Arts & Crafts Arts & Crafts Business & Certification 3 — Questions and Answers
Question 1: What is 'wholesale pricing' for handmade craft products?
- The price charged to retail stores who buy in bulk to resell to end customers (Correct answer)
- The price charged directly to consumers
- The price before materials cost
- The price at craft fairs
Correct answer: The price charged to retail stores who buy in bulk to resell to end customers
Wholesale pricing is the discounted price a maker charges to retailers who purchase items in quantity to resell, typically 50% of the suggested retail price.
Question 2: When labeling handmade fiber products for sale in the US, what federal law requires disclosure of the fabric content (e.g., '100% wool')?
- Textile Fiber Products Identification Act (Correct answer)
- Fair Labeling and Packaging Act
- Consumer Safety Improvement Act
- Federal Trade Commission Act
Correct answer: Textile Fiber Products Identification Act
The Textile Fiber Products Identification Act requires sellers of fiber products in the US to label the fiber content, country of origin, and manufacturer identity.
Question 3: What does 'MSRP' stand for in the context of pricing handmade goods for retail?
- Manufacturer's Suggested Retail Price (Correct answer)
- Maximum Standard Retail Price
- Minimum Sales Retail Price
- Market Standard Rate Price
Correct answer: Manufacturer's Suggested Retail Price
MSRP (Manufacturer's Suggested Retail Price) is the price the maker recommends their wholesale accounts charge end consumers, helping maintain consistent pricing across retailers.
Question 4: What is an 'EIN' and why might a US craft business need one?
- Employer Identification Number — required to open a business bank account, hire employees, or form an LLC (Correct answer)
- Electronic Invoice Number — for digital billing
- Etsy Identification Number — for platform sales
- Export Import Number — for international sales
Correct answer: Employer Identification Number — required to open a business bank account, hire employees, or form an LLC
An EIN (Employer Identification Number) is issued by the IRS and functions as a business's tax ID, required for LLCs, partnerships, hiring employees, and often to open a business bank account.
Question 5: What does 'net 30' mean on a wholesale invoice sent by a craft maker to a retail store?
- Payment is due 30 days after the invoice date (Correct answer)
- A 30% discount applies to the order
- The order ships within 30 days
- Returns are accepted within 30 days
Correct answer: Payment is due 30 days after the invoice date
Net 30 is a payment term meaning the full invoice amount is due within 30 days of the invoice date, commonly used in wholesale craft business transactions.
Question 6: What is the primary benefit of joining a professional craft organization like the American Craft Council or a regional guild?
- Access to juried shows, networking, education, and industry credibility (Correct answer)
- Government grants for craft supplies
- Tax-exempt status for all craft sales
- Free booth space at craft fairs
Correct answer: Access to juried shows, networking, education, and industry credibility
Professional craft organizations provide juried exhibition opportunities, peer networking, educational workshops, advocacy, and the credibility that comes from membership in a respected organization.
Arts & Crafts Arts & Crafts Business & Certification 3
What is 'wholesale pricing' for handmade craft products?