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Ali Thompson tackles the question of whether you can make good money selling handmade products online. She explains that profitability depends on factors like product, price point, and profitability, and uses real examples to demonstrate how sellers can be successful.
Ali also emphasizes the importance of being honest and doing the math to determine whether your business is profitable.
Finally, she discusses the benefits of selling handmade products online versus at local vendor events, including the ability to sell products 24/7 and the ability to reach a larger audience. Tune in for expert insights on making a successful living selling handmade products online.
[00:02:11] Selling online saves time, is less labor-intensive, and expands the market for products. It allows for marketing to a larger audience without having to attend physical shows.
[00:03:16] Online sales have great potential for reaching large audiences and allowing creators to focus more on product development, but limitations like shipping must be considered.
[00:07:18] It's hard to make good money selling some handmade products.
[00:10:37] Choosing products that are in high demand and highly profitable is crucial for online success
[00:14:14] Reevaluating pricing and sustainability is necessary.
[00:16:35] Good income is achievable but beware of the ceiling.
[00:21:08] Take trial, watch pricing masterclass, use calculator to see if handmade sales are profitable, join Handmade Sellers Club for resources and community at $27/month or $7 for trial.
[00:23:00] Facebook helps increase prices and turned business profitable
Entire transcript:
Ali Thompson [00:00:00]:
Welcome to this Week's Live where I jump on here and I answer your handmade business questions. I am so excited to be here with you guys this week. I love these lives. I love having conversations with you about all the ins and outs of selling things online. I love it, love it, love it. So I get questions many times people will share questions with me on a form that I send out from time to time and I come onto this live and I answer those questions. So the question that I've been actually, I've been sitting on for a while and I'm excited to talk about it today is can you make real money selling handmade products online? Now, that wasn't exactly her question. Her question was can you make real money, good money selling crochet items online? So I'm going to expand it out a little bit more and go beyond just crochet items, although I will talk about that a little bit and we're going to expand it out to handmade products.
Ali Thompson [00:01:05]:
Can you actually make good money selling handmade products online? And the answer is, it depends. So let's talk about some of the factors that come into whether or not you have a product that is highly profitable and something that you can make good money on versus not. Now, I want to get kind of embedded in that question was like, can you make good sales real money online? So let's kind of tackle the online part of it because I think that's a little bit easier for us to talk about when it comes to online selling your products online. It is not like selling at a local vendor event where you only have X amount of people who are going to walk by your table. You have to set up for the weekend. You have to take down all of that. You have the availability to sell your products 24/7 without you sitting there and talking to each customer individually. So when we talk about can you make good money online, the potential to make good money is definitely there.
Ali Thompson [00:02:11]:
It is less labor intensive as far as taking that time to pack up, go unload, set up, sit for a day or two or three, and then unload and bring it home. Or take it down, bring it home, unload, and start the whole process over the next weekend. So the selling online definitely is a lot less labor intensive. Therefore you can do a lot more of it without that labor getting in the way. While there may be only so many shows you can physically do, your website can be shown to literally millions of people at a time and it takes no additional labor for you. So that in that way, selling online actually expands your ability to sell your products both in that you can multiply yourself with your website and your marketing and your social media. So you do one thing, it goes out to thousands or even millions at a time versus having to have those one on one conversations at shows. But the other reason is we've just expanded your market, right? Your market is so much bigger than your local area or even metropolitan areas.
Ali Thompson [00:03:16]:
You may go to a large metropolitan area and do a show there, but that's just that one area. When you're online, you can literally be in front of thousands, hundreds of thousands, if not millions of people at a time. So the ability for you to make a lot of money with your handmade products online is there when we talk about the online part, right. It allows us to multiply ourselves in a way that we wouldn't normally be able to. It gives us more time to spend on our product versus creating product than setting up and taking down at vendor shows. So in that aspect, yes, the Internet definitely opens up more opportunity. Now, there are some limitations that the internet creates and again, her question was specifically, can I make good money selling crochet items online? But there are some products that people are making that are really difficult to ship. So when we talk about selling online, is online a good place to sell this product? Can I make good money selling this item online? The one other thing we got to look at is, is this a shippable, a reasonably shippable product? I know people that sell like large coffee tables.
