Wednesday, May 25, 2011

The Raw Deal On Heartsy - Find out the Inside Information

Heartsy is buzzing all over Etsy lately. A fairly new website that would maybe be comparable to groupon. They basically work with shop owners to offer amazing deals to their subscribers and traffic to small businesses like Etsy shops. As small business owners many of us are starving for traffic, and sales so when an opportunity presents itself with minimal investment we all want to jump but I am here to warn you to really think through what this will entail and if it will truly be a positive and beneficial experience. It seems like a MINIMAL investment because you pay NOTHING to be featured but think carefully about your deal!!

I pride myself in being business saavy. I have spent a lot of time researching and reading about every business topic you can imagine. One of the more important topics that should be thought through carefully is pricing before jumping into a site like Heartsy where huge discounts are involved. I have most of my items set for retail prices so that I can offer wholesale and cosignment. But I do not offer wholesale on my entire inventory and Heartsy does not offer coupons to specific groups of products (it is for your entire shop.) So unless your entire shop is priced at wholesale and you negotiate a low % for Heartsy you will not profit from using Heartsy.

Wholesale pricing means the person/business wanting to buy in bulk will expect 50% discount on the pricing. You make a lower profit but because they are buying so much product it is worth it. Heartsy is basically asking for wholesale OR MORE for individual sales. So it is a risky venture to take. Heartsy expects 50% off MINIMUM to be considered for a deal, and if you should only sell a handful of vouchers it probably wouldn't be worth it financially to do it.

If you want more information on how to price your items so that you ensure a profit, and you give yourself as many options as possible for selling check out this article:

Here is the catch: They offer a large discount but based upon a limited amount of money. For instance, they will offer $16 for $36 which is a discount of 56% percent on a purchase of 36 dollars. Most of my items that sell are 30 dollars and 3 dollar shipping. So in this example, I sold 33 dollars to most for 16. (The Heartsy vouchers include shipping.) So this is just a little over 50% off. So that really wouldn’t be as bad as it seems. The customer feels they are getting a steal, but keeping it close to wholesale pricing, IF you are priced correctly for wholesale… it can be great to gain new customers.

You need to consider when negotiating your deal not just the percentage but think about those dollar amounts. If most of your items are around 10 dollars and you offer 10 for 30, you will be selling 3 of your items likely for that 10 dollars. Ideally set up a deal that will leave each customer with a credit to your shop. Don’t forget it includes shipping costs, so in my example above most of the customers I had ended up with a 3 dollar credit to my shop. That isn’t a huge amount, probably could have been a higher credit to entice more…. But try to consider that…. to promote the customers to come back!

So if you have considered the finances of this arrangement, here are all the other pitfalls and experiences I had during my deal with Heartsy. (Since my deal over a week ago their deals have already changed. They now want 70% off of my items for VIP’s and 65% off for others. They require one deal for all users and then a special deal for their VIP’s that is a minimum of $10 dollars more for VIP’s!)

I submitted my shop the 1st time, got the 30 votes required and waited about 5 weeks to get denied!! I submitted a 2nd time, they then required 60 votes. I acquired the 60 votes, waited about 4 weeks and finally got a positive response. Once you receive the required # of votes, Heartsy then sends your deal out to their VIP members and best buyers to do more market research. If they don’t receive a more positive response from their frequent buyers they do still deny your deal even after receiving the required votes. I know many people that got their minimum votes waited over a month just to be denied!!

It was indicated to me that I had a “high quality” shop and an unusually positive response from their VIP’s and so they would love to work with me. This is what they asked me in the initial contact to me:

1. What are your goals for this promotion?

>>> How many new customers would you like to attract? This will help me
understand how to help you best structure your deal.

>>> 2. Given your statistics and products, you are a perfect candidate for our VIP exclusive program. VIP Exclusives are deals that can only be purchased by our paying VIP members. This community of paying members on Heartsy is growing each day and currently represents 25% of the purchases made on the site. With a VIP exclusive deal your store receives the same amazing visibility and attention on Heartsy as all other deals, but it is targeted to a specific cohort of extremely dedicated buyers.

