We live in a world where we can source practically any item we would like within seconds, just by typing a few words into a device that sits in our pocket. While this can be hugely beneficial, many shoppers, especially those of a younger generation, are leaning away from mass consumerism and towards handmade, second-hand or unique shopping experiences.
According to the Craft Council, almost a third (32%) of today’s buyers of handmade goods are aged under 35 – making this demographic the biggest buyer of craft today. Over 8 million Canadians now buy craft items online – a number that has steadily grown as digital shopping and artisan appreciation expand nationwide. Online handmade goods seller Etsy had over 95 million active buyers worldwide in 2024.
Craft businesses are catering to this demand for homemade and artisan products, but what exactly is a ‘craft business’? Well, it’s a company – typically a one- or two-person operation, but can also scale to become a whole organisation – that sells handmade or artisan goods. Most craft businesses tend to be home-based businesses or side hustles.
One very appealing aspect for many business owners of running a craft business is that they usually have a low barrier to entry – at first, they can often be run from home. They provide creative fulfilment if the owner is the person actually creating the products, control over work hours and then the potential to scale.
For those currently in the early stages of entrepreneurship – like teenagers or students – who have their mind set on strong growth, a craft business can be a really accessible entry point. Ben Francis, founder of behemoth sports brand Gymshark, started his business by printing and selling sportswear t-shirts from his parents’ garage while working for Pizza Hut, for example.
How to start a craft business in Canada
Before starting your craft business, it’s important to decide whether you’ll operate as a sole proprietorship or incorporate as a corporation. Both options have unique legal and financial implications, and knowing which suits your needs will shape your business journey.
Another option is to buy an existing business, which is much more financially viable than you might think. There are lots of different finance options available to help you buy a craft business for sale in Canada.
A sole proprietorship is the simplest and most common business form in Canada. You alone own and run the business, with relatively easy registration processes – often just registering a business name if you operate under a different name than your own. All profits are yours but you are personally responsible for debts and liabilities. For tax purposes, business income is reported on your personal tax return.
In contrast, a corporation is a separate legal entity distinct from its owners. Incorporating requires filing articles of incorporation and registering with provincial or federal authorities. The corporation provides limited liability protection: your personal assets are shielded beyond what you’ve invested in the company. Corporations pay corporate income tax on profits, which can offer tax advantages depending on income and business size, but require more administrative work, including annual filings.
If you are looking to start very small or test your craft business idea, you can operate as a sole proprietor without formal incorporation. However, you’ll still need to keep accurate records and report your income for tax purposes. In Canada, if your business revenue exceeds $30,000 annually, you must register for GST/HST with the Canada Revenue Agency.
You’ll also want to check whether you need any local licenses or permits, depending on where and how you sell your crafts. For example, selling at markets or fairs might require a vendor permit from municipal authorities. Running a business from home could require permission based on local zoning rules, especially if customers come to your property.
Like any business, it is crucial to research the market thoroughly. Understanding consumer trends such as interest in handmade, local products or sustainable crafts will help build a strong business plan tailored to Canadian buyers.
Things to make and sell
Craft businesses can involve as extravagant or artistically crafted products as you wish. Some businesses will focus on selling handmade, time-intensively produced items while others may be more about producing large batches or screen-printed items. What is important is that the more handmade and time-intensive a product is to be created will need to be reflected in the product price point.
Examples of popular product trends in crafts include jewellery, such as clay bead bracelets and lightweight, fashionable and low-material cost items like crochet. Handmade gifts and wood appliques are also currently popular, as is memento jewellery.
When starting off your business, it might be wise to sell products that are quick to produce and in demand. You should also test multiple craft ideas before investing too heavily in the one product group. Researching on digital platforms and websites like Pinterest (a scrapbooking website with avid craft followers), TikTok and Google Trends to spot any emerging craft trends can be very useful.
Selling crafts online
There’s no denying that Etsy is the most dominant platform when it comes to selling craft and handmade items. Its ease of setup, built-in audience and low upfront costs make it a really compelling marketplace for craft business owners, especially as it’s now become a household name among consumers.
In fact, Etsy hosts nearly 89-91 million active buyers annually and boasts a strong global reach – making it second only to e-commerce behemoth Amazon among platforms focused on handmade, vintage and bespoke goods.
Like all rapidly growing platforms, it does have its drawbacks, though. Its meteoric popularity has meant that many sellers have jumped on board, making selling on it a lot more competitive. Some sellers have also mentioned that fees – including transaction, selling and advertising fees – are on the rise.
