As online shopping has increased tremendously over the past 10 years, more and more individuals have entered the online marketplace trying to sell their hand-crafted items, thinking it’s the perfect way to make some extra money doing what they love. And it can be, but it’s often not as easy or simple as people think. I’ve been selling online since 2012, and thought I’d share what I think are important steps in the process to help get you started.
1. Figure out how viable it is to turn your craft into a business. This includes determining how much product you can reasonably produce in a day/week/month based on how much time you have or want to devote to it, your physical limitations, and availability of necessary supplies. Time includes both actual product creation time, and time needed to take photos, post listings online, package and ship items, online marketing and promotion, and obtain materials. Then determining the supply cost for your items.
Based on the labor/time and supply cost for your product, can you sell it for enough to make the amount of profit you need or want?
Check out the competition. How many other people are making similar things and are they selling well at prices you could match? The more unique and/or competitively priced you can make your product from others, the better chances you have of selling a lot of them.
Do you still think it is worth moving forward with this crazy idea? If the answer is yes, keep reading.
2. Determine what is required to start a business in your state. Even if you are only selling as a hobby, you will need to report the income on your tax returns, establish a sales tax account with your state (if applicable), apply for some sort of business license as a sole proprietor, LLC, or Corporation, and apply for a Federal tax ID for your business if necessary,. Most people start out as sole proprietors and may change if/when their business grows. I recommend consulting with your accountant for their advice on what is best in your situation. Most states also have small business departments that can help you navigate your state’s laws.
3. Familiarize yourself with copyright and trademark laws to ensure your products don’t violate any of them, and you avoid using language or tags online that are prohibited. For example, creating anything that looks like a Disney character, and/or using Disney’s character names could get you into a lawsuit with Disney Corporation. Even many everyday words like “onesie”, “smiley”, “shabby chic”, and “kleenex” are trademarked and can’t be used. There are online databases you can search to be sure you are dodging protected products and language. You can use copyrighted/trademarked things if you purchase the rights to use them from the owner. On the flip side, if you have a unique product you want to keep others from copying, consider filing for a patent and/or copyright of your own.
4. Figure out how you will get your products to your buyers.
If you want to provide shipping, explore the cost of boxes, packaging, and pricing through USPS, UPS, and Fedex. These are all expenses you need to plan for, and take into account when pricing your items and/or charging shipping. This can also help you adjust the sizes of your products, or the number you choose to sell as sets. I personally made several adjustments to the size of suncatchers so they would fit into certain sized boxes that I knew I could ship safely and for a certain cost. Also be sure that whatever you are making doesn’t use any materials that are prohibited to ship where you want to ship (ie. certain gemstones, plants, chemicals, etc.). If you want to ship overseas, research the additional rules on packaging and taxes each country has.
Most online sales platforms also have shipping labels available for purchase through them at discounted rates. Or you can set up your own separate shipping account through one of the many business shipping companies like Pirateship or Shipstation to get the same discounted shipping rates.
If you plan to sell your wares at in person craft shows or markets, you will need to consider what supplies (tents, tables, tablecloths, display racks, etc) are needed to do so. I also recommend opening up an account with one of the many companies through which you can take credit card payments at shows. You will also need to research what shows would best suit your products, and generally need to apply to participate several months in advance to reserve your spot.
5. Determine which online sales platform(s)/websites will work best for you in terms of reaching your customer base, ease of use, rules about what is permitted to be sold, and their fees. Most online sellers use two or three different sales websites to sell through. Some of the big players are Ebay, Amazon, Etsy, and Facebook Marketplace. But there are many other online sales sites that may be more specialized to your particular product and work better for you.
6. Establish business social media accounts to promote your products. Social media marketing is more important than ever to get your products seen. Instagram, Twitter, and Facebook have the biggest reach currently. There are many online tutorials for tips on how to best create content and grow your followers on each social media platform.
7. Set up your own stand alone website through which to sell. After 6 months, if you still want to continue down the online sales road, it’s important to create your own website that you have total control over so you are not forever held hostage to rule changes, fee increases, and other site performance issues controlled by other sales websites. There are several web hosting companies that you can do this through, such as Shopify and Indiemade. All have different fees and capabilities to meet whatever your needs may be.
Because you need to drive all of your own traffic to a stand alone website, you will still want to keep selling on the other platforms that have their own built in customer traffic until you start getting more sales on your website. This could take several months or even several years. How quickly your own website takes off depends on how much time, effort, and money you put into marketing it and paying for advertising.
8. Have realistic expectations about how quickly you will sell your creations. There are so many different pieces to this puzzle to figure out and adjust along the way. From figuring out which colors/styles/sizes of your designs sell the best, to which sales sites, social media outlets and/or in person shows best reach your target customers, to which combination of pricing and shipping methods make you enough profit while still selling, among many other factors. Not to mention the changes in the world economy, supply availability, weather events, market trends (what goes in and out of style) and other outside influences that will affect your sales.
9. Make adjustments as needed. There will always be highs and lows in your sales no matter what you do. That is just the nature of sales. When the lows seem longer than usual, it’s time to start making adjustments again to your product and/or marketing techniques. Research style trends and new ways to promote your products. Get your friends and family involved by asking them what improvements or changes they see that would improve your product in their eyes. Different colors, sizes, details, themes, etc. Ask them what they’d search for if looking for your product too for ideas of new ways to market it.
10. Take a break! When you feel yourself starting to burn out, or getting uninspired, take a break for however long you need to get motivated again. Don’t wait until you’re exhausted and give up. To make it work for the long term, mental and physical breaks are a necessity.
The above is definitely not everything you’ll need to know or do, but hopefully it will help get you started thinking and planning. It can be a very rewarding endeavor when it works! Best of luck!