>>> 3. What are your thoughts on the terms of your deal?
Heartsy requires at least a 50% discount but many sellers have been achieving amazing results with better discounts. For instance, the average deal on Heartsy is between 55-65% off. After looking at your store I would suggest a "$14 for $36 in store credit" deal.

  • I made it clear that my goal was to gain new customers, would love huge views for branding, and of course sales.
The initial offer to me was around 60% off and to be a VIP exclusive deal, which I replied that as a small business I am priced for the standard 50% wholesale rate but I really can’t go much higher. They came back to me with a 56% off offer. I really had to debate this heavily, and I said the only way I could do that high of a rate is if I could get a minimum of 50 sales but I would ideally want 100. I asked if this was a reasonable amount of sales or were my expectations to high, especially if this is ONLY for VIP’s. Their response wasn’t, “50 sales is reasonable”… but that it was very likely to get 100 sales. This conversation went back and forth for many days, I asked a lot of questions…

I asked about payments, and how the vouchers would be redeemed etc. and their response was this:

“Customers are typically given 1-3 months to redeem vouchers. They redeem on your site (our account managers will walk you through that).

> Payment works through Etsy (again, we will walk you through this aspect of the deal when it's time).”

I honestly don’t know who the account managers are, and never had a walkthrough. I was told I could call or they could call me the day the deal goes live to walk me through it but there wasn’t an official form or e-mail that would allow you to prep for this.

This could turn into a very long story but basically I thought I had a VIP only deal, I was told I could very likely get 100 sales, not just 50 sales but 100, so I agreed to VIP only if it meant 100 sales. Then the night before my deal went live I was told this, “The feature will be live for 48 hours (1 day for VIP early access and the second day for regular users). The VIP period starts at 12am PDT Friday morning and it will be available for all users on Saturday morning at 8am PDT. The feature will end on Saturday evening at 11:59pm.”

I thought this is great even MORE exposure if it opens up to everyone on Saturday. I posted this EXACT message to my blog and very excitedly I told the Heartsy staff that I had blogged about the event and promoted their VIP members. That if people wanted to make sure to get my deal they should sign up to be a VIP. She asked for a link to view my blog, she read it and replied back it was great.

I then blasted this to like 10 Etsy teams, facebook, twitter etc. I have almost 7000 twitter followers, over 600 facebook fan pages, probably a 1000 or more Etsy members on all the teams…. Basically I promoted their site and my deal to over 10,000 people!

Friday I get up and run to the computer and it is crickets. I go check the website the deal is up, but nothing is happening.

I was really upset, when I was told 100 sales were likely and I was told at one point that I could sell out and they wanted to know if they could extend my deal… but I tried to stay positive and wait for Saturday when ALL users could buy my vouchers!

Saturday I run to the computer and check for a flood of convos and sales, again crickets. I look at Heartsy and my deal is still VIP exclusive. It never turned over to all users! I immediately contacted the lady who told me it would go live Saturday morning to all, and she responded about an hour later… her response? That I originally signed up for VIP she was mistaken when she gave me that information she was sorry. If I wasn’t satisfied I could always submit a new deal.  By the way their live chat wasn't available during this time and I called the number she gave me for during my deal for help and no one answered or returned my call.  So I e-mailed and she responded an hour or so later with that non-chalant response.

Honestly, that is the worst customer service ever. I should submit a new deal and wait another month to have this issue resolved? I wrote her back asking if they could change my deal or offer a new deal that I was very unhappy. She wrote me back that they have SEVERAL hundred VIP members and so they had every reason to believe I would have 100 sales. And that they have a policy against changing a deal once it goes live. Although I am truly not happy with Heartsy as a whole, for the sake of being fair…. I understood the logic. If someone bought the VIP membership just to get my deal and then it goes live they would clearly be upset. But what I didn’t understand was why when this deal ended that they couldn’t offer my new deal. The exact deal we had agreed up, but open to ALL users.

