Genna Tatu, founder of CrochetByGenna, knew she wanted to be an entrepreneur, but it wasn’t until she found crochet that everything clicked into place.
“I think having the passion for it definitely helped keep the hobby alive versus my other failed businesses, where I wasn’t passionate,” Genna says. Now she attributes the success of her crochet business to those past business failures.
With just a hook and some yarn, there’s a world of business opportunities. If you’ve ever considered commodifying your talents, consult this step-by-step guide on how to start a successful crochet business.
Types of crochet businesses
There are many different types of crochet businesses you can start. Here are a few ideas:
Handmade crochet items
If you enjoy crocheting sundresses, throw blankets, and doilies from start to finish, this might be the right business model for you. It is labor-intensive, so make sure you choose something you love to make.
For Genna, this was amigurumi (Japanese crocheted stuffed animals). “I know other people are getting into amigurumi because it’s hot right now, but I personally just did it because I love making stuffed animals,” Genna says.
Since this kind of business requires crocheting items by hand, you must balance growth with sustainability. While she was excited about her business, Genna realized she could only do so much and had to set a cap on how many orders she could receive.
Even then, she still sometimes felt burnt out. “I was like, ‘How is my business going to grow? How am I able to expand it and sustain long-term growth?’” she says. “That’s where crochet patterns came in.”
Crochet patterns
Once you create a digital pattern, you can sell it many times over through a Shopify store. You can sell patterns alone, or sell a combination of handmade items and patterns, like Genna does.
“[Patterns] are passive income, which is key in a market like crochet where it is so manually intensive for you,” Genna says.
Crochet supplies
You can also choose to sell a curated selection of yarn, hooks, crafting scissors, stitch markers, tape measures, pattern books, and other crochet supplies. Brooklyn General Store sells crochet supplies and patterns alongside knitting and sewing materials, both online and at its brick-and-mortar location.
If you’d like to eliminate upfront inventory costs and shipping logistics, you might consider a dropshipping business model. Shopify makes it easy to find dropshipping suppliers.
Crochet kits
Craft kits are another popular type of product you could sell. Create crochet boxes that include all the tools buyers need to complete a project, such as a pattern, the right amount of yarn, and hooks.
You can sell one-off kits or get inspiration from the brand Hooks & Needles, which features a monthly subscription box with three to six patterns and the amount of yarn needed to complete them.
Crochet classes
To share your expertise with beginner crocheters, all you have to do is set up a Shopify store and use a booking app so customers can schedule one-on-one or group classes with you.
One passive income idea is to sell educational materials like ebooks and prerecorded classes on demand.
Crochet: Hobby vs. business
Crocheting might begin as a hobby, but it can evolve into a business. That’s how it happened for Genna. When she received a crochet kit for Christmas, she became hooked.
“I was crocheting all the time,” she says. “And then I was like, ‘You know what? I should sell these, because I can’t keep all of them. I started my business by accident.”
When she realized she wanted to continue making animal plushies, her perspective changed. To be taken seriously, she knew she’d have to invest in ads and offer discounts. While that didn’t make her very profitable (at first), it did build her shop’s reputation, sales, and reviews.
Read more: Turning a Hobby Into a Business in 9 Easy Steps
How to start a crochet business
- Choose your niche and business model
- Conduct market and audience research
- Design your product line
- Decide where to sell your products
- Price your products
- Write a business plan
- Develop your brand identity
- Create a marketing plan
- Form your business
- Set up your online store
Follow these 10 steps to get your crochet business started.
1. Choose your niche and business model
When launching a crochet business, there are a few things to consider:
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Skills and interests. Lean into the kind of crochet items you like to make. Crocheting is a time-consuming process. Therefore, it’s wise to pick a niche you enjoy so you want to keep at it.
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Drops vs. made to order vs. patterns. Since crochet is labor-intensive, it’s important you know whether you want to do drops (selling a certain amount on specific dates), made-to-order (making orders as they come in), or patterns (creating digital patterns that others can print out and make on their own). Some shops do a combination.
2. Conduct market and audience research
Market research is the process of gathering and analyzing information about your potential customers and competitors. Your findings will shape your business positioning, marketing strategy, product pricing, and the types of products you sell.
You can conduct market research by reading trade journals and industry reports, consulting ecommerce blogs, and exploring existing crochet businesses. It helps to use data from online marketplaces to evaluate competitor performance.