Ali Thompson [00:04:33]:
There are people that make pool dining room sets. We have a product that we sell that is a fairly large product that costs a lot to ship. And if we had to build our entire business around selling this larger product that costs a lot to ship, it would be a lot more difficult for us to make good money selling online simply because it raises our cost so much. So I kind of want to get that out of the way. So moving forward, I want to assume that you have a product that is shippable, that is reasonable cost to ship, and we can always talk more about that in the future. So you have a product that's reasonably shippable and we have this expanded market online. So we've covered the online part. So let's talk about the other part.
Ali Thompson [00:05:20]:
Can I make good money selling my handmade products? See, that's a question kind of in and of itself. It really doesn't matter if it's online or in person, can I make good money selling my handmade products? And so let's dive into that. If you are selling a product that is in high demand and is highly profitable and does not take a lot of time for when I say profitable, I want to make sure that we're including that your hourly rate to create the product is included. Meaning that for the amount of profit that you're making, it's more than covering your hourly rate to actually produce the product. If you have a high demand product that is highly profitable, including our time and photographs. Well, you can make a killing online. All right, so I have a client that made $12,000 over Christmas selling soaps and cuticle things and all of the little sugar scrubs and stuff. That's decent money.
Ali Thompson [00:06:38]:
Now, of course, that is gross, not net. I don't know a lot of people's net numbers because they don't necessarily share all of their numbers with me. For us, we were about 50%. We would make about 50% net. So if we made $10,000 in sales, we would gross 10,000, we would net about five, and we could actually bump that up to 60%. But we invested a lot in our business, education and all of that good stuff. So is $12,000 a month good money for you if you netted 6000? That's a little bit subjective. Some people say, man, that's nothing.
Ali Thompson [00:07:18]:
That's not nearly enough for me to live. And other people say, wow, that would be absolutely life changing. But let's assume, like, $6,000 is good money in this analogy or in this example. So can I make good money? Can I make $6,000, let's say, net? Selling my handmade products online, it's really going to depend on your product, your price point, your profitability. And it really depends on you being extremely honest and doing the research in the product that you're wanting to sell. So I'm going to give you some examples of products that I have seen that are difficult. Well, I'll give you one good example of a product I've seen that is time intensive, low profit, low demand, and that would be crocheting blankets, large afghan blankets. The cost of the yarn to make it, the time it takes to create it, the lack of demand there is for such a blanket.
Ali Thompson [00:08:26]:
And it's not that there's no demand, it's just that there's lack of demand. At that price. I can go to Goodwill and find crochet blankets people made and gave out as gifts, and then those people re gifted it, and it's at Goodwill for $5. Afghans aren't necessarily at the height of the demand for people right now. So if you're crocheting a huge afghan and you're not able to get 100 and $5160 out of it, and that's at minimum, that to me, $150 for the afghan is just probably breaking even. You've got to go well above that to be profitable. Then that would be difficult for you to make good money selling crochet products or handmade products in general online. The demand isn't high enough for the blankets.
Ali Thompson [00:09:18]:
The profit margin is very tight and the cost of materials is very high. And the math in general is working against you. So you don't want to choose a product where the math is automatically working against you. We want to start off with the math in our favor. So now kind of juxtaposition that too. I have several clients who are doing the chunky yarn knitted blankets with the kind of that I don't know if it's Chanel or Chanel yarn, it's the big chunky yarn. And they're doing the hand knitting of these large blankets. Now, those blankets can go from anywhere from 100 and $5200 to $150 for these large blankets.
Ali Thompson [00:10:07]:
In fact, I think one of my clients had one for 300. And so they're much faster to put together. You have to use far less materials because the material itself is fairly large and the profit margins are pretty nice on those. I had an in depth conversation with one of these creators and they're like, oh yeah, it only takes me X amount of time. It only cost me X amount of dollars. And they're in high demand. People love these blankets. They're very soft.
Ali Thompson [00:10:37]:
They're in fashion right now. And so if you've got one seller making blankets that is hand crocheted with small bits of yarn that's going to take two weeks to finish, and skeins and skins and skeins and skeins of yarn with low demand, then it's going to be more difficult for that person to be profitable, if at all. But then on the other hand, we have somebody who's using the larger chunkier yarn. They're able to use less materials, save money on materials. They're able to make it much, much quicker. They can make several in a day. And it's in high enough demand that they are able to charge the prices that they need to charge in order to be profitable. So for anybody looking at selling online and actually making it their business, you've got to do these numbers.
