3 Secrets to Stable $20,000+ per Month with Etsy Ads

I really give credit to Etsy ads for not only helping me scale my Brands as fast as possible but also helping me or helped me build a layer or an extra moat around my business in the rise of competition learning how to invest properly in your Etsy ads does a lot of things for your Shop's optimization not only helping you rank not only in the paid search positions but also organically as well and I think that's one key thing that a lot of people forget is that when you have an increased amount of conversions an increased amount of clicks more activity happening on your Etsy listing that also allows you to get reviews faster and then this kind of Snowball Effect of expansion just happens in your shop a lot faster but also again M helps you maintain your rank and competitiveness compared to other people especially other shops that aren't investing in their marketing and obviously with the increase of Impressions and clicks it yields more Revenue and also more profit what I've usually seen in the past with a good dialed in Etsy ads account with it set to the max with good product offerings is at minimum at least a 3X increase in your revenue and that's really like worst case scenario and that normally means that you're increasing your profit at least 2x again on the minimum range as you can see in this brand we've been able to do consistently over $20,000 per month for over 2 years now into 2023 right pretty much every single month we've been able to do about over 20,000 plus dollars and again I really attribute that to having a really dialed in Etsy ads account the goal with your Etsy ads account is not just to turn your Etsy ads on to the max of $1,000 a day and then just blindly hope that it's going to do the work for you now if that happened that's great but that's really not the goal the goal with every Etsy ads account is to figure out how to tweak the dials to get you to the max profitability so if your Etsy ads marketing cost percentage in one month was 20% right the next month we want to get it to 18% and then the next month we want to get it to 16% and consistently get that lower and lower and lower to increase profits and it's also important to keep a note that in order to analyze your Etsy ads data we need to be doing it on a month over Monon B basis turning on and off your Etsy ads because we get emotional and we want to start turning things off when we don't see profit right away this really really kills momentum it also doesn't help you in the algorithm and it also just doesn't give you clear data on what's working and what's not working when you're just sporadically turning things on and off from one day to the next you need to get holistic data on a month overon basis so you can make higher level decisions about your store also keep in mind that only spending a couple dollars to maybe get one or two sales on a listing is also not enough data you really need to get thousands of Impressions and hundreds of clicks to make real higher level decisions about what's working and what's not working when I throw out the number $1,000 a day spend for a lot of etsy Merchants that's a really scary number and the fear with that usually is derived from them not having a clear understanding of the breakdown of their current business model in order for you to run your Etsy ads properly you need to know a very important key metric of your business so that is your total revenue less refunds less discounts less your real-time selling fees less your cost of goods sold less your Merchant fees less your shipping costs and possibly if you're out of the country maybe that sales tax that was built into your sale price so we need to know total revenue less all of these things and what that's going to give you is your net profit percentage before marketing and so that then allows you to know how much piece of the pie is left for you to dedicate to another big variable expense that is your marketing cost percentage right and as we mentioned before if one month it's trailing 20% and your net profit percentage before ads is 40% then that means you're making a 20% profit then we can work on getting that 20% marketing cost percentage down to 10% and the way that you calculate your marketing cost percentage is by taking your ad spend in that month total and you're going to divide it by your Revenue less discounts and refunds and that's how I like to calculate my marketing cost percentage now if you're somebody that's built a business model and you do this calculation for the first time and you realize that your net profit percentage before marketing is really Slim like only 10 or 12% that really doesn't leave a lot of room left over when it comes to investing in your business business for marketing and so it's in your best interest to focus on new product opportunities that have increased profit margins so then you can actually clear a profit at the end of the month with marketing invested and it's not to say that you can't make money in low margin niches I'm not saying that at all you definitely can still make money it's just a really Risky Business and it's not a true long-term viable business because there will be a day that you need to invest in marketing and when that day comes if your business model doesn't make sense from a margin standpoint then it's going to be really hard for you to want to continue to grow the business when it won't make money with ads turned on guys I can talk about Etsy ads for hours and