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What is a Cottage Industry?

Canning food for resale in one's home is considered a cottage industry.
Using technology to work from home is a type of cottage industry.
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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 26 March 2014
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The term cottage industry once applied to manufacturing that took place in people’s homes, prior to the industrial revolution. For example, farmers might take in extra sewing or make cloth, which was then sold to a larger retailer, in order to earn a few extra dollars during the slow months of winter. Today, the manufacturing of goods is largely done in big manufacturing plants, eliminating the individual textiles or sewing worker at home. A few of these small businesses still exist, like home assembly or stuffing envelopes. Most often, today’s cottage industries involve using advanced technology to work from home, via fax, Internet and telephone.

The desire to stay at home but still make money has fueled the popularity of the many Internet-related home businesses. Many women with young children who do cannot or do not want to work outside the home find work from home jobs in order to make extra money with a less rigid schedule. Such cottage industry jobs can be an economical choice for anyone, since staying at home means less money for gas, work clothing, and other work-related expenses. The workers generally must pay for their own Internet service, power, and work expenses, since workers seldom are employees, but are instead freelancers.

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Many people who work from home express their pleasure at the flexibility that this type of job provides them. Some do such work in addition to full time jobs or full time education, while others depend on it as a single source of income, or as income additional to that of a spouse.

A number of people have been successful at starting their own businesses from home. Online auction companies, for example, have a vast number of vendors who sell varied things. Some people hit garage sales and then sell their finds online. Small manufacturers and craftspeople may also use auction or retail sites as a central location for selling their goods. When such businesses function out of a home, they are all considered cottage industries.

People who are considering working for any type of cottage industry should consider compensation. Some freelance work is too low paid to even be commensurate with federal minimum wage. In addition, a number of fraudulent businesses attempt scams in which they request payment from potential employees to give them information regarding work at home opportunities. Most people should be able to find, with good searching, a number of different free sites that offer legitimate work without having to pay for such information.

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Discuss this Article

CoffeeJim
Post 6

One critical element that @Ubiquitous missed in their excellent analysis and advice for pursuing work in a cottage industry is the way in which any potential opportunity will compensate you for the work that you produce.

Often these organizations will not pay an hourly rate or salary for you work but rather some type of quantitative measurement will determine the compensation.

This means that if you are stuffing envelopes to make money from home then you are most likely being paid per envelope that you stuff. The same goes for the assembly of products and writing is often paid by the article or word.

In this case you will want to see at what pace you are able to work and then calculate that number with how much you produced during a given time as to find out what your hourly pay equivalent would be. This can give you a good clear way to determine if you are making more or less then a wage that you would desire at a normal job in a business.

Perhaps if it is less then the benefit and advantage of working from your house outweighs this disadvantage.

Ubiquitous
Post 5

As a representative for a company that brokers cottage industry jobs, I run into a lot of prejudice and misunderstanding about the field in which I work.

Many people approach me with the same concern that have been expressed here and I have to caution them about some of the worries they have. A lot of disinformation has been spread and it makes my job very difficult.

While there are cottage industry scams, they are few and far between. The great majority of opportunities are legitimate.

That being said, there are big differences in the legitimate positions available. Every person that I consult I urge to do their research on any company that they are considering working for.

This means researching business licenses, verifying references and confirming payment for services rendered. When you look into these issues for a company it will quickly become obvious if the opportunity is a scam or honest way to make money from home.

IceCarver
Post 4

@FootballKing, I also have had a very good experience working in a cottage industry out of my house. While I was not impressed with the offers to stuff envelopes for meager wages, I have found an opportunity to perform very basic assemblies of various products for cash.

This manufacturing industry job operated from my home means that the companies will send me boxes with different parts and I have to combine them according to the instructions. The levels of difficulty can vary a lot but most are simple enough for a high-school student to assemble.

I found the job while perusing a cottage industries emporium held at our local college. It was fun being able to see the variety of options that one can take to make money from home.

FootballKing
Post 3

In defense of some of these so-called scam type of cottage industries, I have actually found one that not only works well for me and my tight schedule but also pays very well.

The concept is quite simple. I am sent packages of envelops, papers and other miscellaneous documents all of which are stuffed together and sent out.

This very mechanical and time consuming process is redundant but works well so I can work from home. My kids even help sometimes and I think it has helped them learn that it takes work to create money.

In general I have been very satisfied with my experience in the cottage industry.

JoseJames
Post 2

@sammyG, I have to tell you that photography is one lucky cottage industry as there are many organizations in the world that will specifically take advantage of those looking to work from home. This type of cottage industry scam often preys on stay-at-home moms that need the extra income while caring for children.

Often convention centers will hold cottage industries expositions where potential targets of these scams can be wowed by the variety and options from which they can choose.

These sometimes pricey franchises make promises of grandeur and huge paychecks with minimal work. A typical type of cottage industry is that of a pyramid model scheme. These involve selling the idea of making money from home to someone else and the references then compound fees that others lured in to the scam will pay.

sammyG
Post 1

While there are some photographers that own studios in which they operate, a larger number of professionals and semi-professionals will operate directly out of their homes. This cottage industry is another example of how commercial business can still operate out of the private sector.

This small industry has sprung from the nature of the work. Many photographers are able to maintain beautiful landscaping at their home so it serves as a business expense as well. Other advantages to operating a studio out of your house include the ability to have in-home child care and still create an income without leaving.

I can't think of a better combination of work and home then a legitimate cottage industry like photography.

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