If you have been in sales or marketing for any amount of time you have heard many times that sales is a numbers game. Statistics show you have to have your brand in front of a person 7 times before they will start to recognize your brand! So even if someone loved my deal it wouldn’t mean they will buy in that moment. So you have to get in front of as many people as you can, as often as you can. I have to ask: How on EARTH could I get 100 sales out of several hundred buyers? A couple is 2, several hundred is 3 or 4?? That would mean I would have at least a 3rd of people buying from me which is an UNREASONABLE expectations.

I truly feel mislead by the Heartsy staff, and used. I understand business, and if you help me I will help you. They were getting me in front of a new audience so I promoted their VIP program (how they make their money) to over 10,000 people!! And in the end it was pure confusion on the details of the deal, they definitely mislead me, and did NOT try to make it right. The last offer to fix this was they would extend my VIP exclusive deal through Sunday for a 3rd day. I can’t see how that will be beneficial at all, since the VIP’s have seen my deal now for 48 hours, that last 24 hours wasn’t going to really make a difference.

To top it all off, they are supposed to send out a newsletter to all their buyers/subscribers to tell them of the daily deals. The newsletter wasn’t received until 4pm the day of my deal, 8 hours into my deal!! I had a boatload of convo’s to field of people wanting my deal but couldn’t get it without signing up for a 7.99 a month fee to be a VIP. They were VERY upset with me, felt I had falsely advertised. They couldn’t get my deal for $16 dollars, they would actually have to spend almost 24 dollars, AND the 7.99 is a recurring monthly fee. So they weren’t actually getting a deal on my items. It was a nightmare for me personal and for my business. Ultimately I sold 19 vouchers, several of which were very good friends that were just trying to support me. THANK YOU 

Clearly I didn’t even get the low goal of 50 and definitely didn’t reach the 100 sales they said I could get. Eventually the person I dealt with told me they have close to 1000 VIP members, not several hundred. I don’t know what to believe since everything changes so often with them. And if you go to their site it states, first 100 VIP’s get 7.99 per month, after that the fee goes to 14.99. That statement would lead me to believe they definitely don’t have 1000 VIP’s.

I eventually got in touch with Heartsy staff to complain about my experience and they finally offered to give me a NEW deal without having to re-submit my shop. But they want 70% off now! And they want me to give vouchers for over 40 dollars worth of merchandise. They now require that you offer at least $10 dollars more to VIP’s and then all users get a deal too but it is for a minimum of 10 dollars less.

Meaning I would offer $19 for $44 to VIP’s… and $19 for $33 to everyone else. When I explained that I can’t offer more than wholesale pricing, I was “taught” about marketing. And told I need to think about what it is worth to me to have new customers! I was then told that big businesses spend millions on marketing because they know it will result in new customers!

And to that I want to warn you all to NOT fall for this logic. Big Businesses have a VERY different business model from a small business and for that matter small businesses clearly have a MUCH smaller advertising budget. AND that the millions spent are on well researched ideas, and psychology to ensure results. It is a very poor comparison to put a million dollar campaign against a discount website.

Businesses are about PROFIT, making money… not about taking a loss.

THE BOTTOMLINE: Do your research. This is a coupon/discount site, so their target market is frugal shoppers. Not meant in a negative way, just that these are people truly looking for a deal… what does that mean for you? They are not big spenders. I have looked at the current deals and past deal, then I go into those Etsy shops and go through their sold items. You can get a very good idea of their sales. Many have HUGE sales, like 100 items sold. (Of course they had deals open to all users too.) BUT the BIG thing I noticed is that they are mostly low priced items that have these huge sales.

These shoppers are not spending large sums of money. They are taking the deals that are around $10 dollars or less for vouchers. Some of the shops that are bath and body had HUGE sales but for 10 or 12 dollars you can get 1-3 items so the sales look big but they aren’t spending much money. And for me personally out of my 19 vouchers sold NONE bought over the voucher amount. 2-3 owed me a dollar or two for the shipping cost, but no one bought over the 36 dollar voucher amount of merchandise!! NO ONE.

