So you’ve opened your Etsy store or Shopify site and now you want to drive traffic but have no idea what your marketing budget should be. Since I have the most experience with Etsy’s Promoted Listings, I am going to reference it the most but this same marketing technique can be applied to Google, Instagram, Pinterest, & Facebook ads.

#1: Pay per click
Pay per click is more expensive but it will get your ad in front of people who are actually interested in your product and you only pay if someone clicks your link. Paying for impressions does you no good & does not drive traffic. It’s like paying for magazine advertising & using the outdated advertising technique of “more eyes is best.” No. We live in the digital age and data is available at our fingertips. Use it.
Etsy automatically uses this pricing strategy so no need to change anything but Pinterest, Instagram, and Facebook give you two options.
#2: Bid price per click
Most online advertising is purchased on an auction type system where you choose your daily budget then bid per click. All platforms are going to give a “suggested price”. Ignore it.
Say I want to promote a listing priced around the average Etsy order for 2016, $9.30. Since online marketing budgets are usually between 5-10% of revenue, let’s take the higher number and set my marketing budget per sale at 93¢.
Next you need to calculate the conversion rate for that listing by taking the listings total views ÷ total orders.
The average conversion rate for Etsy Sellers is 1%.
What does that mean?
1% of the people who look at a listing will actually buy it. Depressing, I know.
So if your listing has a conversion rate of 1% that means you can afford ~1¢ per click for a $9.30 item.
Not going to get you great advertising placement, unfortunately.
Now take a look at your best selling item which will most probably have a higher conversion rate:
Best selling listing: $70
Marketing budget: $7
Conversion rate: 4.6%
4.6 % x $7 = 32¢ per click
Notice my bid per click is probably lower than the suggested price which is usually 50¢-$1. No fear. Sellers who are bidding those higher amount will run out of their daily budget by mid-afternoon leaving you with better placement when it really counts in the evening.
Learn more about my marketing experience & some of the lessons I’ve learned along the way:
Instagram & Blog Collaborations
How To Price Handmade Goods
How to Protect Your Brand Online
Instagram Follower Counts Mean Jack
Sacha Brant says
this helped me better understand advertising fees, thanks!
admin says
Ya! So glad I was able to help!