Ask Luci: Low Etsy Sales and Putting Granny Squares Together

Hello Friends!

I am the captain of the Etsy team The Hippie Peaceniks.  I have been an accountant/bookkeeper for 10 years.  I worked at an ecommerce company for a year, and a search company for 2 years.  I have been crafting for almost 30 years.  So if you have questions about accounting, taxes, SEO, the ecommerce game, or crafting you have come to the right place!  If you have a question email it to askhippiepluci@gmail.com!

Lost on Etsy

Dear Luci,

I have been on Etsy for a year and have had no sales.  I am ready to throw in the towel.  I love knitting and making things for my shop, but am frustrated at no sales.  What can I do?

Dear Lost on Etsy,

There are a few things you can do.  First is check your prices.  Search on Etsy for items similar to yours and see if your prices are in line with everyone else's.  Now prices on Etsy can vary widely, so be sure to check and see what kind of sales those shops are doing.  

Another thing I would do is see if you are in a saturated market,  By that I mean are there are lot of similar items to yours on Etsy.  If so, I would suggest looking for items you can make that are unlike what you are seeing on Etsy.  Find a niche, create a brand, and market the crap out of it.  Being unique and providing an item that people can't find in other shops can greatly increase your sales.

Make sure you have great pictures and engaging descriptions that will make shoppers want to buy from you.  Many shops have difficulties in this area and spend most of their time tweaking listings.  You can't spend enough time on making sure your listings are perfect.

Also make sure your SEO is working for you.  If you don't know about SEO you can read previous posts on Ask Luci, or you can do some research on your own.  Google provides great information on SEO, but only some of it will relate to how you name your shop, title your listings, write your description, and what tags you use.  Those are the areas you will work on for an Etsy or Etsy like shop.

On Etsy, I would also recommend becoming active in a team.  Teams are a fantastic support and a great way to help promote and get your shop noticed.  There are many teams on Etsy.  Look through and find the one that best suits you.  You may just love being on the Hippie Peaceniks.  ;)

Best of luck!  And don't throw in the towel just yet.  The internet is a huge place and getting noticed can take a while, but work on these things first before you give up.

Much Love and (((HIPPIE HUGS))),

Luci

What's Up Granny?

Dear Luci,

I am making a granny square blanket.  I have all of the squares made, but am not sure what the best way to put them together is.  I have looked online and there are several ways to do it.  How do you put yours together?

What's Up Granny

Dear What's Up Granny,

There are several ways to do this.  It really depends on how much stretch you want and what you want it to look like when it is done.

I do it one of three ways.  You can attach the squares by crocheting one single crochet into each of the stitches on the squares.  Make sure you have them lined up evenly.  This will allow for some stretch and will create a lovely seem on one side of the blanket.

If you do not want a seem, the other way I put the squares together is by sewing them together with a yarn needle and the leftover yarn I used to make the squares.  Line up the squares like before.  Use a whip stitch, one whip stitch per crochet stitch.  This will leave you with a seem that is not very visible, but there is not a lot of stretch between the stitches.

A great compromise between these two options is to use a slip stitch.  Like always, line up your squares and use one slip stitch for each stitch on the squares.  This leaves a less noticeable seem than a single crochet, but allows for more stretch than a whip stitch.

I would recommend trying out all three and seeing which method you like best.  

Much love and (((HIPPIE HUGS))),

Luci 

Have a question?  Email askhippiepluci@gmail.com!!  Ask Luci appears on the Hippe Peaceniks blog every Saturday!! 

Ask Luci 3/16/13: Crochet Advice and Recording Shipping Accounting Transactions

Hello Friends!

I have been an accountant/bookkeeper for 10 years.  I worked at an ecommerce company for a year, and a search company for 2 years.  I have been crafting for almost 30 years.  So if you have questions about accounting, taxes, SEO, the ecommerce game, or crafting you have come to the right place!  If you have a question email it to askhippiepluci@gmail.com!

Dear Luci,

I am learning to crochet.  I am having problems with my work looking uneven.  The sides are never a straight line.  I'm not sure where I am going wrong.  I have been practicing and practicing, but always with the same result.  I am about ready to give up!  Any advice?

