starting a very small business - extension of a hobby?

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WasabiOsbourne
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starting a very small business - extension of a hobby?

Post by WasabiOsbourne » Sun May 22, 2016 4:38 pm

hi, hoping people can help.

i am thinking of participating in craft fairs...... jewelry making is a hobby for me........ i would like to spend more $$$ on it and make more jewelry.... my interest in craft fairs would really be to share my work with the world, network with others and make back some of the $$$$ (hopefully 100% of the $$$$) i spend on jewelry. i am NOT looking to make $$$$ or to build a sustaintable business........... sort of like how i was a sub-sub-minimum wage winner in poker for many years. something i enjoyed that made me very small amounts of money per year.

my simple question is this: i don't feel like spending all the hours at the craft fair. so would be thinking of hiring neighbour's child (teenager) to help me.. do i have to worry about minimum wage laws? can i tell him/her that i've give them 30% of whatever they sell, based on a schedule?

does the government remotely care about this if it's on a very small scale? maybe 6 days total of shows a year.

thx in advance :) ........

p.s. i am pretty confident this can be successful. although somewhat dependent on craft fairs' rules/politics as to craftiness of product... i sense it could be a problem but on the other hand i have been really underwhelmed by the big very local craft fair i go to every year. seems like people try to sell $2 of raw materials and 5-10 minutes of work for $40. i'm somewhat the same, except i would sell for a firm $10-$15.... edit: didn't say that quite correctly. i would have a small number of high value-added items. and a larger number of low to moderate value added items. i would look to move product much more than the average craft fair vendor i've seen.

mhalley
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Re: starting a very small business - extension of a hobby?

Post by mhalley » Sun May 22, 2016 7:16 pm

You might try selling online at etsy.com. There are many small crafters there.

https://www.etsy.com/search/handmade?re ... ship_to=US
Here is a site with info on minimum wage and commissions, but there may also be state specific laws.
https://www.laboremploymentperspectives ... employees/

stoptothink
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Re: starting a very small business - extension of a hobby?

Post by stoptothink » Sun May 22, 2016 7:27 pm

mhalley wrote:You might try selling online at etsy.com. There are many small crafters there.

https://www.etsy.com/search/handmade?re ... ship_to=US
Here is a site with info on minimum wage and commissions, but there may also be state specific laws.
https://www.laboremploymentperspectives ... employees/
This is what my MIL does. She also sells on consignment in a local jewelery store. FWIW, she literally makes nothing.

joebh
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Re: starting a very small business - extension of a hobby?

Post by joebh » Mon May 23, 2016 5:48 am

As long as you don't care how much money you'll receive, you might as well give it a try. I know a few folks in similar side-businesses, although none that have chosen the initial path you prefer. The ones who did well put in a lot of their own time, at least in the beginning.

You have a lot of negatives already:
- Check your local labor laws before trying to pay anyone less than minimum wage. Also check the craft fair's rules.
- Consider how your "booth" will be set up and taken down. Certainly you'll have to do that part yourself, right?
- You are putting trust in a teenager to handle your business. Choose wisely. Make sure this teen knows how to answer questions about custom items, etc. And don't expect that a teen will care about your business nearly as much as you would.
- I don't know anyone who has ever been successful without spending a lot of their own time. Perhaps you will be the exception.
- What distinguishes your crafts from all the others? If it's just price, you'll have a ton of competition from the others. Low-cost is not usually a way to success at these fairs. Unique higher-quality items usually do far better. Tons of vendors sell cheap stuff.

I do know a few individuals who create the art and wholesale it to craft-fair sellers. They obviously make less than if they sold direct to the consumer, but they make their money up front and don't participate in any fairs. They seem to enjoy the "fun" aspects of their hobby without what they consider to be the "tedious" parts. Perhaps that's something you could consider.

One thing to remember is that an enjoyable hobby could become an unpleasant business.
Last edited by joebh on Mon May 23, 2016 9:32 am, edited 1 time in total.

