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Selling Your Craft- Part 2

In the Beginning
So you think you've got the skill down, and you're ready to start selling? Fantastic. But not so fast, my friend. There are a few things to consider first.

Find a Niche
Before you can start making cash, you need to know what you're going to sell and who you plan on selling it to. In my opinion, the best and easiest way to be a successful indie designer is to find a small, specific group of people to sell to, at least in the beginning. Too often people try to cater to everyone, when they'd be better off focusing on a smaller group. You are not Wal-Mart. You can not compete with Wal-mart (at least not directly). You need to be the Anti-Wal-mart! High quality, hand made, unique goods are how you indirectly compete with big business. Offering a product or a unique design that people can only get from you is going to be what separates you from the competition and motivates customers to come back for more.

Sell What You Know
If you're going to make clothing, think about what you wear and what you like. Find what makes your style unique and start there. If you dress in neon colors from head to toe and despise earth tones, it wouldn't really make sense for you to be making bohemian hippie clothes, would it? And if you don't know who/what/where NOFX is, then why would you try to make and market clothing to P-rockers? I'm not saying you have to want to wear every single item you make, but you'll have a better chance of selling your stuff if your customer's taste is similar to yours. Don't just jump on the bandwagon and sell whatever happens to be trendy right now. Firstly because trends don't last. And secondly, because if you aren't into what you're making, it will show in your work.

Do Your Homework
Take a look around the internet (assuming that's where you want to sell), and do some research. What sells and for how much? Where can you get deals on supplies? Keep in mind that if you're shopping at your local craft store for supplies, you're paying retail. Wholesale prices are generally much lower, which means a higher profit margin. You might try finding basics (for me, it's black knit fabric) in bulk to start with, since you may not be able to afford buying everything in bulk when you're starting out. Some wholesale suppliers require a sales tax ID. How you get one (in Michigan, you fill out one form, super easy and free) varies from state to state, so do some research and figure it out.

And Now for the Boring Business Stuff...
I know, it's the stuff no one wants to think about, but if you want to be your own boss, someone's gotta do it. And that means you.

Legal Smeagol
Well, my precious, legal stuffs for small businesses will differ from city to city, state to state, country to country. It'd be best for you to do some research about your area, but some things you'll probably need and/or want:

  • a sales tax license from your state. When you sell something to someone that lives in your state, you must collect sales tax. Ick? Yes. However, the benefit to having a sales tax license is that you get a sales tax ID, which many wholesale distributors require before you can set up an account with them. Wholesale supplies = lots of money-saving awesomeness.
  • a DBA or "Doing Business As". If your name is Shirley Wolf, but your business name is going to be "Chocolate Kitty Rollercoaster", you might want to think about getting a DBA. It will allow you to receive payments under the name of "Chocolate Kitty Rollercoaster" and prove that you are the owner when you want to do stuff like cash a check.
  • a business license. You'll have to do some research to figure out if this is required in your area.

Location, Location, Location
I know a lot of people dream of opening their own brick-and-mortar boutique, but for most of us, the start up costs make that impossible. Rent, utilities, employees.... That's why the internet is a great way to dip your toes into the River of Selling Crafts. But even then you must consider where you're going to sell.
Here are some popular options, and their grades from Ms. Smarmy (that's me!).

Etsy (A): A site specifically geared towards handmade, and ONLY handmade, goods. Fair fees (20 cents gets you a 3 month listing!), less deadbeats than Ebay, and a nice community feel. You don't have to worry about coding, their selling template is as easy as writing a description for your item and uploading pictures. You'll need to put a fair amount of work into marketing yourself, because this is a large marketplace. If you don't keep your name out there, you might get lost in the shuffle.

Your own website (B-): An excellent choice if you've got time on your hands to dedicate to your business, and if you've got a fair amount of coding know-how. If you don't know anything about making a website, you can hire someone to do it for you, but you'll need at least a little knowledge to keep things running. I recommend Adobe Dreamweaver, I'd be lost without it.
You'll also need to spend a lot of time and effort promoting. With Etsy at least some of that work is done for you. With you're own site, you're on your own. The benefit of your own site is that once the customer's there, it's just you. Zero competition. And you cut your fees in half, assuming you'll still use Paypal or another credit card processor. You'll need to factor in start up costs of about $70 to cover your domain name regisration and hosting plan.

Consignment or Wholesale (C): This can be a good option if you don't have the time to answer customer emails and list and ship items. Wholesale prices are usually discount about 50% from your retail prices and sold outright to the wholesale buyer when they buy from you in bulk. Consignment means you send your items to a shop, and they'll charge a fee (usually around 40%) when your item sells. I don't think this is a very good option for most sellers (at least those who are capable of doing the selling/shipping themselves), because nearly 50% of the price is a LOT to a handmade seller. See the next section on pricing and you'll see what I mean.
My advice is: if you are doing consignment, look for a place that's been around for a while.  See if you can email someone that's consigned with them in the past, to ask about their experience.  Make sure they've got some sort of contract/agreement that clearly states they are responsible for your goods while they are in their possession and how long the items will stay in the shop before being returned unsold. 

Ebay (D-): This is where I started, but Ebay has recently started losing favor among sellers of handmade and non-handmade goods alike. Fee hikes, stricter guidelines for sellers, and the inability for sellers to leave feedback for buyers have made it a risky place to sell. I give it a big thumbs down. The fees and competition will make it difficult for a newbie seller to gain any ground, but try it if you dare.

Back to Part 1
Part 3 Coming Soon!


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