Working For Free?

~ Laura

On Tuesday, we were talking about businesses that make a lot of money convincing people to work for them for free. 

Yesterday, a friend came over for a visit and discussed her upcoming shop on Etsy. We fired up the iPad and looked at the website at the kitchen table. I admit that I became a bit obsessed and spent the rest of the evening checking out the Etsy lifestyle — homemade stuff in hot colors in eclectic, layered homes. One guy sold candles that he made in his Winnebago, which was full of whimsical curtains and pot holders.

Yes, I'm a sucker for that stuff, so I dreamed up my own colorful, macrame, textured, crafty, patina, thingie shop and checked out the restrictions on their sellers. I looked at the actual sales of their sellers. It's basically a place where people sell the products of their hobbies. Nobody really is making money off that website. Except for Etsy. 

Published by Laura

24 thoughts on “Working For Free?”

  2. People who can buy candles made by Laotian teenagers in a sweatshop and can convince other people that the candles were made by a hippie in Winnebago full of whimsical curtains and pot holders also can make money.
    (I have no idea about this specific guy, but that kind of thing is a common target of Regretsy’s snark.)

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  3. I used to live on the west coast of Canada and many people who appeared to live off of their lovely crafts/handmade goods were supplementing their income by a little bit of “ahem” farming, if you know what I mean. In the Pacific Northwest that “ahem” farming is a billion dollar industry.

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  4. Now that I think of it, I think that New Yorker beret seller is from the Pacific Northwest…perhaps beret’s aren’t his sole source of income….

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  5. supplementing their income by a little bit of “ahem” farming
    I’ve always assumed that is how most small-scale organic, local farmers make their actual income. It’s either that or charging people to come pick apples, which is just horrible.

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  7. There’s a small segment of Etsy sellers that do very well, earning six figure incomes. A lot of crafters- it seems many of these are SAHMs- see this and have aspirations to achieve something similar in their spare time. The thing is that the successful Etsy sellers are working their tails off and are certainly not doing it as a hobby. There was an NYTimes article about this a few years back (http://www.nytimes.com/2009/12/17/fashion/17etsy.html).
    Related: it seems like every young SAHM is becoming a wedding and family photographer these days. I have a hard time imagining that they earn much after start-up/equipment costs and the time it takes to shoot and process the results.

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  8. Hey, we city folks like to pay to bring our kids to pick apples. Otherwise they wouldn’t know how apples grow. On trees, right?
    What kind of money is Etsy making? When I buy the $40 bag that’s on my favorites list, what does Etsy make?

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  9. I’m surprised there’s not a paraphernalia section of etsy to deal with the product of “Ahem” farming. In that notorious second year of college, Steve learned how to do interesting things with an apple. Ka-ching!

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  10. I never used “ahem” in college. Just alcohol and tobacco. Sometimes firearms, but not often. In my second year of college, one of my roommates had one of those gun dealer licenses that Clinton eventually stopped.

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  11. OK, I’m going to answer my own question. My current favorite favorite is a hip bag on sale for $39. The shop lists 30 items. She’s made 209 sales since the shop opened on Oct 7, 2009. The average price of a product is $30.
    Assuming she’s listed 30 items/month of about the same average price for the whole time, she’s paid $114 to etsy to list her items. The 209 sales @$30 generated $217 for Etsy. So $6194 of sales generated $330 of revenue for Etsy & $5860 for the seller.
    The bags are fabulous and well made of good quality materials. I talked to a buyer for a clothes manufacturer about how much the items might cost (to hand make), and she thought perhaps $10/materials + 5+ hours of labor. That comes to $3.60/hour. If our time estimates are off, and she can whip off the bags in one hour, she can make $18/hour.
    The numbers don’t make me mad at Etsy. The subscription cost (i.e. listing items) seems reasonable to me, to list 30 items for less than a Typepad subscription, and something comparable to my Smugmug subscription.
    But, even if the per hour pay works out well enough, it’s not enough to be a day job (and you have to pay 13% SS tax).
    (Mad Blue Designs, BTW and it really is beautiful work.)

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  13. Another model (again, from my favorites list): A person who sells digital artwork (i.e. information).
    Store open for 37 months
    700 items listed
    15113 sales @avg price of $5/item
    Sales: $75565
    Etsy listing costs: $5254
    Etsy transaction costs: $2644
    Shop revenue: $67665 (over 3 years)
    (I don’t know how long it takes to design an item; but this model has the benefit that it allows repeat sales of the same item, once generated. And, there are no production costs for the second item).

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  14. Scantee, here the SAHM’s are getting into cake decorating and catering cupcakes.
    On the use of electricity for “ahem” farming, in the cities out west it’s the indoor grow up (beware the neighbour’s house with foil on every window and extra electricity metres. However, the organic farmers are outside in the hippy dippy areas with an acre or two set aside for some “medicinal” farming.
    MH – I hope the gun use was separate from the drinking in college!

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  15. I bet the digital artwork guy makes more money than the handbag lady. You haven’t figured into calculus the vast amount of time it takes to photograph, style, photoshop, and list each item. The time it takes to communicate with customers and shipping. There is a whole game to etsy, as I understand. If you want to get put on the front page and get attention, then you have to network with other sellers and form groups or something.

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  16. I think I can sincerely say that both of these sellers are one’s I found without the Etsy marketing manipulation (Mad Blue is a local seller, and I found her by using the local search feature & the digital artwork woman by searching for a specific item — Kokeshi dolls).
    There’s no question that the digital artwork person (TracyAnn) is generating more revenue — 20+K v 4K or so. And, her photography is much simpler, consisting as it does of the item itself (rather than having to light and photograph it). Of course, I’m guesstimating a lot of the numbers.
    I think it’s really really tough to make handcrafted one of a kind items pay without scaling up in some way (i.e. having low paid labor do some or all of the work, selling patterns or designs). Really what people who want to create want is a patron (and people used to have that in variety of places). Now there are fewer and fewer places where you get paid to do creative work without generating the sales yourself.

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  17. A search for “fascinators” on Etsy gives 25,000 hits. I’m not sure I know which of the two gets the worst of that factoid.

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  18. I’m all for DIY, but there was a reason for the industrial revolution. Handmade stuff is generally labor intensive, and in this day of mechanized production, generative of negative value. (As Marx taught us well over 100 years ago, for the same quality, people will in general not pay twice as much for something simply because it took you twice as long to make it.)
    Also, most homemade stuff looks, well, homemade, and few people would want to pay fully for materials and labor for something that looks rough around the edges. If you are extremely skilled at a craft, you would go high end bespoke, in which case you would not be selling on etsy. The market niche for most DIY hobby products is then hippies with investment banker salaries, who just doesn’t exist.
    My SIL is a professional quilter, and even she doesn’t sell her quilts for the same reason. She sells quilt patterns, and is probably publishing a quilting book. Of course, even though she is probably one of the top young quilters in the US, the truth is it will never result in a sustainable income.

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  20. even though she is probably one of the top young quilters in the US, the truth is it will never result in a sustainable income
    I hope she avoids the steroids and groupies that are such a problem in the higher ranks. You wouldn’t want to see her as another cautionary tale on HGTV’s “Behind the Batting”.

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  21. I think for quilting, it would probably be meth and/or outsourcing to those Laotian teenagers you mentioned.

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