This is why you should NOT use Etsy Research tools for your Etsy Shop…
In this episode, I break down the truth about the popular Etsy tools that most Etsy gurus claim you need in order to be successful on Etsy. Today, I’ll show you how to be successful without downloading another Etsy Research tool.
In this week’s episode we discuss:
[00:51] – Reason #1: Low Competition, High Search Volume Keywords Say Nothing About How Competitive They Are
[02:19] Reason #2: What Matters is the Profit Opportunity
[04:01] Reason #3: Units Sold
[05:54] Reason #4: Turnaround Time is a Mystery
[06:49] What To Do Instead
Reason #1: Low Competition, High Search Volume Keywords Say Nothing About How Competitive They Are
Looking at low competition, high search volume keywords says nothing about how competitive those keywords actually are. It also says nothing about the margin opportunity and the gross margin dollars that could actually come from those keywords.
For example, let’s say you look up cat lover t-shirt and let’s just say there is high search volume, low competition and you think this is an amazing opportunity. What you don’t see from those software tools is the margin is just 2% which makes it a loss leader. They aren’t losing money, but just breaking even. We need to consider if there’s actually an opportunity for us to compete. On paper, the combination of low competition and high search volume might look like a great opportunity, you may find that it isn’t in the long run.
Instead, you could focus on something that has mid search volume, high competition but the competitors are priced at an 80% margin. Even though it looks saturated on paper, there’s a huge opportunity to come in and compete.
Reason #2: What Matters is the Profit Opportunity
When looking at these tools, we don’t know if these items are sold at full price or on sale. That’s a huge problem, especially when many Etsy sellers are running constant sales up to 70% off on a daily basis.
We also don’t know what the cost of anything is. We can see an estimated revenue but we don’t see the estimated cost on that revenue. For example, let’s say we go to EverBee and they say that a certain listing is a $10,000/month opportunity. If that seller is always running that listing at 70% off and also paying to run ads to that listing, that brings it down to just a $3,000/month opportunity.
You also have to consider the cost of goods sold. Let’s say that it was a print on demand item and their cost of goods sold was 2,000. Now, EverBee is telling you that this is a $10,000/month opportunity that some seller is losing $2,000/month on.
Reason #3: Units Sold
Sometimes an opportunity might look like an even better opportunity than it initially appears because it is often purchased in higher quantities. The biggest piece of data missing from these Etsy software tools is qualitative information. What really matters is value proposition which is how you show up in search results. That is where we learn if there is room for you to compete. Looking at the first page of search results is going to tell you way more than just looking at supply and demand numbers.
Reason #4: Turnaround Time is a Mystery
Today, turnaround time is one of the best ways you can compete. For example, are all of the listings on the first page of search results print on demand where they take a week to fulfill? If you’re making something at home and can ship something out within 24 hours, that makes you so competitive. Knowing and understanding the competitive landscape and fulfillment methods that they use can give you a huge competitive advantage.
What To Do Instead
We always want to use data to make decisions, but we need to see the whole picture to make these decisions.
In module six of the Ultimate Etsy Course, I walk you through how to use data to make decisions. When building a business, we want to see the complete picture so that we can make informed decisions.
If you are ready to try something different that gets you results, then schedule your free call with myself or my team today.
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