I actually have hours of etsy ads content in my channel so if I don't answer one of your questions make sure you queue it above this video I have a full Etsy ads playlist just dedicated to that whether you're selling digital products physical products print on demand products I have different explanations for all of these types of things things inside my Channel all of your questions I promise there is an answer to it for free in this channel somewhere and I just want to point this out because it's really important to note that when it comes to not just Etsy ads but strategy for any type of business model right every single business has different needs wants fears and goals when it comes to the operation when it comes to margins finances how it's run fulfillment their pain points and so the Etsy ad strategy that works for a super high ticket business model like solid gold jewelry versus someone selling $4 digital downloads those are two completely different ads strategies not one size fits all so the goal for my ads trainings especially in this video or in any of my ads trainings it's not this is the one strategy that's one siiz fits all because that's just not how it works unfortunately you're not really going to get that in-depth strategy unless you work oneon-one with somebody that's dissecting your actual businesses with your listings with your price points with your value propositions cuz everything is Niche and business specific so the goal is for you to take out the information and understand how to play this game of etsy ads and apply the rules to your specific use case so without further Ado let's get into secret tip number one by the way Guys these are not really secret these are just the facts of the Etsy ads game so let's just put that aside now like I mentioned people get really scared when I throw out $1,000 a day now just because I have my budget set to $1,000 a day it doesn't mean it's actually spending $11,000 a day and we're actually going to talk more about that later but the point is that's usually a scary idea for people and hopefully this first tip is going to give you some comfort on why that shouldn't be as scary as it seems or sounds the first thing that you have to understand is that it's Etsy pay per click it's PPC meaning you're only paying when someone either clicks on your listing or if you're running offsite ads and someone purchases which is actually even better it's actually a better deal for you that way instead of Click so the point is here is that when someone searches something into the search bar etsy's going to show your product based off that search term which is really the hottest traffic on the Internet it's people with their wallet open looking to buy something this is not like Tik Tok or Facebook where you're just mindlessly scrolling people go to Etsy with their wallet open knowing that they're about to make a purchase decision so Etsy showing you're listing to a data sample of people that are the hottest people on the internet for your product that you're selling with the keywords that it has in it so what does that mean then that means then if you have your budget set to $100 a day versus $1,000 a day if your marketing cost percentage at the end of the month is 20% you switching that ad budget from $100 a day versus $1,000 a Day January it was 100 and then now February you just put it to a th000 that doesn't mean that your ad cost percentage is all of a sudden going to Skyrocket to say 50% the revenue you make is is proportional to the budget set so it doesn't mean then that all of a sudden your ads get become more expensive because you raise your budget it means that your top line is also going to increase as well because it's in the title it's called pay per click so this should give you some comfort when it comes to actually scaling your ads so even if you want to set your ad budget to as low as $5 a day for the next 3 months even at $5 a day that's not a lot of money and not a lot of data that you can collect but it is some data that is going to tell you something so you switching from $5 a day to $20 a day doesn't mean that if you are trailing 10% marketing cost percentage now that you have it to $50 a day now it's all of a sudden going to go to 40% marketing cost percentage right it should scale proportional to the amount of clicks you're getting because it's the same data sample the same hyper targeted people clicking your listings at the $5 a day spend versus the $50 day spend now one variable that can affect this is if you start launching hundreds of listings and trying to run ads to it right or a lot of listings like last month my marketing cost percentage I think actually went up so here's an example in November of 2023 if we take 3200 divided by 25,000 let's just calculate that real fast 3215 / 25559 right that's a 12.5 marketing cost percentage whereas if we go to 20 24 January we I think our marketing cost percentage actually increased to 3833 divided 24234 yeah so it went from 12.5 to 15.8 so it increased and the reason it went up so much from November of just 2023 to January of 2024 is because we launched like 50 new listings we were testing out split testing new listings new products new bundles right and that actually increased that marketing cost percentage now our marketing cost percentage ranges anywhere from 10 to like 18% 18% being really really high but the reason it would increase is because I'm investing in new listings because I'm testing out more products to sell trying to pick