For example, an individual Etsy shop displays total sales, average customer rating, and customer reviews—all useful competitor data to learn from as you build your own business.
Genna also recommends getting involved in the crochet community—Ravelry is a good place to start—and tapping into pop culture to help you decide what to sell. “Follow current events, new books coming out, popular series, and see what animals or characters are within those books that you can try to capitalize on,” Genna says.
For example, Genna created a Wednesday Addams doll pattern inspired by the TV show Wednesday.
Market research also involves identifying specific target audiences within your target market and researching their needs, decision drivers, and buying behavior.
If you make intricate lace dresses and shawls, your research might tell you the primary consumers of your products are women between the ages of 35 and 60 in middle- and upper-income brackets. You can then conduct interviews or hold a focus group to learn more about this group’s specific needs and buying patterns.
3. Design your product line
The next step is creating your initial line of crochet items. Use your audience and market research to design or source products to meet customer needs.
You can also look for gaps in competitor offerings. For example, if you join crochet message boards or social media groups, or attend crochet meetups, you might determine crochet dresses are popular and there’s an unmet need for inexpensive options. You might then use this information to create a line of affordable, quick-to-create dresses that can work as beach cover-ups or to layer over slips for more formal occasions.
If you’re selling at a craft market, Genna recommends picking something that’s quick and easy to make.
“Maybe it’s no-sew, very easy to make in bulk, and something that would sell at a low price point,” she says. “At markets, people like buying the cheaper items.”
If you’re selling online, take into account how you plan to sell. For example, if you’re selling handmade items, your product line will depend on if you are a made-to-order shop or have items readily available.
“When I first started out, I was just doing plushies. I was a made-to-order shop,” Genna says. “Now, I’ve kind of gone to the other side of selling plushies through drops. I sell whatever I have made over the course of about two months. I’ll list it on the website for sale and people can buy it, and I’ll ship it out immediately.”
4. Decide where to sell your products
The next step is to decide where you’ll offer your products. You can sell through your online store on an ecommerce platform like Shopify, use an online marketplace like Amazon Handmade or Etsy, sell at local craft fairs or markets, or approach local craft stores about carrying your crocheted products.
To make your choice, research the demographics of each platform to see if they align with your audience, compare the fees associated with selling at different venues or websites, and consider the level of control you want.
Genna started on Etsy.
“Etsy is a platform that’s very easy for you to dive into. It’s pretty low risk,” she says.
Platforms like Etsy and Amazon Handmade are easy to set up, but they don’t provide customer data, which can help you plan marketing campaigns. They also don’t allow for customization in branding and shop design. Eventually, Genna wanted more control over her business.
“I opened my Shopify store a year after having my business on Etsy,” she says. “With Shopify, you can customize everything. You can make it exactly how you want it. It comes off more professional when you have a standalone website.”
Genna still sells on Etsy to appeal to the widest possible audience. With Shopify, you can use Shopify Marketplace Connect to integrate your Shopify and Etsy shops.
5. Price your products
Planning your finances is an important step in starting a profitable business. Genna has set up two different pricing structures for her business.
When it comes to pricing her patterns, Genna mainly looks at competitor pricing. “I just really like to look at the market,” she says. “I like to go on Etsy and search up similar patterns. I go see what the competition is doing and then place myself within the average. A very expensive pattern, while you earn more money per pattern, is not going to capture as many buyers.”
When it comes to pricing her plushies, there are more considerations. “I do try to break even,” she says. “I take into account the cost of materials and how long it took me. Some people like to add in another factor, like, ‘I want to get paid this much an hour.’”
That approach involves estimating your expenses before you can set prices for your products. Follow these steps:
Calculate your cost of goods sold (COGS)
COGS expenses are those directly associated with making your product. They might include fees for materials, equipment, packaging, marketplace charges or vendor permits at in-person markets, or any number of other recurring costs.
Let’s say yarn and packaging adds up to $10 per order. Price in your labor and assign yourself a fair wage, say $20 an hour. If a product takes five hours to complete, your labor cost is $100 and the total cost to your business is $110 per item.
Shipping items to customers is not usually considered part of COGS, but you do need to factor in this expense, either in your price per item, or as an operating expense you average out across orders. You can also pass this expense directly to customers.
