Giving Away Knitted Items for the Cost of Materials

Good evening, everyone. I absolutely love knitting accessories like hats, booties, and so on for babies and toddlers. Since my own children are already grown and I’m still a long way from having grandchildren, and I’d love to bring joy to others with my knitting, I’m wondering what the best way to go about this is?
Giving these items away online would mean I’d be covering all the costs myself. Can I take on small knitting orders here online—in exchange for payment for the yarn and shipping—and then give the finished items away? I don’t want to make any money from making them. It’s my hobby, and I’ve enjoyed it for years. Do any of you have experience with this? What’s the best way to go about it?
I’d appreciate any answers.

Hmmm, I imagine that would be a bit tricky. Most of these initiatives involve full donations—including the materials.
But if payment is involved, it’s hard to separate the two, at least from a legal standpoint. I think the only option would be to list items on eBay Classifieds, Etsy, and similar sites, and specify in the description that you’re only covering the cost of materials.
Or you could offer the service itself—knitting something for people (using their choice of yarn??)—but that would essentially amount to running a shop of sorts.
Swap groups would be another alternative; while no money is involved, they have their own “currency” that you could use to trade for more yarn.

@0711mariechen,
welcome to our community.
It’s nice of you to want to exchange knitted items for the cost of materials plus postage and give your working time for free, but I think if you want to do this more often / regularly, you may need to register a business. After all, these are not items made for friends, but for people on the internet whom you don’t necessarily know. To be on the safe side, it might be a good idea to talk to a tax advisor about this. The tax advisor can tell you how to handle this sensibly. 
I wish you every success, and please let us know what you decide and how things go for you.

Hi!
From a tax law perspective, any form of compensation constitutes payment. It doesn’t matter whether you receive a bar of chocolate as a thank-you, the cost of materials, or even just a cent.
You can have someone buy the yarn, knit something from it, and then “return” the finished piece to the person who bought the yarn. However, you’re still not allowed to receive anything in return—not even the leftover yarn.

It sounds silly, and it’s hard for most people to understand, but that’s the (German) legal situation.

Best regards

Hi Mariechen,

Josefa has already brought up the topic of commercial activity.
The problem is that there’s no clear definition of when such sales are still considered “private” and when they become “commercial.”

You also have to differentiate. Trade law is not the same as tax law, and tax law is not the same as private law.
It’s all very extensive and not easy to deal with just like that.

If you really want to give them away, do what I do and donate your items to a good cause. When my children and grandchildren outgrew teddy bears and the like, I started sewing for the Kindertafel—I’ve been doing that for 10 years now. I buy fabric with my savings, or sometimes I get fabric donations, which I then use to sew children’s clothes and toys. My reward is imagining the children’s eyes lighting up when I hand the items over—that alone is enough for me and makes me feel content and happy. There’s plenty of hardship here in Germany, too—people who aren’t as well off as we are or as I am—and we can help them.

Love, Inge

I also think the tax office doesn’t care whether you give it away. They won’t believe you and will assign a price that’s subject to tax.

It’s the same with apartments. I’m not allowed to be nice and rent my apartment cheaply to low-income tenants and think everything’s fine. I still have to report the difference from the reduced rent and pay income tax on it—lost revenue for the government.

  I think this will only be credible if you knit for a group or organization—as Inge mentioned above, for example, a food bank or for the homeless, etc. You receive materials from this organization and return the finished items to them.

Have a great weekend! 

Petra, I’m afraid I have to disagree with you—I don’t get any materials from the organization; I have to get them myself. I do receive fabric donations from friends, but never from the Kindertafel—they don’t have any money for that. For the things I sew, I ALWAYS have to get my own materials.

Best regards, Inge

Thanks, Inge, for the information. I’m not in touch with the food bank, but I’m part of three groups on Facebook. There, you can basically “order” fabric and yarn donations (always donations from others) in exchange for covering shipping costs and then use them in your projects.

You also repurpose a lot of your own clothes—I always love your ideas, and I think it’s great how you’ve been committed to this for so many years now. 

Dear Mariechen,
as has already been noted several times, any sale constitutes a business—ZwergnaseBär is definitely the right expert on that.

I see a different problem, namely selling items far below their value. This has the effect of completely eroding market prices; after all, there are a lot of people who make a living from selling or earn a little extra income that way. It would be much better to charge a fair, market-based price. You could then donate the surplus—or part of it—if you’d like. I think people should definitely pay a fair price for handmade items; that’s also a form of appreciation. And many can actually afford it.

One more thing: There are a lot of rules for selling: material labeling, washing instructions, etc. Very important: When selling toys (if, for example, you knit, sew, or crochet animals), you must comply with German or European CE standards for toys. It’s time-consuming, but doable. I have no idea how this works with donations to public institutions, but I assume the CE standards apply there as well.

Warm regards,
Steffi

In addition to Steffi’s detailed and sound arguments:
The CE standard also applies to toy donations. When “putting a product into circulation,” it must be ensured that CE compliance is met and documented, etc. After all, this isn’t about the seller, donor, or giver—it’s about the absolute safety of children.

Best regards, Nina 

 Man, everything is always so complicated in Germany.
I thought the idea of a swap group was the best. Mowi19 has experience with that—maybe she’ll read this. She’s always swapping great stuff. 

Anja, it’s great that you brought this up. I’m a huge fan of bartering and have years of experience with it. That’s where most of my yarn comes from, as well as some supplies that I’d otherwise have to pay a lot of money for. There’s also a lot of handmade items offered there. Since I always have people interested in my work, I haven’t needed to do that so far. But I’ve also toyed with the idea—I’ll probably give it a try eventually.

If anyone would like more information, feel free to send me a private message.

Best, Monika