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alpenglow
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Re: starting a very small business - extension of a hobby?

Post by alpenglow » Mon May 23, 2016 8:29 am

My wife tried this for awhile. She sold online at Etsy and also at craft fairs. She undoubtedly lost money. Craft fairs near us usually have a booth fee starting at $100. That really cut into profits. Setting up and taking down was a drag. Enjoy your hobby as a hobby.

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lthenderson
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Re: starting a very small business - extension of a hobby?

Post by lthenderson » Mon May 23, 2016 8:37 am

I buy stuff usually at craft fairs with a story, i.e. I like to talk to the artist about what goes into their craft before making a purchase. I probably wouldn't buy from a teenager proxy unless it was just something I had to have. As someone who sells crafts that I make as a hobby, i.e. pens, the most fun I have selling them is meeting and talking with the people who buy them and enjoy a good pen as much as I do. If I were in your shoes, I would just set up and sell and when I had enough, pack it up and go home.

quantAndHold
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Re: starting a very small business - extension of a hobby?

Post by quantAndHold » Mon May 23, 2016 9:05 am

My wife did this for awhile, and still does it once a year to get rid of extra stock at one particular show that doesn't charge table rental but has good sales. The biggest risk is that you won't sell enough to pay the stall rental. As far as hiring a kid, the problem is that you will do a much better job of selling your own product than the kid will do. Unless your product is amazing, the kid will probably not earn his/her keep.

My wife was selling at a farmers' market and ended up meeting someone from Whole Foods, and sells there now, so she doesn't need to do the craft fair thing. But getting that set up had its own challenges, and she still hasn't been able to parlay her WF success into any other stores.

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Re: starting a very small business - extension of a hobby?

Post by Jack FFR1846 » Mon May 23, 2016 9:14 am

show up at the craft fair. sell for cash wholesale to the vendors there
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dodecahedron
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Re: starting a very small business - extension of a hobby?

Post by dodecahedron » Mon May 23, 2016 9:28 am

WasabiOsbourne wrote: does the government remotely care about this if it's on a very small scale? maybe 6 days total of shows a year.
The IRS states that "hobby income" (of any amount that rounds up to $1 or more) should be reported on Line 21 of Form 1040 as "Other Income." The amount you would report on line 21 would be your gross receipts less cost of goods sold (COGS). In your case, since presumably you are not paying for any labor to help you produce the jewelry, the COGS would most likely be just the cost of the materials used in producing the jewelry (i.e.,beads, stones, string, etc.), taking into account changes in inventory as specified in this IRS link. If you had any associated expenses other than COGS (e.g.,stall rental costs, tools, travel, etc.) those can only be deducted as itemized miscellaneous deductions on Schedule A (and those miscellaneous deduction expenses are only deductible to the extent they exceed 2% of AGI. Moreover, any expenses in excess of your line 21 gross income can't be deducted at all.)

https://www.irs.gov/uac/newsroom/five-b ... ut-hobbies

You should also check with your state tax authority about how to fulfill your obligation to collect and remit sales taxes.

DSInvestor
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Re: starting a very small business - extension of a hobby?

Post by DSInvestor » Mon May 23, 2016 9:47 am

WasabiOsbourne wrote: does the government remotely care about this if it's on a very small scale? maybe 6 days total of shows a year.
From one of your other threads, you've indicated that you're Canadian. It would be helpful for readers to know whether you're asking about rules in Canada vs US or both. Big differences in requirements. For example, Canadian businesses have to collect and remit GST (good and services tax) and probably PST as well. I was an independent computer consultant in the US and services were not subject to sales tax in my state. USA does not have a federal sales tax. There may be a higher administrative burden on the canadian side to track the amount of GST your business has paid vs how much GST you've collected from clients/customers.
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kithwang
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Re: starting a very small business - extension of a hobby?

Post by kithwang » Mon May 23, 2016 10:21 am

I walked away from a buy once because the vendor couldn't tell me how he did the screen print. I don't think it was his art work.

joebh
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Re: starting a very small business - extension of a hobby?

