PRICING! I think this is, bar none, the most difficult thing to get right when it comes to Etsy.
Here's basically a cut-and-paste from an earlier Etsy thread in response to a question about pricing crochet work:
http://forum.mrmoneymustache.com/mustachian-marketplace/sharing-an-etsy-code/msg783767/#msg783767"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 money. 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 4+ year journey for me, and I've only this year really gotten into my groove!"
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I sell pretty expensive jewelry. My necklaces, my best seller and what I am known for, range from $70-$180. I sell a lot of them. An astonishing amount of them. I have competitors who sell very similar necklaces for less, and I outsell them. There is one person who sells similar necklaces for much, much more and people still buy from her! Don't automatically assume that a lower price equals more sales.
I THINK my success comes from several factors:
1. I have great photos. It took me a long time to get to the point where I take good photos, but it really helped my shop. I think that's what really kickstarted things for me. You can have the most beautiful, well-priced item in the world and if you had bad photos it won't sell.
2. My descriptions are long. Super long and rambly (a lot like my posts, ha!). But I talk a lot about the items: what they are made from, what the quality is like, all important measurements, my inspiration for the piece, I use adjectives like elegant, luxurious, playful, lively, sparkling, classic. When someone reads my descriptions, I think they get a feel for my items and, more importantly, a feel for ME. They know I'm a person, they know what I look like (I use myself as a model), they know how I talk. It really drives the point home that you are purchasing a quality, handmade item from a real person who is totally grateful for their business.
3. Social Media. This has been a boon for me, and I'll talk more about that in another post.
Because I have done these things and because I have a solid customer base and a good product, I can charge more than my competition. I also KNOW I have a quality product- better than or equal to my competition, and I'm not afraid to talk about it. I'm also not afraid to charge for it.