Moving craft hobby into selling

[Zoe Girl]

I got invited to a small church craft fair in december based on my booth at Maker Faire. I realized how much stuff I have from dolls to octopod toys to the kitchen things I used to make that have been stored, and even the dragons. Now I realize I may have to do things about sales tax and how to take money from people and all that. I am just dipping my toe in, not sure how much I want to make this a total side income. However I do want to follow all the rules. I have one of the cube things I got from a friend for my phone, and other than that I am a total newbie.

Do I need to sign up for a tax license or just pay taxes on what I collect? So far I have sold under $150 to friends so I haven't worried about it. Is there some type of income threshold that I need to pass or is it just a good idea for anyone who sets up a booth at a fair?

Gonna go google a lot

[Chicken lady]

Call the municipal office (city, township, county) of the location where you will be selling to ask about licenses or local taxes. The state auditor should have information about state sales tax (if the church keeps a portion of sales you may be exempt)

[Tybee]

Call your local library and ask for directions to SCORE--that's where our SCORE holds meetings--and they can totally get you set at SCORE--amazing organization and it is totally free.

[Chicken lady]

What is SCORE?

[Tybee]

It's volunteer business advisors-- partners with SBA I think? Anyway, their presentations are amazing, and they give you one on one mentor counseling to help get your small business started.

https://www.sba.gov/tools/local-assistance/score

[sweetana3]

Our state, IN, has a whole section on the web for new business people. They are trying to make it easier.

Zoe, it is an interesting thing you are doing but please do a business analysis and plan regarding cost of your material and YOUR TIME when selling homemade crafts. How much time can you realistically allocate from your life to producing items to sell? My motherinlaw is retired and has nothing much else to do and crochets a whole lot of baby things which she mostly donates. She gets very little for her time and skill when she is able to sell them. She would cover the cost of material if she purchased them at full retail.

Suggestion: Make a few items and keep track of your accurate cost of materials and time. Once you have truly accurate numbers, sit down and figure out if this is what you want to spend your life energy on or whether there are better avenues to follow. SCORE is a great resource but they will want some data about your business idea and costs.

[Tybee]

Sweetana, I disagree about not contacting SCORE and how they will want data. I have been to two of their presentations with a very vague business idea, and no ideas about costs or records of my time and they have been full of great ideas and support. In fact, going to them very early on is my recommendation, as they can tell her what she will need for business licensing and sales tax, right off the bat. That was covered in the first presentation I went to, very thoroughly, and they had lawyers there to help if you wanted to talk right then.

Sometimes just talking to them early will help you get your bearings, Zoe!

[sweetana3]

And I still think it is jumping into the details before first seeing if you are making any money on the few items already possible. It is quicker to make a few items and write down the cost and the potential price, than attend meetings where they should first ask what do you do and how much cost you in material and labor to make each item. They are going to need to know something before they can accurately talk about hobby vs business and the ramifications of each.

Note: It is a very rare home crafter that can realistically make any money when they factor in a reasonable cost for labor and want to have a legitimate business and pay their taxes.

It is also helpful to know whether you will be doing work on commission as ordered and deal with the stress of time commitments or selling the items after you make them in the time between other activities of daily living.

Zoe, good luck on whatever you decide. It is just my personal experience that trying to make items to sell while holding down a full time job often created stress and removed the enjoyment of the activity.

[herbgeek]

What is SCORE?

Stands for Service Corps of Retired Executives.

[Zoe Girl]

Thanks all, mostly i would create about the same amount of stuff whether i sell it or not. It is for fun and mental health. A lot of yarn is from goodwill unless i need a specific type or color. However my plan is to keep track of this money and put in savings specifically for silent retreat. I have earned close to $150, and i need about $500 i think. Very low stress on my part, I have other options. I did make some of the octopus toys last year and they took a week outside of work with some self discipline but not high stress, in other words no crochet injuries :)

[iris lilies]

I know what sweetana means, and it is unlikely this becomes a business. But if all Zoe
Girl expects to make (net) from it is $500 annually, that's ok and it is a hobby. Those are the numbers I would carry into any discussion about how to handles taxes and business license.

[Lainey]

ZoeGirl,
I just attended a good size craft fair here in AZ, and no sales taxes were charged. Not sure if that's because they were all individual sellers at a community center, or if the small dollar amounts are exempt, etc. - probably different in different states.

But I also wanted to add that one of the busiest booths there had a lot of useful and nicely sewn items like generous sized baby bibs, and even adult bibs, that were 2-sided washable fabric in nice patterns and colors. She also had children-size colorful aprons that sold well. Everything was under $20.
Another crafter sold a number of eyeglass cases (I think they were crocheted), plus small crochet bags with a drawstring top that she said were used to collect soap slivers and then use as washcloths. The bags even included a bar of inexpensive soap and sold for $4.

Small stained glass ornaments were selling well. Also hand-knit baby caps and booties, plus adult-size booties, seemed to do well.

I don't know if you could use any of those ideas but I thought I'd pass them on.

[Zoe Girl]

Those are great ideas, I was going to also survey my facebook friends for what they thought would sell the best. I agree that anything under $10 or $15 will sell better. The dragon puppets do need to be priced higher than that, and part of that will be sold by connections in my email newsletter. i already do a few email newsletters so I could do a simple monthly one and offer things for sale through that medium. I could also just show off some of the work I am doing which is fun.

[JaneV2.0]

Not that you asked for suggestions, but I would buy lengths of crocheted trim, boot toppers, seasonal items, pet toys, pillow covers, gift pouches...

[Zoe Girl]

Oh I will take all ideas! I worked on a hat and sweater for grandbaby this weekend. Not anything I would sell because the time it takes, but definitely as a gift. I haven't tried boot toppers but I did fingerless gloves for my daughter.

[JaneV2.0]

The pillow coves I'm thinking of would be a crocheted square or circle with an overlapped fabric back, sold without an insert.

[Lainey]

Oh I will take all ideas! I worked on a hat and sweater for grandbaby this weekend. Not anything I would sell because the time it takes, but definitely as a gift. I haven't tried boot toppers but I did fingerless gloves for my daughter.

Yep, fingerless gloves seem to be selling too, along with pet-related items. Seems like people will open their wallets for babies, kids and pets.

[Teacher Terry]

When my Mom retired she made crafts and sold them at fairs. She made some money and really enjoyed it. She sewed Barbie clothes which was a huge seller. She never really got paid for her time but enjoyed it. It sounds like it is fun for you and yo uare not looking to make much $. My Mom never had to pay taxes on it but maybe because her overall income was not high.