Navigating the intricacies of an Etsy business extends beyond creative expression; it’s about utilizing data to drive success. So whether you aim to improve your shop’s presence over the competition, manage a team of assistants, or sustain your artistic passion, keeping a close eye on these Etsy business stats is necessary to run a thriving shop.
When it comes to running your own Etsy business, starting is only half the battle. Sure, someone close to you probably mentioned that your creative hobby would make a great business opportunity on Etsy. So you’ve gone through the painstaking process of starting your Etsy business from the ground up… now it’s time to keep it running!
Between scaling up to compete with other Etsy shops, hiring and managing shop assistants (if you’re fortunate enough to need help), and trying to keep your creative spirit alive, running a small Etsy business is hard work.
Multiple hats of an Etsy seller
You know, as well as the next Etsy seller, that part of what makes it so hard is that you must wear multiple hats.
Think about it. You’re an artist, a creative director, a marketer, an accountant, a copywriter, a photographer, an influencer, customer service, and everything else in between.
But there’s one more hat you need to wear: Data Analyst.
That’s because if you want to run your business to the best of your ability, you need to know these Etsy business stats and know them well.
Year To Date Orders: Etsy Business Stats That Matter
The number of orders you’ve received between January 1 and today is a vital business metric.
Year-to-date (YTD) simply means from the first day of the year until now. So, at any given point within the year, you can pull your YTD orders to know exactly how many orders you’ve fulfilled since the beginning of the year.
Pro tip: Depending on your business, you may be operating on a calendar year or fiscal year (FY). A calendar year is simple, it starts on January 1 and ends on December 31. But a fiscal year can be any 12 consecutive months throughout the year, not necessarily starting in January. Whichever you choose to operate your business has different tax implications and requirements for maintaining your financial records.
Being able to pull your YTD orders throughout the year can give you a snapshot of your Etsy business’ success at any given time. This will help you compare orders from this year to last year without waiting until the end of the year to do it.
While YTD orders are a significant number to know, it’s not a precise measurement of your brand’s integrity, health, or success. So don’t compare your number of sales to that of your competitor. You’re not them, and they’re not you – don’t rob yourself of happiness by comparing yourself to others!
Cost of Goods Sold: Etsy Business Stats That Matter
One of the most essential Etsy business stats is your cost of goods sold. You need to know this for every item you trade in your shop. Every. Single. Item.
What is the Cost of Goods Sold?
Your cost of goods sold is just what it sounds like the amount of money it costs you once an item is sold in your Etsy shop. It’s important to know because it adds up all the little fees and costs you might not think of daily.
We’re talking about Etsy’s selling fees, processing fees, shipping costs, gift-wrapping costs, etc. All these expenses chip away at your bottom line, and you’ll need to know them before calculating your gross profit.
How do you find your cost of goods sold?
To find your cost of goods sold, you add all of Etsy’s selling fees, shipping fees, processing fees, and the actual amount it costs to produce your product. This is everything it costs you to create your item for sale.
Related: Know your Cost of Goods Sold with our Etsy Fee Calculator for Serious Sellers
You can try remembering all of Etsy’s fees on your own, typing or writing them all out, and then crunching the numbers with your phone… but we’ve created a tool to make this a little easier. Use our free Etsy Fee Calculator to punch in a few of your product prices, and it’ll calculate your Cost of Goods Sold so you don’t have to!
Gross Profit: Etsy Business Stats That Matter
Keeping track of your gross profit throughout the year is absolutely essential!
What is Gross Profit?
Your gross profit tells you how much your business makes from selling an item. This amount goes directly into your pocket, even though you’ll have to pay taxes later.
We’re always shocked to hear that Etsy sellers don’t know how much money they make per sale. And we talk with a lot of Etsy sellers!
How do you find your Gross Profit?
To calculate your gross profit for your Etsy business, take your total revenue and subtract your cost of goods sold.
When you first calculate it, it can be pretty thrilling to see how much money has gone through your hands!
Net Profit: Etsy Business Stats That Matter
Once you learn your gross profit from your Etsy business stats, it’s time to figure out your net profit.
What is Net Profit?
After everything is said and done, your net profit is the money you’ve made to put food on your table. Everybody else (Etsy, the IRS, the mailman, your landlord, etc.) has received their percentage of your earnings, and now this is yours to keep.
Your net profit is what proves the success of your business. Are you losing money or making money?
How do you find your net profit?
To find your net profit, simply take your gross profit and subtract your operating costs, taxes, insurance, and other business expenses that aren’t included in your cost of goods sold.
You don’t want to add your cost of goods sold into this calculation, becuase you’re already accounting for this in your gross profit.
Once you know your net profit, you can tweak everything mentioned above to increase your profit margin.
What’s your Profit Margin?
Your profit margin is the amount you pocket after everything – fees, production expenses, and shipping. It’s an important metric to know, as the profit is ultimately why we’re selling.
This Etsy business metric also helps you understand how much you can afford to reinvest into the company, be it creating more products or increasing your marketing spending.
Two of the easiest ways to increase your profit margin on Etsy are by spending less on creating each product or raising your prices.
Year to Date Expenses
Your expenses for the year give you a great insight into how much it costs to operate your business.
Obviously, keeping your expenses as low as possible is essential. Low expenses mean that you can price your products more competitively and potentially sell more products thanks to that competitive pricing.
But it goes without saying that keeping your expenses too low can lead to problems and, ultimately, unhappy customers.
However, the main point is this: Knowing how much your business costs to operate and do its thing helps you stay in control should any financial problems arise.
Shipping Expenses: Etsy Business Stats That Matter
Do you offer free shipping?
Thanks to Amazon Prime, it’s now something that a lot of us expect. But here’s a tricky question: whether you offer free shipping or not, do you know how much it costs?
Knowing how much free shipping costs your business is arguably the first step in offering free shipping. If you don’t offer free shipping, the amount you’ve charged for shipping for the year can help you analyze if you can afford to provide it.
Knowing your shipping expenses also helps you find a better delivery service. But note that “better” doesn’t always mean cheaper. Cheaper shipping can often lead to more refunds, lost items, and, ultimately, more unhappy customers.
Using this data
There’s no need to memorize the numbers, but having them on paper or in a spreadsheet and constantly updating them can help you set tangible goals to make your company more profitable.
Gather these Etsy business stats in your shop for a few months and then compare them monthly and yearly.
What’s valuable is comparing the data from the same period last year (if you have access to that data). It can help you show how you’ve grown in the previous year and how your business has evolved and developed. Have your profit margins increased or decreased in the last year? What’s the relationship between your profit margins and your expenses?
The answers to all these questions help put you in the driver’s seat of your business. It pays to spend the time figuring these business statistics out and collecting the data over the long term.
This data tells you about more than just your business. For example, if your average order value is down compared to last year, competitors may have moved into your market. This is a sign that it may be time to improve your SEO to rank higher, launch more products, or re-address your pricing structure.
Related: Learn more about the importance of calculating your average order value
Comparing this data year over year and month over month gives you a micro and macro view of your business’s performance.
From here, you can make more informed decisions about what to do with your business rather than blindly trusting your gut.
Over to you
The information we’ve listed in this article can help you take steps to figure out the weak points of your business operations. Now is the time to figure this out and fix it for the new year!
Frequently revisit and analyze your Etsy business stats to identify key operational areas for improvement. This proactive approach ensures robust growth each year.
What did you find most surprising about your Etsy business stats this year? Did the cost of your materials rise, thus decreasing your profit margin? What did you do to pivot, if anything?
Let us know in the comments below! And as always, happy selling!