out the best sellers and that's just a normal part of the process and so now we're going to tweak the dials and start turning off the listings that aren't profitable now again I have full ety ads trainings on that alone that has many variables at play it's not as black and white as you think it's not just turning off things you know at random there is a method to the madness but anyway the first secret here to summarize this all up is that your Etsy spend is proportional to the revenue right and that means that there should be comfort in that once you know what your marketing cost percentage is before marketing so we need that number first so we know how much piie is left over when it comes to how much can go to your ET PC the second tip is learning how to calculate your break even row us your break even row us is the single most important metric that is the kpi or the key performance indicator that tells you that whether or not you are profitable or not on the ad level so if you go into your Etsy ads account you have a column here called Roos Ros is return on ad spend if I give you a doar and you give me $2 back that means that you would have a 2X return on adsb in this column Roos in itself stands for return on adsb right so it's the return you make on the money you spend so if I give you $1 and you give me $2 that's a 2X return on my money but that doesn't mean I was profitable per se right because in that exchange I had to give you a product and I had to spend money so if that product had cost associated with the sale then I actually could have lost money at a 2X Ros so we talked about calculating your net profit percentage before marketing and that's a really key metric that we need in order to calculate this which is your break even Ros Break Even Ros is what's telling us whether or not on the ad level we're making money losing money or breaking even right so how to calculate your break even Ros is very simple it's one divided by your net profit percentage before marketing so if you discover that your net profit percentage before marketing is 40% so that means that based off your sale price if you're selling an item for $100 and your take home after fees and cost and shipping and packaging is $40 that means that you have a $40 net profit percentage before marketing so if I take 1 divided by4 that's a 2.5 Break Even row us so if my break even row us was 2.5 that means that anything in this column under 2.5 that means I'm I'm not breaking even on the ad level now this is not the extent that I analyze my ads that doesn't mean I'm going to anything under here I'm going to turn off the ad right that just means that it's signaling me saying that we're not making money on the ad level for that time period And I like to analyze my ads in a pretty good time period maybe like two to three month windows I don't just like to look in the last 30 days because Etsy ads for me can spend pretty slow but again if you're selling something in a low ticket Niche like this is a really high ticket Niche I'm selling at the top price point per the niche right so my ads spend really slow but if you're selling really cheap items it might spend really really fast if you also have thousands of listings it's probably going to spend a lot like it might actually spend your whole budget where in my case it doesn't and again that's where it's like not one siiz fits all so I like to look at my time range in a broader time range where if you're in a niche that it spends really fast like if you have your budget set to a th000 and it's spending $800 right you're going to pay extra attention right this brand will only spend like max200 a day even though it's been set to a th000 for over 2 years guys if you're getting some value out of this video make sure you subscribe to the channel I put out videos regularly I have thousands of hours of free information about Etsy and building an Etsy brand online so make sure you subscribe and comment any of your questions down below because I do answer all of my own comments so I can help you out further down there as well but again guys that is not to the extent that I am making higher level decisions but it is getting my attention on the ad level of what my winners are right and obviously the Heavy Hitters are the ones that are spending the most amount of money with the highest Roff right and those are the ones that we want to pay attention to the most so in recap number one was gain the confidence by knowing your numbers this is going to give you the confidence to scale and understand how to scale to profit ability when you know your numbers month over month when it comes to your marketing cost percentage your net profit percentage before marketing right number two understanding your break even R Us Break Even R Us is going to help you know when you are on an ad leval profitable or not again this is not to the extent of when you are going to turn things on and off per se this video could go on for literally 2 hours but I really really implore you to cue full trainings next on really how to tweak the dials um and all the different variables that are at play here because it's not just oh it's not breaking even on my Ros level maybe it is for you but some businesses will not be just that won't be the extent of which it's getting turned on or off again it's contingent on what you're selling what your price point is so that's why I don't want you just to go run ads this video is really like giving you some insight into Etsy ads but you really got