our price,” people are going to be like, “Yeah, but I’m going to go get the $7000 hot tub for the same price.” So it’s all mental! People feel great if they got a good deal on something and people feel awful if they overpaid.
Test your Etsy promos and let them sit
This is something you should test on your listings over time. Run this during a slow season on a handful of your listings. Now, you’re going to want to let it sit for a while. You probably don’t want to run this for a day or two and decide in that short amount of time whether it’s working or not.
We’d say give it a good week or two before you make any decisions about whether this is helping, or maybe whether to adjust what your sale percentage is to try to help suck people in even more.
When Etsy offers a large sale
It’s also a great tool when Etsy is running much larger sales, where they have a huge marketing initiative around them and they’re really pushing products that are showing up on sale. You’d like to participate in those sales, but at the same time, you’re looking at it thinking, “Man, I don’t want to cut my stuff all down by like 30% here. I’m going to be making barely any profit and have a bunch of extra work to do.”
This is a great solution for a way to still participate in those sales, still benefit from all of that marketing that Etsy is doing to try to pull people into their platform and see the listings that are on sale without taking too much of a hit profit-wise.
There you guys go! This is a good tool that you can have in your back pocket to use during a slow season or to participate in one of the Etsy sales. Let us know what you think in the comments below. And let us know what percentages seem to work for you in your market spaces for sales that you’ve done in the past and what your experiences have been.
Happy selling, everyone!
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