Discussion about selling wraps

[deb193redux]

What about state sales tax, and federal income tax? It cuts into profits, and there is a record keeping burden. You need to figure that into pricing. You might sell a few on a cash basis, but anything with checks or PayPal leaves a trail. Once you sell more than a few, you should be careful to do things legit.

You can federal file as hobby-business and use expenses to adjust gross income, but you cannot claim losses. If you go as a regular business, any losses can be used to offset income for whatever source - but you can't have a loss year after year. State revenue not only wants sales tax, but often scrutinizes you for materials bought online, and they want a use tax. (Likely you paid tax on silver wire, but a lot of rock is sold online w/o tax involved.) They want this from everyone, but the people with a state ID# get looked at more closely.

[NDK]

Thanks Daniel. I had thought of that earlier but forgot to ask.

Nate

[dbrealityrocks]

Another thing to consider is the cost of, let's say silver. I bought 1200$ worth of wire @ 20$/oz which was @2.65$ per foot for 18 ga square. @ 35$ that same wire is about 4.75$ and if you're still figuring @ 20$/oz you're losing $.

[sitnwrap]

Nate, you might also want to consider a home party. either have a friend host one for you or host one yourself. I don't sell much but one of the first times I did sell was a home party that a friend hosted for me and I made a bundle. This was five years ago and from that home party I booked another and that one became annual for 4 years.

You can build a clientel out of it and the ladies love socializing while shopping. Plus if you host your own even if it is just once to get your product out there and your name circulated, you don't have to worry so much about tax.

If you do decide to try this, make sure you have items with a wide price range. I learned that earrings are a favorite and they are a super profit maker. If you have a lot of "profit makers" in your inventory that sell well, this can be a factor that you can incorporate when pricing your other items.

I will say that my last two home parties were dissapointing but it was still fun and no real out of pocket expense for setting up.

[NDK]

Good point Dave. I definitely know prices of materials need to be kept up to date.

Lori, I don't know if a home party is something I want to do, but it is a very original and interesting idea. I'm glad it works out well for you. Thanks!

Nate

[FrogAndBearCreations]

Just watch out if you consign to a shop as I have had my stuff stolen by the shop. Heart Of The West in Winthrop Wa. was a place I consigned a bunch of jewelry to and a carving. They went out of business and never bother to contact me to let me know and are gone with all of my items.

I had lots of turquoise and opal wire wrapped items, big turquoise necklace that was pricey, lots of beaded jewelry in their shop.

You have no recourse if the place where your consigned items are goes out of business and leaves town

[NDK]

Thanks Frog and Bear.

After going to my local rock show (which was almost a jewelry show) today, I'm convinced that selling may not be worth the effort. Most pieces were priced lower than I thought they would be, and their wrapping is much better than mine.

I'll probably still try to sell a few at work or maybe sell outright to a shop, but won't put more than that into it.

Thanks for all the help everyone.

Nate

[drocknut]

Nate, don't sell yourself short on your wrapping abilities. We are our own worst critics ya know. We all have different styles and what appeals to one person might not appeal to another. You might find a niche market for your style.

[NDK]

Thanks Diane. I'm not beating myself up, just being realistic. I will probably try to sell a few pieces at work, and if that goes well I could always move beyond it from there.
My main goal was to only make a few dollars on the side to pay for wire or whatever, so I'm not in any hurry to get going on this...

Who knows what the future holds!

Nate

[Larry]

Chiming in a little lare here...

I opened an Etsy shop a couple years back and put my wraps in there. One thing I like about Etsy is you pay $0.20 per item listed. You can put 20 wraps up for $4 and that's it. Maybe you get lucky, maybe not but it's a low cost option and better than just giving up. Also it gives you a place to send people if they want to see what you have or if a relative tells somebody about your wraps and they want to see more. People like shopping at home.

One downside is that selling online opens your competition up to basically the whole world, which makes it hard to stand out. When I first opened my shop, I went all out, with multiple photos and the like that just took all my time. I made out way better locally so now I don't focus online anymore... just enough time to list some things and keep it current. As said before, it's a cheap way to have a 'website' to send people to.

I'm very lucky as I live in a city that is big into its craft festivals. I'm going to try that method this year and see how it goes. I noticed I compete much better locally, especially in the northeast where the market is not flooded, than online.

If you try the festival route, there's one thing I learned last year... I had my first festival booth at a smallish, cheap ($25 booth) show. I only sold like 4 things but more importantly, it allowed me to pinpoint my target market. I noticed the two groups that had the most interest were artists and older people. I used that info (in marketing, paying $25 for that is a steal) and now am targeting the craft shows that are more artsy driven. That might be a way to go if you have a lot of summer festivals near you.

As stated above... taxes. If you sell at shows, collecting tax is almost a must. In NY state, there have been tax agents that hit the bigger shows to find the people that are not charging tax. I know it sounds phoney, but my accountant knows some folks that have had it happen.

