How to Start Your Own Fabric Scrap Business

Quilters and other crafters need sources for the scraps of fabric that they turn into art. You can make extra income for yourself by selling scraps if you have a variety of fabric leftovers around your sewing room and access to more scraps. Starting a fabric scrap business provides you with income from inventory you already have, which lessens your start-up costs possibly enabling you to see a profit sooner than someone who has to purchase inventory.

Instructions

1. Decide on a name and the ownership structure for your business. Owners can use a "Doing Business As" (DBA) name to identify their business and provide separation from their business and personal finances. In some states, you must register your DBA with the Secretary of State or the county clerk in the county you have your business.

2. Get a Employer Identification Number for your business. Having an EIN is mandatory if you have a partner in your business or pay an employee. Contact your state's revenue department to acquire a sales tax permit and your local government to register for a business license, if needed.

3. Build a website and register for an account with online auction websites. If you sell your scraps through auction websites, you can use PayPal for your payment services instead of registering for your own merchant account with a credit card processor. Depending on the PayPal service you choose, registering your business with PayPal allows you to accept credit card payments without a monthly processing fee or credit check. You will pay a transaction fee for each sale.

4. Take digital images of your scraps and upload them to your website and online auctions. Include the dimensions of each scrap and type of fabric in the description. Scraps that are large enough to make baby items -- bibs, burp cloths and even blankets -- or other items can sell as single scraps. Sort smaller scraps by like colors or patterns and sell as bundles.

5. Add scraps to your inventory by searching yard sale and consignment shops. Ask neighbors and friends for any discarded material and shop the discount bin at your local fabric store to increase your variety of fabric further. Ask local stores and manufacturers if they have scraps to give away.

6. Advertise your business with friends and family. Place classified ads in newspapers and on online classified websites. Make a business page on a social networking website and ask friends to share it with others. Network with other crafters and let them know you have a fabric scrap business. Place fliers or business cards for your business in local hobby and sewing stores and contact crafting clubs to advertise your business. Rent booths at local flea markets and craft fairs; you can sell your scraps and make contacts with other businesses.

7. Start selling your scraps. Along with your online store, you can rent booths at local flea markets and craft fairs. Not only can you sell your scraps, you can make contacts with other businesses for future customers and inventory. When selling at booths, make display items with some of your scraps so shoppers can see the different uses for scraps.

Tips & Warnings

• Check with the local county clerk to determine the business permit requirements for your locality.

• You can design your own fliers, business cards and logo on your computer and print them yourself to save money.

• Keep track of sales using a computer spreadsheet. Knowing what patterns and colors sell the best can help you determine future inventory choices.

• Offer scraps that do not sell to local woman's centers and churches. You can write the value off on your taxes as a donation.

• Make sure you follow your state regulations for filing your sales taxes. While you are not responsible for collecting sales taxes for online sales from out of state buyers, if you are in a state with a sales tax and you sell your product to someone in your own state, you must collect and pay the tax.

References

• IRS.gov: Taxpayer Identification Numbers
• SBA.gov: Follow These Steps to Starting a Business
• Tax Foundation; Quill Corp, v. North Dakota and the Physical Presence Rule for Sales Tax Collection; Chris Atkins; July 2005
• SBA.gov: Register Your Fictitious or "Doing Business As" DBA Name
• Sewing Business Blog; Holiday Sale & Yard Sale Goes Hand in Hand; Sarah J. Doyle; November 2009
• Sewing Business Blog; How to Organize Your Fabirc Stash; Sarah J. Doyle; February 2009

Resources

• IRS.gov; Apply For an Employer Identification Number (EIN) Online; June 2011
• Sewing Business Blog; Information & Inspiration; S. Denise Hoyle; June 2011