This is a super common question that I get from lots of sellers. And lots of times I’m getting this question from sellers when it’s too late. Sellers who have lost a lot of money on ads without even realizing it. So today we’re going to clear this question up. Do Etsy ads work?
The short answer is it depends.
We have a few things to look at to determine if ads will be profitable for you. The first is your conversion rate. Your conversion rate is the number of sales you get divided by the number of visits. So if you have 1 sale for a listing and 50 visits. Your conversion rate is 2%. 1 divided by 50 x 100. If you had 4 sales in those 50 visits, your conversion rate is 8%.
A normal conversion rate is 1-3%. If you want to learn more about raising yours, you can pop back and listen to episode 7 of The Handmade Shop Podcast where I talk more about what your conversion rate is and how to increase it. The reason this is so important for Etsy ads is that you are charged by click. So if you get more sales for every 100 clicks, you’re going to have a bigger ROI on your ads
We’ll pretend that each click costs you 10 cents just for this example. If your conversion rate is 1 percent it’s going to take you 100 clicks to get a sale. And that will cost you $10. If your conversion rate is 5%, it will only take you 20 clicks to get a sale and that will cost you only $2 per sale.
Now these pretend numbers aren’t good or bad. If you get a sale for $10, but your item costs $200 that’s a great ROI. If your item costs $5…not so much.
The second thing we want to consider is your market saturation. Because those estimates we just talked about are all very different if you have a lot of competition for your ads and each click is costing you fifty cents.
And there is no way to estimate this cost per click, or CPC. It will depend on your market, your keywords, how your listing is optimized, and even the time of year! My ad costs go up during the summer a lot of times because sellers turn ads on hoping to combat the summer slump. So there are less buyers and more sellers competing for those searches.
So…do Etsy ads work?
Yes! If you have your SEO down and a good conversion rate.
If you want to learn more about this, I invite you to join us in my JumpStart training. You’re going to learn how to get a sale from your social media in the next 7 days and there’s a really fun bonus that helps you figure out if you’re ready for Etsy ads and how to start them if you are.