Many people begin selling crafts because they want to bring in a little extra cash on the side. . . . And hey . . . who doesn’t?!
You may be a stay-at-home parent who wants to supplement the family income just a bit, or you may love crafting and started thinking “I wonder how much of these I would need to sell to bring in an extra $1,000 each month?”
It’s a smart question to ask before deciding to take the leap and start selling your craft for money for profit.
And . . . lucky you! — helping people sell their handmade products is what I do for a living so don’t worry, you’re in good hands!
Today I’m going to show you a very logical step-by-step approach to figure out the answer — we’re going to talk about a five-step process that will help you decide everything from how much money you can actually make to what you’re going to be selling to what your marketing goals should be as you get started.
AND – I have a brand new FREE download – The “How To Make $1,000 Selling Crafts Guide” – that I will give you at the end of the article that will walk you through this step-by-step process!
Ready? Let’s dive in.
Before you think about what you want to sell and the details of all that, you first need to clarify your financial goal – or in other words, decide how much money you want to make!
[free] get your GUIDe on how to make your first $1,000 Selling crafts online
This free GUIDe will help you clarify your financial goal, decide what craft you should sell and where, calculate how many sales you need and how to reach this target with your marketing.
I see a lot of makers in this niche focusing on the number of sales – especially people selling on Etsy. They obsess over the revenue amount and how many sales they’re making – but I strongly recommend that you do not focus on that number!
Sure sales and revenue do matter but they are not the most important.
It’s important that you focus on the right financial goal – the actual number that matters – which is how much money you want in your personal bank account
So when I talk to you about making $1,000, I’m not talking about $1,000 in sales, I actually don’t care much what your sales are.
Why?
I don’t care if you’ve made $1,000 in sales because this doesn’t tell me whether your profit is 50 bucks or no profit at all . . . and I don’t care if you’ve made $1,000 by selling three products or 100 products, because that still doesn’t tell me the important information you should be focusing on!
The number I care about is the actual bottom line, which is your profit . . . and in addition to that, how much money you can actually keep for yourself!
I focus on these numbers because I want you to have super realistic goals . . . because realistic goals are the only way to do business.
Let’s quickly talk about how to do this.
If you want to make X amount of money each month, this money doesn’t go straight away into your personal bank account, right? You’ve got to pay some stuff inside of your business first.
So a portion of your sales is going to go towards paying your expenses, a portion is going to get put aside to pay the taxman at the end of the year, and a portion will be earmarked as profits to invest in your business on things like new equipment or other improvements.
And then the last one is obviously paying yourself.
When I’m figuring out the profit I want to make, I use something called Profit First, a system (and a book) from Mike Michalowicz. This is a great system and I highly recommend it!
Michalowicz puts percentages on all of these numbers we just discussed.
So as you see in the chart, 100% is the revenue you made from sales. Of this revenue, you will put aside:
So for every $100 that you’re making you should expect to pay $30 for expenses, $15 for taxes, $5 will be your profit, and $50 will be your take-home pay. Now obviously this might vary a little bit based on how much tax you actually have to pay in your country, but this is a good guideline that you can use.
And what this means is that if your goal is to make $1,000 to “put in your pocket,” you actually need to make $2,000 in revenue.
Once you’re clear on your revenue goal, you are ready to move to step 2, deciding what you’re going to sell.
Now this is a very very important step – so important that it would take wayyyyyy to much time to go through in this article!
The good news is I have multiple articles that talk about how to choose what craft to sell plus a workbook that will walk you through the process so you don’t miss anything important, and I’m including them all in my new free guide.
Grab this free workbook + decision grid!
This free workbook + decision grid will guide you through the decision process so you know exactly what handmade products you should sell.
So for this step you will want to download the free guide below this article and work through it, and for now we’ll move ahead to step 3.
Once you know what you want to sell, you need to determine what you can sell this product for.