Ali Thompson [00:11:30]:
If you don't know your numbers, if you don't know if you are actually profitable or not, then really it doesn't matter how popular you get and how much of your product you sell. In fact, if you're not profitable and you get really popular and you sell a lot of it, you're actually digging a hole. If you're not profitable, the more you sell, the further in the hole you go. And you never quite get ahead. So for my family, we were able to create a handmade business back in 2001. It really saw its heyday probably between 2010 and 2017, 2018. Somewhere in that range is when we did our best. At that time, we had discovered Amazon helped us a lot, and we also found Facebook, which helped us a lot.
Ali Thompson [00:12:18]:
And we were able to update our website in a new way. So between 2010 and 2017, we made decent money. Like, was it good money? No. But for the area of the country that we lived in, for our lifestyle, it was nice money. At our height, we were making about $100,000 a year gross. We would profit at about $50,000 a year. And again, we live in a very low cost of living area. At the time, we lived a fairly simple lifestyle.
Ali Thompson [00:12:57]:
Like, we didn't have car payments. We bought used cars outright all of that good stuff. And not only were we able to live, but we were able to save. We were able to start putting money aside. We were able to start taking our family on vacations, but we never would have been able to do that if we hadn't paid attention to our profitability in the products that we had, number one. And number two, made sure that there was a demand for that product. Now, when we first started out, there was very little demand for our product. It was still a new product, and it was very difficult to market it.
Ali Thompson [00:13:29]:
There was no facebook, but over time, social media came around, and that helped out a lot. But we were vastly underpriced, vastly underpriced at the beginning. Now, we had a couple of things going for us in that our material costs were very, very low, so that helped. Many of our toys were very quick and easy to create, so that helped. Other toys took more time to create, but we weren't charging enough for those larger toys for us to actually be profitable. And so the time it was taking us to do that, we were taking time away from these smaller toys. And while they were technically profitable, because it didn't take a lot of time, there was hardly any costs there. We sold a decent amount of them.
Ali Thompson [00:14:14]:
We were selling a lot more of these bigger toys that we had not priced appropriately. They took a long time to make. So the more of them we sold, the more it took us away from the more profitable part of our business and put us in that hole. And this is where I'm saying, like, you actually start to create a deficit because you're taking time away doing less profitable things instead of the more profitable things. So we really had to have an honest look at our business and how we were pricing and whether or not we could actually sustain that. I remember the moment where I told my husband, I said, why are we working so hard? And we are never getting ahead. We are always behind the eight ball. And yes, we were making money, but we just weren't making enough.
Ali Thompson [00:15:01]:
And so we were constantly running after other little side hustles and things that we could do to try to make up for the deficit. Now, again, mind you, we had no other job. We were 100% dependent on that handmade product income. And had we had let's say my husband had or let's say I had a job because my husband did most of the building. Let's say I had a job and he did the building and we just did a little bit of marketing on the side. Yeah, it would have been really nice side income, but we didn't have that job to buffer. So we were making $5,000 a month, roughly income. Whether or not that's a good living or not depends on the people.
Ali Thompson [00:15:47]:
But before that, we were only making two or three, and we were never getting ahead. And there's always some sort of emergency or thing that happened or rent increase or whatever it was that seemed to put us behind again. And once we took that honest look and realized we have to increase our prices and we have to increase our marketing, then we were able to make up for that deficit. And then all of a sudden, I was like, whoa, we can go on vacation. We hadn't gone on vacation, like, from when the kids were born. 2001 was when our oldest was born until 2014. We did some things when we lived in Florida. I wouldn't call it a vacation, but we would take road trips, right? Like a day trip somewhere, or just spend the night somewhere and come back.
Ali Thompson [00:16:35]:
But somewhere around 2014, I think it was 2014, 2015, we took a month long vacation to California, and we stayed on the coast for an entire month because the money that we were bringing in was finally enough to cover all of our costs and then a little bit of extra, and that's what we needed. And so then for us, that was good money, because we were able to meet all of our demands, all the demands of living, and have that bit of extra. So define what is good money for you. Do the math. Do the math. Find out whether or not you are profitable enough. How much product can you make per day? And if you sold all of it, would you be making would you be netting what you need to net in order to survive? That's the other thing you need to look at. We hit a ceiling at 100,000, and we couldn't really get past that ceiling.
