An Introduction to Etsy
Well, we're gonna be doing today is talking about bookkeeping specifically for betsy sellers. So, uh, handmade artists, but also folks who might sell supplies or vintage because this is the three big categories there, um, as I mentioned it's, a little bit of a different animal from, uh, but keeping when it comes to your own online shop or selling in person or selling in retail stores because etc encompasses that whole process but it's really important and really, I think, satisfying to do bookkeeping for your business because it lets you take control of where your business is headed, right? Very often, it's easy to, uh, let the money take control for us to look at that bank balance and have it make the decisions for us about what we spend our money on, what we spend our time on and maybe how we feel about ourselves. Um, and I don't know about you, but I want to be the boss of my business. I don't want my bank account to be the boss of my business. I want to tell the bank account what I...
want to see in there and then have it listen and obey, but the only way that we can do that is to look at how we're doing as faras income and expenses how we're getting paid is it enough? Is it on time making sure that we're making the decisions for our own businesses that get us to where we want to go and the only way that we can make those decisions confidently is to be informed about them? And the only way to be informed is to take a look hard look at the nitty gritty of what those numbers are actually telling us andi, we're going to really dive deep and look at some of those numbers so um uh what I want to start with first is sort of a little bit of an intro as to why we're looking specifically at etc I did as j k o mentioned there is another class on bookkeeping for crafters it's a two day class on its part of the catalogue you can visit it any time and we will be going a lot um we'll be going a lot deeper into etc today but there are some things because it's only one day class about bookkeeping in general that we go a lot deeper into in the bookkeeping for crafters class so I'll be calling those areas out a cz we get going but why do ah whole class just on bookkeeping for etc um there are a couple of reasons for this the first is that that's he's probably the single largest uh then you for especially handmade artists to sell their wares online. Um, it has over a million sellers. Um they make over a billion dollars in sales on etc and, you know, there are several million hundreds of millions of listings on here at any given time. S so it's just huge everybody uses that there are very few, uh, handmade artists or creative professionals in general that I know who don't use as you have not used at sea at some point in their business. Um they've been around now for ten years. Um, I actually joined at sea back in two thousand five. Ten years ago when they first opened, I was one of those rare people had my own online store first and then went to etc rather than the other way around. Um and I think that's the reason that so many people start with a the reason why so many people start with that sees because it's so easy to get set up right off the bat, right? It was kind of a nightmare too program my own web site and then figure out shopping card software to plug into the back and then how'd away take credit card payments, and at the time paypal was the only way that anybody could pay anybody online really, um without some really complicated set up and it was just me you know, sowing toys in a closet in my like terrible apartments so um I don't really have the resources to devote to that um the other thing that makes etsy different these days is the end to end control which I mentioned they encompass the listings they encompass the sales they take care of the payment, they take care of the credit card processing, they take care of the shipping labels and so when I had my own online store I had all of these different pieces that I had to track um but it also sort of kept everything in order because everything was separate within etc you'll see that a lot of different categories get lumped together either within the orders or within the bill and it can be a little bit difficult to pull things out and figure out where everything goes. Um I've been bookkeeping for also about ten years now and um when he made a lot of recent changes in two thousand twelve it threw me off completely and it took me a really long time to figure out actually how to enter my transactions all of a sudden I've been using etc forever and then one day they made all these changes and it just completely turned my system upside down so I'm going to share with you guys today uh the sort of solution that I developed to that, and hopefully that will make things a little clearer and a little easier to pull out. So let's, take a look at how things have changed over the last ten years. This is not a complete list of feature updates, by the way, this is just what I was able to find through the block and the forum's. Um, not everything goes back that far, but, um, you can see that they that s e made some updates on an annual basis for the first few years. They were fairly minor updates, things like being able to download your transactions as a c s v that's basically a spreadsheet, which was really convenient back then, actually being tooth. It wasn't until two thousand eight that you could actually printed in voice and have it look like anything cohesive and decent. Um, they started taking multiple currencies in twenty ten, and then you can see starting in two thousand twelve, they just started making changes like crazy. Um, I mean, the lines start getting really long here, right? In twenty twelve. All of a sudden you have auto renew, which means you no longer have tio realist your items, they just realist for you and you automatically get charged for them and that sort of threw a lot of people for a loop like wait how did I end up with all of these listing fees this month when I didn't myself list these products right direct check out as he started handling credit card processing on their own and all of a sudden people had to apply for a merchant account with etc it's the shop payment account and then that started automatically depositing into bank accounts but it wasn't clear like when that was happening and so you would get these bills that said, ok, you have to pay for all these listing fees that you didn't know about oh and by the way here's a random deposit to your bank account but it's not for the amount that you actually sold because we took a cut out of that but we didn't really say that up front anywhere there's just money missing from it s o that personally threw me for a loop um they started selling their own shipping label so now you didn't have to go off site to purchase shipping labels and then that became part of your bill um they also started gift cards but you could only do that if you had applied for the merchant account which also by the way has like credit limits built in but they didn't tell us many about that either and that was really hard for me to find. Um and then in twenty thirteen they started automatic bill pay. They started etc wholesale. Um they started