Post by joebh » Mon May 23, 2016 10:22 am

kithwang wrote:I walked away from a buy once because the vendor couldn't tell me how he did the screen print. I don't think it was his art work.
Just curious - If you liked the item, why did it matter whose art work it was?

hardrain
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Re: starting a very small business - extension of a hobby?

Post by hardrain » Mon May 23, 2016 11:08 am

Some indirect experience with this (although not in this specific product line), and to sort of echo others:

1. For many, many customers the experience of seeing and talking with the producer is 90% of the reason they're shopping. I'd be very suspect that you can proxy that.

2. I've found "success" to be had only through steady and consistent selling, so I would make sure you're 100% of that mindset, or at least advise it if you want this to be a longer term thing. To generalize the time line: you're going to feel like after year one it's totally not worth it, and year two will still feel unproductive but you'll see improvement, and then year three will feel productive. Skipping markets or being somewhat erratic with offerings will pause or even reset that timeline.

But just my 2 cents. I think it's awesome you're interested in doing this with a hobby, and think with the right variables and mindset it's very rewarding.

kithwang
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Re: starting a very small business - extension of a hobby?

Post by kithwang » Mon May 23, 2016 12:06 pm

joebh wrote:
kithwang wrote:I walked away from a buy once because the vendor couldn't tell me how he did the screen print. I don't think it was his art work.
Just curious - If you liked the item, why did it matter whose art work it was?
I create art as a hobby and like to know the process. I buy art because I know the artist, want to support the artist, and see it as an unique item that can't be mass produced. If I want mass produced item then I'll get something at IKEA. The art I buy is at least $500. May not be a lot to some, but is a lot to me.

petiejoe
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Re: starting a very small business - extension of a hobby?

Post by petiejoe » Mon May 23, 2016 12:48 pm

My mother really enjoyed participating in craft fairs when I was young, so I spent a lot of time at various craft fairs and bazaars. One thing she learned after experimenting was that lowering prices did _not_ necessarily increase sales. In fact, she sold significantly more when she raised the prices. She had a hard time adjusting to that reality - some of her best sellers were literally made from scraps of her big projects and took her a few minutes to make, but she sold much more of them in the $20-25 range than when they were in the $5 range. This naturally changes somewhat depending on the specific craft fair and the clientele. Clearly there are limits to this, but those limits are going to be pretty well defined by the other artists you're selling near. If the biggest difference between you and the next artist is that you're willing to make it for cheaper, you might want to stick with giving your product as gifts.

If you really want to sell without putting in the time at the booth, look at consignment shops. People attending craft fairs generally expect to establish a relationship with the artist but that expectation doesn't exist in consignment shops. Consignment shops will eat away at your price advantage, though, because they include a significant markup.

joebh
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Re: starting a very small business - extension of a hobby?

Post by joebh » Mon May 23, 2016 12:48 pm

kithwang wrote:
joebh wrote:
kithwang wrote:I walked away from a buy once because the vendor couldn't tell me how he did the screen print. I don't think it was his art work.
Just curious - If you liked the item, why did it matter whose art work it was?
I create art as a hobby and like to know the process. I buy art because I know the artist, want to support the artist, and see it as an unique item that can't be mass produced. If I want mass produced item then I'll get something at IKEA. The art I buy is at least $500. May not be a lot to some, but is a lot to me.
I understand you purchase expensive art from artists you know because you want to support them. But I guess I'm still confused.

Did you think you knew the artist that this vendor was using for his screen prints? And after learning that he "couldn't tell me how he did the screen print" you realized that you didn't know the artist? Or are you saying he was ripping off the artist you know?

Are you just trying to say "stay away from such marketplaces"? Or are you saying "don't have a teen work your booth, because some/many people will only purchase from the original artist"? Or something else?

Just trying to understand what you were saying...

joebh
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Re: starting a very small business - extension of a hobby?