So basically 19 people spent 16 dollars. That was it, not a single one spent more actually all but like 3 have a 2-3 dollar store credit with me now! I know quite a few people that had Heartsy deals and they said many of their buyers spent over the voucher amounts, I can’t speak for them… but from my experience they did not.

And as you can tell it was not a smooth transaction.

Make sure you are pricing retail before offering discounts like this, and if you have higher priced items it is more unlikely to have a huge surge of sales.

Sellers beware :(

I hope this helps put some of the inner workings from Heartsy in perspective. 
Janet - beading supplies - Crafting and Business books/ebooks


  1. Thank you so much for this post, I have been waiting to read it since you first mentioned it in the team thread.
    I will definitely send anyone interested in Heartsy to read this before pursuing it.
    I know that people see Heartsy as an advertising tool but it does seem that the bargain hunters who shop there are probably not people who will come back to a shop to buy at full price.
    I am sorry you had such an awful experience but thank you for sharing it with us.

  2. Great post!!! That is horrible, they were pretty much asking you which one do you want more new customers or profit?... they arent doing it for the benefits of everyone... honestly for a monthly payment just to get deals like that is beneficial only for the site and a horrible deal for the customers because they are paying for the service to get the "great deal" when it technically cost the same to just purchase from you directly. Sorry to hear about your experience, you have a great shop so Im sure this is only a little bump on the road. Thanks for sharing. I will definitely keep your story with me when thinking about sites like that!!!!


  3. UGH!! Sounds like some stuff that would drive a sane person crazy. I hadn't even considered using Heartsy b/c of the insane discounts...I try to reasonably price my items so that I can still offer 50% or close to for wholesale, but there's no way I could do the 70% they asked you to give.

    I can't imagine that after all the problems they had that they would actually ask YOU to put yourself out there for more dissapointment and a huge loss.

    I NOT listen to those that say big businesses spend more. Big businesses also MAKE more than small business and even they aren't willing to gouge their prices to the point of taking losses to bring customers in...that would defeat the purpose of having the customers to start with.

    I am sorry this was such an ordeal for you. I hope anyone who is considering doing this will take everything under consideration before doing so.

  4. Sorry to hear this was such a bad experience for you and thank you for sharing this with us. I was uneasy about Heartsy already and have heard from others who have had negative experiences.

    If the customers of Heartsy had the potential to end up being repeat customers and later made their purchases at regular prices then possibly there may be some value to view it as a "marketing expense" but since these are "frugal" shoppers I believe that once they have received such high discounts they will only continue to buy from others offering deals on Heartsy or you as a seller you will have to offer severe discounts to encourage them to return to your shop. In a way I believe Heartsy is decreasing the value of handmade goods.

  5. I was thinking about trying Heartsy - but just don't price my items high enough to even offer a 25% discount - just wouldn't make any money.
    Have only heard one good experience with Heartsy.

  6. thanks for this in-depth look at heartsy. I haven't had the opportunity to look into it yet, and I'll be sure to do my research first if I ever do decide to use it.

  7. Glad to know all this! I was considering using Heartsy but was skeptical too and just don't have the margins built into my products to swing it. Thanks for this GREAT post and for sharing your experience, but sorry you had to go through it!

  8. Thanks for sharing your experience in such detail. Have thought about doing Heartsy but the way they just keep jacking up their requirements I don't think I could spend so much time producing for so little return. I have read about people who have had great experiences with it and many more like you who haven't. I'm sorry you had such negative experience.

  9. What a nightmare. I'm so sorry about all of this! I know you were counting on it, and it's so upseting to see hopes dashed.

  10. Thanks for all of the insight! I don't have anything close to that profit margin for my work, so a big........el paso!

