Building up an inventory is both challenging and VERY important, because the more things you have the more chances you have to catch the eye of a potential customer. Also, many Etsy shoppers will come to your shop for one thing and then end up buying several because they just like them (I'm terribly guilty of this!), so it is great to have a wide variety.
I make jewelry, so I'm lucky that I can remake the same item over and over. Some of my most popular items have sold upwards of 50 times! I'm not sure how easy that is to replicate with crocheted stuff, but it definitely helped me to list an item and then re-list it when it sold with the idea that I could re-make it when someone else purchased. That way I was able to focus on making new things while also keeping my inventory up. I have about 300 items listed now (but I also sell vintage millinery supplies like flowers and ribbons, so that boosts the numbers with very little work from me). I would advise you to put a lot of effort into building as much varied inventory as you can, as long as you keep an eye on your production times! Make sure you're clear in your listings if something is made-to-order or ready-to-ship.
You definitely have to make a decision at some point of this is just a little hobby or if you really want to make money at it (and spend a lot of time on it), because your strategy will really be different for each scenario.
Pricing: OY! The Bane of Etsy! So many well-intentioned crafters! So many people who don't value their work (or think that others don't value it!), so many re-sellers from China dragging down the prices. I really struggled with this at first and severely under priced myself. When I finally decided that HEY, this is working and I think I can actually turn this into something big I sat down and figured out how much I was really making (not much) and how much I wanted to charge per hour. I make about $30/hour at my real job, and I wanted to make more than that, so I charge my labor at $35/hour. Now pricing for jewelry and pricing for a labor-intensive craft like crochet is VERY different, because I don't think the market could support those kind of rates for your work, so you really have to figure out what works for you. I will tell you that I have a 100% markup on ALL of my materials (and I'm marking up less than some of my competitors!), so don't underprice yourself there. My I-want-to-stand-on-a-mountaintop-and-yell-this-mantra to all Etsy sellers is "DON'T BE AFRAID TO CHARGE WHAT YOU ARE WORTH!". When I raised my prices I actually started selling more...true story!
I absolutely consider the pricing on my competition, but don't get stuck in a price-war with someone. It is bad for both of you. That's how I started out doing it and I regretted it. Don't be in a bubble, but think about YOUR needs and what works for YOU. It isn't worth it to sell 5x more than that other person if you are making less. If you can sell 1 of those things and make the same amount as if you sold 5, then just sell 1! Your hands will thank you! Getting my pricing was the hardest thing I've done related to my shop, so don't let me make it sound like it was easy. This has been a 3+ year journey for me, and I've only this year really gotten into my groove!
I'll send you a PM with my shop name. It's very publicly linked to my real-life world, so I'd prefer to stay somewhat anonymous on the ole' forum!