I have a free pricing calculator that will make this process much easier for you, as well as some helpful articles all about setting prices and common pitfalls you’ll want to avoid – and they will all be in your free guide to use when you get to this step.
Once you have set your prices, you’ll now want to determine what your average price is going to be for the products that you think will sell the most.
If you have some high-end products and some more medium-priced products in your collection, you will most likely have an average price that is closer to the medium price because you’ll probably sell more of that.
Once you figure out a rough average product price, then you can work backwards and calculate how many products you need to sell to reach the revenue goal you set in step one.
For example, let’s say your goal is to pay yourself $1,000 each month. In step one, you figured out that in order to put $1,000 in your pocket after paying taxes, expenses, and profits, you need sales of $2,000.
If you are selling candles and you have determined your average price is roughly $20, you will need to sell 100 candles to achieve your goal.
Let’s stop here for a second – As someone who’s working with handmade businesses every day, I want to share some of the most important advice I can give you.
There is an important part of this step that many makers miss, it’s actually a bit of a trap that most people fall into when planning how many products they need to sell to make the money they want to make.
It’s a very dangerous trap that will hinder your profits, and will actually make it really difficult for you to run a successful business and be a happy person doing so.
Here is what happens: once someone determines the amount of sales that they need based on the average product price, they forget to figure out the actual amount of time it will take to create those products.
It is so, so important that you think about this. You need to think about the amount of time that it will take to create those products because, unlike some shops that sell ecommerce but have their products manufactured, you do not!
So every time you increase the amount of sales you make, you increase the amount of time that it takes you over a given week or month to make those products.
Now of course you can hire help if you want to, but some of you want to stay a one-person shop. And if that’s the case, then you’re going to be capped by how many hours you have in a day.
So in our 100 candles example, you have to think of how long it would realistically take you to create those 100 candles. . . how can you batch the production of that? And compare that number with how much time you realistically have to work on your business each day or weekend or month.
You also want to think about the practicality of creating those products in terms of if it fits with your life right now. Maybe you only have part time to work on your business, or maybe you’re busy with work and kids and all of that and only have one hour a day to work on it.
You can see that it’s going to be important to think about these things before you move on to the next step – which is determining how much shop traffic you will need to sell that many products.
For this step, we will use an average conversion rate of 2% – which means that if 100 people visit your online shop, on average 2 of them will make a purchase.
Let’s work through a quick example:
Since you need to sell 100 candles, you will need 100 people to visit your shop and make a purchase – assuming here each person only purchased one candle.
Now of course if your average customer purchases 2 candles then this math would change, but for this example we’re being conservative and assuming one candle per purchase.
Since 100 is 2% of 5,000, you will need 5,000 visitors to accomplish your $1,000 cash-in-your-pocket goal.
Is all this math making you dizzy?
Don’t worry if math isn’t your strong suit— I have an article that talks all about figuring out the traffic you need, plus two resources including a traffic calculator that will do the math for you — and they will all be in your free guide as well!
Next you need to determine where you’re going to sell your product: is it going to be on your own website, or on a marketplace like Etsy or something similar?
After that you’ll decide how you’re going to promote your products – so you will decide which social platform you’re going to use, and if you will rely on organic traffic or if you have a bit of a budget to use for paid ads.
I have resources that will help you make each of these decisions in the free guide so be sure to download it – it’s important to sell and promote your craft in a way that fits with your product, your time availability, and your budget.
You can see that each of these 5 steps builds on the one before, so it’s important to go through them in a logical, step-by-step approach — so go and download your “How to Make $1,000 Selling Crafts” guide right now — I have included all the resources you need to help you make each one of the important decisions I have talked about today.
[free] get your GUIDe on how to make your first $1,000 Selling crafts online
This free GUIDe will help you clarify your financial goal, decide what craft you should sell and where, calculate how many sales you need and how to reach this target with your marketing.
Thanks for reading, make sure to download your free guide, and until next time, aurevoir!
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