Launching a craft business is a wonderful thing.
Finally, you’ll start getting paid for making the things that you love. There’s nothing better than monetizing a hobby.
But learning how to deal with friends and family members who want you to continue making things for free is a fine art and can actually cause a lot of tension when you’re first starting out as a craft business owner.
So, should you offer discounts to friends and family?
We’ve compiled this short guide to help you make the right decision for your circumstances — while keeping everyone happy along the way.
Let’s get down to it…
The Case for Offering a Friends and Family Discount
For many of us who’ve launched a craft business, our friends and families were our first customers and supporters.
They’ve long loved the products we’ve made, have recommended our work to others and maybe even encouraged us to get our business launched in the first place.
A small discount is essentially a way of rewarding them — or saying thank you — for all the support they’ve offered so far.
It doesn’t have to be a huge discount, just something nominal that will reflect their importance to you while still not detracting too much from your profits or bottom line. Somewhere between 5 to 25% might be appropriate, depending on how much your costs are.
This little discount again should guarantee that they come back as repeat customers as well, and even spur them into recommending your products and store to their friends and family. It’s amazing how far a little kindness like this can spur your business forward just by word of mouth.
Speaking frankly, a friends and family discount is (rightly or wrongly) almost expected in this line of work so to refuse one may appear rude or bullish. But if you can point to clause in your store policies that says you offer 10% off to friends and family, hopefully they won’t attempt to negotiate you down from that point at all and will be able to accept those terms.
The Case Against Offering a Friends and Family Discount
Some people will be much less inclined to offer any discount for friends and family, and that’s OK too.
You’re completely entitled to your own reasons for this — maybe your costs are running high and you really need to focus on profit at the moment, or maybe you feel like there’s no need to reward close ones with a ‘thank you’ discount.
Whatever your reasons, just be sure to stick to your ‘no discounts’ rule — people tend to get annoyed when they see one person being treated one way when they’re being treated another.
If you’re more on the fence about the issue, however, there are other reasons why you shouldn’t offer a discount.
One thing that we’ve noticed is that you’re likely to get most of your orders from friends and family around the holiday season — and often they’ll order in bulk.
This means that you could be spending most of your time on orders that will make you less money instead of orders from real customers who aren’t using a discount. While this might not be a problem when you’re first starting out and still seeking out orders, it could be a real detraction on your time once you’re a well established business.
There is a way around this — you can always rule out discounts during the months of November and December, for instance — but this can be seen as quite cynical and greedy in some quarters. As such, some crafters just choose to withhold discounts the whole year round.
Another reason against offering a friends and family discount is that you may find that every man and his uncle uncovers some deeply buried connection to you when they’re ordering. Friends of friends of friends, as well as fourth cousins twice removed have been known to rear up and demand a discount when they see what’s on offer!
Tips for Managing Discounts in Your Craft Business
Ultimately, it’s completely up to you if you want to offer a friends and family discount.
You’re entitled to your reasons either way and, as long as you stick to it, you shouldn’t have much problem with people quibbling with you.
Personally, we’ve always offered a small 10% discount to friends and family throughout the year, rain or shine, Christmas or slow period.
Whether or not you offer one, always keep in mind the following tips for relationship harmony:
- Keep it consistent: don’t offer one family member a product for costs only and only offer another one 5% off — if you’re offering a discount, pick a number and stick to it. People talk, and it’s easy to look unprofessional and as if you’re playing favorites if you don’t stick to your own policies.
- Document it: whether you’re offering a discount or not, make sure that you include the point as a clause in your store policies. If you’re not offering one, make clear that you do not offer discounts to friends and family. If you are, write down exactly how much discount you give. This way you can point to the policy every time someone asks you about it.
- Be clear about who your friends and family are: don’t give in to friends of friends or people you don’t know masquerading as long lost family members begging for discounts. Be firm, kind and clear on who you include in your friends and family circle.
- Treat them like any other order: it can be tempting in busy times to push discounted orders to the back of the queue but if you want to act like a professional, it’s important that you treat any orders from friends and family as if they were any other order without a discount. If you’re offering a discount, you have to offer it without caveats and conditions.
- Consider offering them a referral discount: if you don’t want to offer a typical X% discount to friends and family, you could instead offer them the incentive of a referral discount instead — this way, you’re getting new customers at the same time as offering a discount! For instance, you could offer them a 10% discount off their next order if they get a new customer to order something from you.
Are you considering launching a craft business?
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What do you think about offering friends and family discounts in your craft business?
For more tips and ideas on making money from crafts, check out our Craft Business section.