Experienced Etsy shop owners will know that when you have a high performance Etsy store it can be hard to keep up with the demand from all your customers without turning away potential sales. Customers expect a high level of care and attention to detail for the premium products they order in the Etsy market place. The process often requires substantial amounts of extra work compared to a traditional ecommerce order, causing friction between the customer and store owner as well as increasing production costs. Sometimes, it feels like there are never enough hours in the day to get everything done! While some may not realize it, Etsy store owners have several strategies in place to deal with this ongoing problem. This article will outline a couple strategies that successful Etsy store owners can use to cut down on the workload involved in running their business.
Table of Contents
1. Know Your Limit
One great place to start when trying to expand your fulfillment capabilities is to do an assessment of your current production limit. Having a robust understanding of your entire production process and the time involved for each step will be an important piece of data for a number of tasks. Production time will be used when optimizing operational procedures, setting realistic fulfillment targets, ensuring there is enough time to fulfill all open orders, and establishing an inclusive cost model. While bringing in more help may seem like an easy solution, it is likely to cause more problems than it solves unless you can create a better system to handle your order volume. Calculating production time is a great first step towards developing a full operational system for your Etsy shop.
First, start by writing down a list of all the tasks you will need to complete when putting together an order. Be specific! Try to include every step, even if it seems trivial. As an example, let's consider Steve's Etsy store that sells personalized dog tags. Here are the core tasks involved for Steve when processing a custom engraved dog tag order:
1. Receive and download order information
2. Engrave the dog tag
3. Purchase and print shipping labels
4. Prepare envelopes with peripheral accessories
5. Match shipping labels with dog tags
6. Add shipping label and dog tag to envelope
7. Submit tracking number to purchase order
8. Deliver envelope to shipping provider
Now that we have a complete list of all the tasks involved in preparing and fulfilling a dog tag order, we will need to get a measure of how long each task throughout the process will take. The best way to do this is using a sample by doing a certain task for a couple orders and then take an average. The only extra tool you will need is the free stop watch app on your phone to keep track of time. If you are considering hiring staff in the future this will also be helpful information to use later when calculating your true production cost! This sounds like a simple exercise but this is actually a very involved process to do properly! Be prepared to spend a little extra time recording information over the course of a couple days to get a good feel of your production speed. Revisiting the dog tag example, here is a rough estimate of the time involved in each part of the customization and fulfillment process:
1. (16 seconds) Receive and download order information
2. (179 seconds) Engrave the dog tag
3. (85 seconds) Purchase and print shipping labels
4. (10 seconds) Prepare envelopes with peripheral accessories
5. (40 seconds) Match shipping labels with dog tags
6. (14 seconds) Add shipping label and dog tag to envelope
7. (16 seconds) Submit tracking number to purchase order
8. (18 minutes - daily batch) Deliver envelope to shipping provider
Total Marginal Time Per Dog Tag Order: 6 minutes
Knowing that the average time it takes to produce and fulfill a custom dog tag can immediately begin helping Steve manage his production schedule. Steve decides to spend 6 hours out of his work day on production and fulfillment. After subtracting the 18 minutes to deliver orders to his shipping provider at the end of the day, he has 5 hours and 42 minutes left to produce custom dog tags at an average pace of 6 minutes per order. Steve can now say with confidence that he can fulfill 57 orders within a 6 hour day with one person. Now he can set realistic fulfillment goals, and set order targets based on the number of hours he plans to spend on production per week.
If you sell multiple products, take the time to write out your task list and average production times for each different product. It may seem a bit intensive to do this entire process for each product, but it is well worth the extra effort to have this sort of valuable data available to you! After your first time measuring, set a schedule to continue re-measuring your production time on a regular basis. This is a great performance indicator, and also ensures that your order capacity is accurate and up to date.
