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The Business of Selling: Part 1
We recently concluded a series of posts about getting our business established and one of the core aspects of that has been our storefront. We’ve talked a lot about it (here and here) and how we’ve shifted our approach multiple times but here’s something we haven’t talked too much about: fees.
That’s right, fellow creators, you have to pay to sell your goods. There are fees for the platform (Shopify, WooCommerce, Etsy, Amazon, etc.). There are fees for credit card and invoice processing (separate from your platform fees). And then there are shipping fees. These fees eat into your profit and, when starting out, many of us fail to consider the impact.
Over the next few posts, we’ll talk about:
- Fees (Transaction and Processing)
- Product Pricing
- Anything else that comes to mind
The money spent for product production, copyrights, business licensing, and all of that kind of stuff was addressed in previous articles so we won’t rehash it here. We welcome you to search our archives to find relevant content: News Archive.
WooCommerce was the cheapest platform for us to establish because we can piggyback off our business-plan subscription to WordPress. We use this platform at no additional cost (aside from the 3% transaction fee for WooCommerce Payments). However, a lot of core functionality that you would want to have (i.e. pre-orders, packing slips, order gift customization) have their own individual costs. Add enough functionality and you’ll be paying a hefty subscription fee to run your store.
Our assessment: WooCommerce is great for those of you already leveraging WordPress. It’ll be familiar and frustrating in all the same ways.
We found Etsy to be easy to establish with cheap up-front listing fees at $0.20 per item, but you ultimately pay about 10% in fees between the platform fee and the transaction fee. (It breaks down to 6.5% platform fee and 3% processing fees.) However, Etsy has the core advantage that your products are listed on a platform that people go to every day to spend money. This means that Etsy has an advantage of already having consumers looking for niche products.
Our assessment: Etsy is crowded but still a fine place for the unknown creators. You can get your products in front of shoppers who trust the platform and that goes a long way towards getting sales.
Amazon was… confusing. For the individual seller plan, you pay a $0.99 fee for each product that sells but the platform fees range from 8 to 45 percent of the transaction dependent on category. We didn’t move forward with Amazon as a selling platform because the fees just aren’t straightforward enough.
Our assessment: It’s a little confusing to figure out exactly how much you’ll be paying in fees with Amazon. However, if you need to get your product in front of shoppers – there’s no better place.
Shopify is a solid platform that will give you all the features you could want but you’ll pay $39 per month for their basic plan. (You can save by paying for an annual plan.) Transaction fees for card processing will cost an additional 3% on the basic plan. We feel that Shopify would be the best platform once you have an established product and marketing plan that drives monthly revenue since it includes so many features as part of that monthly fee.
Our assessment: We like the promise of this platform but the subscription fee doesn’t align with our budget at this time. If you’re established and only need a storefront, this is likely the best solution for you. If you’re looking for a storefront, online portfolio, and blogging platform all-in-one, WooCommerce is probably the better option.
Squarespace gets an honorable mention. To us, it is an alternative to WordPress and WooCommerce. Had we not decided to go with WordPress for our hosting, Squarespace would have been a top contender for our storefront because e-commerce tools are built into the hosting cost much the way that base WooCommerce is covered by our WordPress business plan.
Our assessment: If we could go back in time and standardize on Squarespace, we probably would. You can get blogging, portfolio tools, and run a storefront with a simpler fee calculation than using WordPress/WooCommerce. Additionally, paid Squarespace plans offer unlimited storage which is a nice perk when you’re constantly uploading product pictures.
A Note on Shipping
Shipping itself deserves a special callout. The ability to send goods to your clients is a critical part of an online business and many of these platforms offer shipping label discounts. We standardized on PirateShip for our shipping needs. It’s a free platform, gets you discounts on shipping labels, and handles transactional shipping emails to your clients directly.
Our advice here is simply to use any platform you like to get shipping discounts with one caveat: if you are only selling books, you can rely on MediaMail shipping at USPS which is flat rate shipping no matter where you purchase the shipping label. All other shipping classes, though, you’ll save tons of cash by leveraging one of these services.
We didn’t look into every possible option for the storefront side of our business. We fell into WooCommerce largely because we started our business with a need to blog and share where you could find our books. As we started adding on to this, we realized that we needed to have an online store and WooCommerce was the easiest choice based on cost. We continue to evaluate this relationship and may change it in the future. Of course, we’ll let you know!
Hey, thanks for stopping by and taking the time to read this. Next time, we’ll go a bit more in-depth on those fee calucations so follow us here, on Facebook, or LinkedIn to stay up-to-date on our business. If you want to support our work, check out our shop or our current Kickstarter campaign for Ina Changes the Sky.