Improve Profit Margins to Make More Money

You need to improve your profit margins if you want to make more money from your crochet items.

While that may be easier said than done, there are several ways to go about improving your profit margins. Below are just a few things you can try. (I have also created a printable cheat sheet that you can keep handy to remind yourself of these processes. That will be at the bottom of this post.)

Since it is already difficult to price crochet items that don’t send potential customers running for the hills, you will need to consider ways to lower your costs.

This is not a long read, but if you prefer video…here you go… (Please subscribe while you’re there. Click the little red button at the bottom of the video. Thank you!) Don’t forget to scroll to the bottom for the cheat sheet!

Lower Labor Hours

I’m big on using simple crochet patterns in order to lower your labor hours. A fast and easy crochet pattern, that is still cool and stylish, allows you to work faster and be able to work up multiples of popular items. Most of the free patterns offered here at CrazyCoolCrochet.com are designed with this tactic as the end goal.

A perfect example of this is my Pumpkin Spice Poncho. This is an adult variation of a child size poncho that I once and made and sold 50 of in one holiday season (photo above). I made different children’s sizes and used different (basic, inexpensive) yarns to offer variety. But the pattern was the same. That same pattern is now offered here at CrazyCoolCrochet.com and on my YouTube channel where it has gotten over 70,000 views as of this writing, and is sold at my Etsy shop (the pattern). This one simple pattern has given me A LOT of mileage!

Use Less Costly Materials

While it may be tempting to use gorgeous, luxurious yarns to lure a customer, it will eat away at your profits!

If your goal is to make a profit from your crochet items, then you must embrace a business owner mentality. Keep emotion (‘ooh ahh such pretty yarn’) out of the equation.

Obviously you want to create nice products that a customer will gush over and gladly pay for. But, you need to “keep it real” and keep profit margin front and center.

Fortunately, there are now many inexpensive yarns on the market that are soft and offered in trending colors. Each season we are offered up current colors, so that is one way to keep costs down while creating really nice garments or home decor.

The Pumpkin Spice Poncho above is yet another perfect example of my suggestions. While scouting for trending colors and styles at the mall, I saw a lot of mustard gold tops. It was summer but I knew that color would be perfect for fall too. I was thrilled when I hit the yarn shops and saw that they had the exact right trending shade in an inexpensive Lion Brand Wool Ease. (This post contains affiliate links, which means I will make a commission at no extra cost to you should you click through and make a purchase.)

Customers went ga ga for that color!

Lower Cost of Shipping

While there is only much you can do here, there are a few things to consider.

If you are shipping completed items (or kits) yourself, you want to keep costs to a minimum by choosing inexpensive shipping materials and shipping methods.

While it’s fun to think of using adorable boxes branded with your business name and wrapped with ribbons and tissue paper and branded tags…it’s unrealistic to go all out with crochet products that are probably already priced low.

If this is a new business for you, you want to be realistic. You will make very little, or no profit if you go all out right from the start. Using less expensive plastic bags or Fed Ex, USPS or UPS packaging might be a better alternative.

And of course you’ll want to comparison shop between shipping companies.

Lower Waste

Ah, that one might be something you hadn’t considered or given much thought to.

So how exactly do you lower waste? What waste?

Well let’s start with yarn. We all have left over yarn from myriad projects. Don’t throw those away! I can’t imagine any crocheter actually throwing away yarn…but if you do…STOP!

There are so many crochet projects you can create with all the left overs. Sweaters, blankets, afghans, scarves, etc., etc., etc…You absolutely can mix and combine different yarn types and colors to create something truly unique. The crochet color block pillow below was made from left over yarn. The back is a different shade of white but it works!

While you won’t be able to create multiples of that custom item, you can still sell it. It’s better than throwing out the precious yarn which is the same as throwing money out the window.

And of course the same principle goes for any other materials you might use. Did you have to buy a package of 4 buttons but only needed 3? Figure out what other project might be able to use just the one button (hats, mittens, tops). Don’t just throw the button into a button-catch-all bin where it will never see the light of day again!

Tell us your ideas for lowering waste in the comments below.

Price Well

Oh boy. This one is really tricky. The most popular pricing strategy is to simply multiply the cost of yarn times three.

But if you are using inexpensive yarn (and using coupons and taking advantage of sales) this might not be the best idea.

You also need to consider your labor hours and overhead (utilities, taxes, rent, etc). If you are treating your crochet sales as a business and not just a hobby where you sell to friends and family and offer a friends and family discount…you need to incorporate your cost of doing business into the price.

After taking all that into consideration, add on a markup for profit. Again, this is a business and profit is the name of the game!

How much should you “mark up”? That is where you don’t want to sell yourself short. Your skills are worth money over and above the price of yarn and shipping and so on. But it is also where reality hits the fan. As you may have already experienced, customers will ooh and aahh until they hear the price of a correctly priced crochet item.

This is why I don’t advocate setting up a crochet business that consists solely of selling individual items.

Earn Higher Profits from Crochet!

All of the information on this post is addressing those of you that sell individual, completed crochet items. I personally don’t believe that this is the best way to earn money with crochet. As a matter of fact, I think this is the most difficult, least cost effective and least profit generating way to earn money from crochet.

I am a big believer that the best way to earn GOOD money from crochet is to create a business that allows for multiple streams of income from crochet.

And the best way to achieve multiple streams of crochet income is to start with a crochet blog. A crochet blog allows you to incorporate many different tactics and strategies that generate actual INCOME.

Most crocheters cannot create enough products at a high enough profit margin to create true income. Sure, they might make a couple hundred dollars from an occasional craft fair or maybe $50 a week from a few hats. But it is the very rare crocheter who can make enough money to pay the bills.

I have always avoided selling the onsie twosie items for this very reason. But, when I learned that CROCHET BLOGGERS are making anywhere from $2,000 – $10,000 a month (and more!) I knew I wanted in on that!

A crochet blog is the mother ship from which all other crochet income streams are born. This is the perfect way to incorporate your love of all things crochet into an income generating business where you don’t have to crochet your fingers to the bone, day and night, to make a meager few bucks. Check it out…I have written extensively about this here:

Start a Blog

Crochet Blog Income Report

Want to remember this? Click this link to save to your favorite Pinterest crochet board!

As mentioned at the start, I have created a printable cheat sheet with the 5 steps detailed in the post. This colorful PDF is accessible in the Resource Library that is password protected for my select readers (YOU!). Get the password by entering your name and email below. The password will be found in the Welcome email you will receive upon signing up. Enjoy!