2. ProducE In Batches
Now that you have a good idea of your production capacity, it is time to start the optimization process. Try to segment products with similar production processes together to cut down on the time it takes to switch between different tasks. You will be surprised how much time you can save by doing your production runs in small batches. During this process of operational optimization keep in mind that there will be two key objectives:
1. Minimize the time involved in producing and fulfilling each order
2. Minimize the chance of a production or fulfillment error.
Remember the list of fulfillment tasks that we made for each product type in section one? That list is going to come in handy now! Our goal is to look through the list and identify which tasks are batch-able and which tasks are not. A great example of a batch-able task would be taking his orders to a shipping provider at the end of the day. This is a bit of an extreme example, but it can help to build intuition for more subtle cases. Imagine if you decided to make a trip to the post office after every order. Each product would involve an 18 minute trip to the post office! Let’s revisit Steve's dog tag shop as an example. First, Steve goes through his task list and tries to identify any areas that might be possible to reduce time by grouping tasks. Here are the tasks that he marked:
1. Engrave the dog tag
2. Prepare envelopes with peripheral accessories
After identifying the areas in your fulfillment process that have the potential for batch production, the next step will be to test your theory! Remember that any test will have two key metrics to keep track of:
1. Time Savings: This can be done in exactly the same way as your tike tracking in the first section of this article
2. Error Rate: Whenever you make changes to your production flow, there is a possibility that it could open the door to production errors. To avoid this, keep your orders unsealed during a new production flow test, and do a thorough check before sealing and shipping orders. Keep a tally of the number of errors and compare it to your previous error rate. If the error rate appears too high, make an executive decision whether you think you can decrease the error rate while still saving time. If the answer is no, then the process may need more modifications before it is ready to be adopted as your standard process.
Checking back in with Steve, he ran two separate tests by doing things in bulk. Here are the results:
1. (60 seconds / 4% error rate) Engrave dog tag: Steve found that he could line up the tags on his engraving machine 4 at a time
2. (5 seconds / 0% error rate) Prepare envelopes with peripheral accessories
After doing your tests, take a step back and consider the results careful. In Steve’s case, batching envelope preparation with accessories is a no brainer because it saved him 5 seconds and did not cause any errors. For the dog tag engraving, Steve saw significant time savings of 119 seconds per order but it did result in some mistakes being made during the process. In this case, because the time savings were so large Steve decided to run a second test going a little bit slower than before:
1. (75 seconds / 0% error rate) Engrave dog tag
In some cases it will take more than one try to get a new production process right. This is why it can’t be stressed enough that you should double check all order before sealing packages in case of new errors arising during the process. In Steve’s case it took two tries, but in total he was able to reduce his average dog tag fulfillment time by 109 seconds, which increased his daily order capacity from 57 to 81 orders per day! While it may seem like a lot of time and energy, there is definitely money to be made by paying close attention to your order output volume and optimizing your operational procedures.
3. Digitize Your Process
In the last section we looked at how Etsy Shop owners can save time by optimizing their production methods. In a similar and equally important way, it is important to streamline your fulfillment process to ensure that you can ship out items as efficiently as possible. After hours spent creating the products you will send to your customers, you don’t want shipping to be the reason they don’t receive their order on time. Delayed shipments can lead to refund requests, dissatisfied customers, or in some extreme cases account suspension by the Etsy platform. Our goal in this section will be the same as the previous section: reduce the amount of time spent on fulfillment without increasing the error rate!
One way to do this is by using automated shipping software like Shipster or Shipstation. These programs are designed specifically for sellers who need to ship large volumes of items across multiple countries at a low cost per package. They also offer support services that can help answer any questions.
Spend some time to shop around for different shipping software that suits your needs and gives you a good rate. The best feature to look for in a shipping provider is bulk order import. Bulk import will allow you to submit your shipping orders all at once instead of one by one. Especially for high volume stores, this can save hours at a time.
4. Hire An Employee
So now you have tried all of the three recommendations above, but you STILL have too many orders to handle with your existing team. Congratulations! This is the best possible problem you can face as an Etsy Shop owner. If you are looking to expand your order quantity, but there are no other ways to increase production efficiency it is time to consider increasing your inputs. The consideration to add an employee to your team is one that should be done carefully. Here are a couple of questions you should ask yourself before deciding to onboard a new employee:
1. What tasks in my operation could be handed over to an employee and still get done to the standard that I need?
2. Does the employee I hire need to have any special skills that are involved in the production process?
3. Is there enough demand year-round to keep a staff at all times? Should I consider a seasonal hire instead?
4. Will my employee be cost positive?
For the first two questions, you will need to have a look at the current products you offer and think about the steps involved in the customization process. If it is something that anyone could learn quickly given the right tools, then finding an employee should be a relatively easy process. If the customization process involves specific skillsets that take hours of learning and practice, then you may need to look for an employee with an existing skillset or consider training someone yourself.
