First off, this is my opinion based on my own experience. I believe buying locally crafted goods supports the economy tremendously and transparency in communication facilitates informed shopping choices. I think ongoing awareness is especially important to consider when the item is something one puts on or in their body on a daily basis, as it can affect overall health. I encourage everyone to make the opportunity to talk to a person who grew or made the products that provide their sustenance.
- A lot of crafters begin their pursuit out of sheer fascination with their materials; it is a hobby. They purchase their beloved materials when and where they first see them – and they probably aren’t thinking about starting a business right off the bat. They buy only a small amount at first and in their learning process, identify the features that give it its quality and made it stand out to them in the first place. At this scale, often the smallest amount of materials that is not cost-prohibitive from engaging in the hobby will be enough to fulfill the curiosity. Of course, as the hobbyist’s expertise in their chosen materials increase, often demand follows. If the hobbyist chooses to share their craft, they become accountable to other people’s demands. They may still be purchasing their high-quality materials at consumer prices, while they are creating a business persona. There’s even more expense if they are cultivating their materials from scratch, but this makes it all the more lovely, in my opinion.
- Even as the budding crafter looks for suppliers with reduced cost for their materials, often the timeline and quantity of the demand will dictate how much room they have to negotiate price. They are often not paying themselves a salary or equating their administrative time in their end product, so other priorities (job, kids, school, etc.) will compete. They will often have to be satisfied with finding the right amount of product available in the right geographic location that is within their out of pocket budget.
- As the aspiring small business entrepreneur begins to note the cost of their product, shipping and packaging materials along with the time spent making it; they will factor in the cost of the “privilege to do business”. Even if you put all your profits back into the business, it is wise to include an hourly rate for your time to accurately project sustainability. Collecting and reporting sales tax, product liability insurance, fees for retail space and maybe even memberships in promotional networks become new expenses challenging the bottom line. It’s not just a hobby anymore – and the expense does not just account for the cost of the materials, either. If the crafter chooses to continue to offer to the public, the product inspired by their creative hobby, they must include all these costs into their product. More about pricing craft products in the Etsy Seller’s Handbook.
- The craft-based business will also need to create a short and long-term task list (which lends itself to a business plan), so that they can maintain a work-life balance without using money designated for personal expenses, for the business. It’s one thing to make a bunch of gifts for friends and family at one’s own expense – that’s thoughtful. But it’s another to conduct a transaction with total strangers, not collect or report sales tax, while potentially entering into a saturated market. Not to mention, you might actually be giving away your time, which is not so good for the work-life balance.
- While some large companies often have expensive advertisement campaigns that drum up awareness in people to buy their product; this doesn’t necessarily mean more quality went into the product materials. The more a company buys, the lower the cost in materials, and often the supplier needs to cut corners on quality to ensure shelf life and marketability on their scale. For both the supplier and manufacturer, this puts more money towards staff, marketing expenses, etc. which helps consumers find their product. Which appears cheaper to the consumer, when in fact, they’re getting less of the quality to begin with. Think of it as a factory farm versus your own vegetable garden in the backyard. Here’s more about “True Cost“, from the sustainability perspective.
- Handmade is not necessarily a Hipster marketing trend. A lot of the time it isn’t trendy at all, because it isn’t getting the same kind of media attention as those corporations that split their expenses with big marketing campaigns. If an informed consumer recognizes the time and money put into something made in small quantity and by hand, they may make an effort to tell their friends and family about it because it means something to them. It is quite the opposite of “hipster”. The product continues on a meaningful path, beyond its intended – and practical – function. And personally, I am grateful to be surrounded by people who are able to look at a product and see all the layers of work that went into its creation, and are willing to support the underdog.
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