Etsy Jam Episode 21: Greed Part 1

In this episode, Richie and I talk about greed. Good versus bad greed – and YES – we are claiming there is a good kind of greed out there. It involves wanting only the best for other people, giving advice, crazy expensive gym memberships, and little kids who try to ride the Polar Express without a ticket. Stick around for another crazy journey in part 1 of a 2 part series on greed.

We want to redefine the word ‘Greed’ and talk about how greed doesn’t have to be something that’s negative.

The Good Greed

Would it be greedy to want only the best for people? Can you be greedy for doing good?

Well, if it’s the best for other people, it doesn’t sound so greedy, no?

One of the examples is giving advice. Have you ever had anybody ask you for some advice? Maybe you have a friend or a family member who’s asking you for advice on web design. Maybe they want you to build them a website or something like that. Have you ever had anybody spend a whole bunch of your time with nothing in it for you and you only just wanted to help? At first you thought they’re gonna love it and then after all the hard work… crickets.

It happens. It happened to me, and to some people I talk to and it’s unfortunate. Really what happens is I get all excited about whatever I’m helping them with and then after that, they do nothing. I really want them to follow through with it so they can feel good about what they did. The problem is, when people ask you for something free and they get something for free, that’s the value they place on it.

Gym Memberships

This is a famous thing about gym memberships. Have anyone ever been in a gym in January and February? Ever notice how that’s also when they have a bunch of gym specials? They get a bunch of people at the door for cheap and they make it a really low cost, really low barrier to entry. The problem is, people aren’t putting anything on the line. Their aversion to loss makes it so that it doesn’t matter if they go to the gym.

When I sell you a $15 gym membership, I don’t care as long as you pay, right? Typically that’s how gyms work – they don’t want everyone to show up. If everyone shows up, they have to get more equipment. That’s the problem with a physical space like that.

But if I really care about you, I want you to show up. I want you to gain something when you come over and I want you to lose something when you don’t. I think your gym should charge you an amount that’s painful for you to lose because once you start getting into real money – that’s when you start talking about real loss.

I think if gyms want to keep people there, and they are greedy for the people and really want what’s best for people; they would incentivize showing up more. Maybe in a gym’s case, the membership would cost you $50 per month. But, if you don’t show up X amount of times (you get to set this yourself), they’re going to charge you with a fee.

Free vs. Paid

Let me give you another example. I collect a lot of crap. I don’t know how many times I had given my email so I can have like, an eBook that I want to have because it addresses the exact problem I’m having right now. But it’s free – so what do I do with it? I put it in my folder and say to myself that I’ll come back to it tomorrow. Then the next thing you know, I have this huge folder that I can’t even bear to look at because there’s so much free crap in there that I haven’t done. Now, is there good stuff in there? Yes! There actually is a lot to learn and a lot of good lessons in there. But I ignore them because they are free.

Looking at my bookshelf though; when I pay for a book, I read it. Because I am not going to buy a book and then NOT read it because that seems like a loss. I don’t want to lose. Reading the free book is just a win. People are more averse to loss than winning.

We have been conditioned very early on that ‘FREE’ means worthless. Zero cost equals zero value. Also, there’s nothing to lose, so why do it? It’s just unfortunate that it works that way.

Greedy with your Time

Most of us have different things going on around us especially if you’re working at home.

If you work at home; obviously you can’t say you’re at the office, and turn off your phone, and pretend like you’re in a meeting. There’s a lot of distractions and there will be distractions around the house. I think being greedy with your time is important. It’s important not just because it’s good for you but if you don’t take care of yourself, and you don’t take care of your own time management – you are no good to other people. If you’re a complete disaster, who are you gonna help? So you gotta take care of yourself first, too.

Also, the more people you are trying to serve, the more demands there are on your time. Which means that in some way, you have to filter out who gets your attention when.

Related: Leaving Your Day Job for Entrepreneurship

The Free Rider Problem

In economics, the free rider problem is basically when you have people that are not contributing – but are using up the goods. If you look it up, it probably has a definition that says it is only valid when there is a finite resource that can be taken. You might ask, “What does that have to do with software and computers and stuff – I mean, those are infinite, right?” Well, they are not infinite (although they do scale really well).

The limited resource is time. Serving people the absolute best and being greedy with your time is the finite resource. As Etsy shop owners, you need to be really aware of this too.

I can’t tell you how many times I have read comments from Etsy sellers that are going back and forth with buyers haggling them in price and asking for discounts. In the end, the story is not usually a happy one. It goes one of two ways:

A. They spend a whole bunch of time, and the person never actually even ends up buying. They end up just going somewhere else. They go somewhere else even though they just took up a bunch of time. A bunch of your finite resource.

B. The other one is these sellers make all this effort for the buyer, spends all his/her time and give the discount. Then the person gets it and says “This is not what I expected. I want to send it back.” then they leave a bad review while they’re at it too. Ouch!

So what do you do to fix the Free Rider problem?

In the case of an Etsy shop, I think what shops need to do is identify the free riders. Identify people that message you for discounts, that message you if your prices are flexible, that tell you your listings are expensive, etc. because it is very likely that those type of people are not value based.

Your best use of time is not to deal with those individuals. It’s not good for you and it’s not good for the customers that are in line. Right behind those messages that you’re busy answering are serious buyers. While you’re dealing with people that aren’t going to buy, you got a buyer right there just waiting to be helped.

When someone asks you if your prices are flexible, I would recommend saving a response that you can simply copy and paste. It would save you some brain cycles and also a wiser use of your time. You can say something like:

“Thank you so much, I really appreciate you checking out my shop and my listings. As you can see, my listings are handmade and one of a kind. Our prices are set the way they are.”

Send something like that, be done with it and go help the people that are really part of your tribe.

Related: Etsy Jam Episode 8: Pricing