A friend of mine who is really into beading and making jewelry recently opened an Etsy shop where she could sell her stuff.  Beading started out as just a hobby for her, but she doesn’t really wear jewelry, so she decided she needed to be able to do something with the things she makes.

Even your hobbies can be lucrative if you turn them into a business.  For example, say you recycle glass jars and make homemade scented jar candles.  Brick-and-mortar candle stores often have an expensive overhead (i.e., rent, employee wages, etc.), so you will probably find it much more lucrative to sell your candles someplace like Etsy.

The important thing is to make sure you run it like a business.  If the IRS classifies it as a hobby, you cannot deduct business expenses, such as the cost of the materials used to make your jar candles.  However, if you keep close track of your business income and expenses, and can demonstrate that you are trying to make a profit (even if you aren’t yet), you should be classified as a small business, and therefore able to deduct your expenses from your gross income.

My friend would like me to add that if you decide to turn your hobby into a business, Etsy is a great place to sell things.  Since they specialize in handmade things, it’ll be easier to attract your target market on Etsy than on sites like eBay; and the fees are much more reasonable than some other third-party ecommerce sites.

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