Monday, February 21, 2011


This blog post was inspired by a post in a team forum (Etsy Entrepreneurs Team). One team member today had a thought of when she can expect to start to quit her day job and be able to run her shop full time. And then I had a question that came up..."When can we expect to turn a profit?"

It takes an average of 3-5 years for a physical store to turn a profit. There is a lot of costs associated with start-up costs. Equipments purchases, materials costs, and inventory costs.
I have a lot of items in my shop, so I have to hold a good quantities of inventory on hand. That means, my inventory cost is pretty high. My start up cost is pretty high too because I had to buy in materials and equipments to start my shop.

In the beginning, these are my start up costs:
  • I bought a brand new camera to take good pictures with.
  • I bought a brand new apple computer to run my shop with because my PC keeps getting viruses and crashing.
  • I bought new lighting for pictures taking.
  • I bought new equipments and tools to hand make my crafts.
  • I had to have enough samples to start a shop.
  • Office supplies
  • packaging materials

Advantages of having an online shop:
  • No monthly rent (saves thousands $$$)
  • tax write off (everything above)
  • No landlord that you have to answer to
  • No employees to pay yet (in the beginning)
  • You are your own boss
  • Doing what you love (priceless)

When can I expect to earn a profit?
Here is a simple way to measure how long it will take you to make a profit:
(Start up cost + inventory cost) divide by your average monthly profit (subtract your costs from the total sales)= the number of months it will take you to break-even...and then after that, you will start to turn a profit. **but this is an estimate because it does not take into consideration marketing costs (relisting fees, etc...)
But it should give you an idea.

It is faster to turn a profit with an online store than it is if you have a physical store. But that is not always the case. Some online shops rents out warehouses to house their inventory; but most of the smaller shop owners use their house or an extra spare bedroom to house their craft business.


  1. Thanks for the insightful post! Reading about this is inspiring.

  2. I hope to live long enough to see Hide A Heart turn a profit!

  3. Really good post and should help others with an idea as to the direction they want to take regarding profitability. Your newest follower from EBT. Welcome.

  4. Hello,
    I'm following you from and from my blog you are following.:)

    Great post! I have been dreaming of being full time Etsy for 3 years!

    I just gave my 2 weeks notice at my job yesterday! I am so happy. I finally, after 3 years selling online, am making enough profit to replace my job income.

    I was a 911 dispatcher and now am a full time Etsian!! I can't begin to explain how happy I am now. :)

  5. Great little post - hello from the Blog Forum!

  6. Thanks for the post! I'll have to run those calculations!


Related Posts Plugin for WordPress, Blogger...