Seller Handbook

The following is a transcript of a podcast episode released in July 2019. The transcript has been edited slightly for this format. You can listen to the episode on Apple Podcasts, SoundCloud, Spotify, or wherever you get your podcasts. Or stream it via the Spotify player above.

Note: This interview includes strategies put forth by the seller community, which are not necessarily recommended by Etsy. It is the individual seller's choice to determine their item pricing structure.

Tess: Today we talked with two sellers about their shipping strategies. First I chatted with Meital of the Etsy shop Meital Lev. She’s been selling leather bags and accessories out of Tel Aviv, Israel since 2013. She talked about how great customer service and top notch packaging all tie into her shipping strategy. Hey Meital! Thanks so much for talking with me today.

Meital: Hey! So happy to be here.

Tess: How did you get into fashion design and what drew you to leather accessories?

Meital: I graduated from a fashion design institute in Israel. As an accessory lover, I knew that I had a deep connection to that field. In the summer break of that year, I decided to make a mini collection of five bag styles. The bags were an instant success and sold out immediately. After finishing school, I worked two years designing bathing suits at a large swimwear company in Israel. After awhile, I got bored and felt like it was time to start my own business. Immediately I knew that I had to come back to my true passion—accessories. I felt that being an accessories designer was my calling.

In September 2015, I launched my brand carrying my name and made my first leather handbag collection. That included clutches, shoulder bags, backpacks. I developed some new skills and aesthetics so it changed a little bit. I thought, “How can I reach potential customers around the world?” Etsy was the perfect platform for that. Especially when all the designs I was producing were 100% handmade by me in my home studio from beginning to end. I took a small course that explained what Etsy is all about. I read articles on the Etsy blog, joined all the groups I could, and started gathering information about this new world I was entering.

Tess: What have you learned about your target customers and how you appeal to them?

Meital: After selling in all kinds of local designer fairs, home sales, my studio, and talking to my customers when I help them choose the right bag, I started to understand who my customer is and what their needs are when buying a designer bag. I’ve learned that young women prefer bags that can be converted from day to night, and older women will always prefer a bag that is fully lined and closed with a zipper. I think that learning about your customers’ needs is very important when developing your product. Without that, it’s really hard to find your key audience and grow your brand.

Tess: You fulfill orders from all over the world, including the US, and you offer free shipping on them as well. What have you learned about shipping internationally?

Meital: I’d like to talk about customer service first. Even with all the customers around the world, one of the primary things that I knew was most important to me was good customer service. When a new customer is buying a bag from me face-to-face, I can always consult them and help them choose the right bag. When selling online, it’s a bit difficult. Being available and answering questions is the main connection I have. While I’m awake, no matter what I’m doing, I always try to answer immediately when I receive a question or when a customer tries to connect with me on Etsy. A lot of these questions are regarding the shipping times and fees they would have to pay. That’s why I try to answer quickly and give them all the information so that won’t be a problem that prevents them from purchasing the item. So my first tip is fast communication.

My second tip is writing all the information you can regarding real shipping times with estimated dates so the customer will know the item’s arrival time. Also you should make a note that in some countries, especially in Europe, the customer will have to pay customs fees in order to receive the package. I think that giving all the information ahead of time is really important so the customer won’t be disappointed and will have a better experience.

Tess: Why is extending your free shipping approach beyond domestic sales the right choice for your business?

Meital: As a customer who loves shopping online, I always prefer ordering from a shop that offers free shipping. For me, psychologically, I know they must have added the shipping cost to the item and still I prefer it. After I decided to make this part of my strategy, I made a list of the main countries that I ship to—you can see them in your shop stats on Etsy—and I’ve calculated an average of shipping costs and added it to the item’s final price. I try to be fair and add exactly what I have to pay so the cost won’t be too high. In Israel it’s around an additional $5-7 per item for shipping so I’ve added $6 to each item in the store to cover the shipping. I think that this strategy helps me sell more items, for sure. If the shipping is not free, there’s a high percentage of them that will abandon the cart and search for similar items in a shop that does offer free shipping. For me, it’s really important and makes a huge difference to help them finish the purchase. I make an average and add that number to all items. So it doesn’t matter if I ship to Indonesia or Canada, they’ll all pay the same because it’ll end up evening out over time.

