online handmade business mistakesOwning your own online business can be a great way to make money doing something that makes you happy. Hand-making products shows top-notch dedication to your store and the products you provide. However, even with all that good intent and strong commitment, you’re bound to make mistakes along the way. We developed a list of the most common mistakes to avoid when running your online handmade business.


Business vs. Hobby Separation

Think of your business as just that, a business. Oftentimes, handmade online merchants will make a living out of a previous hobby (knitting, pottery, woodwork, etc.). While this can make your career even more fun and rewarding, it’s important to keep the proper frame of mind when running a business. At the end of the day, you’re here to sell products and make a profit, not practice a hobby. This doesn’t mean you can’t have fun making your products! Just make sure that you keep the business in mind. Pay attention to profit margins, customer service, taxes, etc.


Incorrect Pricing

Determining a price point for your handmade products can be difficult. It’s important to list your products at a high enough price that you’re making a profit while still not breaking the banks of your customers. You’ll need to consider the time you put into your products (remember, just because you have fun doing it doesn’t mean your time is worth any less), as well as the cost of materials, when pricing your items. Some handmade craft sellers use a simple formula when pricing their products:

Cost of Materials + Your Time = Item Cost

Item Cost x Markup (usually 2 to 2.5) = Wholesale Price

Wholesale Price x Markup = Retail Price

However, it’s always a good idea to do some research and look for prices of similar items online before deciding on using a formula.


Bad Product Sources

Make sure to properly source the materials for products you make and sell. While getting cheaper materials is more cost-effective and can sometimes be the correct choice, remember that your customers are expecting a quality handmade product.

Buying more expensive materials can also have a negative effect on your business if the cost is not offset by the quality of the product.

Determining the right materials (and the right cost for materials) can be tricky. Some suppliers may offer special pricing to those who purchase materials in bulk. Forming a good relationship with your suppliers is a great way to get a good deal on materials.


Improper Marketing

It’s not enough to create a product and list it online anymore, you must market your business to the correct audience. Marketing to a target audience helps your online visibility and will increase overall sales. The best way to determine your target audience is by looking at who has bought your products in the past and who your competitors are marketing to. Take note of gender, age, and any other demographic information you can. This will help you determine who to market to in the future and how to develop a corresponding marketing strategy.


Insufficient Promotion

Promoting your store is vital to its success. While it’s true you need to focus on creating your products and amassing inventory, make sure you spend an ample amount of time on marketing your business as well. Insufficient promotion of your business can quickly lead to a drop in sales and loss of profits, so do your best to get the word out about your business. Small businesses can potentially increase their marketing reach through word of mouth. Consider offering special discounts to those who refer your products to their friends and family.


Not Unique

You’ll need to make sure your product is unique enough to stand out among other handmade products. Handmade products typically cost more than their commercially made counterparts, so you need to make sure your customers see the value in your product. Products that are too similar to other options available on the market, handmade or otherwise, may not sell well enough to generate much profit. One way to ensure that your products are unique is to find a product niche that isn’t saturated. For example, instead of selling handmade ceramic dishes of all sorts, focus on handmade ceramic dog dishes.


Poor Admin Process

Remember, there are many factors involved in running a successful business online. As the owner, you’ll be responsible for not only making your products but also dealing with administrative processes like inventory management and customer service. Failure to properly acknowledge those aspects of your business can be detrimental. There are many software solutions available to online sellers that can automate numerous administrative tasks. They help you keep track of everything you need to, without taking a lot of time away from making your products.


Not Taking Advice

Being open to advice is an important part of running any successful business. While you may feel particularly close to your handmade products, it’s important to remember that the tastes of your customers may differ. Make sure you’re open to hearing from customers and give them an opportunity to supply you with feedback. Whether they’re satisfied with your products or not, their suggestions may give you more insight. Use this information to develop new product ideas and make strategic business decisions.


Final Thoughts About Handmade Businesses

Launching an online business is a great way to earn an income and find fulfillment in your career. Starting a handmade business can be even more special and satisfying, as you have a personal connection to the products you’re selling. However, like any other business, you’ll run into issues along the way. Following the aforementioned tips can help you avoid some of those mistakes and ensure the success of your business.


Better eRetail eBook
Better eRetail eBook

We teamed up with other ecommerce industry experts to put together 75 tips to help your boost online sales. It’s perfect for the beginner and advanced retailer alike.

You will receive an email with your download shortly!

Pin It on Pinterest

Share This