to watch full videos the worst thing you can do is just go blindly spend money and waste money on your Etsy listings okay and for number three I'll give you a little bit more insight into tweaking the dials now like I mentioned there is so much more that goes into this that I really suggest you cue that video next what does tweaking the dials even mean tweaking the dials means going through your Etsy listings and looking at the ones that are spending the most right cuz etsy's choosing to spend the most money on those for a reason right you're going to have listings in the back that just don't spend money and that's a normal occurrence Etsy is picking out the ones that they like the best best for a reason and we want to pay attention to those listings most those listings that start spending the most normally hopefully will yield you the most revenue or they'll become best sellers sometimes Etsy listings decide to spend a lot of money and they're not profitable with ads turned on and that's okay and we can turn those off later but when it comes to tweaking the dials one looking at what's spending the most what's working in those listings are the ones spending the most actually profitable like over our break even Ros moreover what is the actual cost percentage of those ads compared to Topline Revenue so a lot of people like to look at what we spent versus what the ad generated me I like to look what the ads spent versus the lifetime revenue of the listing itself and what is that marketing cost percentage right so we really want to pay attention to the ones that are spending a lot but then also making a lot compared to Topline organic and paid collectively so again tweaking the dials is comprised of paying attention to those seeing what's working in those listing what imagery what keywords what product opportunity if it was a pink dog collar that took off maybe we go out and now we make 30 more product listings with pink dog collar but with a bunch of different textures or Styles or patterns but we know that that image with that staging environment is the one that did really well so let's go find 10 more of those to put into our collection that hopefully take off and do just as well optimize in your listings or your next rendition of products based off what's working is one way to tweak the dials two is by turning off listings that are dead now I particularly like to turn off listings that are not profitable compared to Topline sales so if it's under my break even r on the ad level that just gets my attention but then I want to go actually investigate a little bit further and compare with the total spend compared to the lifetime revenue of the actual listing and see what that metric is but again that is just my strategy for me if you're somebody that spends really really fast you might want to be a little bit more strict and maybe if it's not hitting your break even row us that's the only kpi that you look at for a certain time period that turns it off but again more full trainings I cannot emphasize this enough you there is more trainings about this that you can check out or you can cue that playlist next so pulling out kpis of the top performers to then be inspired for that for our future rendition of products turning off the dead listings is what's going to help us get that marketing cost percentage down over time and then if you haven't already just continue increasing the budget as you are tweaking the dial so if you're only spending $5 a day maybe go to $10 a day and then maybe in a couple of weeks go to $15 a day and slowly increase your budget over time now other than that that's really the extent of etsy ads the only real thing that you can do is turn off negative keywords and that's when you gained enough data on the listings and you can see the Search terms that you basically got clicks for and sometimes for whatever reason Etsy is going to show your listing to people for keywords that don't even exist in your listing so if you're selling 24 in pillow covers and you got a bunch of clicks for 20in pillow covers but you don't even sell 20-in pillow covers those are anomaly words that you're wasting money on so you can turn off those negative keywords and other than that there's really not much that you can do when it comes to tweaking the diet but the key thing here is the turning on and off of listings and knowing when to turn them on and off so again Watch full trainings for that I've probably said this like eight times now and I'm just probably annoying you guys but super super important stuff overall guys thank you so much for staying until the end of this video if you have any comments or questions please comment in this comment section down below I do help you as much as I can right there in the comments and I can even direct you to the right videos that will help guide you further all right guys I'll see you in the next video bye [Music] guys

Channel: Hannah Gardner

Views: 13,315

Keywords: etsy, etsy ads, how to run etsy ads, run ad on etsy, More Etsy Sales, Sell on Etsy, How to sell on Etsy, Get more etsy traffic, Make Money with Etsy, how to make money on etsy, how to scale on etsy, how to get more sales on etsy, how to sell on etsy 2024, selling on etsy, how to sell on etsy, etsy success story, etsy digital products, etsy print on demand, etsy seller tips, what to sell on etsy in 2024, how to be successful on etsy, how to make money with etsy, etsy hacks

Id: AC1zd_TTVf0

Length: 21min 43sec (1303 seconds)

Published: Thu Feb 15 2024