I won’t really call them disadvantages, maybe we can say that what are the problems faced by a cottage industry. Starting with a very basic problem, competition. Its difficult for a cottage industry to resist and sustain in this competition with big manufacturing units producing almost same products, maybe better. Hence cottage industries may be seen as “hobby” businesses rather than legitimate small-business operations, which means owners must work to establish brand recognition and build a solid reputation for quality products and services.
It is also difficult for them to do marketing for their product as they are operating on a small scale, they can’t put all their money into advertising. Hence they must use some creative ideas for marketing of their product.
It’s a home based industry which takes us up to another problem of finances, cottage industries may face difficulties securing financing for business start-up and expansion.