Crafting, a hobby full of creativity and passion, can sometimes lead to unexpected consequences. When it comes to making a living out of handmade crafts, there are certain legal mistakes that many crafters unknowingly make. This blog post aims to educate you on these legal pitfalls, helping you safeguard your crafting business. Let’s dive into some of the most common legal mistakes crafters make.
Disclaimer: This article should not be considered legal advice.
- Using Popular Characters Without Permission
- Copying Patterns and Selling Without Permission
- Not Registering Your Business
- Overlooking Sales Tax Requirements
- Ignoring Consumer Safety Regulations
- Navigating Legal Aspects in Your Crafting Business to Foster Unhindered Creativity
- Things I Never Considered As A Shop Owner
- My Solution
Using Popular Characters Without Permission
One common mistake is using popular characters from movies, television shows, or books in craft projects without obtaining proper permission first.
CrochetPreneur writes about this issue in their article, 5 Common Ways Crocheters Break the Law. It brings up some good points that made me stop and think about how I wanted to operate my business.
I also saw first-hand how serious companies with licensing rights are. In 2018, Sarah from Repeat Crafter Me got into trouble for a Minion hat design she created and shared for free. Universal Studios, who created the Minions, sent her a cease-and-desist letter. This ultimately prompted her to remove the pattern since they own the rights to these characters. Thankfully, Sarah sorted it out and shared her experience on her blog.
Avoiding legal issues involves a mix of creativity and awareness. Instead of using popular characters in your crafts, which may infringe on copyrights and trademarks, why not design your own unique characters? The joy of crafting is in creating something unique and personal. Creating your characters adds a personalized touch to your crafts.
Alternatively, buying licensing rights for products or characters you fancy can save you from potential legal troubles. A licensed product can tie your craft to certain demographics, making your creation more appealing to a specific audience. According to UpCounsel, licensed products are different from promotional materials, and if targeted to the right audience, they can drive considerable interest and revenue.
Obtaining a product license involves finding the rights holder and negotiating a fee for using the license. Some licenses are exclusive, giving rights only to you, while non-exclusive licenses allow multiple users to use the product or character. Avoid legal mistakes by understanding these processes before incorporating popular characters or designs into your crafts. Be innovative, be original, and be aware to keep your crafting experience free from legal complexities.
Copying Patterns and Selling Without Permission
Another common legal mistake is copying patterns, tutorials, or designs from books, blogs, or websites and selling the finished product without permission from the creator. This is a violation of copyright law, as the original designer owns the rights to that work.
If you want to use someone else’s pattern as a foundation for your own creation, make sure to ask for their permission before selling the finished product. Many designers are open to collaborations, but it is essential to communicate and respect their wishes.
Not Registering Your Business
When starting a crafting business, many people jump straight into selling without considering the legalities behind registering their company. This can lead to problems with taxes, liability, and other legal issues down the line.
First, find out the laws for starting a business in your town, state or province, and country. Different places have their own rules, so it’s important to know and follow them. Here are some helpful websites for learning about these rules to avoid legal mistakes:
Next, get the right licenses for your crafting business. Licenses depend on what you want to sell and where you live. Some places only need you to have a basic business license, while others might have additional requirements.
Finally, register your business with the correct officials. This will make your business more trustworthy and protect it from possible problems in the future.
To sum up, if you want to start a crafting business without any legal issues, you should learn the laws, get the necessary licenses, and register your business. Doing this will help you build a strong base for your business and avoid any trouble.
Overlooking Sales Tax Requirements
Some crafters may not realize that they need to charge sales tax on the products they sell. Unfortunately, the rules about taxes can change based on the state or province in your country. This makes it easy for people who sell crafts to miss this important part of running a business.
Understanding sales taxes might feel tricky, but it’s key to running a successful business, regardless of where you are in the world. Let’s break it down into simpler steps.
First, look into the tax laws where you live. You can find this information on your government’s finance or revenue department website. Remember, rules can change a lot from one place to another.
Next, figure out the correct sales tax rate you should use. This can vary a lot too, depending on where you live. Once you know the rate, use it to calculate how much sales tax to add to the price of your goods or services.
Lastly, make sure you give the tax money you collect to the right government department by the due date. If not, you might need to pay a penalty.
Following tax rules can seem a bit scary, but staying in the know keeps your business on the right path.
Ignoring Consumer Safety Regulations
When creating and selling crafts, it’s essential to adhere to consumer safety regulations, especially if your target audience involves children. Crafters may make the mistake of using materials that are not suitable for young children or creating items that pose choking hazards.
Before selling your crafts, check if your country has a specific organization or agency responsible for product safety. If you are in the United States, familiarize yourself with the Consumer Product Safety Commission (CPSC) requirements and guidelines to ensure your products meet safety standards. Adhering to these standards not only ensures the safety of your customers but also helps prevent potential lawsuits and recalls.
Following these safety rules protects your customers and helps avoid possible legal issues or your products being called back. So make sure to learn the safety guidelines for your country and keep your crafting business on the right track.
Navigating Legal Aspects in Your Crafting Business to Foster Unhindered Creativity
To sum up, it’s crucial to stay informed about the legal aspects of your crafting business. By avoiding common legal mistakes crafters make and following the appropriate guidelines, you can focus on creating beautiful, high-quality products without the worry of potential legal issues. Remember, your creativity should never be hindered by legal pitfalls – so always do your research and explore new and unique ways to express yourself through your craft.
Things I Never Considered As A Shop Owner
When I first opened my shop in 2014, I created hats that sat in a grey area of what I could sell. This was before I knew any better. Since then I’ve taken the time to educate myself further on licensing and copyrighting. It was also the inspiration to design my own characters and the patterns to make their hats.
In the meantime, however, I have some character hats that I feel need to be moved from my inventory.
I wracked my brain and thought, how can I clear out the inventory in a fun way and not waste all my work? But also consider my lesson learned and not create such characters again.
As I considered what to do with the inventory, I had a thought – why not clear them out and offer them as mystery hats so my customers could get the same sense of anticipation?
All you have to do is choose the size of the hat that you want and then patiently – or not! Wait until it arrives for the big reveal.
This post was originally published in The Ruthless Crafter and was featured in Guelph Local on December 24, 2019.