  11. Thanks for this post! I am obviously not pricing my items well because if I offered 50% off I would lose money on most of my items! I need to do so evaluations of my prices. - Over The Moon

  12. An extremely thorough examination of Heartsy! I get offers from them all the time, and now I wonder how many of those sellers are getting the deal they expected. I don't plan on doing any business with them ... buying or selling. Thanks so much for taking the time to outline this entire process for us!!!

  13. uniquecozytreasues - Thanks for the info. Think I'll pass on Heartsy!

  14. Very interesting story. I wondered what really happened with your heartsy deal, after you posted in a team thread. Sounds like a pretty risky venture and a frustrating one at that! Shame on heartsy for their poor customer service and their lack of concern for sellers, shame, shame, shame!

  15. I am sorry to hear about your experience, I have often wondered about these deals and their benefits.
    Thank you for taking the time to create this informative post.

  16. ...WOW! That is awful. Thank you so much for sharing this. I had thought about trying heartsy with my second shop once I get more listed but... wow. speechless.

  17. I had a bad hunch on that heartsy thing when I heard about it, even though a lot of my glass jewelry is set for wholesale. A lot of it is NOT. I heard they like 65% discount if you;ll agree. Not for me.... I make more dichroic and keep listing new items~!

    Galla, that was a very informative article. Thanks fro all your tjought and hard work~!

  18. Galla, this is completely AWFUL! Talk about abuse by a business! WOW! I would have had no idea. I so appreciate your HONESTY about this. I'm stunned. I too had considered Heartsy to help bolster my sales to help support the cost of all my medical bills after my surgery. But now, there's NO WAY I'm going this route. I'm so sorry that it happened to you. But I'm so glad that you are spreading the word to others.

  19. PS: I hope it's okay....I'm sending everyone I know from Etsy to this blog to read your experience, hopefully to save them from the same nightmare & disappointment you faced. Tweeted. Facebooked. And will post a link on my blog this week.

  20. WOW! That is ridiculous! I'm so sorry that it didn't work out for you. What's surprising is that they're a small and upcoming business. They should know that customer service is very important in maintaining future relationships and sales. The fact that they just brushed you off is just RUDE on so many levels! And I'm glad to have read your post. Sometimes, people don't hear about the bad side, and only focus on the good side. Yeah, the number of sales you had might have increased, but if the revenue you make is less than before, is it really worth it?

  21. Oh Janet I am so sorry how this worked out for are so right do your homework and thank you for doing that for us!

  22. Thanks everyone :) AND YES TOYS it is ok to share away! I am sure many have had a good experience with Heartsy, but I do think it is important to just be informed. And I wanted to share my personal experience and knowledge. I think there is a SMALL window to make Heartsy work for someone but that is a very small window. Thanks everyone!

  23. All I can say is wow. I didn't really know much about Heartsy. I am so sorry you had to experience this but I know your the wiser for it.

    As always this is a great post. Thanks for sharing your knowledge and experience so that others may learn too.

  24. Janet,
    Thank you so much for this post! I really can't believe what I just read! I want you to know that I have so much respect for you and your shop! It is just beautiful and you seem to know just how to market yourself! This is just awful! You know, the weekend before last, I spent quite a bit of time in your shop looking at how you did things. (I guess you could say that I look at you as a role model) :) I want to do it like you! And this negative experience for you, doesn't change that for me! Thank you so much for giving us all the benefit of your experience. I'm sure that you'll continue to be a success! You are so nice to share this with all of us!
    Thank you!
    Carol from Carol's Jewelry Orchard

  25. P.S. Although I did do the promo frenzy blog day today, I did not get to read this post (I think you were even's and I was odd's), I clicked on a link on FB from Toystory that was on my newslink on FB. Glad I did!

  26. Thank you for sharing your experience. Now I know I will never work with them.

  27. I'm so glad you posted this! I've been wondering about heartsy as it's received so much buzz lately. Thanks for the detailed info!

  28. I am so glad you posted this article. I did not know to much about Heartsy other than I have seen it all over ETSY. I will think twice before I even do that. I feel that my prices are too reasonable and that would not be a profitable adventure for me to pursue.