Another important question to ask yourself is whether there is enough demand for the employee to stay on as a permanent member of the team. The answer to this question will also depend a lot on how involved you would like to be in the order process yourself. Would you prefer to pay to have someone around full time so that you can help out during busy holiday seasons? Or would you prefer to handle most of the order processing yourself and just bring someone on for the holiday season?
The final, and potentially most important question is whether hiring an employee will be a cost positive business decision. To answer this question, we will have to return to our previous task list to start making some educated estimates. Let’s consider Steve’s dog tag store one more time. Steve knows that it takes him about 6 minutes to produce a dog tag. Steve also knows that his net revenue after subtracting materials cost and shipping fees is $4. Steve would like to know if he can afford to profitably pay an employee $20 per hour. He considers two cases:
1. If the employee is just as efficient as Steve, they can produce 10 orders in one hour. This means they will produce $40 of net revenue at a cost of $20. Steve can hire without worry!
2. If the employee is half as efficient as Steve, they can produce 5 orders in one hour. This means they will produce $20 of net revenue at a cost of $20. Steve might reconsider hiring!
Adding an employee to your team is a big decision that you should consider carefully before moving ahead with. It’s a good idea to expect productivity to be reduced for a few days or weeks depending on how intensive your onboarding process is. Despite this, having an extra pair of hands to help out can be a life saver, especially during peak holiday seasons. If you plan to operate your shop for a long time into the future, investing the time, effort, and capital to hire and train an employee can definitely be a great addition to a high volume Etsy shop!
5. Consider Outsourcing
The customization process for Etsy products can be a daunting one. Add in the high level of quality that most shops wish to adhere to for their clientele, it would suffice to say that handling this type of production at high volumes is not for everyone. If you are struggling to keep up with your order volume after trying all of the tips above, then it may be time to consider finding extra help out of house. In this section we will go over a couple of tips for finding a reliable outsourcing partner. A couple key things to consider are:
1. What is the production and fulfillment time? Is it reliable?
2. Does the production quality match the standard that you currently provide to your store customers?
3. Is the outsource pricing profitable? Do the prices include shipping and handling?
When considering working with a new outsource partner, we highly recommend that you start by placing a sample order to deliver to yourself first. This is the most reliable way to ensure that the product will be shipped and delivered on time. It will also get the product into your hands so you can carefully inspect the quality of the base product and the care and skill put into the personalization request you submitted. Finally, you will need to consider whether the outsource pricing will be profitable. Make sure that any model you make includes shipping and handling fees if they are applicable. Once you have a physical sample in your hands, and a cost comparison sheet between the new supplier and your current production method you will be ready to decide.
If you are interested to give the outsource model a non-committal test, sign up for a CM Offer account and get your first sample shipped for as little as $5! If you are looking for a personalized jewelry and gift drop shipper, we are confident you won’t find a better company to partner with than CM Offer (but we are a little biased!)
6. Set A Production Cap
If you still haven’t found a solution that has helped to make your production volume feasible, it may be time to consider setting an upper limit on the number of products that you manage. This could include making fewer product variations, or it could also mean limiting the number of open orders to accept at a time. If setting a production cap, here are a few recommendations to make sure that you can still keep profits as high as possible:
1. Consider letting go of products that have a highly intensive customization process first
2. Look for products that you can partially produce in advance of peak holiday seasons
3. Decrease the number of variations you offer to keep operations streamlined
4. Consider letting go of products with low margins or high shipping costs
When setting a production cap, you want to reduce your order volume while keeping your profits as high as possible. This can mean having a hard look at how much net revenue each product brings in per order after considering all costs including your labor. Another approach would be to try and find high value items that can be prepared in advance for high volume seasons such as Thanksgiving, Halloween, Christmas, and Mother’s Day. Cutting back on product offerings can be an emotional process for some store owners, especially if the products carried a special personal meaning. If you have a product that you feel is too special to let go despite it not being a top performer that is okay too. Try to find a manageable production load that works for you!
Fulfillment is a touchy subject in this day and age. On the one hand, we want convenience and a wide selection at our fingertips. On the other, we value authenticity, pristine packaging, and customer service. We want our items shipped to us quickly and efficiently while knowing that they were handcrafted by someone halfway across the country. It's best to seek out a fulfillment solution which helps you automate as much of your order fulfillment process as possible, and does so within the framework of your existing business model. The key takeaway for all of this is that streamlining your production will ultimately save you time and money down the road. I'm sure you'll agree that's something every Etsy store owner can use a bit more of.