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Learning how to start a crochet business or your own business, in general, can be scary and full of uncertainty because there are ssssooo many different ways to go about starting an online business. But if you are willing to take the first step and do the work this is the step-by-step guide to starting your own crochet business.
I do want to give you a friendly heads-up about starting your own business.
And that is that it can take a lot of time to get to where you want to be. Whether that is to make some extra money that you can have fun with or you want to make a full-time income.
Be patent with yourself and don’t get caught up in the numbers that you give up. Or feel so pressured to make this business successful that you are so stressed you’re not enjoying the process. This is a marathon, not a sprint. And right now you are simply training for that marathon.
There are two things you need to know before you start your business. And that is who your ideal customer is and what they will buy. The “how” of starting a business doesn’t matter right now.
The first thing you need to know is THE MOST important thing you will decide in your business… and that is this.
Who Is Your Ideal Customer
This is going to take time to figure out and will shift over time. But this is the thing that will dictate literally everything in your business. A lot of small businesses miss this part. They think the product is the most important thing but it’s not.
It’s the person you are selling it to.
Because that will help you with important things like branding your business, making your own designs, and how you post on social, and how you talk to your customers. Here are some questions you can think about as you walk through this process.
Start with these questions
- How old is she?
- What would she be buying items for? Her home? Gifts for others?
- What is her style? Is she classy or down to earth? Maybe she likes a touch of BoHo style.
- What is her income and what does she spend on luxury or nice-to-have items?
- Where does she shop normally?
- Are there any values she holds that influence her purchasing decisions?
There is a lot more that you can go into detail about but these key things will help you make a lot of necessary business divisions.
- Things like what handmade items you should start working on.
- What colors to use?
- Even the right materials and what to charge.
If you are creating products for a woman who lives in the north where winters are long, she has a specific sleek reserved style, and she is willing to pay for what she wants.
You know you should be using higher quality yarns, soft, thick, warm products. You can charge more because of the material used. You also know that you will need to market your small business in a very well-branded manner.
Vs a woman who is concerned with animal cruelty, has a smaller budget, and has a boho sense of fashion.
This gal wants to see “cruelty-free” on her products, she likes wider color pallet, and you can have a little more fun with the branding.
Questions For Coming Up With Crochet Business Ideas For Products
- What types of items do people buy at a nice retail store that you could make?
- What are some things that people might like to place custom orders for or get something that is one-of-a-kind?
- What DON’T people buy crocheted? – Just because you can make it doesn’t mean you should.
- What color schemes are in right now? – Yes, bold colors are fun to work with but would someone wear it or use it in their home?
Figuring Out What People Want To Buy
If you are looking to sell your crochet projects you need to do some research to figure out what is in high demand. This is going to be the best way to know what people want and what they will pay for.
Don’t get scared. I know this is very out of your element and I am going to walk you through how to tell what people are searching for to help you know what crochet patterns to start working on.
Use Google To Figure Out What’s In Style
There are a few places you can look when you are using Google to search.
The first is type one like “crochet” Then look to see all the words that come after it. Things like scarf, hat, beenie, and blanket will come up.
NOTICE I did not say women’s swimwear, tank tops, jewelry, or sun hats. Again just because you can crochet it doesn’t mean you should. If people aren’t searching for it don’t think they want it crocheted. Just because that free pattern was hanging from the yarn rack at Hobby Lobby does not mean it is in style.
When you see something you want to start a project on like blankets for example.
Look at what comes up in search as far as designs go. Work off of that. If you can make something that is handmade and looks like a classy design then do that. You are going to be able to charge more.
Go To Other Home Decor Websites And Design Stores
This is a great idea! If you know you want to make blankets, hats, or scarfs of some kind go to a store like a world market or another high-end place to see what they have as their seasonal design.
Sites And Shops to Check Out
You can even follow fashion bloggers on Instagram to see what they are promoting each season and see if you can find something that is “in” but is also something you can make as well. You might even year of some popular brands or shops that people buy from and you can look at their online stores to see what is in style.
For example, the chunky yarn used to be really big with popular home decor influencers but that is starting to not be as popular. Well, that is a good way to tell what your target audience is starting to want.
Use Etsy To Tell What People Are Buying
Etsy is going to be a great place to do a lot of market research for what crochet products you can make and sell easily.
Just like google go in and search crochet + modifier word like blanket, scarf, bag, or whatever.
Find a product that looks like something you would make and click on it.
