Etsy Physical

Welcome to Etsy Physical


My hope is that you will learn a lot of valuable information on how to build and grow a successful Etsy Shop which builds and ships physical items. Running an Etsy Shop which sells physical items is incredibly difficult. It requires tons of time, resources, management, and planning and is - in my opinion - about 100 times more difficult than running a digital download shop on Etsy.

Our Etsy Shop, Melinda Wood Designs has had over 30,000 Sales.  What's great about selling digital items, is that as soon as you finish a design, you can sell an infinite amount of digital items without having to re-create that item again and again. But the downside to selling digital downloads is that just about anyone can copy, steal, and resell your digital items to other people. We've seen hundreds of Etsy Shops literally take our designs and resell them on Etsy and on other websites around the world.

So the best thing about running a Physical Shop on Etsy is that you can build your own brand that no one else can have. You will have a lot more control and ownership over a physical shop on Etsy. And your knowledge of building your physical items - such as designing, sourcing materials, production, and shipping - will be incredibly invaluable, and no one will be able to steal that away from you. 

Whether you are already selling physical items on Etsy, or you're just getting started, my hope is that this guide will help you improve and perfect how you create a business that sells physical items. It's a lot of hard work and a huge time commitment to build a successful shop over time. But if you're passionate about what you do, and you love to learn how to get better at your craft and love selling and being a business person, then you have the potential to be very successful.

Selling Physical and Digital Items On The Same Etsy Shop

If you sell Digital Items on your Etsy Shop, and want to expand to Physical Items, one of the main issues I've seen is confusion from Etsy Customers. So if you do not make it very clear which items of yours are Digital and which are Physical, you'll likely not hear from customers. They'll simply leave your Etsy Shop because they're confused. So there are a few ways to help with clarity on this:

  • Use some sort or color coding technique on your Listing Photos. For instance, digital items have a white background and physical items have a black background.
  • Use text directly on your Listing Photos to the effect of "DIGITAL DOWNLOAD" or "PHYSICAL PRINT" and make it stand out, so it is super clear.
  • Of course, make your Listing Descriptions very clear that it is a Physical or Digital Item.

Do not rely on Etsy's automated system to tell customers if the item is Digital or Physical. Lots of customers will totally ignore that, or not even notice it, and think they are getting a physical item when it is in fact Digital. So do everything you can to make this super clear and blatantly obvious.


So how do you go about selling Physical Items on your Digital Download Shop?
If you have already sold physical items on your Etsy Shop, that's proof already that your concept works since real customers are willing to pay money for them.

If you're struggling to figure out how to sell Phyiscal items on your Etsy Shop, the best way to get started is to simply test out your ideas.  Melinda and I have tried several ways to incorporate Physical Items into our Etsy Shop, and most of them have failed. 

Also take advantage of Etsy's built in "Custom Order" request. The main thing that has worked for us in selling Phyiscal Items is allowing customers to ask for physical printed items in a Custom Order. We make it clear on all items that any artwork can be printed and shipped. They just need to get in touch with us to get them a quote. But by doing this, we only get a few requests per week. 

Also, our Physical Items have done much better once we hit Christmas time. A lot of our customers are willing to print artwork out for themselves, but when they give it as a gift to someone else, it seems like customers feel embarrassed about the quality and want a more professional option. 

So the best way to go about it is to test this out several times and record the results. Here are all the ideas I can think of in terms of laying this out on your Etsy Shop. Every Etsy Shop is going to find that different things do and do not work for them:

  • Add  a "Printed & Shipped" option on your Featured Items area
  • Make a separate section called "Physical Prints" in your Categories
  • List your top 10 best-selling printable items as physical items. Make sure to make the listing photo very different than your digital items
  • Include it in your About section or FAQ section and make it clear that physical items are available

Adding a brand new item to any Etsy Shop is almost like starting a business all over again. It targets a new set of customers, with a different price point, and there are lot of logistics that go into physical items versus digital ones. So this is going to be a long and experimental process for you. You're not going to be able to simply put up Physical Items on your Etsy Shop and see them start selling immediately. You have to set up everything just right, including the right photos, in the right spot on your Etsy Shop, with the right prices, listing descriptions, shipping options, and more. So take it one step at a time, just like as if you were starting your Etsy Shop from scratch all over again.

