In the first stages of planning your handmade business, you will probably wonder, do you need inventory to start a handmade business? And if so, how much stock do you need? That’s not a one size fits all kind of question. How much inventory depends on what type of craft business you are starting. Every business needs a finished product to show when they are beginning, and if you are going to do a festival or craft fair, then you need to have inventory to display in your booth. So let us dive in and see how much inventory you will need for your business.
What Is Inventory
Inventory is the good that your craft business has for sale. It is a finished product, the items you have to create the product, and items that are in the middle of being made.
Finished Products
Your finished product inventory is the products you have completed, listed, and are ready to be sold. Nothing more needs to be done—just package and ship. You will set out finished products at a craft fair for people to purchase. Done, finished, nothing else to be done.
Work In Process
This is a product that still needs to be completed. Maybe you create custom-made items, and the product is completed to the point of customization. This can include a name, initial, date, unique engraving, or marking on an almost finished product. If you are selling these types of products at a craft fair, you will have the customer pick out the product, tell you the customization, and complete the product, ideally onsite. The example that stands out in my head when talking about work-in-progress items is the ornaments that you buy and have a name and date put on them while you wait. It can be more complex than that, but that example stands out to me.
This can also be materials you are in the process of making items with. You can include these materials in your inventory if you have several steps to your procedure.
Product Supplies
Product supplies are the materials that you purchase to make your finished product. You intend to use the raw material to create your product. So, this doesn’t include my stash of fabric I just had to have because it was cute, but don’t tell my husband that.
Why Is Inventory Important
Inventory will be one of your most significant expenses, so it is essential to have a basic inventory stock. If a customer places an order, you want to be able to deliver as soon as possible. Having inventory on hand is essential to meet the demands of your customer.
How Much Inventory Do You Need For A Craft Fair?
A question that is often asked by crafters who are just starting on the craft show scene is, “How much inventory should I bring to a show?”. Since empty booth space will dramatically hinder your sales, the obvious answer is to bring more than you intend to sell.
But how do you calculate how much you will sell? Of course, it is impossible to answer this question with 100% accuracy, but there are a few guidelines to follow to ensure you have enough inventory for an event.
First, if the event you will be attending is not brand new, talk to other craftspeople who have participated at the show in previous years. Try to get an idea of how many customers typically attend the show. The show promoters can also help you out with this question.
Also, ask them some of the following questions:
- Were the customers a serious-buying crowd in the past?
- What types of products seem to sell the best at the show?
- How many people typically attend the event?
- What types of advertising do they use to promote the event?
- What is the average sale?
- How many crafters are repeat vendors?
If you expect a large number of buying customers at the show, you should plan to create more products for the event well in advance. This advice, though, depends on whether or not you’ve attended the event before, along with your experience at craft fairs.
After considering the experiences of other craftspeople and yourself, assess the things you already know about your product line. What are your best sellers?
If this will be your first time selling crafts, ask yourself what items your family and friends like best. Do you have any seasonal or holiday items that correspond to the season the show is held? You should always bring an excess of these items to a show.
While there are no easy answers to inventory, a good rule of thumb is to bring as much as you can to an event.
However, if your crafts are small and lightweight, this is much easier to accomplish than carrying large, harder-to-transport items.
So if your products are very large, concentrate on bringing as many of your most popular products as possible. Twice the amount of inventory you expect to sell is considered a safe number.
Remember, a booth that is scarce of products will also be scarce of customers! You can always bring home what you do not sell, but craft shows have a very impulse-buying atmosphere, so you should always be prepared to have enough inventory to not sell out of anything.
Speaking of inventory, it’s crucial to have an organizational system to quickly tell what you have at any given time. This is especially true if you have themed merchandise. If you run out of nursing plaques and have only two left, you want to know this immediately when you have an RN and her friend waiting for theirs.
The best way to organize your merchandise and all the other things you need to bring is to sort them into similarly sized, easily carried bins. You can get great containers with lids at discount stores and hardware stores.
Organize your inventory into bins by section or type so that you can quickly put up a selection and then take it down and store it.
Have separate bins for administrative materials (sales forms, staplers, tape, handouts) and utility items (extension cords, table risers, table covers, display pieces).
Label these bins with peel-off mailing labels. Make those labels very specific so there’s no doubt about what’s inside.
Once you finish, sit back, reflect, and take notes of what worked, what didn’t, and what you will do differently next time.
Remember to have fun and enjoy the experience.
Want to know if you are ready to turn your craft hobby into a craft business? I’ve created a free checklist of the 5 Things to Have Before Starting A Craft Business so you can turn your hobby into a craft business. I created this checklist because I often see DIY Crafter and Handmade Crafters struggling with knowing how to get started as a business. If you can relate to this, my 5 Things To Have Before Starting A Craft Business is explicitly designed to help you know exactly what it takes to start a handmade business and get to do what you love, crafting. So if you’d like to take advantage of this free download.
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