Instead of making handicrafts, Mitla [1] people concentrate on selling them, mostly at the big handicrafts market adjacent to the archaeological zone parking lot. Here you can sample from a concentrated all-Oaxaca assortment, especially textiles: cotton huipiles, wool hangings and rugs, onyx animals and chess sets, fanciful alebrijes, and leather huaraches, purses, belts, and wallets.
For a fine private for-sale collection, stop by Artesanias Acacia (Morelos 32, 9 a.m.–8 p.m. daily, tel. 951/568-0539), on the main street to the ruins, on the right, a fraction of a block past the Frissel Museum. The main attraction is hundreds of lovely hand-embroidered dresses, blouses, tie-dye, and innovatively attractive pescaderos (embroidered blouses, sold as a set with embroidered, pedal-pusher-length pants).
Links:
[1] http://www.moon.com/destinations/oaxaca/the-oaxaca-valley/east-the-textile-route/mitla-archaeological-zone