Online alternatives to Etsy include Shopify, Amazon Handmade and iCraft, while some sellers have found more social media-centric avenues like TikTok shops and Facebook Marketplace fruitful too. TikTok sellers sometimes use the social platform to advertise products on yet drive the audience to their Etsy shop.
Of course, if you wish to leapfrog the setting up of the business stage, you can buy your own online-based craft business. Here’s everything you need to know about buying an online business.
Figuring out how you can successfully sell on Etsy? There are a number of practical considerations, including:
- Strong product photography, snappy product descriptions and competitively priced shipping and packaging options.
- It’s important to build an authentic brand story – customers who buy handmade goods often want to know about the person who is crafting their items.
- Always factor in pricing: materials + time + profit margin is a simple sum to keep in mind.
- Offline selling, such as at craft fairs and farmers’ markets, can prove to be a useful launchpad to spread the word about your business and drive online repeat customers.
Scaling a craft business
When it comes to scaling a craft business, a familiar route for many online sellers is transforming their Etsy shop into a Shopify business. Sellers will often launch on Etsy for its direct access to millions of craft-focused buyers and its simple setup. However, as their business grows on the platform, sellers may struggle with increasing Etsy fees, tough competition and limitations on branding – shop URL and control being a couple of examples.
Many craft sellers have moved to Shopify, which allows for full ownership of their digital store, customisable branding, data ownership and direct relationships with customers.
Other examples of how to scale a business in the craft space include starting locally and then growing into a wholesale supplier. Once you can show that there’s a demand for your product – maybe from your online sales increasing – you could pitch your products to boutiques and look into partnering with subscription box services.
When it comes to realising that there is a strong demand for your craft products, then it’s worth looking into scaling strategies. These can include outsourcing production or hiring additional staff and support. Be mindful, though, that by outsourcing production, you may lose your original customer base, especially if the ‘handmade’ or ‘artisan’ nature of your business is a strong, unique selling point.
Another avenue for growth is to look at expanding the core product range – adding complementary, additional lines of products could make for a more seamless expansion of lines. For example, if you are selling jewellery, then moving into candles and even home decor could feel like a natural progression. From there, moving into clothing accessories and similar items doesn’t feel like a far departure.
With the business doing well, it could be a good time to start using any revenue generated to market the brand. TikTok ads, sponsored Instagram reels and influencer partnerships are all good ways to raise awareness of the products you sell.
One small-scale craft business that scaled up successfully is Studio One Studio – a ceramics studio in North Carolina, USA, founded by artist Lindsay Emery. Emery started things small, creating limited-run porcelain tableware and decor pieces, with all the designs and production managed by herself.
She used Instagram to build a huge following, focusing her content and marketing on both craftsmanship and process, which resulted in her pieces selling out within minutes during online restocks. To keep up with the demand and scale production without losing the studio’s handcrafted ethos, she hired a team, implemented small-batch production and introduced slip casting to increase output while preserving quality.
Emery also formed collaborations with high-end retailers, including a licensing partnership with huge homeware brand Anthropologie. This involved designing pieces manufactured at scale for global distribution that still carried her studio’s distinct style.
The Suite One Studio story is a great one for growing craft businesses to take note of: start with passion; grow with strategy; and use partnerships and technology to scale up without losing the true essence behind the brand.
If your business also hadn’t already been doing so, now it has matured into something scalable, it is a good opportunity to start looking into tracking inventory, scaling shipping and outsourcing customer service. There are plenty of service providers and tools available to small business owners to help with those aspects.
From crafter to entrepreneur: How to turn a hobby into a career
The beauty of the kitchen table, ‘side hustle’, and early-stage craft business is that the majority of the time, the business owner rapidly learns essential skills. Business owners will quickly learn an array of core business lessons like marketing, finance, customer service and entrepreneurship.
Even if your craft business endeavour was only ever envisioned to be a side hustle, it can quickly develop into a sustainable, small business. It can also act as a great trial for what business ownership entails, and if you have developed the passion and business acumen to take the next step, you may wish to buy an existing business that boasts a larger setup than your current operation.
That being said, starting a craft business takes dedication, so many makers choose to buy an existing venture instead of building entirely from scratch. Buying an established craft business offers a wealth of advantages – it can save time, lower risk and you can dive straight into a business with existing customers and systems already in place. If you spot potential in a craft brand, your fresh ideas and energy can transform it, so there’s still plenty of room for creativity when buying a business.
If you’d like to begin quickly, browse available craft businesses for sale before deciding.
Buying a business still requires research, investment and careful planning – make sure you understand the buying process. Also, consider whether you want to improve someone else’s vision or launch your own from scratch. If you require advice at any stage, feel free to contact us.
