If you’re thinking about starting a craft business, you may be wondering what type of disadvantages come along with selling handmade products. This article will give you an idea of the pros and cons of handmade products.
The main disadvantages of selling handmade products are that you have much higher production costs than similar products that are mass-produced, therefore, your product’s prices will be higher. You then must get consumers to understand why your prices are higher and see the benefits your handmade products provide, otherwise, they’ll buy the cheaper, mass-produced product.
CONS OF HANDMADE PRODUCTS
1 – Startup Costs
Craft businesses don’t require you to go into as much debt as you would if you were starting a retail store, restaurant, or business with several employees, but you still must follow the same laws as most other businesses.
This can feel overwhelming at first; LAWS FOR SELLING HANDMADE will help walk you through the steps.
On top of getting set up legally, getting a logo designed, building a website/online shop, etc. you must also make all the stock you plan to sell.
2 – Marketing hours
Marketing may not seem like a disadvantage, but most makers want to spend all their hours creating.
When you’re the one and only person running your business, that’s not realistic (unless you’re able to hire a marketer).
So many may find that the hours required to properly market the products made, is a disadvantage.
Marketing also isn’t easy and you’ll need to invest plenty of time (and some money) into becoming a good marketer.
It’s not as simple as sharing your creations on Facebook or Instagram and waiting for the sales to come in.
These days, a handmade business owner must be a marketer first and a creator second.
It’s likely you’ll need to spend the same number of hours on marketing as you do on products.
3 – Lower profit margins
Because you’re making the products yourself, your costs are higher than a company that has a machine make their products.
Although your craftsmanship will allow you to charge more for your product than a mass-produced, machine-made product, there will likely still be a cap on how much a consumer is willing to pay.
Therefore, profit margins tend to be lower for handmade products because of the hours spent on production.
4 – Higher prices
Higher prices aren’t necessarily a disadvantage, as there are people who want to spend more on products to get better quality or something that’s better suited to their needs.
However, you must know how to find those people and properly market and sell to them so they’re aware of your products and understand why they’re the better option for them.
This requires you to choose your target market wisely and then target them properly (i.e. choose a profitable target market, know where to find them, and create a business and products they’re drawn to). HOW TO FIND A GOLDMINE OF CUSTOMERS will help you with that.
5 – One-person operation
Oftentimes, a handmade business is a one-person operation. There’s nothing wrong with that and there are several perks…especially if you like to be in control of every detail. However, it can become tiring to wear all the hats a successful business requires you to.
You not only need to be highly skilled at your craft to produce top-quality products, but you must also be skilled at marketing and selling, as well as several other tasks your handmade business will require:
- Photographing products
- Building a website/online shop
- Tracking inventory and orders
6 – Slow growth
As a small handmade business, it’s likely you’re not investing thousands of dollars each month to grow your business.
Most makers rely on organic growth using search engines, social media, craft shows, local media coverage, etc. and may spend a few dollars on ads here and there.
With a small marketing budget and smaller profit margins, growth takes time.
Many expect sales to come in immediately or are misled by gurus sharing how they’ve had “overnight” success on Etsy.
When in reality, it takes months, sometimes years, to get to a point where your handmade business is providing a healthy income (even if you do everything “right”).
A handmade business can grow quickly, but typically there’s an experienced entrepreneur behind that business (and they often have failed business attempts they’ve learned from).
Be prepared for gradual growth over several months (not weeks).
Those are the disadvantages of selling handmade products, but it’s not all bad. There are lots of perks to starting a handmade business.
- A handmade business is relatively low-cost to start
- You get to be creative
- You can set your own hours
- You’re your own boss and can run your business how you see fit
Running a business comes with its challenges, but it’s also very exciting to dream up new ideas, make plans, and then adapt those plans if you need to, without asking for someone’s permission.
If you need an easy-to-understand and simple-to-follow guide to help get your handmade business started on the right foot, check out THE SUCCESS PLANNER.
Hey, I’m Erin 🙂 I write about small business and craft show techniques I’ve learned from being a small business owner for almost 2 decades, selling at dozens of craft shows, and earning a diploma in Visual Communication Design. I hope you find my advice helpful!