Offering Custom Orders

When a customer asks for a custom order, don't be afraid to charge them an appropriately high price. Designing, producing and shipping a custom order can be loads of work. And it is often extremely difficult to estimate how much time, resources, and energy it is really going to take. 

The best way to approach custom orders is to compare the customer's request to something else that you've already done before. If you log how many hours it takes to make something, that generally helps 

Minor Customizations
Minor customizations are simple design edits to your item which take very little effort on your part. Let's say you sell a brown leather purse, but someone asks for the same exact item in black leather. The only obstacle you have to have to overcome in making this item is to source new some black leather. If you already have that material, then the minor customization for your customer could be the same price you were already selling the brown item. 

Designing minor customizations for Etsy Customers is a great opportunity for you to figure out new items to add to your Etsy Shop.  These minor customizations are simple ways to figure out what your customers want, and then consider adding them to your Shop. You can even photograph the finished product and add it as a "made to order" item to your Etsy Shop for someone to buy a 2nd time later on. 

From my experience, about 50% of these minor customized items are something I can resell again later on the Etsy shop as a brand new design. The other 50% of these items tend to be odd colors or requests that are too unique to sell to the general public, and so I never add them to the Etsy Shop. 


Major Customizations
Major customizations are items that are going to require significant effort on your part to design, source materials, put the item together, and ship it. With major customizations, there are so many variables along the way you have to figure out, and can often be a huge headache for you. If you are willing to experiment with these customers, then you must be willing and okay with lots of time and effort on your part. 

I only take on major customization projects on Etsy within the following criteria:

  • It will take very little effort on my end, with a maximum estimate time of 30 minutes.
  • The customer seems reasonable. Some customers seem off the wall and have crazy ideas, or they have no clue what they actually want. If the customer seems unrealistic and confusing, I avoid the project altogether by giving them a ridiculously overpriced estimate, like $200+ for a custom art project.

Product Development

It is very difficult to figure out where to get your items at first, especially when you are looking to do a lot of items. 

The main thing I highly recommend when getting started is to focus on 1 main product with 1 main material. There are so many variables when it comes to physical items, that you really should not go after every idea, or you'll spend a lot of time sourcing material all over the place and then spend a lot of money as well. 

Also, I highly recommend you step back and do some research on the market for printed cards and bookmarks.  Unless you sell a high quality, custom leather or ceramic bookmark that is stamped and foiled, and costs $20 USD or more, you'll be competing with people who can do $1 bookmarks. 

Same goes for Cards. A Physical Card that is simple, usually goes for $5. So if you had craft, make, package, and ship each one individually, you'll be spending at least 10 minutes on each just to make a couple dollars.  

So, unless you can mass product cheap items, I highly recommend going after a bit more of a high-quality, custom, or very elaborate market, to make it worth your time for physical items. 

The other thing is, definitely start with 1 product. Bookmarks are extremely cheapand people expect to spend $2 on them, so I don't think they're going to be a slam dunk right off the bat. 

Also, yes, unless you go to large printers who mass produce these items, the other option is to hand-make them yourself with your own machinery, which is very expensive. 

So start off with something that is  feasible and realistic for you, and you don't have to spend a lot of money getting up and running.  

Gold Foil is also extremely expensive. My husband designs wine labels for larger wine companies, and the printing in the US is extremely expensive. Only in China is where the prices are affordable enough. Like you said, the machinery is expensive, and the prints only go for $20 each. So you need to sell at least 50 prints in order to get your money back. Definitely not impossible, but it's a lot of work. 