Ali Thompson [00:17:29]:
That ceiling was just about the top of where we could go. If we wanted to go any higher, we had to hire somebody, and that was not in our plans. This is very much a lifestyle business for us. We're not trying to build an international corporation. And to me, hiring somebody was like that first step. And we've had people work for us on and off, just doing little things here and there. The kids have always worked for us, but officially hiring somebody to come in to help us make beyond 100,000 was not in our plans. So we had to be honest about how much product could we actually produce every single month? And we were practically killing ourselves to make ten grand in a month.
Ali Thompson [00:18:17]:
That's gross again. So ten grand gross was really difficult. And we'd hit it. We hit it many times, but it was really difficult, and we couldn't go much beyond that. So you got to look at your time limitations, how much product that you can actually make. Again, you got to make sure that it's profitable, know what good money is for you, and the linchpin that holds all of this together is even if you have a great product that's highly profitable, that is in high demand, you can make 100 of them a day, and you can charge $40 for each one. So you have huge upside to it. If you don't have the marketing in place, then all of this falls apart.
Ali Thompson [00:19:02]:
It doesn't matter that there's tons of potential online. It doesn't matter that you have a fantastic product with a high markup that you can sell a ton of. None of that matters if you don't have the marketing in place. The marketing is what connects those two things. It takes your product to those customers. And that's what I teach in handmade sellers club, is I teach and show you the marketing, how to get your profitable product to the marketplace so that they want to buy it. And I do that through my super seller system, which is my complete system on how to use Facebook to find the right buyers for your product and start making sales sometimes within 15 minutes. Even if you do not have a single follower on your Facebook page.
Ali Thompson [00:19:52]:
You're brand new. You just started a page. You don't have any followers. I can show you how to make sales in as little as 15 minutes using my super seller system. It's highly effective. It's a program I'm really proud of. And right now, you can access my entire super seller system plus my pricing master class, which is a game changer. I've had more than one handmade seller tell me that changed my life.
Ali Thompson [00:20:23]:
Charging appropriately for the labor and for the time and for the demand of that product absolutely changed my life. We have a full calculator in there showing you what you're actually getting paid now, so you know if you're in a deficit or not and what you need to charge to get paid, what you want. We also have in there the prompts and profits calendar that tells you what to post to your Facebook page every single day. We have an amazing community. We do monthly workshops. You get all of these things in the handmade sellers club for only $27 a month. And on top of that, you can take a two week trial for just $7. So you can take a two week trial that gives you access to everything I just talked about.
Ali Thompson [00:21:08]:
Even if you take the two week trial, go in there and watch the pricing master class, it's going to change your life. It will change your life in the trajectory of your business. And it's going to tell you flat out whether or not you can make what you consider good money selling your handmade products online, whether it's crochet, whether it's jewelry, whether it's sublimation products, whatever it is that you're creating, you need to use this calculator to figure out whether or not you are currently profitable. You get all of that again in my handmade sellers club. We created this amazing community in the club, amazing resource of everything you need to know as a handmade seller to be successful with your online sales. You get everything there. It's only $27 a month, but you can take two week trial for $7. If you have questions at all or want a link, I'm going to drop the link for Handmade Sellers Club.
Ali Thompson [00:22:06]:
I always forget to do that. I'm going to drop the link for Handmade Sellers Club in the comments section right now. So you can just click that link, go check it out, take the two week trial, give it a try. Be sure to if you have any questions about Handmade Sellers Club, you can either send us an email or you can comment right here on Facebook. And we're more than happy to help you out with that. We want to see you profitable. I want to see you profitable. Why? Because I struggled with it for so long.
Ali Thompson [00:22:34]:
I don't want that for you. It sucks. It sucks when you're working, working and you're never quite getting to where you need to go, and it can make you start to feel very helpless and hopeless about your business. And we actually quit at one point in time. We actually shut the business down. I'm like, that's it, I'm tired of this. We're done. And we shut it down for nearly a year.
Ali Thompson [00:23:00]:
And then I'm like, all right, let's try it again. And thankfully we did, because that's when we found Facebook. That's when we figured out we needed to increase our prices and we were able to make changes that actually turned us into a business that was making pretty good money online. All right, guys, thank you so much. It was so great talking to you today. I'll be back here next week with another live answering another one of your questions. So I'll see you then. Bye.