Post by joebh » Mon May 23, 2016 12:53 pm

petiejoe wrote:People attending craft fairs generally expect to establish a relationship with the artist
I guess I tend to disagree.

People spending $10-15 on an item (as the OP plans), probably don't intend to establish a relationship with the artist.

kithwang
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Re: starting a very small business - extension of a hobby?

Post by kithwang » Mon May 23, 2016 1:05 pm

joebh wrote:
kithwang wrote:
joebh wrote:
kithwang wrote:I walked away from a buy once because the vendor couldn't tell me how he did the screen print. I don't think it was his art work.
Just curious - If you liked the item, why did it matter whose art work it was?
I create art as a hobby and like to know the process. I buy art because I know the artist, want to support the artist, and see it as an unique item that can't be mass produced. If I want mass produced item then I'll get something at IKEA. The art I buy is at least $500. May not be a lot to some, but is a lot to me.
I understand you purchase expensive art from artists you know because you want to support them. But I guess I'm still confused.

Did you think you knew the artist that this vendor was using for his screen prints? And after learning that he "couldn't tell me how he did the screen print" you realized that you didn't know the artist? Or are you saying he was ripping off the artist you know?

Are you just trying to say "stay away from such marketplaces"? Or are you saying "don't have a teen work your booth, because some/many people will only purchase from the original artist"? Or something else?

Just trying to understand what you were saying...
I don't know why the artist create the piece. What is the meaning behind the art. I want to know how was it created. Will it preserve with time or will it fade over time and crack? What is the best way to frame the piece so it will last.

I'm also saying have someone that know your art so that s/he can explain common questions like I posted.

joebh
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Re: starting a very small business - extension of a hobby?

Post by joebh » Mon May 23, 2016 1:14 pm

kithwang wrote:I don't know why the artist create the piece. What is the meaning behind the art. I want to know how was it created. Will it preserve with time or will it fade over time and crack? What is the best way to frame the piece so it will last.

I'm also saying have someone that know your art so that s/he can explain common questions like I posted.
Okay, I think I understand what you are saying. You only want to purchase from the original artists, or at least from someone who knows all the details of the art being sold.

I don't think it applies to someone selling $10-15 items, but I think I understand. Thanks!

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Chicken lady
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Re: starting a very small business - extension of a hobby?

Post by Chicken lady » Mon May 23, 2016 1:25 pm

I have family and many friends who make a living selling their craftwork 100% of the time in fairs, festivals, shops, etc. Read the fine print carefully of the contract for the fair. Quite a few require the maker/artist to be in the booth selling/being present most of the time - no having someone else run your booth while you are totally absent. They also expect you to have made most of the work yourself - helping staff is OK but the idea and most of the work has to be done by the person renting the booth. States expect you to charge and pay sales tax; they get your contact info from the fair sponsors and come after you if you fail to contact the tax board yourself.

Artist selection for fairs that have a reputation and history are juried by an artist. You have to pay to get considered, have to submit decent quality photos of your work, and have to plan in advance. Generally submission for consideration is between 6 and 4 months before the fair.

If you go to a fair, you need to expect to stay the whole time the fair is going on. If you get tired or sold out and leave, you'll likely never be juried in to that show again. If you sell out, make sure you have good quality photos of your work so you can show them to potential customers and take orders.

I agree that people who are purchasing very inexpensive items often don't care about having a relationship with the artist. However, it seems there are two groups of buyers (to me) 1) people who are decorating a space or their bodies with pretty or interesting things, and 2) collectors who pursue the particular artist and make repeat purchases from that person because they like the person's work. Money isn't necessarily the factor that pushes a person into one group or the other.

I'd probably try selling on etsy or a similar site first. It's a lot easier to get set up and doesn't go away once you break your booth down. The set up and take down for a craft fair can be a bit much - tiring, dirty, exasperating. Dealing with the public can also be a bit much too - the things people will say to artists about their work is beyond rude sometimes.

Good luck!

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