Factor in your overhead and startup costs
Overhead might include costs like website hosting and rent on a shared studio space, while startup costs might include purchasing crochet tools.
If you anticipate 10 sales a month and your monthly overhead is $200, your overhead costs will average $20 per product, bringing the total cost to your business to $130 per item when taking into account the $110 for your cost of goods sold. You might add another $5 per sale as part of your plan to pay down your startup costs, arriving at a total cost of $135 per item.
Apply your markup
Markups represent your profit and typically run between 20% and 100% of the item cost. You can use a profit margin calculator to determine yours.
If you’re unsure about how much to mark up your products, aim to keep your products aligned with competitor prices. However, try not to lower your price to a markup below 20% because you risk taking a loss on your orders if production costs—like your time—are higher than you expected.
6. Write a business plan
Your crochet business plan provides a road map for how to run your business. It includes the following elements:
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Company description. Outline your business model, big-picture vision, goals, structure, mission statement, and value proposition.
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Market research. Provide insights into the strength, opportunities, size, and competition of your chosen market.
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Products and services. Describe your offerings, including how you’ll price your crochet wares, supplies, or services.
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Financial plan. A financial plan includes possible funding sources, projected revenue, and expected operating expenses.
7. Develop your brand identity
You can think of your brand identity as your company’s unique personality. It includes your business name, logo, typography, color palette, and voice and tone.
A strong brand identity will represent your work and influence how you communicate with your target audiences. For example, if you sell crocheted baby clothes and other baby items, you might select bright colors and a playful tone of voice, while if you make cottagecore doilies and table runners, you might opt for a more vintage aesthetic.
Toni Lipsey, founder of TL Yarn Crafts, wants her brand to be accessible to beginners. She accomplishes this by speaking to her audience casually and honestly, just as a friend would.
For example, one of the thumbnails on her YouTube channel reads, “How to read crochet patterns for real this time!” The thumbnail taps into the confusion and frustration crocheters feel when learning to read patterns and promises to explain it in a way that is easy to understand.
For CrochetbyGenna’s branding, Genna fosters a cozy, creative, and positive space. “I’m passionate about spreading the magic of crochet and turning joyful ideas into the cutest crochet plushies and patterns,” she says.
Genna says her brand identity took shape naturally because she wanted to create positive content that welcomes everyone. To create a brand identity, Genna suggests that business owners “do some self-reflection and ask themselves what the main mission of their business is, what values guide their work, who their audience is, and what they want to provide to their customers.”
8. Create a marketing plan
A marketing plan outlines how you will get your products in front of your target audiences. It includes your marketing goals, primary selling points, and key marketing channels.
If you plan to sell products online, consider digital marketing strategies like search engine optimization (SEO), email marketing, and ads. Make sure the time and money you invest in marketing is accounted for in your business plan, budget, and pricing.
Here are a few marketing ideas to try:
Run ads
When Genna began her business, her priority was to make sales and build a reputation, even if she wasn’t making a lot of profit, so she started by running ads.
“I did invest in ads from the start,” she says. “I always tell people, ‘Invest in marketing upfront.’ This is the way you’ll get your initial sales. That’s how you build your shop’s reputation. You build credibility and then people will come back to you.”
Offer discounts
Offering discounts is another way to get people to buy your products. “In the beginning, it is not about profits; it’s about making those sales,” Genna says. “I ran a lot of sales on my shop, like 25% off, 30% off. Slowly, over time, I was able to increase the prices, take away the incentives, and then really just go from there.”
Post on social media
Social media can help you grow your brand. Genna started on Instagram, posting consistently to build an audience.
You can share new products, updates on crochet events you’ll attend, and other types of content. Process videos are popular on Instagram, TikTok, and YouTube because people often find it interesting and even soothing to see how things get made.
You might use a social media channel or blog to distribute free resources, a strategy known as content marketing. For example, you could post a free pattern to your company’s Facebook page or publish regular blog posts on topics like how to style various crochet pieces.
Over time, content like this helps potential customers become more familiar with your brand and interested in what you offer.
Use videos to connect with your audience
Genna wanted to connect with her audience in a more personal way, so she started a YouTube channel.
“YouTube opens up a whole new world, a whole new audience,” Genna says. “On Instagram, people saw my products, but I found it’s very important to connect with you as the business owner, the person behind the business. YouTube is a really important and great platform if you want to further connect with your audience and build a community.”
