Last week my financial planner, Julie Ford of Ford Financial Solutions, broke down some of the financial elements related to starting your own Etsy shop (click here if you missed it). This week, I'll build on Julie's advice and walk you through what it cost to start Paper by JLee. I’ve been taking you through the ins and outs of how I started this business with previous blog posts (you can click here if you haven’t read them yet) and this post will be an extension of that series where I’ll talk about the financial specifics of starting Paper by JLee.
I started Paper by JLee in November 2014 but didn’t launch www.paperbyjlee.com until August 2015. So for about a year, I sold exclusively through Etsy and even today a majority of my sales come from my Etsy store. It is an invaluable tool for anyone trying to start a product-based business.
While Julie and I were working together on the administrative tasks, I was also doing things like purchasing a printer, business cards and watercolor paints. In addition to the steps Julie mentioned in her post, here are the physical and digital supplies I purchased in order to start my Etsy shop:
Etsy Startup Shopping List
- Printer: I chose the HP LaserJet Pro 200 Color. You can read more about why I chose this printer here. ($220)
- Toner: Toner is one of the more costly recurring expenses related to stationery and was a large part of the initial cost of getting started. ($350)
- Sample Stationery Paper: I spent hours at various paper stores and finally settling on using Paper Presentation for my stationery paper. You can read here if you want to learn more about how I chose that store. ($200)
- Watercolor Supplies (Paints, Brushes and Paper): I usually shop at Blick and AI Friedmen stores for my art supplies. Read more about the supplies I use here. ($180)
- Storage: Who doesn’t love an afternoon at The Container Store? ($75)
- Business Cards: MOO offers great quality business cards and the option to upload your own design or choose from one of their templates. ($180)
Optional Physical Supplies
- Photo Styling: I buy most of the items you see in my photos from Target and West Elm. I’ve built my styling supplies over time but in the beginning I spent some money on just a few special items and paired them with things I already had in my apartment. ($70)
- Camera: When I started Paper by JLee I was using the camera I had since college, a beginner DSLR Canon Rebel. While it was a great camera I eventually decided it was time to upgrade and bought the Canon EOS 70D. The 70D is an intermediate DSLR camera and I love it. You certainly don’t need a fancy camera to start an Etsy shop but good photos are key to selling your product. Since photography is the main tool to market and sell your goods on Etsy high-quality photos and styling are essential. ($800)
- Photo Editing Software: I use Adobe Photoshop and Illustrator CS6 for all my images. While Adobe doesn’t offer single-licenses anymore (what I use) you can subscribe to their Creative Cloud plan for as low as $9.99 per month.
- Website: I use Squarespace and pay for the commerce plan plus $20/year for the domain name. The interface is easy to use and I was able to build my website in a matter of weeks. ($312/year)
The total amount of supplies I bought to start Paper by JLee amounts to $1537 (doesn't include optional supplies). After these initial purchases the only ongoing expenses I have are the following items:
- Manufacturing Supplies: This includes the stationery and watercolor paper I use to produce my items.
- Toner: Thankfully toner lasts a long time so I don’t have to make this purchase very often.
- Shipping: I ship all my items via USPS Priority Shipping. You can read more about this process here.
- Etsy Fees: It’s free to create a store but there are fees attached to your listings and sales. ($0.20 to list an item, 3.5% of selling price when you make a sale)
- Stripe Fees: Stripe is the payment processor that powers Squarespace Commerce. (2.9% + $0.30 per successful charge)
- Squarespace Yearly Fees
- New York Quarterly Sales Tax
Quarterly Sales Tax
Speaking of ongoing expenses and sales tax, once I started the shop I had to pay quarterly sales tax to New York State. This can be daunting but it really doesn’t take long and it’s the same simple process each time you file. To aid in your quest to open an Etsy shop I’ve made a free excel worksheet download that shows you how I calculate some numbers for my sales tax filings. This document is based on excel file you can download directly from Etsy.
Follow these steps steps to download the Etsy sales file that can help you file your quarterly sales tax:
Step 1: On the upper right hand side of your storefront page click on "Payment account" under the "Finances" tab.
Step 2: Scroll to the bottom of the Payment Account page and click on "Download payment history"
Step 3: Choose "Orders" and the current year then click on "Download CSV" to get your excel file.
There you have it! Everything it cost me to start my own Etsy shop and a few tips on filing sales tax. If you have any questions or comments you can shoot me an email at firstname.lastname@example.org. You can also learn more about Julie at www.fordfinancialsolutions.com and read her "Starting Your Own Etsy Shop: Part I" article.