Hmm it's not exactly near Melbourne but if you're out in the Eastern suburbs, Warrandyte riverside markets are fantastic! They're held on the first Saturday of every month and has some amazing local crafts and handmade goods... including yummy food! I've picked up everything from lovely cushions to yummy pasta.
Ooh yes Fitzroygirl I lovvvve Finders keepers. There's also a similar one called The 'Big Design Market'. Huge! and a smaller one called 'Markit at fed square'. Tons of local designers often way ahead of the trends. Love them.
In my opinion, the biggest and best annual craft market in Melbourne is Finders Keepers at the Exhibition Centre http://www.thefinderskeepers.com/. It showcases 1000s of independent Aussie designers and their finest wares. There's also food trucks and live music. This year it's on Oct 19-21. Cannot wait!
I also like perusing smaller markets locally. Like the Rose Street Market in Fitzroy which is on every weekend. They have lots of little jewellery, art, ceramics, fashion & plants stalls.