Thursday, June 16, 2011

Selling Your Handmade Books: The Checklist

Originally posted on the Bookbinding Team Blog:

We're adding to the checklist today. If you've been selling online already, you might still find that setting up some of these checklist items might be worth doing!

Once you have decided what your shop name will be, the products you will sell, and what level you'd like to work at, you are ready to get set up to sell!

There are four accounts that you need to set up for your small online business. Here are numbers 4-7 for the big checklist.

#4- Email: You may have a personal email that you've been using for years. If you are working at hobby level, this might be all you need to keep things together in one place. However, if you decide to go part time or full time with this business venture, I suggest getting a separate email account. This will help you keep the business separate from your personal emails. If you want to just keep your personal, I suggest setting up three folders in your personal account so you can keep all the Etsy info separate. The three folders I suggest starting with are: Etsy Invoices, Etsy information and Etsy emails. Etsy sends out emails everyday that you can opt into. One is Etsy Success, another is Etsy finds. If you want to learn a lot about the handmade business online, I suggest signing up for Etsy Success emails. Etsy Finds is an email sent out to buyers and puts Etsy's products out there to bring in potential buyers. It's way fun to look at these emails and way exciting to see one of your products in them! They have other subscriptions too that you can sign up for by clicking here.

#5- Bank Account: I set up a separate checking account for my business. It's just a separate free checking account through a local bank. This helps me keep the finances separate. If you're at hobby level and plan on staying there, you might be ok just using your personal account if you have one set up. However, it is super nice at tax time to have everything separate. If you have a debit/credit card associated with the new checking account, you can use that for all supply purchases and quickly see, on your monthly banking statement, how much money has gone into your various business expenses.

#6- PayPal Account: Etsy currently uses PayPal as their best option for purchasing items from Etsy. I know they would like to set up a monetary system with checkout right inside of Etsy and it's in the works, but it will be a very big move for Etsy, and therefore will take a lot of time in setting up. There are other options to use but most of Etsy users will opt for PayPal and it's best to accommodate your customers as much as possible in this way by setting up the payments to come through PayPal. So for now, you need to set up a PayPal account. There are three types of PayPal accounts: personal, premiere and business. For selling online, we only need the premiere account. Sign up by clicking here. You'll need to connect this account to your bank account; the sign in process takes you step-by-step through the process.

#7- Etsy Account: Your Etsy seller account is the final account to sign up with because you'll need the email, credit/debit from your bank account and your PayPal account to sign up for an Etsy seller account. These things can be changed later through Etsy in your account settings. It's always nice to just enter these things in once though. Some of my students had a hard time finding where to start their shop. There's a "Sell" button on the top of Etsy's pages, you can click on that and it takes you to the Seller's page. Once there you'll need to look on the right side of the page first for a blue sign up button and then a green Start Selling button. If you ever get stuck in this, click on the Sell button and look to the right side of the page.


Lizzie said...

This is great, Karleigh-Jae! Would have liked something like this when I was starting up with my Etsy shop all the info in one place is very handy.

Just a couple of things to add:
1) Etsy Shop Name - be careful to think this through carefully, BEFORE you register with Etsy, since the name of your shop can not (currently) be changed. Etsy plan to alter this in the future, but for now, if you call your account "SuperFluffyKittens", that will be your Shop name!

2) Paypal - customers with no Paypal account can still pay by credit card, or sometimes cheque, through Paypal's system. They will handle the transaction for the seller and put the money into their Paypal account when the payment is cleared.

3) Also Paypal - Payments for anything you purchase with your paypal account, are taken first from your Paypal Balance - ie. the "pot" of money that is sitting in your Paypal account, wherever it came from. This means that, if you have made shop sales online and been paid with Paypal, you either need to take that money out immediately and move it to your business bank account, or you need to have a seperate Paypal account for your business, to stop your money getting mixed up (also useful if, like me, your shop transactions are in a different currency to your local currency - Paypal were taking my $ and converting them to Sterling, to pay for stuff I bought with Paypal. I could not stop them doing this, so I opened a new Paypal account for my shop).

However, when you set up a Paypal account, you have to link it to a bank current account.
BUT, Paypal will only allow you to link that bank account to One Paypal account. Therefore, if you already have a personal Paypal account and you want to have a seperate one for your online business, you either need two bank accounts, or you can do this:
De-attach your bank account from your personal Paypal Account. Set up your new business Premiere Paypal account, linking your bank details to this new account. Once Paypal have confirmed your new account, you can de-attach the bank account and re-attach it to your personal account. You will need something like a credit card still registered to your new Paypal account though.

I hope that all makes sense!

robssurfreport said...

Karleigh Jae, I'm sure I get how using a separate accounts makes things way easier - that's almost a no-brainer . . . but does using your personal account in the interim make things much more complex at tax time? I've been keeping a file of digitized reciepts on my computer for supply expenses and Etsy invoices.

Also, my bigger question is, how does one go about collecting sales tax when the buyer is in one's own state? I'm a bit daunted by that idea.

Cynthia Schelzig said...

Very informative and helpful ...I think I should have gotten my Masters in Business Admin. sometimes though:)

Karleigh Jae said...

Wonderful points Lizzie! It's nice to have the perspective of someone using PayPal internationally as I've never had the problem of dealing with currency conversion.


We still sometimes use our personal account to make purchases as there are times when I forget my debit card at home for my business account. We just keep the receipts in a folder to use at tax time. The nice thing about having a second account set up just for business is that at tax time, you can just quickly review your statements and view how much you spent.

Each state has a different percentage for sales tax. You can google it or view this here:

Etsy has it set up so you can add your sales tax for the state you sell from. In your Etsy Account, you enter shipping and payment from the shop settings section. It will bring up shipping profiles first and at the top you'll find a sales tax tab. This is where you enter your sales tax rate.

Sales taxes are on the checklist so they'll come up in the next few weeks in my posts.

Cynthia, I hear you! I've always thought artists in school who were majoring in art should have a business minor. :) I'm lucky to have a husband that was a business minor and enjoys accounting.

robssurfreport said...

Thank you for your time in answering those questions!