One of the best and most sustainable ways to make more money on Etsy is to increase your average order value. Doing so will raise your potential earnings per transaction and ultimately you’ll earn more money for every hour that you work.
We know that Etsy sellers are some of the most creative people on this planet. They’re artistic, independent, and know how to turn their passion into a business.
And we want you to grow even faster. So in this article, we’re going to give you some really good tips and strategies on how to increase average order value of your Etsy business.
What is Average Order Value?
Average order value is the average amount of money a customer spends when buying products from your shop.
To calculate this value, you can use the average order value formula. Simply divide the total value of all the orders in a certain period of time by the total number of orders received during that time.
A.O.V. = Total value of all orders / The total number of orders
How to calculate Average Order Value For Your Shop?
In order to increase your average order value, you first need to know your current average. To calculate your Shop’s current average order value, download the CSV file of your orders, and use the spreadsheet formula for average to calculate the average of the values from the “Order Value” column of the spreadsheet.
How to download the CSV file of your transactions?
To download the CSV file, follow these steps –
- Go to Shop Manager > Settings > Options > Download Data
- Use the dropdown to select CSV
- Select a month and year to download the data for that time range (we recommend downloading the data for the entire year)
- Finally, click on Download Orders as a CSV
Benefits of Increasing the Average Order Value
There are many benefits of increasing your average order value, some of which are listed below –
- Expand your business. When you earn more money per sale, you can invest that money to develop new products and scale your business earning potential.
- Better ROI on your marketing efforts. When you earn more money per sale, you can invest more into marketing and grow your business quickly.
- More cash flow from your business. When you have more cash flow you can improve all the different aspects of your business.
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Now that you know the basics of average order value, let’s dive into the strategies for increasing it.
Basic strategies to increase Average Order Value
There are a lot of different ways to increase the average order value on Etsy. Some are pretty straightforward, while others are a little complicated. Let’s start with some basic strategies first, then we’ll move on to the more advanced ones.
Offer product customization at a higher price
This is a basic yet effective strategy for increasing the average order value of your products. You can simply add a few variations to your product that helps people customize the product by paying a premium over the standard product.
People who are shopping on Etsy are more often than not looking for ways to customize the products they are buying. This makes for a perfect opportunity to increase your average order value.
Look at this Custom Engraved Necklace from geopersonalized. They offer a variation option that allows their customers to choose how many bars they want with the necklace. The base price of the product is $13.46, but with the variations, the price goes as high as $47.46.
And this technique can be used in almost all product categories, you just need to come up with clever ideas to increase the potential earnings of your product.
Offer Add-on products to entice your customers
This is another brilliant strategy to increase the average order value of your products. In this case, you don’t add variations to your product, instead, you create new listings that can be added to the order as an add-on with the original product.
When offering add-ons, you need to cater to the fact that the add-on product should make sense and enhance the experience of your original product. You can even offer personalization service as an add-on too.
The best part of this strategy is that you can add variations to the add-ons themselves at varying prices. You can see the perfect execution of this strategy in another one of the products from geopersonalized.
They did not offer any price-based variation in the product itself, but when you go on to read the description of the product, you can see that they have mentioned three different types of Add-ons that their customers can choose from.
And these add-ons aren’t even specific to this product, these are add-ons that the seller offers with other products like bracelets and keychains. This makes it a win-win situation for both you and the customer.
Notice that the Add-on Personalization itself is made up of 4 variations starting from $10 and going to $15. This is how you can increase average order value for your products.
Here is a screenshot from the Etsy Seller Handbook where the Etsy Merchandising Team has given their insights on add-on items in some popular categories.
Offer Bundled product packages
This is another basic strategy to increase the average order value of your shop. Amazon uses this very effectively and suggests products that people are most likely to buy together.
If you’re buying a smartphone, they’ll suggest phone cases. In the case of hair shampoo, they’ll suggest a hair conditioner. If the case of a camera, they’ll suggest SD cards and lenses. You get the idea.
To create product bundles on Etsy, you need to create listings that contain two or more products that are most likely to be bought together. Or you can bundle together products in a kit or a mystery box. Here are a couple of examples of bundling your products.
- DIY Kits
- Mystery Boxes
- Complimentary products
Here is a screenshot from the Etsy Seller Handbook where the Etsy Merchandising Team has given their insights on product bundles in some popular categories.
Offer gift-wrapping services
A lot of items that are bought on Etsy are meant to be a gift. So offering a gift-wrapping service is another simple way to increase the average order value of your product.
What you need to remember is that a customer can mark any order as a gift during checkout, but that simply means that when you print the packing slip, it won’t contain the breakdown of the transaction. You don’t need to do anything in this case.
However, when you offer a gift-wrapping service, you can set a fixed price that will be added to the order. Follow these steps to enable gift wrapping service in your shop –
- Go to Shop Manager > Settings > Options
- Scroll down and select Offer gift wrapping
- Click on Enable and set price
- Enter the price that you want to charge per order (can’t be ‘0’)
- Upload a photo that shows your customers how the gift wrapping will look (optional)
- You can include a message for your buyer providing information about the wrapping paper, details about how the wrapping is done, and any instruction that the buyers need to know (optional)
You need to be aware of the local sales tax laws in the US if you’re offering gift wrapping services. You need to change the following settings in your shop, if you need are supposed to offer sales tax for the gift-wrapping service –
- Go to Shop Manager > Finances > Payment settings
- Select the Sales Tax tab
- Adjust the sales tax settings by selecting the state, zip code range, or a specific zip code
- Enable the Yes box under Apply to gift wrap? And click on Save
Offer discounts through a minimum order value sale
It may sound counterintuitive to offer discounts to increase the average order value. But the fact is that offering discounts help you increase your sales volume by attracting more customers.
