Turning Your Hobby Into Crafting Income - pros, cons, tips & tricks for income through crafting
Some Handcrafted Items
Where To Start???
The first thing you need to remember is - just because you thought of it does not mean it will be a winner. Making money from your hobby or craft is more of a lifestyle than a viable income source for most people. That is because most people enjoy crafting (sporadically) rather than dedicating the majority of their week to cranking out items for sale and end up having to market them as well.
First , you need to test the waters. Go to some craft shows and see what people are selling. Go early and stay awhile then go back near the end and see who is still hanging out. Check them out carefully to see if they are packing up a lot of merchandise or if they have a significantly smaller inventory than what they came with. Flea markets are good for this as well.
Second , check out things of interest to you on the internet as well as what is "hot". If what you want to sell is not in demand you may need to modify either your urge to become your own boss or change what you are willing to make &/or sell (just because you want to sell it does not mean there is a large market for your item). -- Here I speak from experience. You have to remember that what you are selling today, this week, this month or this year may not or more likely will not be popular the next week, month or year from now. Another point of concern is you can't make just one of an item unless you are making high-end, high cost items that do not necessarily turn over very fast (which is not good if you are trying to establish income from your 'handiwork'.
Third , you have to be willing to dedicate your time to it as if it were your full time job. Even if you are working full time and trying to get started. Making money from something you create means you are the factory, salesperson and CEO. I do not want to discourage you, rather to get you prepared for what is to come.
I sold my crafts for years on e-bay but only as a hobby or in-between jobs. I also sometimes sold my crafts at school and park craft shows. Each one has their own flavor and clientele base. If you are blessed with children that are interested in making the same types of things, there are things they can do to help, but in the grand scheme of things you are also quality control. Give them jobs they can do without having to denigrate their efforts.
Fourth (& final), life is supposed to have flavor, challenges, hardships, fun, and sometimes failure. If you take the flavor and taste it for yourself, seek the challenges, ride out the hardships, laugh, love and sometimes fall down, but always get up then you will gain so much more than the knowledge of life. You will take the essence into yourself and send it right back to others.
HARD AT WORK
So, You Are Still Ready To Proceed?
Ok, so, you want to do it anyway, sucker! No really, I applaud you in your effort.
Your options are varied.
1. If you want to target craft shows: You should set up a schedule of small goals to accomplish prior to the date you need to show your wares. Everything you want to sell must be made prior to arriving at the craft show/fair. (Remember that you may/will not sell everything that day.)
As you attend more and more shows you will see what is in demand, what sells well on a regular basis and what is not selling well at all. You should always cater to what is popular while still remaining true to your inspiration. In other words, if you don't like making it don't chose to sell it, even if it is a money maker. You don't want to get yourself away from the job you don't love now just to get yourself into a situation you can't fire yourself from! You will keep telling yourself it is for the money. However, nothing in life is worth torture if you can't enjoy your life. If you end up eating spaghetti more often than not but are comfortable and satisfied, isn't that better than eating Filet Mignon but dealing with a stomach ulcer?
2. If you want to target internet sales, make sure you are aware of the variables. Lets say you make an item that is all of a sudden very popular. You need to make sure you have a good source of supply (stuff you use to make your crafts) and keep yourself supplied, or set a cap on stock so that once it is gone it is no longer available.
What I used to do is make something and have enough supply to make a few more (say 5-10) of that item. If it sold quickly I could refill my supplies and make more. Usually if you say you will ship within 2 business days make sure you have enough time to make the quantity you are offering and get it shipped out. Also remember you are not offering one item only. Make sure you don't overlap item production. This means that if it takes 4 hours to make 5 total of one item and 2 hours to make 5 total of another item and you need to make 4 different variations of it that is 12 total man hours. So, don't list the entire quantity as in stock & as ships in 24 hours. If the best happens and they all sell all of a sudden, guess what? You are staying up with your friend, 'Monster', and working your hinney off to get them ready to ship! That is what the CEO does, make sure the production is accomplished. Guess what? you are the CEO, Head of Production, and Factory Staff!
If, however, your items did not sell quickly, leave them in inventory and promote them later or stop them and featured them as 'close out items' at a later date. You can always set up an auction for quick sale as limited quantity 'buy it now' items. Usually you can pay one auction fee for an individual item or multiples of the same type of item (showing variations) so why not offer them all for the one low fee?
p.s. auction fees are a 'cost of business' which is deductible on your income taxes. Having to sell something at a reduced price is a 'business loss'. Do you see where I am going here? Don't worry about how much you are losing now if it will lower your taxes at the end of the year. **Remember that I am referring to filing long form, Schedule C, not a short form. Even if it is classified as a hobby you cannot file 1040A or EZ. Definitely speak to your tax professional and keep all your records on external hard drive. You can always print them out if needed.
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Let's Wrap This Up!
Ok, as the title says, "Let's wrap this up!"
Make lists! Take notes! Write down your goals!
Make an outline of what you want to do and when. Forecast a budget. It will not be accurate, but can easily be revised and help you with achieving your goals. Get a journal or start an Exel spread sheet. List all your income in one column and all your expenditures in another column.
Take a hint from someone who has been in the trenches. If you don't know how much money you have or don't have you will soon feel discouraged. Highlight anything that can be deductible. This will help you see how having to sell something at cost or a loss now is not always a bad thing at the end of the year. (Show yourself the full selling price, the sold at price and the difference as business loss) Don't get lazy, keep those records up to date! No matter how awesome your memory is, once you start to multi-task on a daily basis you will not remember what that receipt in your coat pocket was for unless you record it the same day! Your enemies are stress and lack of sleep. Take time every day to do something with your family or for yourself if you are by yourself. Absolute satisfaction is the key to your hapiness!