Tess: What motivated you to accept returns on your items and how have you created shop policies that support that strategy?

Meital: I think if the item wasn’t a custom order, you have to give a full refund if the customer asks. Especially when buying online because the customer never saw the product in person. They had to rely only on the pictures you uploaded and the information you wrote about the item. I think they have the full right to return it and for me it’s really important to obey that rule. I write in my shop policies that if the customer doesn’t like the bag, they can ship it back and receive a full refund, not including shipping costs back. I also state that the customer needs to contact me so I can give them instructions on how to ship it back.

Before all of that, I always ask what the problem was and if it’s fixable with a change of color or size. If not, I always accept the return as long as it was shipped back in its original packaging and condition. It’s also important to ask them to ship it back via registered mail only so the package can be trackable. After receiving the returned item, I give them the full refund.

Tess: Did you have any reservations about offering free shipping before you did it?

Meital: Actually, I did it from day one. From the first day I opened the store, I decided to offer free shipping. I’m a customer myself so I know that I prefer that.

Tess: Do you have any advice for other Etsy sellers who might be on the fence about offering free shipping?

Meital: I think on Etsy you have to try and see. You have to try something new, give it some time and see how it changes your sales. After that, decide if it was good for you or not. You can always change back. You always have to change your strategy and think about new ways to sell.

Tess: What do you wish you’d known about shipping when you first started selling online?

Meital: I spent so much time just trying things out and reading and consulting and going to private lessons. Eventually I got to a point where my shop was selling so much that my main income was from Etsy. I think it’s because I spent so much time learning and gathering information, reading all the blog posts and Etsy Success emails we receive. It’s really important.

Tess: You’ve shared some photos of your packaging on social media and it looks so lovely. Do you have any tips about creating a delightful unboxing experience for customers?

Meital: Packaging is my favorite part when I’m shipping an item. I always try to imagine the customer rushing to the post office and getting the package and opening it. Every time I wrap, I do it with all my heart. I use beautiful ribbons, colorful tags, thank-you stamps. I print postcards with my latest collection sometimes.

One other thing that’s super important and I read about a lot in my shop reviews is that I always write a thank-you note by hand. So if I have about 950 sales, that means I wrote 950 thank-you letters to the customers. In the letter I thank them for the purchase, and kindly ask them to leave a review on Etsy. I can say for sure that it’s helped me a lot, gathering all the reviews I have today, which is around 400 reviews. I think it’s all because of this little letter I write every time.

Tess: My next guest is Mikey of the Houston, Texas-based furniture shop Year of None. He started an Etsy shop for his eco-conscious furniture brand in 2016. He got into how he navigates shipping large and heavy items and packaging them sustainably, and he shared tips on how to establish connections with your shipping carriers. Hey, Mikey. Thanks for talking to me today.

Mikey: It’s my pleasure.

Tess: First I want to talk about what led you to start your Etsy shop. Can you talk a little about what you were doing before and why you switched gears?

Mikey: Like a ton of people in Houston, I started out in school and in work focused on oil and gas. I worked several corporate jobs while I was in school and during the first year and a half after I graduated. It really wasn’t doing it for me. There wasn’t enough creative flow, and there wasn’t enough freedom. There wasn’t enough social impact and all the good things that I think a lot of people my age are now looking for out of their work environment. I decided to do something a little different. I assessed what skills I had at the time and tried to decide how I could craft a business model around my current skill set.

