The art of crafts and the crafty arts

I live with a craft worker, she is into her crafts in a big way and has, frankly, made a reasonable supplementary income at times. She does this whilst holding down a full time job, it's amazing. If you are even a little bit dexterous you can do this (unlike me as I have five thumbs on each hand). The Wigjig site is a good place to start with loads of instructions for making stuff (plus you can buy all the necessary tools). To start with a couple of pairs of needle nose pliers and some wire cutters, will get you started (a good set will cost around £20 from you local craft shop).

Amongst the things my partner has made money on were:
Earrings: Buy the findings and beads on line from sites such as Ebay, or The Bead Shop (you need an account but registering is free). Aim for the more unusual beads and don't stint on the quality of the findings unless you aim to make cheap earrings. Remember some people have sensitive ears so perhaps use some real gold and silver findings for them. We found that making the drop interchangeable, meant you could sell a single expensive gold of silver finding and multiple drops to go with it.
Christmas cards: Try and make something different. We used FIMO modelling clay to make Christmas puddings, Xmas trees and other Xmas related items, mounted them on card. As added bonus the Christmas puddings had attachments on the back that allowed you to make them into earrings. Fimo is very versatile have a look at this example of what you can do with a similar product amazing
Jewellery: Once again, buy beads or other materials on line, in junk shops (old necklaces to be cut down and reused), car boots or even craft shops locally. Be as creative as you like, but remember the more time you spend on making the more money you will need to feel you got a satisfactory return.

I found this site quite useful Top 100 craft sites for reference.

In addition we had a short period of trading jewellery, sourced on line and sold at Xmas markets with some success. Aim for the Chinese suppliers, via Hongkong, for some fairly reasonable deals. We aimed for the teenage £ where quality was not always a concern, but bling per buck was ;-) Markup and presentation are key, price to sell, i.e. keep markup to a reasonable level. We gave away an organza bag (100 for £3.99) to make the sale a bit special and at 4p per bag was a no brainer.