How to develop a winning pricing strategy for your Etsy products

Having an effective pricing strategy for Etsy is an important part of running your business. An effective pricing strategy allows you to maximize revenue and increase customer satisfaction.

In this post, I talk about how to develop an Etsy pricing strategy that works well for you and your customers. I go over a super useful, free tool that helps you price your products correctly every single time. I share the easiest pricing plan on the planet. And I dive into the importance of strategizing your sales and promotions.

Let’s take a look…

How to use the Etsy Profit Calculator to price your products right

People often worry about what to charge for their products. They worry about whether they’re factoring in Etsy’s fees and commissions correctly. And they worry about missing out on profits (or worse – losing money).

But the Etsy Profit Calculator removes the guesswork from the process. It makes figuring out how to price your products quick and easy. Here’s a video going over it and some more information underneath:

 

The super useful calculator is totally free to use. All you have to do is enter your email address below and you’ll receive the instant download. Sign up here for that:

Using the calculator is super straightforward. Plus, the spreadsheet includes directions. All you have to do is adjust the spreadsheet’s orange areas (don’t change the grey areas).

Input the following information about your products:

• Base cost
• Base shipping cost

The calculator will then tell you…

• The base cost and base shipping cost total
• Etsy’s payment fees ($.25)
• Etsy’s payment commission (3%)
• Etsy’s commission (5%)
• the total amount of Etsy’s fees and commissions

Next, tell the calculator…

• The price of your product
• Your product’s shipping cost

The calculator will then tally the following based on your inputs:

• The total amount customers will pay
• Your profit
• Your profit margin percentage

Using the Etsy Profit Calculator helps you price your products so you earn the profits you want.

And a super simple pricing plan that I recommend is to aim to have your profit be at least $10. So after figuring out your base cost and shipping cost and all of the fee and commission amounts, add $10. And this will give you your product’s price. 

Enable automatic coupons to encourage repeat business

I don’t recommend taking a “set it and forget it” approach with your pricing strategy for Etsy.

Your Etsy pricing strategy should be dynamic and include coupon campaigns and sales, for which you should develop a plan. Doing so will help you stay organized while reaching both new and repeat customers.

You can set it up so Etsy automatically sends customers coupons once they perform certain trigger actions (like abandoning their cart or favoriting an item). And you can run holiday-specific sales to attract customers during special times of the year. 

How to set up “Abandoned cart” and “Favorited item” coupon campaigns

• Go to your Etsy Shop Manager
• Click Marketing
• Select Sales and discounts

To create your targeted campaigns, click Set up below either Abandoned cart or Favorited item.

Choose Abandoned cart shoppers and/or Favorited item shoppers. Then, select the type of coupons you want to create:

• Percent off
• Fixed amount off
• Free standard shipping

If you choose either Percent off or Fixed amount off, you need to specify how much you want the discount to be (e.g. 20%, $10). And if you choose free standard shipping, you have the option to select Domestic only.

Next, specify the text of your promo code(s). For example, for an Abandoned cart campaign, you could say DONTLEAVE or MISSYOU. And for your Favorited item campaign, you could say FAVORITE or OURTREAT.

When you finish, click the Create offer button. Shoppers will now automatically receive these coupons when they trigger these actions.

How to set up a “Thank you” coupon campaign

• Go to your Etsy Shop Manager
• Click Marketing
• Select Sales and discounts
• Click Set up below Thank you
• Select the type of coupons you want to create:
  • Percent off
  • Fixed amount off
  • Free standard shipping
• Enter your promo code (for example – THANKS)
• Specify an order minimum (optional)
• Select whether to include customers from the last 90 days
• Click Create offer

Shoppers will now automatically receive this coupon after they purchase from you.

Create holiday sales events 

Holiday sales events are a great way to position your business for even greater success during gift-giving times of the year. Plus, you can connect with buyers who may not have found your shop otherwise.

Below, I’ve outlined the most significant gift-giving times of the year. You can run sales around all these events or pick the ones that appeal the most to you. Whichever sales events you choose, you can create sales events for your entire store or you can select specific items from your inventory to mark down. 

To learn more about setting up a holiday sales event, click here. Below, you’ll find the dates you should keep in mind during the year as you structure your promotional calendar. 

Holiday inventory clear-out sale – The month of January

Valentine’s Day sale – The last week of January through February 14

Easter sale – This depends on when Easter falls but you should aim for 3-4 weeks before the holiday

Mother’s Day sale – 3-4 weeks before Mother’s Day, which is the second Sunday in May

Father’s Day sale – 3-4 weeks before Father’s Day, which is the third Sunday in June

Back-to-school sale – The month of August

Holiday season kickoff sale – The end of October until just before Thanksgiving

Cyber week sale – From Thanksgiving until Cyber Monday

Christmas sale – From just after Cyber Monday until Christmas

Here’s an example of how your 2023 holiday sales event calendar might go: 

Holiday inventory clear-out sale – January 1 – 31

Valentine’s Day sale – January 25 – February 14

Easter sale – March 19 – April 9

Mother’s Day sale – April 23 – May 14

Father’s Day sale – May 28 – June 18

Back-to-school sale – August 1 – August 31

Holiday season kickoff sale – November 1 – November 22

Cyber week sale – November 23 – November 27

Christmas sale – November 28 – December 25

You can schedule sales for all these events ahead of time and make adjustments as needed. Click here to learn more about creating sales and coupon codes on Etsy.

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I hope you enjoyed this information about pricing strategies for Etsy. If you have any other tips or advice to share, please leave a comment below. And if you liked this post, please share it with your friends and followers.