Not sure if any of that helps, maybe it was just rambling nonsense Either way, good luck Nate!

-Larry

[NDK]

Thanks Larry, that does help. I figured to really make it work online, I'd need a lot of time to just take care of the site. I'd rather be cabbing or wrapping...

I wouldn't mind doing an art show (there's a lot of craft shows around here too. I could probably pick from more than one each weekend to attend) , but I don't want to make 100 wraps to display. I would think a table with 6 wraps hanging there would look a bit anemic.

And the tax issue... I don't doubt for a second that Uncle Sam trolls craft shows to make sure the taxes are collected. Big brother has nothing better to do, right?!! LOL!

take care,
Nate

[Larry]

The one I did was a small show and I had 50, spread out and displayed different ways. I'm planning to have around 100 for a late summer show. With some creative display ideas, you can make 50 wraps take up a whole 6' table. I actually needed more room. It's not how many wraps you have, it's how many wraps it looks like you have

Again, good luck and feel free to ask if you had any questions at all about what I've said. I'm relatively new and not a pro but am an expert at doing as little as possible and trying to squeeze something out of it LOL

-Larry

[peachfront]

Nate, I never heard of "Uncle Sam" (the federal government" trolling a craft show to look for tax cheats. I guess it might happen, but I never heard of it. Since sales tax is not collected by the federal gov't, it seems like it would be a truly odd thing to do. It's the states, parish/counties, or local gov'ts that find it worthwhile to check for tax cheats.

Your federal tax on your sales is just the usual income tax, same as from selling anything, and it will not be much different than from any other self-employment business. You file a schedule C-EZ -- well, most of us here would qualify for the EZ and it sounds like you would too -- and it's really easy if you have kept track of your income/expenses over the year.

When you sell at booths, craft shows, etc... the different sales taxes do become a hassle. You will need a business license in any area that collects states taxes where you sell as a matter of routine. For instance, to sell at a certain big gem and mineral show in New Orleans, I needed the state AND city tax numbers for reporting taxes even though I only sold there once a year. This is one of the reasons that an honest person can get ground down and quit selling at craft shows. Too many individual gov'ts with their hands out. Once I could sell online and sell most of my items without getting all kinds of extra tax forms to fill out, which I did by now selling everything to people OUTSIDE my home state of Louisiana, it was actually easier. So that's one huge advantage of selling online. It is not your job to figure out how much state sales tax a person owes who lives in a different state. It's their job to keep track of it and put it on their state tax form at the end of the year...so the paperwork burden has been taken away from the seller. I no longer accept checks or money orders, just Paypal, and Paypal makes it really easy because they break everything down, you can see exactly what the person paid, what the fee is, what the net is.

I guess it is obvious from my previous, grumpy post that what happened to FrogandBearCreations also happened to me -- some storekeepers went bankrupt and vanished, along with my consigned items. I won't name the storekeepers in question, since they were truly struggling financially, and even an honest person can become financially overwhelmed...but nor will I again consider any kind of consignment deal. Nor will I consider the scam where supposedly you pay for a space on a shelf in a store! That's even worse than consignment. They have your items, and you're giving them money too! Yikes! Someone tried that about 15 or 16 years ago, and like a dummy I fell for it. After about 6 weeks, when she had filled the store (and her pockets) she vanished...as did the store. Considering how long it was open, I have to figure she paid the landlord with a rubber check. The whole thing had to be a scam from start to finish.

[akansan]

Very late to this discussion, but I looked into selling locally a few years back and had 3 different responses.

The first one had their own standard consignment contract that they wanted me to sign - had no clause in it for theft, security, and asked for 60%. I turned them down.

The second one wanted me to draft my own consignment contract and provide a locked display cabinet, and they promised me up front counter space. BUT - they would have their choice of 20 pendants of my stock, and I would stop in every other day (at a minimum) to be sure the case always had 20 pendants (and if they had less than 20, would meet with the manager for the manager to choose the pendants to bulk out the stock). Honestly, it seemed a great deal of hassle, and the manager that started the agreement with me left the store during the discussions and I chose to not pursue it with the new manager.

The last store purchased 15 of my pendants outright. I gave them a discount for purchasing "in bulk", ordered extra chains for them (NOT at discount ) and checked back in 2 weeks later to see if they needed anything else (only to discover the managers had all decided they wanted my pendants and didn't actually put a single one out for sale)...

After that, I've stuck to selling in person or online.

[Larry]

Just for clarification... the cases I've heard where tax agents hit the shows were NY State tax agents, not the Feds. For craft shows, your state tax agents definately do have a reason to do this as they stand to lose the sales tax revenues.

[NDK]

Thanks for the insight Ronda.

I was using the terms Big Brother and Uncle Sam to mean any part of the government. I, too, hope it didn't look like I meant the feds.

Nate