Venture: Can you make a living selling handmade crafts online?

The marketplace Etsy has hundreds of thousands of online shops where artists post photos of their wares.

August 29, 2011

By Kate Springer and Dan Weissmann

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(WBEZ/Kate Springer)
In her home studio, Megan Lee prints her original designs on t-shirts that she'll sell at fairs and online.

With about one in 10 workers unemployed, people are getting creative as they try to make ends meet. Some are turning to a website called Etsy -- kind of an Amazon.com for artists and crafters to sell their handiwork. But a question lingers over this online craft fair: Can you turn Etsy into a viable career path? 

Maybe you're into building children's furniture, sculpting coffee mugs, or crafting fine jewelry. As long as it's handmade, you can sell it on Etsy.

And a lot of people do: The online craft marketplace has more than 800,000 "shops" according to its website and sales have gone from $30 million in 2007 to $225 million in the first half of this year.

The site was started in 2005 by a Brooklyn carpenter and artist who tapped into a growing mood for simpler times and handmade products, and figured lots of Internet shoppers would attract craftspeople.

People like photographer Rebecca Plotnick. Plotnick is a regular at Chicago's Green City farmer's market.

On Saturday mornings she finds inspiration in piles of purple eggplants and bundles of sunflowers. Plotnick started her photography business on Etsy in 2007, a year after she lost her job at the high-end clothing retailer Chinese Laundry.

"I started out on this path, thinking I'm going to graduate from college, get a job, I've got health insurance and I'm just going to continue on that way," Plotnick said. "I never expected that I would have this change of lifestyle."

And her first year wasn't encouraging.  Plotnick made $1,000 from her Etsy storefront. The way Etsy works is a crafter posts photos and descriptions of the product-each time you do, you pay Etsy 20 cents. Each time you make a sale, the company gets 3 and a half percent.

So at first, even with a nanny job and unemployment benefits, Plotnick had to cut costs.

"My friends made fun of me because I ate peanut butter and jelly like every day," she said. "It's not like I can go to Nordstrom and have a shopping spree."

Then last year, Plotnick took a leap: She took off for Europe to wander streets with her camera, snapping photos of antique bicycles and cobblestone alleyways. Turns out, Paris sells. This year, Plotnick counts her sales to be on track for $20,000.

"It's not any different than any other business," said Rosalind Paige, a marketing professor at the University of South Carolina Upstate.  She's been studying craft markets for decades and said Plotnick's experience is pretty common.

"When you could be unemployed or at risk of losing your job, or losing your benefits, your retirement, you begin to think more creatively," Paige said. "The Internet isn't going to go anywhere and more and more people are looking at it for avenues of supplemental and even primary revenue right now."

Megan Lee left her nine-to-five graphic design job in 2007, and took her chances on Etsy, with Megan Lee Designs.

In her basement, Lee pulled a wood and rubber bar across a screen. She was printing a picture of three dachshunds riding bicycles onto a t-shirt.  Lee spends seven days a week screen printing her designs on t-shirts, tote bags and even onesies for infants.

Her first year on Etsy, Lee said she made about $25,000 in sales. This year she said she's on track to bring in $100,000.

By the time she pours money back into apparel, paint and craft shows fees, though she ends up with about half of that in profits.

"So many people will say, 'Oh, you won't make a profit in the first two, three years,'" Lee said. "And I was like, 'I'm going to have to make a profit before that, because that's not going to work for me!'"

Sellers like Lee are good news for Etsy because the site makes most of its money from crafters' sales. Anupam Palit is a financial analyst at Green Crest Capital in New York who covers Etsy. He said the company has more handmade crafts listed online than eBay, Artfire, Amazon and buy.com combined.

"It's certainly a lot smaller than your Amazon and eBays of the world," said Palit. "But that's probably mostly a function of the fact that they've decided to focus on this one niche."

Still, the number of active shops has more than doubled annually,  from 150,000 in 2009 to the 800,000 now. And Palit said such growth can have a downside for sellers.

"In order to attract buyers, you need to have a lot of stores. People want to go to a place with a lot of selections," Palit said. "Of course, that cuts two ways. The other side of things is that, you're competing with a lot of other stores."

Etsy spokesman Adam Brown said the company's goal is to increase the number of buyers per seller. Theoretically, that would mean each shop owner would make more money. The company won't say what a typical income is, but researcher Palit insists even Plotnick's $20,000 is way above an Etsy average.

"Etsy's intended to be a platform and we're certainly not saying you can come here and be a millionaire," Brown said. "Some people are running full-time businesses on Etsy and we're doing our best to support them."

In spite of all the competition, Plotnick and Lee both say even if corporate jobs were available, as long as they can make some kind of living, they'd like to avoid returning to a more traditional workplace.

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