The Real Costs of Selling Handmade Items Online
Filed under:
Selling your creations online can be very rewarding. It allows you to showcase your talents and connect with customers from all over. However, before you dive into the world of online selling, it’s essential to understand the costs associated with selling handmade items online.
In this blog post, I’ll break down the actual costs to help you make informed decisions and set yourself up for success.
Let’s go!
Disclosure: some of the links below are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.
1. Your Domain Name
Obtaining a domain name for your online shop is essential in setting up your online presence. A “domain name” is a fancy way to say your website address.
The cost of a domain name can vary depending on the domain extension (.com, .net, .org) and the domain registrar you choose. Generally, expect to pay around $20 per year for your preferred domain name.
I recommend purchasing your domain name from a provider such as Godaddy or NameCheap.
Generally, owners register domain names annually, and you’ll need to renew your registration periodically to maintain ownership of the domain.
Additionally, some registrars may offer additional services, such as privacy protection or domain forwarding, at an extra cost. It’s important to research different registrars and their pricing to find the best option that fits your budget and needs.
The most crucial part of getting a domain name is ensuring that no one else uses your chosen name! You want to avoid purchasing a domain only to find another business with the same name.
2. A Web Platform
Most handmade sellers will start their online business on a marketplace or with their website.
Various online marketplaces and platforms are available, each with its own fee structure. For instance, platforms like Etsy, Handmade at Amazon, and Shopify charge fees for listing items, processing payments, and other services.
These fees can vary, so it’s essential to carefully research and compare different platforms to find the one that suits your needs and budget.
I recommend Etsy as a good starting point. The cost to start a shop is $0, and they charge you a $0.20 listing fee, plus final value fees on your sales.
If you want to go with your website, I recommend Shopify. It’s highly customizable and provides a good framework for a website that can be competitive.
3. Selling Handmade Items Online Comes with Fees!
Most online selling platforms charge transaction fees and payment processing fees for each sale you make. These fees can add up and impact your profit margins.
It’s crucial to understand the fee structure of the platform you choose and factor these costs into your pricing strategy. Additionally, if you accept payments through third-party payment processors such as PayPal or Stripe, they may charge fees for processing transactions.
Please familiarize yourself with these fees and account for them in your overall cost calculations.
Credit card processing fees are usually around 3% of the total charge. And this applies no matter where you’re selling. Whether selling on Etsy or your Shopify website, you’ll pay the same fee.
4. Your Email Service Provider
Using an email service provider (like Mailchimp or Klaviyo) can offer numerous benefits for your online selling business.
Email marketing can be a powerful tool for promoting your handmade items, offering special deals, and keeping customers engaged.
Email service providers also offer features like list segmentation, automation, and analytics, allowing you to target specific audiences, automate email sequences, and track the success of your campaigns.
However, there are costs associated with using an email service provider. Most providers offer different pricing tiers based on the number of subscribers, the email volume, and the features offered.
As your email list grows, the cost of using an email service provider can increase.
It’s important to carefully review and compare pricing plans to ensure you choose a plan that aligns with your budget and business needs.
Overall, the benefits of using an email service provider outweigh the costs, but carefully considering your budget and business requirements is essential.
5. The Cost of Shipping
Whether you offer free shipping or pass on the cost to your customers, it’s essential to factor in shipping costs when setting your prices.
Shipping rates can vary depending on the size and weight of your items, the shipping method chosen, and the destination.
Researching shipping options, comparing rates, and optimizing your packaging to minimize shipping costs can help you save money and provide competitive pricing for your customers.
One way to save significantly on postage is to create and purchase your shipping labels at home. Purchasing your postage online will save you anywhere from 25% to 40% in shipping costs!
Using a third-party provider like PirateShip allows you to consolidate your orders and provides you with the best pricing for shipping.
Get more help with shipping here!
6. Packaging Costs Are A Must for Selling Handmade Items Online
Packaging is a significant expense and can vary wildly. The word “packaging” includes the raw materials and any packaging materials, labels, and other consumables required for shipping and packaging.
It’s essential to accurately calculate and incorporate these costs into your pricing strategy to ensure you’re covering your expenses and making a profit.
Also, while you may want to save money by reusing boxes and other packing materials, I recommend using new packaging. Watch my Youtube video on the costs of selling online for more information on why I suggest new packaging:
The Real Costs of Selling Handmade Items Online
While selling handmade items online can be the ticket to your dream job, it’s crucial to understand the costs involved.
From setting up an online shop, materials and supplies, shipping, transaction fees, payment processing fees, and your own time and effort, there are various costs to consider.
Thoroughly researching and accounting for these costs in your pricing strategy will help you ensure a sustainable and profitable online selling business.
Ready to get your handmade business online, but just not sure where to start? I’ve got a great guide for you – Online Must-Haves for Makers! My free guide has everything you need to know about how to start selling your creations online. Get it here!
I’m not sure about online selling because my pieces are one-of-a-kind. I polish the rocks and then make pendants from them. They are truly individual. No 2 stones are ever alike, I don’t see how to advertise for each one-of-a -kind piece. Any suggestions?
I’m not sure about online selling because my pieces are one-of-a-kind. I polish the rocks and then make pendants from them. They are truly individual. No 2 stones are ever alike, I don’t see how to advertise for pieces like this. Any suggestions?
Yup…my things are all one of a kind also 🙂 This is why my program teaches building the relationship with your audience as opposed to trying to sell a product: you won’t be “advertising”, you’ll be sharing what’s new in your shop!
The majority of successful makers who sell online have mostly one-of-a-kind items: in fact, you create a great loyal following when you have people who begin to collect your pieces. You are in a great spot!