At the time I had, very much as a hobbyist, been building furniture for friends and family. I did it all through high school and college. I took it with me after I graduated. I probably spent between six to twelve months throwing together my original business model. After about half a year of working my first job out of college, I decided to quit and take a stab at working for myself.

It was less about furniture to be completely honest, and more about finding a way to do something creative that I found personally fulfilling but also something that I felt would positively impact my community, if not society at-large. Furniture was my way of going about that because at the time it was the only thing I felt I had going in terms of interesting skill sets that might allow me to build a business model around them.

Tess: What inspired you to open an Etsy shop?

Mikey: At the time, Etsy was really the only big platform for handmade goods. It was the only thing for individual, sole-proprietor, small business, owner-creative type makers to sell what they were making and not have to create a standalone website and worry about all the front-end capital that goes into branding and everything else. Etsy really does all of that for you which every single Etsy seller knows is a huge plus when you’re starting out.

I don’t remember exactly how I came across Etsy. I think just through buying things on Etsy as a customer, honestly, is how I knew about it. When I started crafting my business model after college when I was working my first job, it was like a no-brainer. It was the first thing I thought of. I did a little research into what it takes to start an Etsy shop and figured out almost immediately that it’s very, very easy to do. It’s a very low barrier to entry which is another huge plus.

Tess: It is very clear that you have a mission for eco-conscious living. What tips do you have for running a sustainable but also profitable business?

Mikey: When I was crafting my business model—everything from packaging to shipping to the raw materials that go into the furniture to the energy I source for my studio—I really wanted it to be comprehensively environmentally sustainable, if not regenerative, which is the goal we should all be striving for. I figured out really quickly that packaging and shipping were both going to be difficult, specifically to cater to an environmental approach because as a society and as a manufacturing hub, we’re so oriented towards plastics and disposables at the moment.

I did a ton of research online and through talking to other small business owners here locally to try and figure out whether or not it would be feasible to find a way to source environmentally sustainable packaging and production materials. That was probably the area of my business that caused me to lose the most sleep in the first few years because I just couldn’t make it work. The first 10 to 20 orders I shipped out in February of 2016 when I started my Etsy shop, I took a pretty pathetic approach to packaging compared to how I do it now. I basically used single-wall, corrugated cardboard sheets with bubble wrap and some Styrofoam edge and corner protectors and held the whole thing together with packaging tape which interestingly enough isn’t a far cry from how I do it now. I’ve made a few really important changes that have shaped things up quite a bit for me and made a world of difference.

Over the years I’ve really refined my shipping concept. What’s nice now is that our technology advances in the world of packaging have allowed packaging manufacturers to start using things like cellulose-based packaging tape and plant-based shrink wrap and cardboard with adhesive that’s more environmentally friendly that doesn’t have as many petrochemical additives in it and things like that.

I’ve made a deliberate attempt to stay on top of my packaging research over the years so that when something new comes out that allows me to replace something less environmentally friendly with something more environmentally friendly, I know about it. I can then source the new material, get rid of the old stuff that I still have, and place an order with my new supplier. That’s been fun to watch my Styrofoam packaging change over to mycelium-based packaging. For anyone who’s listening that doesn’t know, mycelium is the root structure of mushrooms. There’s a really cool, New York-based startup called Ecovative that’s building packaging out of mushrooms essentially. Everything I was using that was Styrofoam in the past is now grown from mushrooms which is really cool because it’s biodegradable and totally natural.

It’s definitely become, even in the last three years, easier to source more sustainable materials for packaging. Honestly once I got the packaging figured out, the rest wasn’t too difficult. There’s a handful of natural wood-finishing brands. It’s not too difficult to find a wood mill in most parts of the country or a lumberyard that’s FSC-certified. That the material that’s going into the work is certified, sustainable and other things like that. Packaging was one of the most difficult areas for me to check off the green box.

Tess: It sounds like you’ve really gotten the environmental aspect of your packaging down over the years. Generally speaking, what’s your strategy for packaging such large and fragile items?