Look at the number of sales from the Etsy shop so you know they are not completely new.
This shop has been around a while and they have over 2000 sales.
Go to their shop page and click the stars at the top right by the shop name. Read through their shop reviews. What are people saying. Look at the words they are using.
Soft, beautiful, cozy… If those are the words people are using that is a good indicator that the type of product is what people want.
Be Careful Of Profit Margin
If you want to run a successful business you have to keep things like the cost of materials and how much you need to charge at the forefront of your mind. You never want to just make something and then look at the going rate and list it for what you think you can get or your item. You could end up selling the item for less than you paid for the materials.
Here is an example of what I mean.
If a lap-size throw cost you $75 in materials to make and you spent several hours making it are people going to be willing to pay $150 for a small blanket? Uuuummmm that’s questionable. Unless you have built a strong brand identity around your crochet business and a lot of people are extremely connected to you, probably not.
Make sure to have a way to track what you paid for the skein of yarn you use for your items. As well as how long it took you to make the item. So you can get a decent hourly rate for what you made as well as being compensated for the materials.
How To Figure Out What To Price Crochet Items
I am going to be fully honest with you. Making money only by selling the crochet items themselves is going to be a side hustle income. Probably not a full-time income and you will still be putting in full-time work hours. Unless you are willing to do the really hard work of building up social media platforms to build a brand and get people to want your unique products. The issue is it’s not scalable. You are trading time for dollars and you will hit your limit. You may have to look into other income streams if you what to increase your revenue and make a lot of money.
Here are some ways you can figure out how much you can charge for what you are selling.
Again go back to Etsy and look for items with multiple sales. Look for items like the scarf below shows that it has been sold over 400 times to see what their prices are and choose a price that is comfortable for you. You want to feel compensated for your time and effort but still within a price that your ideal customer would pay.
Now there really isn’t a way to see if someone has raised or lowered the price but this will give you a good idea of if someone has sold it at that price.
These items are not hand made but you can still go back to the shops and stores I talked about using to tell what is in style and see what they are charging. You will know at a minimum you can charge that price for your product. There are things like the chunky knit blankets on amazon for over $100 so you know a handmade blanket could go for more.
Start Lower And Increase
You don’t have to keep the price you started with. You can start with a price that is on the lower end what feels good while still making sure you are getting your expenses covered and still getting some money for your time. Then you can increase the price if they sell extremely quickly.
How To Sell Your Crochet Items
There are two things you need to sell your items.
And that is a platform to get eyeballs on your products and a way to check out.
With anything new, you would start at the end of the process and work backward to figure out the steps you need. This will help you with choosing tools and setting up processes so you can easily make business transactions and streamline the process as best as you can.
You will see what I mean in a minute.
Some people recommend going to local craft fairs and while those can be fun they are not as efficient for selling your products. You are competing with other people who are also selling crocheted items and even other people selling to the same audience. If you want to go to in-person events then by all means go for it but don’t dismiss selling online and eventually setting up your own website and shop.
How To Sell Your Product
This is where the scary stuff can cause you to give up. But take a deep breath and work through one thing at a time. Tech doesn’t have to be scary.
Etsy is the best for crochet sellers to get started.
You can set up an online store for no extra fee. And they have a checkout page and they also have an easy-to-print shipping label which is going to be THE best for keeping it simple. You get an email with the shipping label and all you have to do is print it out and tape it to the box.
This was the process I used when I was selling herbs for people to use with their rabbits. The other amazing part was Etsy calculated the shipping and I never had to pay more at the post office or anything like that.
There are other options like Shopify but they have a monthly fee of a minimum of $9 and you would still have to find a way to get shipping labels. Which I believe would be another fee you would have to pay.
Etsy charges twenty cents to list your product for four months. I think that’s a great price in my opinion.
Now Let’s Talk About Getting People To See Your Products
The fastest way to make an income is to use social media. As much as I would love to tell you that all you have to do is set up your own site and you will make sales it’s just not true these days. While you can get found in Google search that can take literal years before google sends any traffic your way.
So in the meantime, you have to take matters into your own hands.
How To Choose A Social Platform
First, start with the platform you are most comfortable using. If you hate being on a particular platform you would be consistent with creating content and promoting your products.
The two platforms I think will do the best for you is either a Facebook page or an Instagram account for your crochet business. The reason for this is that the people who are most likely to buy your products are there.
