2023 has been a rough year for a lot of us shop owners.

Sales are down even for shops that have made a ton of sales in previous years.

Shops are closing down left and right.

It’s really scary times right now.

What is going on?

In this blog post, I’m going to explain to you exactly what’s been going on, why sales have declined, and why you are not alone.

2023 was a year that didn’t work for a lot of online shops, especially if you’re just starting your shop this year and barely made a sale.

Everywhere I turn, shops are reporting a 40-50% decrease in sales, especially around July.

All of my physical product shops are down 40-50% too, so you’re not alone.

I had one of my lowest Black Friday and Cyber Monday weekends of all time and made only $4000 in sales compared to the $10,000 I pulled in last year.

Literally only 40% of what I’ve done in previous years.

But that’s $4000 I didn’t have before, so I’m not here to complain.

So, after spending some time investigating what could cause everyone to drop at the exact same time, I finally figured it out.

And I want to share with you the reasons why, so you know it’s not YOU.

Yes, everyone always blames the economy, inflation, the recession, the US election. But that doesn’t explain the precise behavior we’re seeing in the sales decline.

There are multiple reasons, broken down into two main categories.

One, Etsy shops and two, ecommerce which is online sales in general.

Let’s break it down.

Losing Sales In Etsy

Let’s start with Etsy.

If you sell on Etsy, and you’re struggling to make the same kind of sales you saw in previous years, here’s why.

In 2020, we saw almost a double in active Etsy sellers on the platform.

That means double the competition.

As if that didn’t already make things hard enough, we also saw a surge of Etsy coaches come out of those pandemic years when people saw how easy it was to sell digital or POD products on there.

These Etsy coaches have made starting an Etsy shop so much more accessible by teaching their tricks on YouTube and TikTok.

You’ve probably seen these videos.

And most of the time, the advice they give is to publish hundreds and thousands of product listings and copying other shops’ bestsellers.

It’s basically a spaghetti on the wall approach and seeing what sticks.

It’s ONE strategy, but frankly, not a time-efficient strategy.

If you try often enough, of course you’re going to find something that sells on Etsy.

In Q3 of 2023, we saw another huge surge of new Etsy sellers.

And because Etsy doesn’t have a great system for filtering out sellers, we’ve got a TON of shops that sell dropshipped, mass manufactured in China or copycat products.

In other words, not only are there so many more shops to choose from, there are a LOT of crappy products on the platform.

Shoppers are struggling to find beautiful, unique goods on Etsy, and are choosing not to shop on Etsy anymore.

Therefore, traffic drops and sales drop.

The solution? We’ll talk about that in a bit!

eCommerce Sales in General

Let’s cover ecommerce (online) sales in general now.

It’s not just Etsy.

Anyone who has an online shop is suffering right now.

To the point where I’m hearing so many shops closing down.

Even big companies like Allbirds and Blue Apron who have millions of investor funding are basically empty shells close to bankruptcy.

Why?

In the USA, the government created 2 major initiatives to help with COVID.

And now we are seeing the consequences of each one.

First, student loan interest rates went down to 0%, which means no one was motivated to pay off their student loans.

The average student loan for a person is $300-500/month.

This meant people now had an extra $300-500/mo of disposable income they were using on shopping.

This student aid officially stopped in September 2023.

And that interest rate has almost doubled!!

Which means people had 3 years of feeling like they had more money to spend, and now are feeling the financial pinch again for having to be more budget conscious because they have to pay student loan debt again.

Second, the cost of homes (rent or mortgage) has gone waaay up this year.

Further enforcing people to be tighter with their spending.

So what should you do?

If there’s one thing economics class and being in business since 2006 has taught me… It’s that EVERYTHING works in cycles.

There is a natural order and balance of things, and we will find our equilibrium once again.

For example, all that Etsy competition?

Eventually, many of these new Etsy sellers are going to find out the cold, hard truth: It’s hard to have an online shop.

And they’re going to quit and find something else to do.

And all of these terrible Etsy shops will actually impact Etsy’s own bottom line as customers struggle to find things to buy.

This will cause Etsy to lose out on their sweet commission fees.

And Etsy will weed out the shops and close many of them down and they are already doing this.

Whether Etsy is doing it correctly is a whole other topic for another day.

People will also get accustomed with having a tighter budget again, and once they get back in the habit, they’ll continue to shop again like before.

Bottom line is, do what you can to keep your business up and running. So that you can ride this out until things go back to normal.

Now, how long will it take to get back to normal?

No one knows.

It could be six months, a year or two years.

But it WILL happen, I promise you.

We’ve had to let go of staff, increase prices, and change our marketing strategies.

This is how we’ve stayed in business for so long.

By pivoting based on market changes.

We always have a plan for what to do, and we always survive and eventually go back to thriving.

If you’ve been a part of my story and journey, you know I have 3 online stores selling jewelry in two of them and personalized art in the other.

And with my coaching business, we’ve still crossed the $1million dollar mark this year with all our businesses combined.

And my physical product shops bring in more than 50% of that revenue.

We made twice as much in previous years, so our sales did drop this year, but it’s still a lot of money and I’m extremely grateful I don’t have to close anything down.

And if you want to know how WE run our businesses, here is a free workshop where I talk about the strategy we use that will help you start and grow your business to a living income that can stand the test of time.

So go sign up for that, it’s free.

And just keep swimming.

I’m right there with ya!