the automatic downloads for digital files. You no longer had tio email people about that and send them something. Um, direct checkouts went global, so then it could start taking credit cards from shops all over the world. And in twenty fourteen they started adding they're shipping labels to canada. They took the etc wholesale out of beta and made it available to everybody. And then they, um well, they had they went from the etc iphone app which more of a browsing and buying up to the cell on etsy app. And they came out with one of those little plastic card readers that you put in your phones so that you could start taking credit cards that craft fairs and still sell items from your etc shop, because they figured out, of course, that when people go to fairs, they were using something like square, and none of those sales were going through, etc they were all happening and completely out of the process. And because etc is a company very corporation than they have a bottom line and they have investors on shareholders, they need to make a profit, and they need to make evermore and more profit every year so of course it's in their best interest to start encompassing as much of this process is possible so that they're not losing those credit card processing fees they get those now they're not losing their cut of the postage they get that now they're not losing those in person sales even though they're an online web site they get those no, um I'm not sure what else they can encompass in the next couple of years, but they've done a pretty thorough job of taking over the whole sales process from beginning to end and taking a little peace along the way, which is fine that's their prerogative uh and I know a lot of people have had a lot of complaints about etc over the last couple of years, especially when they change their policies in regards to using outside manufacturing or being able tio hire local help and what the definition of handmade actually is according to them versus a lot of their users. Um but the bottom line is is that you know, they're a company like they're not a nonprofit that exists to help sellers realize their dreams of having a full time income being creative professionals working from home on even though they have have helped a lot of people do exactly that um it's really their prerogative how they change and manage things and as a company they're going to change over time constantly um that's just sort of how it works in global commerce you can't really stay static and expect your company to thrive um and I think a lot of sellers actually know that I think it's at least eighty to ninety percent of betsy sellers do not make their full time living, you know, through etc they they run their business and sell their goods through other outlets as well, whether that's their own website whether that's in person, a craft fairs whether that's in retail stores so it is a great tool to have in your tool kit on gets a really easy way to start your business at the very beginning and to get things going in to test things out like it's a really good place to test out prices although we will talk about this when we talk about pricing a little later but I don't recommend like changing your prices all the time and, you know, having them very widely but it's a great place to test out new products see what's, you know the most popular. Even if you're not making sales, you can see for example, we'll look at the stats later as well how many people are visiting each listening, how many people are favored in each listing what you're most popular ones um and when you combine that with evaluating the profitability of those products it allows you to make decisions that you can then use in other parts of your business too so it's a really useful tool to have in your tool kit, especially at the beginning um, of the business but you also early on in your business want to start keeping accurate records so that you know what's happening and so you can make those informed decisions about running your business later on right? Um so that's why we're having this class today so that we can navigate all of that take that useful tool um and figure out how to make it work to our advantage and get as much information out of it as we can it's like a big information sponge kind of um and so we want tio really just like, squeeze it and get every little drop of useful information out of it that we can um we're gonna take all of that data that they're giving us and we're going to put it to work for us um so what we're going to cover today, it's a lot we're gonna have to go kind of fast uh we're going to look at finding the information you need on etsy itself first and foremost, where do you find your bill? Where do you find your payments and that shop payment account? Where do you find your orders in your listings where do you find the place to download all of those things? How do you set up your sales tax? Um where do you set up your shop policies to tell people what you are and are well not willing to d'oh we'll talk about setting up shop and putting all of those pieces in place like the policies and the sales tax we're going to look at the ledger and the chart of accounts which I'll get into in a in another segment that will be the beginning of the next segment. Um the ledger and the chart of accounts are part of the bonus materials there's both a simple version of the ledger if you like to do things by hand, you could just print it out and fill it in with pen and paper um and then there's the fancy ledger, which includes all of the equations that will pull things in from where they need to be and add them all up. So if you are a little more comfortable with technology you like using spreadsheets, you could go with the fancy ledger, we're going to cover sales tax and that slashed gsd um sales tax is what we have here in the u s is a consumer tax that gsd is where they is the value added tax or goods and services tax that is also a consumer tax in other countries making sure that everything adds up, making sure that everything that you have charged for actually got paid, making sure that everything he got paid actually ended up in your bank accounts where it was supposed to go, um, looking at profitability, my personal favorite segment. Um, I always love looking at profitability because that's, literally your bottom line, we're going to look at sc web analytics, so both the stats that s he will show you themselves and how to pull in mohr powerful stats from google analytics, all of which is free, which is amazing on it's really easy to set up, we're going to look at wholesale, we're gonna look at digital products, we're going to look at how you account for your time because that's actually going to be the biggest cost associated with the things you produce if you're a handmade artist, um, we're going to look at pricing and at the tail end of that we're going to look at sales discount it's coupons on other things that you can use for that, um, not only how to use those effectively and track whether they're actually driving your sales, um, but also looking at how we actually account for those, how do you pull out the discounted price for something as opposed to the full price?