Mikey: I’ve gone through a few different approaches. Like I said, when I started out, I would buy sheets of single-walled, corrugated cardboard and basically cut them to size to make a crate, like a small box just big enough to fit in the furniture with a little bit of bubble wrap. That didn’t work out so well. It was such a headache in the beginning to start filing claims and rebuilding all the broken pieces that my packaging pendulum swung all the way to the other side. I was like, “OK, I’m just going to start beefing these things up as much as I can so I never have to worry about a single damaged shipment.” I switched over to using plywood and metal hardware. I wouldn’t say it’s as unsustainable as you can get but it’s not where I wanted to be at all. I knew that at the time, but I felt like I had no other options.

For maybe a year to a year and a half I shipped everything in plywood crates with metal hardware to hold everything together. Sure enough, I didn’t have a single damaged shipment which is awesome. It was emotionally taxing for me, though, because I knew that I was using material that’s not biodegradable that has toxic chemicals in it like formaldehyde which are carcinogens. Metal’s not the worst thing in the world but if I can avoid it, I do. A lot of it’s not recyclable. The manufacturing process isn’t incredibly sustainable either.

I knew I wanted to switch. I was just giving myself some time to source other materials. I thought that might take a little while. After about a year and a half, I actually ended up switching back to cardboard except using a different kind of cardboard. My current process, which has been working really, really well, is using really thick, heavy-duty, industrial-grade cardboard. That has replaced the plywood. It’s about the same thickness as plywood. It holds up equally well against things like drops if a package is dropped at a shipping hub or something like that.

It doesn’t protect very well against coming into contact with sharp objects because it will usually pierce the cardboard. But that, in my experience, is extremely rare. When it does happen, more often than not, I would say almost always the shipping carrier—I use FedEx—is willing to cut a reimbursement for any damage caused by that. Keeping things to a minimum shipping weight and shipping dimension really helps save on cost which is a savings that I get to pass on to my customers. That’s also really important to me.

Tess: It sounds like it took a lot of trial and error, but you really figured out over the years the strategy that works best for you. Obviously it’s working for your buyers too because I noticed you had some customer reviews where the buyer mentioned how lovely the packaging was and how you include a note that explains how to recycle everything. I think people shopping on Etsy appreciate that.

Mikey: Yeah. I think it requires a bit of a paradigm shift for sellers to realize this, but it’s one of my beliefs that the buyers shouldn’t have to do any extra work to make sure they’re disposing of the packaging properly. They shouldn’t have to lose any sleep at night. If they’re environmentally oriented themselves philosophically, they shouldn’t have to be discouraged when something they’ve ordered shows up in material that they can’t recycle and material that they can’t compost because it’s not biodegradable. I think that people just inherently appreciate something when they can tell a lot of thought has gone into it. Like I said, I’ve put three years of thought into my packaging process so far. I think that resonates with people and they appreciate it. I’m happy to do it and I’m happy that other people appreciate it.

Tess: I’m curious to know how you’ve made pricing or operational adjustments to make free shipping a sustainable business strategy for your shop?

Mikey: The free shipping concept is interesting for me. Shipping isn’t free, if we’re being honest. Someone is covering the cost. If I’m not eating the cost, then that means inherently my customer is paying for the shipping whether they realize it or not. I’m all about transparency. That said, there’s something to be said for playing into buyer mentality. I ultimately decided to do that because my customers seem to react better to it. And I guess it’s because other furniture and large item sellers are using a free shipping model. If you can go to one seller’s page and they’re selling a coffee table with free shipping and then go to the next seller’s page and it’s a relatively similarly priced coffee table but the shipping is $200 or $300, which one are you going to go with, right? I totally appreciate that. It makes sense to me from a buyer’s perspective.

