When Inventory Makes Sense
If you start seeing that one product sells pretty consistently, let’s say 50 times a month, then you might need to consider creating stock of that product.
Knowing roughly how many you will sell a month allows you to create the product in batches, which frees up your time. That way, every time an order comes you just put a packet up in the mail rather than having to stop and create one every time and it’s a lot more time efficient.
And because you waited to make inventory until you had solid sales data, you are not wasting your time and money making products that don’t end up selling.
What About Supplies?
You also don’t want too many supplies for products that you aren’t sure will sell – remember, 20% of your products will probably bring in 80% of your revenue. That means that you aren’t going to sell a whole lot of the other 80% of your products, and some are not going to sell at all . . . that’s just the reality of selling online.
Of course you want to have enough supplies to be able to start making a product as soon as it is ordered. But don’t over-order your supplies: instead, make sure that your suppliers are pretty responsive in sending you those materials, so if suddenly the product sales increase you can order more supplies and receive them in a reasonable timeframe.
Put Realistic Timeframes In Your Listings
It’s also important that you clearly communicate your processing time in your listings.
So if it’s going to take you 5 to 10 days to make the product that’s fine, just be really specific and clear about that and say 5 to 10 days in your listing.
If it’s going to take you 1 to 3 weeks say that also — what’s important is setting realistic expectations so people know they have to wait a little bit before you can ship it, rather than expecting that products are in stock and will ship it as soon as they’re ordered.
If you are wondering what a “reasonable timeframe” is for your product or your niche, you can use software like Erank to help. This program allows you to look up the average processing time for a specific keyword or product type.
Once you have that information you will want to align to that timeframe in order to be competitive.
So for example, if everyone has a processing time of 3 weeks and yours is 3 weeks, then you’re within the timeframe that people will expect and all is good. But if the average processing time is 2 weeks and yours is 3 weeks, then you need to try and reduce your processing time to get it closer to that 2 week average.
It’s not perfect, but this can help you know if your processing time is competitive with others in your niche.
Additional Benefits Of Making Your Products To Order
In addition to saving you time and money, making your handmade products to order has a few other noteworthy benefits.
First, you can offer a much larger selection in your shop, which absolutely can make a difference in sales. For example, if you make macrame plant hangers, you could offer 4 or 5 designs of a certain color without needing to pre-make stock of each one. Since they are the same color it doesn’t significantly impact your supplies inventory, and you are giving your customers more options which can turn into more sales.
Second, many makers feel more motivated and purposeful when making their products because the item is already sold. There is an excitement of making your product knowing someone chose that product out of all the products on the internet, which will create a little spark of energy and satisfaction when you make it!
These benefits offer even more reason to wait until you have sales data for your handmade shop before deciding if you want to create a stock for some of your products.
Smart Inventory Decisions Pay Off In The Long Run!
So as you can see, my favorite approach for new handmade and Etsy shop owners is to start with no stock and create products as orders come in, then possibly establish inventories of your high-selling products once you have the sales data to support that decision.
That way you’re not spending time making products that you’re not sure will sell, and money on inventory that may never get purchased.
I have even more advice about how to start selling handmade products on Etsy the right way that you will want to review before starting your Etsy shop, plus a very helpful free guide called “The Maker’s Roadmap” that walks you through the process of starting and growing a profitable handmade shop, so be sure to take a look at these next.
Thanks for reading, make sure to check the links below, and until next time, aurevoir!