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 dive deeper into other essential aspects of selling handmade goods. Without this information, you only get half the story.
If you haven’t read Part 1 yet, I recommend doing so before continuing with Part 2. Why? It will give you a better understanding and help you make informed decisions. Hopefully, by now you’ve created a mini business plan, researched your target audience, and explored the best platforms for your business. Maybe you’ve even come up with a name for your shop!
In Part 2, we’ll cover the following topics:
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Legal Regulations
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The Fine Print
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Return Policy
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Shipping Costs
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Offering Discounts
Let’s get started with selling your knitted or crocheted creations!
1. Legal Regulations
When selling handmade goods, especially online, it’s crucial to understand the rules. In the Netherlands, for example, you don’t have to pay VAT if your annual turnover is under €10,000. However, some platforms may require you to register with a VAT number or Chamber of Commerce (KvK) number before you start selling.
Do you need a VAT number?
On platforms like Etsy, you don’t need a VAT or KvK number as long as your sales stay under €10,000. Etsy itself does charge VAT on your sales. They handle the tax for you, which means you indirectly pay VAT on the items you sell. Why?
Etsy charges fees for using their platform and expects you to pay VAT in your country if you have a VAT number. If you fall under the “small business scheme” and owe no taxes because your sales are under €10,000, you still cannot reclaim VAT for materials you’ve purchased.
If you want to reclaim VAT for materials you’ve bought, like beads for jewelry, you must pay VAT on the items you sell. It’s important to keep this in mind when planning your purchases and pricing.
2. The Fine Print
When running your online shop, it’s essential to have clear and transparent Terms and Conditions. But what exactly should you include in this “fine print”?
Your Terms and Conditions should include important details such as:
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Your business address or home address (if selling from home)
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The full name of your shop (if you use an abbreviated domain)
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VAT or Chamber of Commerce numbers (if applicable)
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Policies for:
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Purchases
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Returns
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Shipping costs
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Warranties
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Sale items (exchange or refund policy)
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Refunds
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Many websites offer templates for Terms and Conditions. There are even tools that generate the text for you so everything is legally compliant. Make sure you understand and agree with the terms—once published, you can’t just change them. Think carefully before setting your rules.
3. Return Policy
Your return policy is an essential part of your customer service. It’s often included in your Terms and Conditions but can also be on a separate page for easy access. Be specific about which items can and cannot be returned. For example, custom-made products may not be eligible for return, while standard items might be.
Also, provide a clear timeframe for returns. Make it clear that items kept for too long (e.g., 3 months) are no longer eligible for return.
4. Shipping Costs
Shipping may seem simple, but it’s not always that straightforward. If you’re only selling small items, like crocheted bracelets, shipping costs can be minimal. But if you sell a wide range of items (bracelets, toys, blankets, etc.), shipping costs will vary greatly depending on the size and weight of the items.
Platforms like Etsy and your own Shopify or WordPress shop allow you to categorize items with different shipping labels. Large items like blankets may require a box, resulting in higher shipping costs, while smaller items can fit in a standard envelope or box at cheaper rates.
Don’t feel obligated to offer free shipping—large retailers like H&M or Zalando can afford it due to high sales volumes. As a small business, you may not have that luxury. Check the rates with your local postal services (FedEx, DHL, UPS) and set your prices accordingly. Incorrect shipping costs can quickly eat into your profit!
For example, I once sold a “mystery jewelry box” for €14 with €4.95 shipping. However, I miscalculated the shipping 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 shop inevitably means friends and family will ask for discounts. It’s important to decide in advance who you want to give a discount to—maybe your sibling, but not the neighbor six doors down.
Don’t feel guilty if you refuse discounts. Explain how much time and effort goes into each handmade item. You could suggest that they buy the materials themselves and only pay you for your time. Often, people don’t realize the cost of high-quality materials. Once they have to buy it themselves, they understand why everything isn’t cheap!
You might also consider offering discounts to repeat customers. For example, after a purchase, you could offer 25% off their next order. Make sure to set a minimum spend (e.g., €50) to avoid losing money. Be careful with general discount offers like €10 off, which can encourage customers to spend just enough to get the discount. Result: no profit!
Selling Your Knitted or Crocheted Creations
That’s it for Part 2. In Part 3, we’ll bring everything together. We’ll dive into product photography, writing effective product descriptions, and a bit of marketing strategy. Customers won’t find your shop on their own—you’ll need to make sure they come to you!
Have a great day!
