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Where To Start When Building A Handmade Product Business

So you're ready to figure out how to make some cash making a product and selling it?


I can help with that. 

A little backstory - May of 2017 I quit my job to start a custom furniture company. We specialized in Dining Tables and living room furniture.

After lots of trial and error, and blood, sweat, and tears... today I have a viable business that repeatedly does between $20K-$40K a month in revenue.

What does that mean for me? 

It means that my life is beginning to look much different than before I started the business.

More money (Obviously), but also more time because I've learned how to grow correctly, and more fun (It's fun growing a business!)

So if you've already decided that creating a handmade product is the way that you're going to break free financially, (Click here to take the quiz to find out if you haven't already!) then you need to know what the first steps to take are.

Here are the steps to start from scratch.


1) Pick the product or group of products that you are going to make and sell.

It makes sense that you can't build a business around making products and selling them if you haven't picked out what product you're going to make and sell. 

But this is often harder than it sounds.

Why? Because you're committing to this becoming your business from this day forward. Seems like a pretty big commitment, right? 

So as you start planning out what product you're going to start making, what things should you think about to figure this out? Here's what I did:

  • If you can, begin making a product that you have prior experience with. I had spent my high school years in a wood shop, so I knew I had a basic foundation of knowledge in the field of making things out of wood. Some of us won't have any prior experience making anything by hand, but that's okay! Start on the next one.
  • Make something that you're going to enjoy making. If you're starting from scratch, spend a week trying to make a few different products. (Example: Knitting, sewing, making things out of wood, pottery) Most likely one of these will stand out head and shoulders above the rest in regards to how much you enjoy it. You're going to be spending a lot of time making this stuff, so make sure you like doing it!

2) Think about profit.

Profit is the driving force behind a business, not revenue. What's the difference you ask?

Revenue is the total amount of money you bring in from selling a product. Profit is what is left over after you spend money on expenses (labor, materials, overhead like rent, etc...) If you fall in love with selling a product that you can only sell for $50, but it costs you $50 to produce it, I hate to tell you, but you have a failing business model. You must be able to profit, and honestly it needs to be at least double, if not triple or quadruple your expenses. So for example, If you sell it for $50, at most it needs to cost you $25 to make. 

"Well Zach, how do I know how much it costs me to make a product?"

Here are the basic things to consider:

  1. Material costs

If you're building a dining table, what are the material costs? Wood, screws, wood glue, paint or stain, and then the finishing product that you use (Polyurethane or Lacquer). You must factor in EVERY SINGLE THING, or you are going to lose money. 

2.     Labor costs

"But Zach, If I'm the one building it, then I don't need to worry about labor costs right? After material costs, everything else will be profit!" 

No, no my grasshopper. Here's a rule to always remember: Begin with the end in mind. Do you want to be the person responsible for making your product until the end of time? OR would you rather hire an employee and train them to make your product for you while you focused on growing the business? 

That's really for you to decide. Some people don't want to grow a business and manage people, but for me, I wanted to grow a large company, so it was inevitable. I needed to hire employees, train them, and remove myself from the day-to-day grind of it all so that I could focus on the business.

With all that being said - you need to factor in what it would cost if you were paying an employee to make the product. For example, if you built a hand-painted sign and it took you 2 hours from start to finish to make, this is what your expenses might look like: 

Wooden frame - $8

Canvas - $6

Paint - $4


Total material expenses - $18

+ 2 hours of labor @ $10 an hour ($20)


-----Total expense to make sign = $38-----

If you build this into your model from the beginning, when demand for your product gets overwhelming and you're forced to hire someone to help you, then your pricing model won't get blown to smithereens. 

If you DON'T factor labor into your expenses in the beginning, you may think "Oh wow, it only costs me $18 to make this sign!" So you start selling them for $36-$50. As they start flying off the shelf (because they are priced low), you realize you can't keep up with demand. So you hire on an employee to help.

Then you realize that it's now costing you $38 per sign for each sign that the employee makes because you're paying them $10/hr, and the $36 sale price for the product obviously doesn't make good business sense, so you have to raise your prices. As you raise your prices, the demand for your product falls again back to a level that you can handle on your own without an employee.

So you have to let your employee go, and you're back at square 1.

Save yourself the trouble and factor in labor expenses from the start.

Here is your third and final tip:

3) Determine how you're going to sell your product

Are you going to sell on Etsy? Are you going to create a website and sell using social media advertising? Are you going to sell at a local trade market each month? Are you going to create a wholesale company that sells your products to other stores? 

There are literally 1,000 ways to go here. 

What would I recommend? 

I would recommend selling to the end consumer (retail) through your own website if possible. (I teach you how to do this in The Handcrafted Business Bootcamp) 

BUT, Etsy is a great testing ground to see if there is any demand for your product.

The only problem with Etsy is that when you post your product on Etsy, the first thing people will do is compare your product, your pricing, and your ability to ship it to them quickly with every other Etsy store in the world that sells your product.


If you have a unique product, you can totally own the market for it on Etsy for a long time. 

Whatever you choose to do, you need to understand how important it is to have a sales/marketing channel that works for your business. 

Without the ability to properly market and sell your product, you could have the most awesome product IN THE WORLD, and no one would ever know about it or buy it. 

That would stink. But guess what? It's happened thousands of times throughout history.

Having the best product helps, but typically the company that wins is the company that can market the product better than anyone else in their industry. 


So, what do you think? 


Think you're ready to try your hand at creating a handmade product and selling it? 

If you still feel lost... you can check out my free guide "The 20 most popular handmade items on Etsy" to get some ideas on what type of business you would like to build and what is selling.

Listen, If I can do this, YOU CAN TOO. 

Nobody is going to come to your house and make your dreams come true. You have to take hold of your life and make your own dreams a reality.

You are totally capable of doing this. 

For more advice, tips and tricks, and downright awesome content, be sure to join my facebook group here ------>

We share encouragement and insights each day and would love for you to be a part of our group. It's totally free, just make sure you answer the questions as you join. :) 


Thanks again and let's chat again soon.






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