There are only so many hours in the week, so we need to be laser-focused on activities that we are confident will generate revenue to grow our Etsy store.
We’re running Etsy as a business, not a hobby, so we need to think like founders here.
Our decisions for which products to produce should always be backed by data.
Here’s the process I use to remove the guesswork and add predictable revenue.
Method 1: If you have no audience
The best place to start is to understand what’s really selling for your competitors.
Run a search for keywords in your niche with the digital products filter flipped on:
Now we want to drill into the products themselves. We need to know…
- How many reviews the listing has
- Date of the first review (to estimate how long the product has been live)
- How much the product costs
… in order to be able to predict the revenue each product generates.
Stack all the popular products from the first 5–10 pages in a Gsheet:
Next, you need to estimate how often they’re selling, and how much revenue they’re producing.
I make these predictions based on our own sales data. Based on our own numbers, I found that people in our niche are leaving a review roughly once in every 13.4 sales.
It’s not a perfect science, but this gives me a rough idea and is way better than producing products blindly.
(That “reviews per sale” may vary depending on your niche. 13 works as a ballpark estimate, but it might be better for you to take a few competitor stores and divide their total sales by their total reviews to get a more useful “sales per review” estimate).
Estimating the revenue potential of a product
The formulas you’ll need for that is:
(Total product reviews/number of months since the first review for the product) x 13 (or your own “sales per review” figure) = estimated sales per month
Sales per month x product price = estimated revenue per month
The whole thing should look like this
Now it’s just a case of sorting the sheet by the “estimated revenue per month” column to reveal the no-brainer products the market is thirsty for.
Like most things in business, you’ll find that 80% of the revenue is being produced by 20% of the products.
So this approach really allows you to zero in and focus on the products that will actually move the needle for your MRR.
You can actually reverse engineer how much money you want to make by just committing to producing products that match your goals 🙂
Then it’s just a case of building a BETTER version of the product that helps your target customer more + producing a listing that is better optimized to convert than your competitors.
(Far too much to cover in this single post. But if there’s interest, I’m game to write a separate post on either product creation or listing optimization)
Anyway, back to finding winning product ideas…
Method 2: If you have an audience
This method allows you to leverage your most valuable asset: the attention you already have.
If you have a following in your niche, ask them what problems they’re facing!
You can basically guarantee responses by offering a small incentive. I offer a $5 off coupon for our store. That’s how valuable the data is!
(Plus, I make the coupon contingent on a minimum order value of $15. I don’t lose out on revenue — I’m just pushing people who probably weren’t going to order soon anyway over the line to give me valuable info & at least $10).
If you can gather at least 20 responses, you’ll start to see patterns emerging. Which problems keep coming up?
Using your own first-party sources to gather new and fresh pain points lets you prove demand in your own community.
With the competitor research method, you, by definition, have competition. But by bringing something new to the market, you can play in an open field and hit some untapped home runs.