Uneven Hooker

Dear Uneven Hooker,

Two things come to mind, and they are the most common problems new crocheters struggle with.  I myself did when I first started many years ago.  So don't give up just yet!

First thing I would check is to see if you are dropping or accidentally increasing your stitches.  Count each row.  Do you have the same number of stitches on each row?  If you have more on a row than you did on the previous row you are accidentally increasing stitches.  This means that you are accidentally putting in more than one stich per chain or stitch on the previous row.  If you have fewer stitches that the previous row, then you are dropping stitches.  This means that you are not putting in one stitch per chain or stitch on the previous row.  If you notice it is one of these two things, count the stitches on each row before you continue.  Eventually it will become second nature for you to place one stitch in each chain or stitch on the previous row.

The other thing it could be is your tension.  This is caused mostly by how tightly or loosely you hold the strand of yarn.  It is always uneven when you first learn, causing some stitches to be tighter than others, and some to be looser than others.  Tension is kind of like handwriting, each person has their own.  The trick is to learn to keep the tension even throughout your work.  This is something that comes with time and practice.  You will find when you do get your tension even, and you start doing more complicated work where gauge is important, that yours will not always be the same as what is listed on the pattern.  You can adjust that by increasing or decreasing your hook size, depending on if your gauge is larger or smaller than what is listed on the pattern.  If your gauge is larger than theirs, use a smaller hook.  If your gauge is smaller than theirs, just use a larger hook.

Crochet is an art that is not learned overnight.  Just try to be patient and practice, practice, practice.  Before you know it, you will be an accomplished crochet artist!

Much Love,

Luci

Dear Luci,

I have been trying to decide how I should record my shipping expenses for my Etsy shop.  I have been doing some reading online, but am very confused.  It seems some people treat it as a shipping expense, but some treat it as a "reimbursable expense"?  How should I be doing this??

Not an Accountant

Dear Not an Accountant,

If you do not charge your customers for shipping than this would be a straight expense, and should be recorded as a shipping expense.  However, if you charge for shipping like most Etsy shops do, you would want to record this as a reimbursable expense.  This can include not just the actual cost of shipping the order, but shipping supplies such as boxes, packing for fragile items, shipping labels, and tape to seal parcels to name a few examples.

By recording your shipping expenses as a reimbursable expense, the money you receive for shipping is no longer considered revenue.  It is only a reimbursement of an expense.  This will lower your revenue, and your tax liability.  You just have to make sure that you also record the money you receive for shipping as an offset to the reimbursable expenses account.  For my Etsy shops, I charge for shipping and record all shipping expenses as a reimbursable expense.

Much Love,

Luci

Have a question?  Email askhippiepluci@gmail.com!!  Ask Luci appears on the Hippe Peaceniks blog every Saturday!!

Ask Luci 3/9/13 LLC taxes and SEO

I have been an accountant for 10 years, and worked for a search company for 2 years.  I know a lot about accounting, taxes, and SEO.   I have also been crocheting, knitting, embroidering, and upcycling for 27 years!  Questions about crafting are also very welcome! So if you have a question please send it to askhippiepluci@gmail.com!  I'd love to hear your questions!

Dear Luci,

I have my Etsy shop set up as a LLC.  How do I report this in my taxes?  Do I need to do a separate return for the LLC?  Or does this go onto my personal tax return?

Sincerely,

Confused by Taxes

Dear Confused by Taxes,

This depends.  If you are the only owner of your shop then you can claim it on your personal taxes.  The LLC would be treated as a disregarded entity and treated like a sole proprietorship.  You will need to complete a Schedule C to attach to your 1040.  You need a profit and loss statement to complete the Schedule C, which is where you will begin, by completing the Schedule C, and then there will be a line on the 1040 to add that into your adjusted gross income, which is the number that your tax liability is figured from.  You will then pay the taxes on your personal tax return and no other return is filed.  It is treated as though you are a sole proprietorship, so nothing more is needed in that case.

Now if your spouse is listed as an owner you have a couple of options, depending on what state you live in.  If you live in a state that has a provision for community property you can file as a sole proprietor on your joint federal tax return.  However, if you live in a non community property state then you will have to file as a partnership.  I'll explain this next.

