The subject of this paper is to study and analyze specifics of the handicraft market, producer's and consumer's preferences in choice of distribution channels and buying handicrafts within the handicraft market in Republic of Croatia. Handicraft market itself is insufficiently explored in the national scientific and professional literature. Handicraft market is anything but typical. Handicrafts exist for thousands of years and they have had a variety of roles. In recent times, handicrafts are gaining importance due to various cultural movements that observed handicrafts in a different way. Primary research was conducted among producers and consumers of handmade products. Results of a study conducted among manufacturers suggest that underdevelopement and lack of quality of a legal framework are encouraging craft producers to use modern distribution channels such as the Internet. Manufacturers are not distributing their handicrafts through retail stores because they are difficult to access, which is consistent with the results of research conducted among consumers who are not even buying handicrafts in such places. Distribution channels through which manufacturers are primarily distributing their handicrafts are craft fairs and social networks. Consumers, although they largely agreed with the statement that they follow the supply of handicrafts on social networks, most prefer when they can feel and try out the handicraft in live. Nevertheless, most of the surveyed consumers selects social networks as the most common way of buying handicrafts, and then craft fairs where they fulfill their need for physical contact.