Also, a lot of shops on Etsy are hobbyists. They are not business people, so they are probably losing a lot of money. And they're burnt out and frustated, because instead of trying to make money, they want to be artists, but they lose a ton of money. 

So, I highly recommend that you focus on 1 item, 1 physical product. Make sure it is the easiest thing you can possibly think of. Make sure it will cost you almost no money. And make sure you can actually make money selling it.  My husband and I have lost a ton of money doing physical items in the past because we had no clue what we were doing.  And so it's good to test things out, and try things out, but you want to make sure you can:

1) Make money immediately
2) Spend almost no money
3) Get your idea to the Etsy market ASAP
4) Take it one step at a time
5) Refine your idea along the way
6) Be willing to dump your idea ASAP if it is not working out

I hope this helps!  It's difficult, and it is almost like starting a whole new business from scratch all over again. 

Wholesaling Physical Items

For most businesses, there is an initial temptation to want to sell everywhere you can possibly get your products. 

Personally, I highly recommend not doing Wholesale if you can avoid it.  If your item is $100, it costs you $10 to make, and you sell it all the time and you make $90 each time you sell it, then for wholesale, they will probably want to sell the item for $50, and you'll make only $40 on each item.  That's a lot less money to make. Wholesale is great for mass-produced items like Coca-Cola, and Pens, and Books. But if you are hand-making each item, you cannot afford to do Wholesale, which is why I think it's funny that Etsy even has a Wholesale option on their website if they want to promote handmade items. So I highly encourage you to stay away from Wholesale, unless you are mass-producing your items. 

Shipping Logistics


What type of postage would you recommend to send your items by ie 1st class or 2nd class or would you offer them a choice? Do you include tracking and insurance?
Tracking and Insurance is always a good idea, mostly so that the customer knows when to expect the item in the mail. In terms of shipping, customers want their items as quickly as possible. I think around 5 business days is probably what most customers are willing to tolerate.  In my experience, 1st class mail gets lost very often, about 10% of the time. So it may be worth doing a slighly more expensive, faster shipping cost, and build the cost of shipping into your Artwork.  I highly recommend a flat-rate shipping option, such as $5, $7, or $10.  The simpler and lower your shipping costs can be, the more likely a customer will go for a sale. Shipping can definitely make or break the sale, because it is an added cost the customer often feels like they shouldn't have to pay for. 


What to do when an item has not been received? What do you do if the customer doesn't want to pay for tracking but the item hasn't been delivered and should have arrived by now?
First I check with the Post Office to see if there was an issue. If they lost it, then I send the customer the same item for free right away. Everyone these days is now more used to free shipping & free returns with companies like Amazon Prime. So to provide high quality customer service, you must be willing to reship items for free. That's why it is important to pay a little extra to ensure the item gets there quickly and on time, and with insurance.  You want to maintain a 5-star review, and it's super important to provide good customer service all the way until the customer recieves the item and even beyond that. 


What do you do when a order has tracking which shows the parcel arrived but the customer said they never received it?
This absolutely can happen, and it happens to us all the time. The United States Postal Service has terrible customer service. So if you can use UPS or FedEx instead, I highly recommend that.  If a customer says this to you, you need to believe them, because it does happen all the time. Ship them a 2nd item immediately for free. This will absolutely happen to you on a regular basis for physical items, especially if you use the USPS. 


Packaging & Materials
I usually go to the Dollar Store for nice, inexpensive packaging supplies, like Tissue Paper, bubble wrap, boxes, and that sort of thing. The hardest thing to find is the right-sized box. And the smaller & thinner the box, the less expensive it is to ship. For glassware, or any other thing you sell, I highly recommend working on standardizing your shipping supplies. So if you can roughly sell all of your items using the same box size, then it's going to help streamline your time and costs, and you can start to order in bulk over time.  So, for a single-glass item you may have a small size, and a dozen items, you might have a small size.But for fragile things in particular, these kinds of items get damaged all the time, very very often.  Even if you do Fragile shipping, I would expect the item to get damaged anyways. So I highly recommend to triple and quadruple wrap your fragile items, or even use popcorn packaging to ultra-protect your items. 