If you have a partner, or if your spouse is an owner in your business and you live in a non community property state, then you will have to file as a partnership, or you can complete form 8832 to be treated as a corporation.  The right decision on that really requires more details, such as what state you live in and how much revenue you are reporting, before an educated decision can be made.  To help you decide if you want to file as a partnership, or elect to file as a C or S corporation (something most Etsy shop owners won't qualify for, but if you have a high volume shop then you might).  Below is taken directly from the IRS website, for filing as a partnership or corporation...

"If the LLC is a partnership, normal partnership tax rules will apply to the LLC and it should file aForm 1065, U.S. Return of Partnership Income (PDF). Each owner should show their pro-rata share of partnership income, credits and deductions on Schedule K-1 (1065), Partner’s Share of Income, Deductions, Credits, etc. Generally, members of LLCs filing Partnership Returns pay self-employment tax on their share of partnership earnings.

If the LLC is a corporation, normal corporate tax rules will apply to the LLC and it should file a Form 1120, U.S. Corporation Income Tax Return (PDF). The 1120 is the C corporation income tax return, and there are no flow-through items to a 1040 from a C corporation return. However, if a qualifying LLC elected to be an S Corporation, it should file a Form 1120S, U.S. Income Tax Return and S corporation laws apply to the LLC. Each owner reports their pro-rata share of corporate income, credits and deductions on Schedule K-1 (Form 1120S).

For additional information on the kinds of tax returns to file, how to handle employment taxes and possible pitfalls, refer to Publication 3402, Tax Issues for Limited Liability Companies (PDF)."

These links will show you the forms, and allow you to research which filings you qualify for, and which ones will get you the best tax deal.

I hope this helps.  If you have any further questions please email me at askhippiepluci@gmail.com and I will answer them in detail.

Much Love,

Luci


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Dear Luci,

I am new to Etsy and have seen many people talking about SEO.  What the heck is SEO and how does it affect my Etsy shop?

Help!

Fried on SEO

Dear Fried on SEO,

SEO means Search Engine Optimization.  This means how effective your tags, titles, and descriptions are in being found on a search engine.  This is important because this is how search engines like Google, and even Etsy, find you.  Solid SEO will get your items found on multiple search engines and help to drive more traffic to your shop.  Naturally, the more people that see your shop, the more sales you are likely to get.

Getting found on the internet, and even on Etsy, is quite a task.  The last I read Etsy alone has something like 850,000 sellers.  That is a lot of competition.  SEO is the best way to deal with this.  Here are a few quick recommendations, and some helpful links, to get you started.

SEO looks at 3 basic things: titles, descriptions, and tags.  This should have a bit of repetition.  I sell t shirt yarn, so for the best results I should have t shirt yarn in the title of my shop and every listing, the description of my shop and every listing, and in the tags.  Put your key search terms in the first 160 characters of your description, as that is all the "spiders" are looking at.  The more relevant terms you have the higher your search ranking is likely to be.

That being said, you don't want to overload your titles and descriptions with keywords.  You want your listing title to be "pink t shirt yarn", not "pink t shirt yarn, tarn, bulky yarn, crafting cord....".  If the spiders see that they will kick your listing out of the ranking.  Use the best search term in your title.  Include it in your description, but also include another keyword or two in the description.  You could say something like "t shirt yarn, also called tarn or crafting cord, is perfect for...".  Then use t shirt yarn, tarn, and crafting cord in your tags.

I found this link from Hobo Marketing.  It is full of good advice, as well as links to many documents that can help you sort this out.  Now some of this won't apply to you as an Etsy shop because you are not writing html for the site, but Etsy has experts doing that so I wouldn't worry about that.  Just worry about what they are talking about with titles, descriptions, and tags.

Pay attention to the dos and don'ts.  Especially the don'ts.  I often compare Google to a Vegas casino in the 70s.  Break the rules and they will break your hand so to speak, by not having you show up in search results.  Death to an online business.  But if you play by the rules, Google can be a wonderful friend to have.

I hope that this helps get you moving in the right direction.  If you have further questions, or require some clarification, please send me a message at askihippiepluci@gmail.com.

Much Love,

Luci

Do you have a question?  Submit it to askhippiepluci@gmail.com.  I will post questions and answers every Saturday!