Putting yourself out there can be intimidating, but Genna encourages just going for it. Start small and slowly include yourself more in your social media.
“I definitely am a shy person,” she says. “Eventually, it will get easier. The first time I shot a YouTube video, I was like, ‘How do people do this? This is so weird.’ Over time, you just get more and more natural, but you won’t be able to get to that point if you don’t try.”
9. Form your business
The next step is to form your business, which involves selecting a business entity structure (like an LLC or sole proprietorship) and opening a business bank account. In some cases, you might also need to obtain a business license.
Consult your state’s website—typically, either a Department of State or Department of Revenue and Taxation page—to determine any legal requirements for establishing and running your business.
If you structure your businesses as a sole proprietorship, you might not need a business license or to register with the state, but you’ll still need to register your business name using a doing business as (DBA) to open a business bank account and accept payments made out to your business.
10. Set up your online store
While starting up on a marketplace like Etsy might help you get your items to market quickly, a strong website will help you establish your brand, boost your online presence, and strengthen your credibility.
Here are a few things to keep in mind while setting up your store:
Consider the user experience
Ecommerce user experience (UX) entails creating a seamless, enjoyable shopping experience in an online store.
Ecommerce UX includes:
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Load time. Does your website load quickly across devices?
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Website navigation. Are your menus easy to navigate? Do they take the user into consideration?
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Accessibility. Does your store meet the latest website accessibility standards?
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Journey mapping. Does clicking a link or button take the user to the right place?
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Responsive design. Does your website function properly on all devices, including mobile and tablet?
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Copywriting. Do your words effectively convey information and represent your brand?
Make sure the ecommerce platform you choose allows you to create a seamless user experience without intensive effort, which can be costly in the form of time or development fees. Shopify’s comprehensive website builder does all of this and more.
Take high-quality photos
Whether you sell patterns, supplies, or wares, product photography can help you make sales. Crisp images that show off your products from different angles can give your audience a better understanding of your offerings and the confidence to make their first purchase.
You don’t need a fancy camera or expensive photo editing software—you can DIY your product photos using your smartphone and then use Shopify Sidekick to transform the product image background.
Make your product pages useful
As a crochet business, your product pages can help customers better understand your offerings, especially those who don’t crochet or who are new to the craft. For example, if you sell handmade items, you can include information about pricing to help a new customer understand the cost.
“Vendors get a lot of backlash, like, ‘Why is this turtle $50?’” Genna says. “Well, it took a lot of time and effort. It can’t be mass-produced. I handmade it. I’m just one person. Crocheters understand that, but from an outside perspective, they’re like, ‘Oh, isn’t it $20 at Walmart or something?’”
If you sell yarns and hooks, you might explain what types of projects those materials work best for. If you sell patterns, you can also follow Darn Good Yarn’s footsteps and include a yardage calculator, yarn suggestions for different patterns, and customer reviews.
Reviews are especially helpful to learn the difficulty of a project or how well made it is. You can download an app (like Judge.me) through the Shopify App Store to start collecting reviews.
How to start a crochet business FAQ
Do you need an LLC for a crochet business?
You don’t need to form a limited liability company, or LLC, to sell crochet products. Many small craft business owners form sole proprietorships, although you’ll still need to register a DBA to open a business bank account. A legal adviser or tax professional can help you understand the pros and cons of forming an LLC versus operating as a sole proprietorship.
Can I start a crochet business from home or do I need a separate workspace?
You don’t need a separate workspace to start a crochet business. Many crochet and craft business owners operate out of their homes.
Should I focus on selling online, in-person at markets, or both?
Many crochet business owners sell products online and in person. Selling online can allow you to reach a larger customer base and minimize the inventory you need to hold by allowing made-to-order projects. Selling in person can help you form personal connections with customers and grow local brand awareness.
Is a crochet business profitable?
A crochet business can be profitable. Many skilled crochet enthusiasts have turned their crochet businesses into their full-time jobs. Standing out in the field, making a connection with your audience, and creating a solid marketing plan can help you create a profitable crochet business.
Do you need a license to start a crochet business?
Business license requirements vary by state, county, and city. Before selling your crochet items online or in-person, check local regulations.
What type of crochet sells the most?
Patterns, small items (like scrunchies and coasters), and amigurumi are among the bestselling crochet items.
