Here we are at the end of the first quarter and already Etsy revenue is nearly at the year end numbers for 2022. When you factor in the recent transaction through PayPal then we’ve far surpassed last year’s umber already.
Thats the good news. The majority of the sales this year have been from two sources. The guy in Japan will soon have 30 hanks in addition to the 16 he ordered before so I expect it’ll be a while before he orders more. The orders for the Sacramento area may soon dry up too. The business relies heavily on new customers. Rope is a durable good so it can be a while before it needs replaced.
The next step is to setup a stand-alone online store in addition to Etsy and advertise it directly. There isn’t a huge incentive to advertise the Etsy shop with the fees being so high there.
So I bought a yarn winder a couple of years ago and I printed an adapter for it to hold the paper tubes that hold the yarn as its run through the machine. It has plastic gears but the don’t have much wear and it had worked very well. I even upgraded the spindle for it. It gets used a lot. Just in the last week it’s wound 62,000 feet of yarn. So I started to imagine what would happen if it were to break. There’s 3 gears made of plastic, 3 axles, the spindle, a handle, a clamp, and a winding arm that could break or otherwise wear out.
The winder cost $53.23 in 2021. I decided to buy a second one just in case it became unusable. I can’t wind yarn without it so no rope can be made until it’s repaired or replaced. So I went to Amazon to look at my order history and the exact model I purchased previously was no longer available. I was disappointed that I couldn’t get an exact duplicate but I did order a very similar one for $40.53. I didn’t even realize it was $13 cheaper.
The design is nearly identical. The included spindle is the same and attaches the same. The clamp and handle are the same design. The only real difference is that the new one has metal gears. So I’m really glad I ordered this winder. I’ll make it the primary winder and store the old one as a backup. Can’t believe the new one has metal gears and cost $13 less than the one I got 2 years ago.
Decided it was time for the yarn winder to get an upgrade. The tubes fit too loosely so a wad of yarn had to be placed between the tubes and the blue spindle. I redesigned the spindle to include a ridge at the bottom and a groove to fit an O-ring. Overall the new spindle was slightly too big but a little sanding and it is good. I generally like the blue better but functionality is more important.
In the photo it’s clear that the new spindle isn’t the same as the blue one. I must have picked the wrong model to work on. I’ll work with this one for now but it isn’t as sturdy as the blue one. It’ll be fine until I can modify and print the right model with more structurally sound print settings.
So 30 hanks of rope is a lot. It will deplete our supply of natural yarn and more will need to be ordered soon. It requires spools of 991 feet to make 30, 8.5m hanks. The yarn ball in the photo on the right is 312′ which is the length required to make 10, 8m hanks. Did a little math and we should have enough of this natural yarn to complete the order.🤞
So we have a customer in Japan that has ordered rope in the past. They’ve already received 16 hanks of custom size rope from their first 2 orders. Etsy has raised its seller’s fee from 5% to 6.5% in addition to the 3.5% payment processing fee. So every sale made on Etsy, we lose 10% in fees automatically. Sometimes there are additional fees for marketing and miscellaneous “services”.
So our Japanese customer contacts me wanting to order 30 hanks of custom size rope! That’s a lot of rope. Like 837′ of rope. This is by far the largest order we’ve ever had. Last order I quoted him $24/hank but gave him 10% off for the large order and repeat business. Every customer receives a coupon code for 10% off future order when they receive their goods so this wasn’t exactly a deep discount. It turns out that the custom size rope actually requires less yarn despite being longer than a standard hank. This is because it is 0.5mm thinner in diameter. In fact, after the 10% off the $24/hank the rope was still more than the calculated price based on actual yarn required. So we didn’t lose anything with the discount and the customer felt good about the transaction. The $24/hank, which is $1 more than for a standard hank, was determined because it is a custom diameter and length. I’m pretty sure if anyone else was willing to make the special size that he would have ordered it closer to home.
$24 X 30 $720! 10% off brings us to $648 plus $120 for shipping. The total would be $768. Etsy gets $76.80 and didn’t do anything but provide an existing customer a way to contact me. So I asked the customer to email me so we could discuss his order in detail. He did and I asked him if using PayPal was okay for this and future transactions. That he could simply email me with orders from know on. He agreed.
PayPal charges 3.49% for basic accounts. There’s a couple other account types that have lower transaction fees but a flat monthly fee is required. That might be an option in the future but this is literally the first invoice sent on this PayPal account. The invoicing system is decent on PayPal and allowed me to put discounts in and all his information will be saved for future transactions. Since the fee using PayPal is 3.49% instead of the 10% at Etsy we get to keep more of our money and I decided to give the customer an additional 3.5% off for using PayPal. After the additional discount, we’re still right at the calculated price based on yarn required per hank. So no loss from the discount and less loss on the fees.
So the guy paid and thanked me for the discount. And PayPal put the funds on hold! Whaaaaaat? I’ve never had funds put on hold before so why now. I just had hundreds of dollars in PayPal transactions last year for car parts without any issues. Oh wait! I don’t use that account for business anymore. Twisted Jute has its own PayPal account now that has one automatic monthly transactions for $2 for web hosting. That’s literally the only activity on the account for the past two years. So this is the first payment received on this account. The funds will be held for 21 days. The company has money to pay for the shipping for the order and to order more natural yarn since this order will use most of what is in stock. Was hoping this transaction would get the bank account to the threshold to start paying back the additional capital added to the company after it was formed.
I added $1,000 of capital to the business to avoid bank fees for a less than $500 balance. I added another $1,000 to buy yarn last Fall. Any week that the business checking account has more than $2,000 and no liabilities to exceed $100, the business will repay $100 of that added capital. Once the $2,000 has been repaid then a paycheck will be issued to the operating business member each week that the same criteria are met.
The digital counter on the machine is kinda cool. It doesn’t just count the number of times the machine rotates but will shut it off when it gets to the number that’s programmed in. We’ll I manually turned the machine and measured how much rope was made to get me a turn per inch ratio to calculate from. It’s actually 1.543478 inches per turn. Asleep yet?
Well wake up! The manual I found online for the counter is in Chinese so I really have very little understanding about how it really operates and I can only mess with it while the machine is on which is only when the generator is burning fuel. I hate standing in the workshop trying to figure something out while the generator is running. Like how much fuel did I waste?
Today I decided to burn some fuel and play with the counter. I was able to enter a new screen where I can change the increments the counter counts by. I accidentally changed it to 10 and when I started the machine it started to count by 10’s! So I changed that from 10 to 1.5435. I ran the machine a bit and sure enough, 60 on the counter was 60″ on the winder.
So now I can eventually change that to an even more useful number like feet or even meters.
So I started working on the gears required to build a machine that will work the rope back and forth over itself to soften the rope and remove loose fibers. The automatib reverse gearing moves back and forth yet advancing a little each cycle. Two steps forward and one step back!