  29. Thanks Carols that was very sweet:) I think that is why we don't hear a lot of negative things about Heartsy is thoset that do have a bad experience are embarassed. I feel it is important to share this because I wouldn't want others to have to go through this.

  30. This is really good information for everyone to know. I'm so sorry this deal was so bad for you. :(

  31. Thanks for sharing. This is one of those deals when you have to try it to know and to have an opinion about it. You tried,you know and you told us.

  32. Hi Janet,

    I'm Eddie from Heartsy. I'm so sorry to hear about your experience on Heartsy. Over the last few months, we've worked with hundreds of sellers on hundreds of deals. We try our best to craft a wonderful experience for each & every seller but needless to say we certainly make some bad mistakes from time to time :(

    We clearly did a very poor job in our communication with you, both as it relates to the structure of the deal as well as the expectations of the deal. We're very sorry for how stressful this whole ordeal must have been for you. I can assure you that we're making changes internally to improve our communication to address the specific issues you have raised.

    I think it's important to keep in mind that Heartsy is only a few months old. With our rapid growth, we've experienced growing pains that sometimes spill over to our sellers. Nonetheless, we've introduced thousands of people to 350+ Etsy stores and driven our sellers over $300k in sales, so we're optimistic that we're at least doing a few things right. We have high ambitions and have a long way to go toward achieving them, but we've certainly come a long way in just a few short months. I can't promise that we won't make more mistakes, but I can promise you that the selling experience on Heartsy will continue to improve every day.

    Once again, I'm very sorry about your experience, but we sincerely appreciate your candid feedback. It gives us the opportunity to continue to learn from our mistakes and maximize our potential. If you have any additional thoughts, questions, or concerns, please do not hesitate to reach out to me personally at


  33. Thank you Eddie for your post. I tried to write a very fair blog post, that even gave some credit to certain things despite me being upset with Heartsy.

    I am in touch with someone again, who is working hard to come up with a solution to help me.
    We are going to take a phone call tomorrow to try to iron out some things.
    Honestly I would feel much better to know that my best interest is at the heart of these deals and that the things that did go wrong can be fixed. I am certainly not perfect and don't expect a new website to be either. I just expect accurate information, and an honest effort to fix things when they go wrong.

    Time will tell. If a new agreement is reached I will happily post the update here.

    Thanks for reaching out to help.

  34. Great, great info. I'm marking this for future use! I was just offered a feature on a similar site (smaller than Heartsy and slightly different structure) called Very Jane. I am definitely NOT priced for wholesale. When I ran the numbers I would lose on every item I sold. For advertising purposes, I can see it being worth something, but not much.

  35. Wow, what a nightmare and a lot of work for. . .nothing. At least they are trying to make it right now- not when it really needed to get fixed though. . .
    What a trooper you are! Thanks for sharing with us all!

  36. Thanks so much for the information. I appreciate your well-written article. So many sellers with a complaint go to extremes and appear to exaggerate, causing me to dismiss the entire article.
    Not so here. And the response from heartsy also adds more valuable information. THANKS!

  37. Thanks Photo :) I appreciate your comment because I really was just trying to lay out events and timelines of what my experience was. I know many people that were happy and many that weren't. I can't really speak in general. I just wanted to share my personal experience and knowledge in hopes of helping others :))

  38. Oh my goodness - what an awful experience, but thanks for sharing. I donate all my profits to charity, and I had thought about trying to boost sales by using Heartsy, but my markup is far too small. However, its good that Eddie from Heartsy commented here - clearly someone there does listen after all :) Erika Price Jewelry

  39. thank you for writing this!

    i am in the process of having my own personal nightmare with heartsy right now and will most definitely blog about it to my 1000 followers when it's done.

    good for you for speaking out!

  40. Thanks Erika. I agree, it is nice that someone from Heartsy commented here and I did comment back and acknowledged that. And they have been calling me and e-mailing me to make this right.

    I am more than happy to report. But we will see how it all ends before I blog again an update.