If you’re planning to look for more deals and generally be a bit more thrifty this upcoming holiday shopping season, you’re far from alone — and retailers are well aware.
That’s why small-business owners and side hustlers on platforms like Etsy begin preparing for the holiday season before Halloween, says Raina Moskowitz, Etsy’s chief operating officer.
Expect your favorite stores to try finding ways to stand out, like offering extra discounts or unique items that you can’t find elsewhere.
“The holiday season is really the busiest season and most important time of the year, certainly across retail, but especially for small businesses,” Moskowitz tells CNBC Make It.
Small businesses especially are getting ready for an uncertain holiday season, as shoppers worry about a potential recession and inflation jacking up prices. Consumers are expected to make fewer holiday purchases this year and be more eager than usual to seek deals.
Etsy could play a large role: Its online marketplace hosts roughly 5.3 million small business-owners and entrepreneurs around the world.
Here are Moskowitz’s top tips for those sellers this year, and how you might be able to take advantage as a shopper.
Consider your prices carefully
Eighty-four percent of holiday shoppers say they’ll try to save money compared to previous holidays, according to a recent Bankrate survey. That could mean buying fewer items or relentlessly looking for the best deals available.
If you’re trying to make some cash by selling items during the holidays, you can always try to undercut your competitors by beating their prices. But you still need to price your ware in a way that’s reasonable for your bottom line, Moskowitz notes.
“We hope [sellers’] prices reflect, obviously, the cost of making their items, but also their hard work and the value that they’re providing to buyers,” Moskowitz says.
An Etsy blog post published earlier this month recommends identifying fair price points by calculating gross profit margins for each product. That means adding up the total cost of producing, distributing and even marketing each items and then comparing that amount to the sale price.
If there’s a healthy margin between a product’s cost and the amount of money it brings in, you have wiggle room to offer discounts while still reaping profits, the blog post notes.
Store-wide discounts can also help bring in more customers and clear out your year-end inventory, as long as they still leave room in your margins for profit, the company adds.
You can get a leg up on big-box stores and e-commerce giants by offering unique, custom or handmade products that people simply can’t get anywhere else.
That’s right in Etsy’s wheelhouse, Moskowitz notes, but the same could be said for any local shop or side hustle across the country.
Shoppers feeling the crunch of higher prices will likely want to stretch their dollars as far as possible, she adds: “Especially during the holidays, when you want to buy gifts for your friends and family, each of those purchases needs to go farther and needs to be even more meaningful.”
Those custom or hand-made products are meaningful almost by definition, Moskowitz says — if a gift is one-of-a-kind, it’ll stand out in people’s minds regardless of its price tag.
Retail trends are always important to follow: People tend to flock toward new sets of hot gifts each year. This year’s trends are already in full swing, Moskowitz says.
“We’ve seen people being quite obsessed with [the color] hot pink, and really vibrant colors and wall art. We’re also seeing trends around things, like pearls, showing up on different accessories and shoes and bags,” says Moskowitz. “I think it’s probably a reflection of people being ready to celebrate this holiday season.”
Those types of takeaways — knowing your customers and what they’re looking for — can influence the types of products you sell, and equally importantly, the way you market them to people.
Moskowitz’s celebratory-themed trends may seem surprising ahead of a potential recession. But at the moment, U.S. consumers do still have cash to burn, consulting firm McKinsey notes, even as the fear of worsening economic conditions drives people to find deals.
Consulting firm Deloitte forecasts that U.S. holiday sales will increase anywhere from 4% to 6% this year, with a top forecast of $1.47 trillion in spending — not nearly as much of a jump as last year, when spending increased by more than 15% compared to 2020, but still significant.
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