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What is Inventory? (And Why It Matters) for Handmade Businesses

Inventory is one of the most misunderstood parts of running a handmade business — and it directly affects your expenses, pricing, and taxes. In this post, we’ll break down what inventory actually is, why you can’t deduct materials when you buy them, and which makers truly need to track it. No accounting jargon, no overwhelm — just clear explanations that finally make inventory make sense.
Originally written & published in 2020 – updated in 2026 for clarity.

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an image of a makers desk with a laptop with multiple spreadsheets open

Do You Really Need 15 Spreadsheets in Your Handmade Business?

Running a handmade business isn’t a “one spreadsheet and done” situation — no matter what the gurus say. Most makers are juggling pricing sheets, inventory lists, COGS logs, craft fair trackers, mileage logs, and at least one mystery tab they’re afraid to delete. If it feels like your business needs 15 different spreadsheets… it’s because you’re running a real business with real moving parts. Let’s break down why this happens — and how to make it easier.

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