The global handicrafts market size stood at US$ 752.2 Billion in 2022. Looking ahead, the market is expected to reach US$ 1,296.6 Billion by 2028 as per a forecast by Imarcgroup. Given the enormous potential and the growing popularity of this market segment, it is not surprising to see entrepreneurs across the world eager to start their own versions of the handmade & customized products marketplace.
In this article, we will discuss everything aspiring entrepreneurs need to know about launching this business along with market insights. Customers’ penchant for collecting antique handcrafted pieces and showcasing them at their houses has significantly escalated the popularity of these items.
Rise of eCommerce Platforms For Handicraft Items
Propelled by the rapid rise in internet users coupled with smartphone penetration, the online purchase of handcrafted products has become easier for customers, eventually assisting the growth of eCommerce businesses for handcrafted products. The online market of handmade items is broadly categorized on the basis of:
- Woodware
- Hand Printed Textiles & Scarves
- Zari Goods
- Sculptures
- Attars & Agarbattis
- Artmetal Ware
- Embroidered & Crocheted Goods
- Imitation Jewelry
- Pottery & Glassware
- Others
Woodware category is one of the most prevalent in handicrafts across the globe.
Popular Online Marketplaces for Handcrafted Goods
Below listed are some of the popular players to be followed if you’re looking to step into this industry.
Etsy
Etsy is an American eCommerce marketplace that specializes in selling a wide range of handmade or vintage items such as jewelry, clothing, toys, art, bags, home decor & furniture, as well as craft supplies & tools.
- Founded in: 2015
- Revenue (2022): $2.476B
- Active Users (2021): 96.3 million
- Active Sellers (2021): 7.5 million
- Net Income (2021): $493 million
Read to know, how to create a website like etsy
Folksy
Headquartered in the United Kingdom, Folksy is an online platform that allows users to buy and sell handmade gifts and crafts.
- Founded in: 2015
- Revenue (2022): $10M – 25M
Spoonflower
Spoonflower is an online community offering custom fabric, wallpaper, gift wrap, and decal printing. It offers custom fabric printing with no minimum order as well as a marketplace of thousands of unique fabric designs by independent designers from around the world.
- Founded in: 2008
- Global Net Sale: $59 million
- Total Funding Raised: $25 million
Storenvy
This is an eCommerce platform that offers a variety of products including apparel, jewelry, art, accessories, and home decor.
- Founded in: 2010
- Active Sellers: 90000
- Revenue: $50 million
- Total Funding Raised: $6.5 million
Potential Revenue Streams of a Handmade & Customized Products Marketplace
Now let’s discuss how the marketplace of handmade & customized products can earn revenue.
Transaction Fees
Charging translation fee from the sellers for every successful sale through the platform.
Subscription Fees
Offering subscription packages to the sellers that include multiple additional tools to boost sales such as advanced shop customization or access to discounts.
Listing Fees
Charging listing fees from the vendors for listing each item on the platform.
Order Fees
Charging for processing/disbursing payments to the sellers can also be a profitable revenue model. The fee may vary depending on the seller’s bank account location.
Advertising Fees
Offering promotional services to the sellers to increase their visibility and sales.
Currency Conversion Fees
As the online marketplace can be global, sellers can also be charged a currency conversion fee if the transaction completed is in a different currency.
How to Start a Handmade & Customized Goods Marketplace
Now let’s see what all goes into starting a handmade & customized goods marketplace.
Defining Niche & Audience
The most essential component of any business is to identify the needs of people. The demand for goods characterizes whether the business will be a successful venture or not. In addition, if the niche you are planning to enter is overcrowded, you need to think about what unique things you can offer to the customers to stand out from the fierce competition.
Solving the Chicken-Egg Problem
The problem is that there will be no buyers without sellers and vice versa. So, in order to start a handmade & customized products marketplace, you need to attract both buyers and sellers simultaneously. Certainly, this is a huge challenge for businesses that need to be addressed.
Choosing Revenue Streams
We already discussed the possible revenue generation methods above. You can select any monetization strategy such as subscription, transaction, advertising, or any other that suits your business model.
Identifying the Basic Features
A handmade & customized products marketplace should have the following features:
- Original & unique web design
- Pages and goods convenient administration
- Catalog of products
- Email or SMS notification
- Feedback form
- Multiple payment methods
- Shopping cart
- Multilingual website
- Search filters
- Review & rating
Choosing a Development Approach
The two approaches of building an online handmade products marketplace is either by using a ready-made software or developing the platform from scratch. The selection varies upon
- Platform idea and its features
- Budget
- Timeframe
You can make the choice by considering these factors. If you have enough time and budget, you can go for custom development. However, if you want your business to be launched as soon as possible on a minimum budget, we recommend going for a ready-made software.
A readymade multi-vendor eCommerce software comes with all the features incorporated required for an eCommerce marketplace to run smoothly. You also do not need to wait for the platform to be developed, tested, and launched. It can be installed instantly after purchase.
As the market is flooded with these ready-made eCommerce software, choosing one for your business becomes overwhelming. One of the ready-made solutions available is Yo!Kart, which is packed with all the robust and powerful features essential for an eCommerce business. This is a fully customizable multi-vendor eCommerce software with complete ownership of source code giving you the freedom to customize your marketplace the way you want.
Concluding Thoughts
Hopefully, this article has shown you that learning how to start a handmade products business is not always as complicated as it seems. Once you have built an idea for your business, and you know there is a market out there willing to buy your products, you are already halfway there.
Choose the right eCommerce platform to build your marketplace, and you will be running a successful customized products business in no time.