So anything that I can do to make my work more understandable and relatable and my pricing model more understandable and relatable to the people who are stumbling across my website and my Etsy page, I’m happy to do that if it works better for them. I would definitely recommend anyone who’s starting out selling and shipping big items online to start an account with a carrier and form a relationship with them. I found, surprisingly, there’s really no lower limit to how much volume you ship with them before they’ll consider you for a custom discount.

What I mean by that is, I’d say for at least the first two years that I was selling on Etsy I assumed I was too small to hold any credence in terms of trying to negotiate better terms and shipping rates with FedEx or whoever I was using as a carrier at the time. That’s really not the case. It actually seems like for a number of the big carriers, small business operations at the scale of my own and similar small business operations around the country are a bread-and-butter sweet spot for the large carriers. We’re shipping big items, so the price tags on the shipping rates are high which means the margins are probably similarly proportionately high for carriers. They want to sell shipments that cost more because it means they’re making more money.

The point is they’re happy to negotiate with you. You just have to make the phone call. It took me a long time to realize that. It actually took them reaching out to me through their customer service program, which is awesome that they do. I got a few phone calls from customer care representatives asking me if I was happy with the service and the rate. After a few of those calls, I finally at one point said, “I’d really like to be paying less, if at all possible.” And that was surprisingly received really well. That’s one thing I would definitely recommend to anyone starting out: Start an account and reach out to a customer care representative and try to form a relationship.

Tess: I’ve heard that from other furniture sellers, too. Have you ever talked to anyone sells smaller items who’ve been able to negotiate different rates with carriers? Is that mostly something that happens when you have larger items?

Mikey: I don’t think you tend to have to do as much negotiating when you’re shipping smaller items because there’s already a cookie-cutter discount model for more regularly-sized and shaped items. You can absolutely and should still pursue discounts on a regular basis whether it’s through an account or whatever else, talking with your customer care representative. You should pursue discounts, even if you’re shipping smaller items. Just because they’re smaller and cheaper doesn’t mean that your carrier won’t be willing to shave off a little bit of their margin to help you out, especially if you’re shipping a large volume.

They’re not going to tell you they have discounts for larger items because they don’t even necessarily have the discounts in a nice, little, cookie-cutter model ready to go. The bigger things tend to be one-off shipments or just something that the carriers haven’t had any experience with yet on a regular basis. They need you to call in and explain to them what you’re doing, what you’re shipping, where it’s going, and how much volume you are planning on doing before they can then respond to you and be like, “OK, that’s interesting. We’ve never worked with a company that ships this type of item before on a regular basis, but I think we can cut you discounts based on how much you think you’re going to be shipping. If you end up shipping more, maybe we can negotiate an even lower rate. If you end up shipping less, then we’re not going to be able to make you quite as healthy of a discount.”

That’s one thing I’ve been surprised about too is how flexible a large carrier like FedEx has been willing to be with someone who is shipping on a very, very small scale in comparison to some of the other huge organizations that they work with. That’s been a nice surprise.

Tess: When it comes to building that price into your item price like you were mentioning, do you factor in variations in cost by distance like using an average shipping cost based on where you tend to ship items?

Mikey: I use flat-rate shipping which means to any US location, my customers are paying the same shipping amount. I’m based in Houston so if something’s going to Dallas, Texas or if something’s going to Manhattan, New York or Seattle, Washington, it doesn’t matter. The customer ultimately is going to pay the same shipping cost. It’s not ideal for me, but again, getting back to the one-off custom nature of shipping large pieces like permanently assembled furniture, the shipping calculators don’t always work very accurately. I started realizing that pretty early on. I decided that it was just going to be easier to use flat-rate shipping.

That said, because the items I’m shipping are so big, there aren’t huge cost differences in shipping rates between someone who is local—and by local I mean in Texas or the southwest region—and someone who might be buying from the northeast or the Pacific Northwest or something. It might be a difference of $10 to $15. That would be a huge difference if it was a smaller, less expensive item. But in the scheme of the rest of the purchase, I think that it’s not been something that has caused a huge negative reaction from my buyers.

