In the first part, I discussed platforms, pricing, and whether selling your handmade items is the right choice for you. In Part 2 of “How to Sell Your Knitted or Crocheted Creations”, we’ll dive into other essential aspects of selling handmade goods. Without this information, you’re only getting half the story.

If you haven’t read Part 1 yet, I recommend doing so before proceeding with Part 2. Why? It’ll give you better context and help you make informed decisions. Hopefully, by now, you’ve drafted a mini business plan, researched your target audience, and explored the best platforms for your business. You may have even thought of a name for your shop!

In Part 2, we’ll cover:

• Legal Regulations
• The Fine Print
• Returns Policy
• Shipping Costs
• Offering Discounts

Let’s get started on selling your knitted or crocheted creations!

1. Legal Regulations

When selling handmade goods, especially online, it’s crucial to understand the regulations. In the Netherlands, for example, you don’t need to pay VAT (Value Added Tax) if your annual sales are below €10,000. However, some platforms may require registering with a VAT or Chamber of Commerce (CoC) number to start selling. So, what should you do?

Do You Need a VAT Number?

On platforms like Etsy, you don’t need a VAT or CoC number as long as your sales remain under the €10,000 threshold. But Etsy, as a business, collects VAT on your sales. They handle the tax on your behalf, meaning you still indirectly pay VAT on your items sold. Why?

Etsy charges a fee for using their platform. They expect you to pay VAT in your country if you have a VAT number. If you fall under the “small business exemption” and don’t owe taxes because your sales are under €10,000, you still won’t be able to claim VAT on your purchased supplies.

If you want to claim VAT refunds for your purchased materials, like beads for jewelry, you’ll need to pay taxes on your sold items that include VAT. It’s essential to keep this in mind when planning your purchases and pricing.

2. The Fine Print

When running your webshop, having clear and transparent Terms & Conditions is vital. But what do you need to include in these “small print” rules?

In your Terms & Conditions, outline important details such as:

• Your business address or home address (if you sell from home)
• Full shop name (if using an abbreviated domain name)
• VAT or Chamber of Commerce numbers (if applicable)
• Policies for:
  • Purchases
  • Returns
  • Shipping Costs
  • Warranties
  • Sale Items (exchange/refund policies)
  • Refunds

Many websites offer templates for Terms & Conditions. There are even tools that generate the text for you, ensuring everything is in place legally. However, make sure you understand and agree with these terms—once published, you can’t change them on a whim. Be thoughtful before setting your rules in stone.

3. Returns Policy

Your Returns Policy is an essential part of your customer service. It’s often outlined in your Terms & Conditions but can also be posted on a separate page for easy access. Be specific about which items are returnable and which are not. For instance, custom-made products may not be eligible for returns, whereas standard stock items might be.

Also, specify a timeframe for returns. Make it clear that items kept for extended periods (such as 3 months) are not eligible for return.

4. Shipping Costs

Shipping may seem straightforward, but it’s not always simple. If you only sell small items, like crocheted bracelets, shipping costs might be minimal. But if you sell a range of items (bracelets, toys, blankets, etc.), shipping will vary significantly by size and weight.

Platforms like Etsy and your own Shopify or WordPress shop allow you to categorize items with different shipping labels. Large items like blankets may need a box, resulting in higher shipping fees, while smaller items may fit in a standard envelope or box for cheaper rates.

Don’t feel pressured to offer free shipping—major retailers like H&M or Zalando can afford to offer it due to their high volume of sales. As a small business, you may not have that luxury. Be sure to check the rates from your local postal services (FedEx, DHL, UPS) and set your prices accordingly. Remember, undercharging on shipping can quickly eat into your profits!

For example, I once sold a “mystery jewelry box” for €14 with €4.95 shipping. However, I miscalculated the shipping cost to Belgium—it turned out to be €13! I lost my profit and had to cover the extra cost, a mistake I only made once!

5. Offering Discounts

Running a website inevitably means friends and family will ask for discounts. It’s essential to decide upfront who you’re willing to give a discount to—perhaps your sibling, but not your neighbor six doors down.

Don’t feel guilty about refusing discounts. Explain the time and effort it takes to make each handmade item. You can offer to let them purchase their materials, and you can charge them just for your time. Often, people don’t realize the cost of high-quality materials. Once they have to buy it themselves, they’ll understand why not everything comes cheap!

You can also consider offering discounts to regular customers. For instance, after a purchase, offer a 25% discount on their next order. But be sure to set a minimum spend threshold (e.g., €50) to ensure you’re not losing money. Be cautious with blanket discount offers like €10 off, which might encourage customers to only spend €10. Leaving with, exactly: nothing as a profit!

Selling Your Knitted or Crocheted Creations

That’s the end of Part 2. In Part 3, we’ll put the finishing touches on everything. We’ll dive into product photography, writing effective product descriptions, and a bit of marketing strategy. After all, customers won’t just find your shop on their own—you’ll need to make sure you’re attracting them!

Have a great day!