Customer Service


How should I deal with an angry customer that is unhappy with their physical item once they receive it in the mail?
Dealing with customers that order physical items is much more difficult than with a digital shop. Even still, I would do this just like any other customer for Physical prints. Either offer a refund, or reship the item and fix the issue, or give them a 2nd item for free. Only about 2-3% of customers complain about items. From my experience, it is even lower than that. Of all the physical items we have ever shipped, I think only 1 customer has complained. And they did not even want a refund, they just wanted to let me know they were a little disappointed. So don't let the fear of returns or angry customers discourage you. Fortunately, on Etsy this happens rarely. And when it does happen, fix the problem immediately. 


How should I respond to a customer who thinks my physical items are too expensive?
It depends on if you can lower the cost of the item or not.  So let's say it takes you $10 to make something, and you sell it for $100.  That means, you are making $90 profit.  If every customer says "It's too expensive" and you're not getting any sales, then you obviously know your item is too expensive.  But let's say you sell the item all the time, and one customer complains the cost is too high, then you know your price is fine. 


What if a customer is unhappy with the item's size, color
If it was their fault, I would hope they would admit it.  This one is tough. Although I've never experienced this personally before. If they leave you a 1-star or 2-star review even though it was 100% their fault, then try to work something out. IF they give you a 3-star or 4-star, then I would let it be. A customer shouldn't complain about this. If anything, they should ship it back to you in an undamaged condition.


Streamlining Production

Etsy is a marketplace of unique, handmade items. But making everything by hand can be tedious, time consuming and boring. Even if you are selling things that you make by hand, the number one thing you need to keep on your mind is: 

How can I make this item faster and better each time I make it? 

If you are always making brand new items and designs, it is extremely difficult to build a successful Etsy Shop. Etsy is a marketplace where items that range between $5 and $200 do best. So if it's taking you 10 hours to make something, and you're only selling it for $50, then you are only making $5 per hour - well below the minimum wage in the United States. 

As a seller of physical items on Etsy, you absolutely must figure out ways to make as many items as possible in as little time as possible. But as a creative person, I know that the whole concept of mass production takes the fun out of the creative process. So, instead of viewing the streamlining process as a burden, think of it as just another opportunity to be creative.

If you've already sold thing in the past with physical items, I highly recommend that you find your best sellers, or at least a style that sells the best, and keep making those items. Perfecting them and streamline the process as much as possible.

Think of your physical items on Etsy like the Porsche car.  The first Porsche Boxster cars were made in the 1950s.  Every year, the designers of the Porsche have refined and improved the car ever so slightly, always trying to make it a little bit better than the year before. But within the last 70 years, the Porsche is in many ways very similar to the original. If they had never updated the car, then fewer people would buy it today. But people by the modern version of the classic car because it is constantly being perfected, modernized, improved, and it is constantly inspired car owners all over the world.

So instead of dreading and avoiding the streamlining process of your physical items, treat it like an artistic expression. Always take your best selling items on Etsy, and constantly improve them. That way, those items are essentially the same as your original design, but it is instead a vastly improved version of the original. 

Another important reason to do this is for keywords. Keywords are the number one way that real customers will find your products. If you are constantly making new items from scratch, then you will also have to redo your product photography, keywords, and listing descriptions. And that's a ton of work. Instead, you should slightly be improving your best sellers over time. Occasionally you may need to update your Photography or Product Descriptions, but you will be doing it in very small, incremental changes. 

Even though Etsy is a handmade marketing place, you must think like a mass production company. Unless you are selling one-of-a-kind painted artwork for $2,000 a piece, you cannot afford to constantly experiment and make new things and start all over again from scratch. So make streamlining your design, production, and shipping process as your number one priority when having a Physical Etsy Shop.