The way that I structure my shipping costs and the amount I charge my customers for shipping is based on what I think the most expensive shipment is going to cost me to send out. I base my pricing off sending a piece to New York or Seattle essentially. There are some customers who might have been able to pay, like I said, $5 to $10 to $15 less just because they’re not all the way at the far end of the country. Maybe they live closer to Texas. At the end of the day, things balance out whether it’s a combination of spending less on shipping but more on packaging for whatever reason or vice versa, more on packaging but less on shipping. Or maybe something went wrong with the order so I have to spend a little bit more time on it that I didn’t get to charge for than I would on a normal piece. I tend to think things balance out.

I think it’s difficult when you’re getting started out to know what the average shipping rate is because you have no data to go off of. After you’ve been working for a few years, sure, take that approach. That makes complete sense, and I definitely think it’s the most ethical approach to take an average rather than to charge the most you think it will possibly cost every time. I’m still in a spot where I feel like I need more data before I can lower my shipping cost to what I feel is an appropriate average amount. I think it’s a little safer to start out with the high-end of the spectrum and then move down if you feel comfortable doing that later on.

Tess: Was there anything in particular that made you decide to offer free shipping?

Mikey: I think the thing that put me over the edge in my decision process was an email that was sent out by Etsy. It mentioned something about listings with free shipping performing better in search. At that point, I was like OK, if I’m getting less traffic because I’m not building it into my item price...the only reason I wasn’t building the shipping cost into my price point and offering “free shipping” is because I thought I was doing right by my buyer by creating a little bit more transparency for them when they’re making their purchase. So I was giving them an itemized list of what they’re paying for—namely sales price for the item they’re buying, shipping, and then any tax if they’re paying tax on it—is the most transparent approach to take. At the end of the day, if a buyer is more comfortable seeing free shipping, then I was like, “OK, this is something I have to change.”

Tess: Do you have any advice for sellers who are on the fence about offering free shipping?

Mikey: You should use yourself as a reference point. The only empirical way to do that is to collect data on your business. Run analytics on your sales. Run analytics on your shipping, even if that just means keeping a simple spreadsheet recording what shipments you’re sending, where they’re going, how much you paid for them, how much they weighed, how much packaging you used for them, etcetera. Even if it’s a simple spreadsheet with manual inputs, which tends to be what I use. Collecting data is going to be the thing that helps you arrive at the most educated and probably effective and beneficial solutions.

I would use yourself as a reference point first and only loosely take into consideration what other people are doing because you may not be privy to all of the details and the nuanced aspects of their business model. There may be parts of it that are completely different from yours. Their margins may be different. Their materials may be more or less expensive that are going into the things they’re selling. You just can’t know. I think using yourself as a reference point via collecting data and running analysis is probably the best approach to take.

Tess: My last question for you, what’s your favorite thing about running your own business?

Mikey: Oh man. I just have to pick one, huh? It’s a lifestyle. It really is. It’s a whole lifestyle, and there’s a lot that comes along with it. For me starting out, it was about the freedom. It still very much is about that. When I quit my last day job I hoped that starting my Etsy shop and pushing this new business model would allow me, as an individual, to experience a level of freedom that I just would never have gotten from a corporate nine-to-five job. Really that’s exactly what I’ve gotten out of it.

Tess: It’s been so great talking to you, Mikey. Thank you for sharing your story and your experience with us.

Mikey: It is truly my pleasure. Thanks for reaching out. I’m happy to share. Sellers should feel free to reach out to me directly whether DM or an email if they have any other questions about something that I didn’t touch on. Like I said, it was a really long road to get here. I had to kind of figure things out on my own. I wouldn’t wish that on anyone else. I think what we can do for each other as a creative small business community to help each other out the most is to share experiences with each other. I’m more than happy to do that with anyone who’s interested.

Learn how to offer a free shipping guarantee in your shop by checking out our Site Update.