But whenever you offer a discount make sure you set a minimum order value under which the discount will not be applied. This ensures that the average order value goes up. For example, you can set the discount rule as getting $15 off when you spend $100 or more.
Follow these steps to set up your sale –
- Go to Shop Manager > Marketing > Sales and coupons
- Now click on the New Special Offer button on the top right
- Now select the option – Run a sale
- Now in the first row, I’d like to offer shoppers…, select Percentage off from the dropdown
- In the third row, in Minimum order to qualify, select Order total
- Define the duration of the sale in the fourth row
- Specify any Terms and conditions for the sale (optional)
- Now give a unique name to your sale so that you can remember it later, and click on Continue
- Now select the listings that you want to include in your sale. Select Add multiple listings from the dropdown and select your listings
- Once you’ve selected all the listings, review your choices once and then click on Confirm and create a discount
And now your sale is live on Etsy. For achieving good results, you can start promoting your sale through emails, social media, or any other platform where you have an audience.
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Advanced strategies to increase Average Order Value
These strategies are category-specific and some will require a nuanced understanding of some concepts about how Etsy works. So let’s get straight into it.
Offer Quantity variations for low-priced supply products
If you sell products in the supply category that are low-priced then you need to start implementing this strategy right now. It basically works for any product that people ought to buy in multiple quantities.
To understand this strategy we’ll use the ‘sticker’ product because they are cheap and are usually bought in multiple quantities.
We’ll use this Short Ghost sticker for example.
Now the first thing you need to understand is that whenever you make a sale, you pay a certain percentage of that sale to Etsy in the form of an Etsy fee.
In the USA, this fee will be a $0.20 listing fee, a 6.5% transaction fee, and a 3% + $0.25 payment fee.
Ineffective way of selling
For this $1 product, the total fee comes out to be $0.20 + $0.065 + $0.03 + $0.25 = $0.545. So basically, more than half the price of the sticker is paid off as a fee, and that’s excluding the shipping label charges.
So the customer pays $1 and you get $0.455, Now let’s imagine that the customer uses Etsy’s inbuilt ‘Quantity’ dropdown to order 20 stickers. In this case, the customer pays $20, and since they bought 20 items, you’ll pay the fee for every item. So you get only $9.1 after settling the fee.
This is a bad situation for your business, but this strategy will turn it around. So basically what you need to do is create variations of this product that has quantity tied to it.
Effective way of selling
You’ll create 5 variations like this – 5 quantities, 10 quantities, 15 quantities, 20 quantities, and 25 quantities. You’ll mark the price of each variation as the bundled price of the number of products.
In this case, if the customer buys 20 quantities using the variation dropdown instead of Etsy’s quantity dropdown, he is essentially buying just one item and therefore Etsy will charge a fee on the overall price of $20, instead of every $1.
So the total fee you’ll pay in this case is $0.20 + $1.3 + $0.6 + $0.25 = $2.35. So the customer still paid $20, but you got $17.65 instead of $9.1 which is an increase of about 94% in the order value.
Now let’s move on to the next strategy.
Offer expedited production with a rush order fee
If you sell handmade items that have a turnaround time of about 5 – 10 days, you can offer an expedited production fee on your items so that customers who want the item delivered quickly can choose that option.
One good rule of thumb to execute this strategy is that you should be able to guarantee delivery within a day or two otherwise people won’t be willing to pay the extra amount.
You can execute this strategy in a similar way we discussed for the Add-on products. In this case, also you’ll have a separate listing for the same item with the added cost of expedited production.
Mention the usual turnaround time in your original product description. Then below that, you can tell them about the expedited production and link out to the other listing.
When increasing the cost of the item, you should consider things like how much extra effort you’ll make, how much will it cost you for quick delivery, and other things as well.
In the following example, you can see that the seller is offering a shipping upgrade to rush the order instead of expedited production fee. Mention in the comments if you want us to write an article on how to use expedited shipping separate from shipping upgrades.
You need to do the same thing, with the difference of linking out to the expedited listing instead of shipping upgrades.
Offer Photoproofing service to your customers
If you sell photo editing services on Etsy, you can offer a photo proofing service as an add-on for an extra cost. Not every customer wants this service, but those who do will appreciate the option.
This strategy will also be executed like the previous one by creating a separate listing and linking to it in the product description.
Offer both side printing options for P.O.D clothing items
If you sell Print On Demand clothing items on Etsy, you should consider offering the option of back-side printing to your customers for some extra cost. This will also be a separate add-on listing that will be linked in your product description.
The whole point of offering these add-on services is to not miss out on those customers who are looking for them. And we know that shoppers on Etsy appreciate it when they are offered multiple options to customize their products.
It serves the purpose of increasing your average order value and also delighting your customers so that they keep coming back to your shop for all the different options you offer.
Conclusion
We shared 9 strategies with you in this article to increase average order value on Etsy. Let us know in the comments if you’re using some of these strategies in your business or if you plan to use one. Also, let us know any unique strategies you might be using for your Etsy business.
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