Drop shipment / Etsy - Anyone done it (successfully)?

I have a small sublimation printing business, I have an online store plus a couple of Etsy stores - been doing it for 5 years. It’s pretty grim in the world of online sales at the moment - my average order value has halved in the last few years. Fortunately, most of my business now is B2B printing - lower margin, but higher volume and don’t have the effort of creating custom designs, packaging orders and going to the post office. 

My only foray into drop-shipping was rubbish with Zalando, to try and sell stuff in the US. Uploaded loads of my my stuff, to find half of them taken down because I was accused of copying someone else’s designs. The few things I sold never saw any money because of their complex way of paying fees.

The good thing about Etsy is it does allow you sell into the EU - it’s too complicated/expensive to do on your own. Pre-Brexit it was 10% of my sales, now it’s 0.1% if I’m lucky.

In terms of the OP - things to think about:

How are you going to drive traffic to your store? Etsy don’t do it for you - so you need to get busy with social media.

Average conversion rate for a webstore is 2-5%, so if you’re trying to make say £50, based on a commission of say £1/sale, then that’s 50 sales, or  1000+ visitors to your store. 

How can you stand-out in a very busy marketplace? - why are folks going to pay a premium for your product when they can buy cheap stuff elsewhere online. As a small business, it’s about your niche because you can’t compete with the likes of Amazon, eBay, Temu - how are people going to find you on a Google search?

You don’t need to register as a sole trader with HMRC until you’ve done a year.

Good luck

My wife uses Folksy to sell her art.  Its sort of like Etsy, but UK based and purely art/craft focused.  More quality, less tat than Etsy imo.  Not sure about drop shipment though.

Sorry, it was Zazzle I tried for drop-shipping

Hmmm, a applying a bit of maths makes it seem a whole lot less attractive as a proposition. Just did a check for enamel mugs as a product category.

This seems an easy one as they are relatively small so not too much design and a simple text slogan will suffice for decoration, GOOD.

47K search results so the market isn't flooded with sellers, GOOD.

Most priced within a couple of quid of £10 so if I price high it will still be only a £ or two from the cheap ones so when looking at a £10 or £12 mug the choice is most likely driven by design not price. This should let me price high and not lose to many sales while making a better profit, GOOD.

Almost all of the top sellers have review counts in the hundreds, not thousands. If we see 500 reviews and guess at 10% of people actually leaving a review then we are looking at 5,000 sales for the best selling product. Remember this is all sales EVER. The general advice is to list as many different designs as possible to hopefully appear in someone's search and perhaps a few will get bought. Lets say we do 500 designs and 5% started selling then the other 95% have to be paid for by those that do sell. So those 5,000 sales have to pay for 100 product design, uploading, placing fees etc. 100/5000 = 0.02. Each product need to make enough money to cover the cost of designing and getting 100 products on the Etsy site. BAD.

Mugs cost about £8 and if they sell for £12 then we start with £4 profit before fees. The basic listings cost money, if you sell anything the fees mount up etc etc so you would be luck to walk out of the sale with £1.50 actual profit. That has to pay for the ideas, design, uploading photo mock ups etc etc etc for the 99 products that didn't sell. So £1.5*5,000 sale = £7,500 sounds great but that is your best selling product out for perhaps 500 designs you have made it actually is closer to £7,500 for trying to sell 100 products so it becomes £75 per product over the lifetime of your shop sales - say 3 years for the ones listed. BAD.

Assume you can design a reusable template and a superfast process to generate the designs and mock ups in an hour (just about achievable) you are in for 500 hours work before you start selling and then there is the time spent dealing with suppliers, refreshing your listings etc etc etc BAD.

I struggled to make more the £5 per hour according to approximate maths and a spreadsheet business model. A fun few hours of research but I'M OUT!

Do people use Etsy to buy stuff like that? I get a fair amount of stuff off there and will pay more for it but it’s typically very niche and small production run stuff: local/historical interest prints; Irish language stuff; synthesiser accessories; quirky laser-cut/printed things I don’t see sold elsewhere. Like many others I can see Etsy going down the tubes in realtime courtesy of Chinese tat re-sellers, though if I wanted things that sold in those higher numbers I’d get them from EBay/Amazon.

Currently 25% of Etsy sales are drop shipment t-shirts, mugs etc. Low margin, high volume market with something like the top 10% or sellers making 90% of the money.

Makes for great YT where the guy can show you how quick and simple it could be to sell $20,000 a month as a side hustle. Doesn't mention the profit margin, time taken and number of zero sales designed you might get. It seems to be a simple numbers game where you need to generate as many designs as possible to get a chance on landing on the search results. Once you get a few sales and reviews you will appear more often but you need to keep refreshing your tags to appear in the latest result sets etc. It works once you get to a certain threshold and economies of scale kick in but is a thankless task to get there from what I can work out.

Etsy for art and crafts stuff is kind of fading away I think as they cash in on the success.

Makes for great YT where the guy can show you how quick and simple it could be to sell $20,000 a month as a side hustle.

From what I have read unless you are really, really lucky and also really, really good at SEO the only real way to make money from drop shipping is being a guru teaching others how to dropship.

Yep

I print/sell lots of mugs - I buy in bulk, an enamel mug costs me £2.80, plus another 35p for a mailer box,  so if I was re-selling, doubling up £6.30. £2.99 postage so out the door cost of £9.19. Sell on Etsy for £12, so they take 6.5% which gives you a profit of £2.03/sale.

What the research info doesn’t tell you is that the vast majority of those sales are a rip-off of someone else’s design/IPR - take away the Disney/Marvel/football teams/computer games/current memes stuff and the potential market gets a lot smaller.

Even to make minimum wage of say £80/day you would need to generate 40 orders/day - going back to a store conversion rate of 2%, this would mean needing 2,000 customers to view your product listing/day. To generate those 2,000 clicks you need something like 100,000 views on Google.

I’m not saying that it’s impossible, but you’re up against volume sellers who are spending serious wedge on SEO which is why  you can’t compete unless you’ve got a particular niche to exploit.

Yes, that is probably more accurate numbers that I estimated. I just googled 'Funny ??? phrases' where ??? was replaced by fishing, cycling, camping etc basically any activity category returned by google when I search Who uses enamel mugs. There were lists of 100 - 500 funny phrases for most things I tried. This meant I can got about 800 basic text designs in about 30 minutes. I figured that multiplying that by 3-5 fonts/colours or whatever and I soon had 3000 designs, or at least the content to paste into a couple of common templates.

I was about an hour in and feeling smug until I realised I would next have to commit to paying software to get these into proper designs and ready for the printers. I would then have to get all the SEO tags correct for the different categories etc and that's when I did the maths check.

I couldn't see an easy way to automatically upload a file full of text entries and use this to auto-populate the designs ready to upload so that would take hours. There is a tool called Vela that allows bulk edits but I think you still need to create the original entries rather than link them to a file input feed.
I couldn't see a way of scanning all the best selling similar items and lift all of their SEO tags so that would be slow and laborious.
I couldn't see a way of analysing the user traffic to see where people came from and what search words they used. This would allow me to refine my entries.
I was also thinking of trying to feed the phrases into an AI text to picture generator to add images but the results were bizzare at best.

If I could be bothered to solve those problems and was in a situation where I needed the money rather than just being curious about the process then I guess I could have moved forward but it certainly isn't easy money.