Tool Tip Friday 7: Online Store

Tool Tip Friday 7: Online Store

Posted by Oksana Ossipov on Oct 26th 2018

At some point in their lives, many artists start looking for a platform to sell their work on. Nowadays, there are many options available. For today’s Tool Tip Friday, I’m going to talk about pros and cons of running an Etsy store versus a self-managed store. I am located in the United States; therefore, I will write from the point of view of a seller to and from USA.

Let’s start with Etsy. They offer a great set of tools to start one’s shop in a single day. After the registration, all one has to do is pick a shop’s name, add shop descriptions, shop policies, payment and tax information. They provide helpful information regarding every step, and, if something is unclear, the first result in a Google search often answers any questions. When choosing a shop’s name, one has to consider the length and ease of remembrance of it. A shop description is also very important, as it helps potential buyers to get to know the artist better. Shop policies are required by Etsy, but they’re very easy to set up. There’s a pre-written set of policies that the seller can choose from a bulleted list, and add their own if desired. Finally, the payment and tax information is well explained and easy to set up. After that the shop is ready to go, but one might want to add a graphic banner to the header of the shop to make it a tad personal. Another massive pro of Etsy is their well-advertised marketplace. A lot of people search for one-of-a-kind gifts there; it is the go-to place nowadays for everything handmade. It’s a great opportunity for undiscovered artists to get some exposure even if the competition is great.

Etsy is very well automated; they provide shop owners with statistics regarding the store traffic and profits. Additionally, they have lots of information and guides in their blog on how to begin and how to succeed as a seller. These can be useful even if one is running a self-managed store, as many of their tips are universal. The cons of Etsy are their fees. As of the time of this posting, there’s a listing fee of $0.20 per item, a transaction fee of 5% from an item’s price + shipping, and a processing fee of 3% + $0.25 from an item’s price + shipping + tax. The total fees for US sellers would equal roughly 8% + $0.45 per transaction. It’s roughly, because Etsy charges 5% from an item’s price + shipping, and 3% + $0.25 from an item’s price + shipping + tax. Still, 8% in fees is below average among competitors. Therefore, Etsy is my number one recommended platform after Storenvy. In my personal opinion, this is a very good price for the set of tools they offer.

A self-managed store is actually a lot more headache, and sometimes it even costs more. It requires lots of research, and a bit of knowledge on how websites and domains work. I own several shops, and one of them is a self-managed store. The platform of choice for me is BigCommerce, and I will talk about why I chose them in my next Tool Tip Friday.

The easy way to get started with a self-managed store is to pick a platform and to get a domain with it. This is also the costly way, as the domain is usually free for the first year, but then the price is higher than with a dedicated domain hosting service. A self-managed store on BigCommerce platform costs around $30 per month for their basic plan, and the domain costs around $12 per year on a separate service. The next problem presents itself in setting up the store, as one has to read every bit of the agreements to make sure there are no prohibited items in the store. Then the owner has to set up all of the categories and website navigation, add information and policies from scratch, as the store is very much a blank page. Lastly, one need to sign up with a credit card gateway and read their policies which are sometimes tricky. For example, the service that I use prohibits sale of any wigs. Strange, right? Unfortunately, this is their policy, and, if violated, they will terminate the contract without a possibility of using their services again. Even after all of this is done, the self-managed store requires constant attention.

The number one issue is security. Even before the shopping cart can be published, the owner has to install a TLS certificate. There are guides on how to do this of course, but one would still have to learn about it and understand how it works. The second issue is keeping up with the software updates. Even though the platform takes care of security updates, the owner has to apply them in a timely fashion. The owner also has to keep the login information safe; this also means keeping safe the computer from which the store is accessed. This is why I would not recommend using self-installed shopping cart software on a self-managed hosting. It’s nearly impossible to keep it secure, and, in today’s world, a data breach is nearly the worst thing that could happen to a seller.

Another downside of a self-managed store is tax payments. One has to calculate sales taxes and set them up manually or use a tax calculator which costs at least $50 per year for a small business. This year, many states began charging tax on online sales even if the seller doesn’t have a physical presence in that state. The seller has to search for these laws manually, and manage tax payments accordingly. Etsy collects sales tax payments automatically, therefore the sellers don’t have to deal with it.

Finally, the store is set up, but then comes the problem of advertising it. That’s the beauty of Etsy marketplace; it’s well advertised already. With a self-managed store, one has to deal with SEO (search engine optimization), but even that makes the chances of appearing on the first three pages of search results nonexistent in the first year. Therefore, it is unwise to rely solely on a self-managed shop unless one has a large following on social media.

A huge plus side to a self-managed store is lower transaction fees. The only processing fee that the seller would have to pay is the credit card gateway fee which is around 2.9% + $0.30 per transaction. Established artists with well-advertised social media accounts can take full advantage if this. Unfortunately, for people who are just starting out it is not a wise option. It’s best to take a small cut in pay, but make more sales rather make a few sales and keep a majority of profits. One has to calculate all of these fees and nuances before deciding whether to go with a marketplace shop like Etsy or a self-managed store like BigCommerce.

I hope this article helped to shed some light on the subject. If you have any questions, feel free to reach out with comments and questions on Twitter: @truenoirart