According to the '7x' rule, makers should aim to sell seven times what they pay for a booth fee at a craft fair. While this can be intimidating and even stressful — especially for those who are just starting out — it's important to note that turning a profit is just one of several financial aspects to keep in mind. From increasing your sales (and curating the right prices) to properly navigating taxes, here are just three important financial tips for vendors who plan to sell at a craft fair.
Smart ways to boost your sales
When it comes to boosting your sales as a vendor, there are a few smart ways to do so, financially speaking. One Entrepreneur post highlights a couple of smart ways for doing just that, noting that many vendors will offer a range of price points to cater to potential customers. Broadening your potential for sales can also be achieved by catering to those who shop by card. "Credit cards are the common currency of shows and fairs, and if you don't accept them, you're going to lose sales to vendors who do," states the article, which goes on to point out: "You also face the risks of dealing with bounced checks from strangers who may be hard to track down after the show," especially when it comes to higher priced items.
Curating the right price
When pricing your handmade items in preparation for a craft fair, it's necessary to consider all of the factors that go into the final price — especially if your intentions are to make a profit at the end of the day or if you're looking to make a living from your business. Made Urban points out that handmade items should be priced in order to cover the costs associated with making your products as well as running your business (including your hourly wage). "Then, you should add profits to your prices, and then add a markup to allow for wholesale pricing, customer discounts, or to help cover incidentals." Keeping a detailed record of your finances (from expenses to prices and profits, etc.) can not only provide a reference to look back on later, but can help greatly in working out a proper pricing formula.
Properly navigating taxes
Regarding sales taxes and vendors at craft fairs, a post from Nevue Fine Art Marketing post points out that in most cases, anyone selling goods or services at a craft fair must have a valid business license. That said, as a small business owner, it's noted that you are responsible for collecting and remitting taxes on your sales, thus highlighting the importance of doing your homework regarding the rules/regulations for your area. "To sell items at craft fairs, you must be charging tax at craft fairs." To do this, the post notes that you'll need to find the tax rate for the jurisdiction where the craft fair is taking place, calculate the tax owed on each sale, collect the sales tax from the customer, and remit the taxes collected to your state's tax agency.
Keeping track of your finances is also necessary when it comes to the annual tax season. While some may wonder how much they'll be paying in taxes over a lifetime, it's important to note that this number will vary for everyone based on factors such as how much you make as well as your location. Generally speaking, while Americans will pay an average of $525,037 each in taxes throughout the course of their lives (according to the financial company Self Financial), the average Canadian will pay $873,345 in taxes throughout their lifetime. Again, this figure can vary widely from person to person, especially when considering specific factors for craft vendors — a vendor who attends one craft fair a year will likely have a different financial situation than someone who vends at fairs throughout the year or who makes a full-time income from their sales. To make tax season less stressful, enlisting the help of a professional can ensure that you're properly prepared, whether you're a hobbyist or running your own business.
Becoming a vendor at a craft fair can be an exciting way to earn money doing what you love, though it's important to realize that the financial side of things span far beyond paying a simple booth fee. From boosting your sales to properly navigating tax matters, being prepared in a variety of ways will ensure that you flourish as a vendor.
