Even if you have been making the same product for years there is always the chance of something going wrong somewhere in the process where you end up with an “oopsie” that you think cannot be sold. Rather than sighing and throwing your hard work in the trash (thus instantly losing money in this situation), consider selling these as seconds.
To do this, you might like to create a special section in your online craft shop dedicated to products that don’t quite meet your usual production standards - most handmade sellers tend to call this section “Seconds” or “Rejects”. If they are a result of experimenting with new lines that didn’t quite work out the way you wanted them to, “Experimental Prototypes” could also be a good section name.
If you go down this route, you’ll want to make it very clear that the product is imperfect and does not represent your usual quality.
You’ll firstly want to ensure that both listing title and description clearly state that the good is of seconds quality and why. If this is a prototyping mistake, detailing a little story about what new techniques you were trying out and how you have learned from it can be really good way of connecting with your customers - you could also link to some of your later product iterations if you have these available so that the viewer can see how you have evolved the product (and so you have a chance of selling them your full priced final design).
Don’t assume everyone is going to fully read your descriptions, so it’s also very wise to include closeup photos with the mistake clearly visible - you’ll want to consider highlighting / circling the issue if possible. For example, an item of clothing with a slightly wonky hem would be best to have a detail photo of the hemline clearly showing the mistake alongside the usual product photos.
As for discounting, you’ll want to adjust this based on how big the mistake is and how it affects the functionality and usefulness of the product. For an example, a shirt with a printing issue clearly visible would need to have a significant discount whereas a bar of soap with the wrong color dye added would only need a small discount as it can still be used as intended. There will be some mistakes that will be unsellable and others that will sell in very much the same way as your usual products.
You’ll also want to consider what your terms of sale are on these products - if you offer refunds and exchanges on your normal range you may want to change this to be more restrictive for your seconds.
One final word about manufacturing mistakes: don’t forget that your production process journey is always really good social content that can be used to connect with your customers and promote you and your business. Most people love to see the nitty gritty of the handmade process, including failures and setbacks so don’t be embarrassed about them!