Facebook is a slightly older demographic and the people on IG are even more primed to buy things or be sold to from that platform.
What To Post
Don’t let all of your posts be sales posts “or buy my thing” posts. You need to seed your products that are coming. Show you looking for materials. Share the creation process and say coming soon. Simple things like that.
Money And Bank Accounts
This is definitely more on the boring business side of things but it’s necessary to talk about. (Quick Note: I am not CPA or a lawyer, more do I claim to be. Any advice is purely out of my own personal experience and you should consult a local professional)
Ok, now that is about of the way…
Start with having a separate bank account for your business. It doesn’t have to be classified as a ‘business bank account” by the bank. Those often come with lots of unnecessary fees. It simply is separate from your personal bank account for your earnings from the business so you can more easily track your income and expenses.
The reason you should start with it from day one is this will help you stay organized from the beginning. If your business grows and you stay with it for a while you will not have a mess on your hands in regard to bookkeeping.
I also recommend using this free bookkeeping app that will pull all the transitions from your bank account and all you have to do is print out the report to give to your tax professional or it will make your life easier when you file your taxes.
When you are small you can file your business taxes alongside your personal income. You don’t need to file separately until your business makes enough money then you can start to pay quarterly. Again talk to a tax professional in your area before taking all this to heart.
Ways To Get A Higher Price For Your Products
If you are extremely skilled at what you do there are only so many people who will pay for that. But there are ways you can increase your prices so you can generate more income with the same amount of output.
Increase Perceived Value To Your Ideal Customer
First off you need to know who your target market is. What do they value, where do they shop, what level of retail prices do they pay? These things will help you decide the best crochet items to make.
The most important thing is to always keep bringing it back to the potential customer (the persona) who will buy your crochet items. It’s not the deal seeker who buys a $10 hat or scarf from Walmart. Those people will not pay you the price you need to make to get your handmade business off the ground.
This is a person who values handmade products or a person who wants luxurious yarns. Someone who will pay top dollar for a customer order.
But even more than that what can you do to increase the preserved value that someone gets from your crochet hat or scarf?
Tell The Benefits Not Just The Features
When you are listing your item for sale you can list the “features” but add the why behind it.
It is made out of angora rabbit wools – so that– you will stay warm and cozy for as long as you wear this scarf.
This scarf is 50 inches long – so that- you can wrap the scarf as thickly as you need it to keep your neck warm.
It is made out of cruelty-free yarn – so that- you can rest easy knowing that no animal was harmed in making the materials for your scarf.
The idea is to put a boring thing about the product that is nice to know but put it in a light that makes them feel good.
When you write your product listing add the features and ask yourself “so what” for each thing you put. Is there a way to make people want the product even more?
While you also need to take the best images possible you can make the images look better by taking out the background and putting them on a pretty shop mockup-style image. Something like this image below.
You can remove the background with something like canva pro OR you can use [this free website] and link upload it to canva to make the design.
Keep the images clean and classy.
People are drawn to what is pretty and even if you don’t send anything extra or have pretty packaging people will look at that item with much higher value.
You don’t have to spend a lot but can you get colored tissue paper or some kind of pretty shipping packaging? You could do something as simple as tie the inner package up with twine like you would a gift box ribbon and people would love it. Not the one that goes through the mail but the wrapping you put around the item you sold.
Can you make things that are limited edition and only have so many for sale and that’s it? The different seasons are a great way to make collections of products to sell. It’s also a great way to get sales quickly and also build up suspense for people wanting to buy your products.
You can make money from your handmade crochet items. But building up your business is going to take some time. The great thing about it is they aren’t going to go bad. So when the market is down or you decide to sell high-end items. you may have to be patent to get the price you want to make.
Things That Don’t Help You Sell More But Can Turn Into A Time Suck
There are some things that can feel really important but ultimately they won’t help you sell more products. Here are some of the things I am talking about.
- Your Website Domain Name – While it can be helpful to have all of your online present assets be the same it’s not going to matter all that much. Especially if they are close.
- Your Business Name – I have a hard time naming things so I decided to go with my name. It gave me the freedom to shift and change without having to make a big deal out of any changes if the name no longer fit.
- Don’t Spend Lots Of Money On Colors And Branding – There are so many affordable options out there and you will most likely have to pay with a few branding colors and designs before you find the one you like most.
It takes time to get a business of any kind off the ground and selling. Trust the process and watch to see what does work and what doesn’t so you can make changes and test something new.