diff --git a/rust2rpm/__main__.py b/rust2rpm/__main__.py
index 5dc5023..b803fca 100644
--- a/rust2rpm/__main__.py
+++ b/rust2rpm/__main__.py
@@ -8,7 +8,7 @@ from cargo2rpm.semver import Version
 from rust2rpm import log
 from rust2rpm.cli import get_parser
 from rust2rpm.conf import load_config
-from rust2rpm.crate import InvalidRequestError, process_project
+from rust2rpm.crate import InvalidProjectError, process_project
 from rust2rpm.cratesio import NoVersionsError
 from rust2rpm.distgit import get_package_info
 from rust2rpm.generator import spec_render_crate, spec_render_project, spec_render_workspace
@@ -53,8 +53,8 @@ def main():
     except NoVersionsError:
         log.error(f"No versions are available for crate {args.crate!r}.")
         sys.exit(1)
-    except InvalidRequestError as exc:
-        log.error(str(exc))
+    except InvalidProjectError:
+        log.error(f"Invalid argument: {args.crate!r} is not a local file or directory")
         sys.exit(1)
 
     if metadata.is_workspace():
diff --git a/rust2rpm/crate.py b/rust2rpm/crate.py
index 6ad6947..61e4d59 100644
--- a/rust2rpm/crate.py
+++ b/rust2rpm/crate.py
@@ -54,7 +54,7 @@ DOC_FILE_PATTERN = re.compile(
 DOC_FILE_EXCLUDES = re.compile(r"CMakeLists\.txt|versions\.txt|.*\.tpl|.*\.in")
 
 
-class InvalidRequestError(ValueError):
+class InvalidProjectError(ValueError):
     pass
 
 
@@ -259,22 +259,26 @@ def process_project(
 ) -> tuple[
     str, str, tuple[Optional[list[str]], Optional[list[str]]], Metadata, list[str], list[str], bool, Optional[str]
 ]:
-    if project_is_path(project) and not project.endswith(".crate"):
-        # project points into unpacked sources:
-        if store_crate:
-            raise InvalidRequestError("The '--store-crate' / '-s' flag cannot be used for unpacked sources.")
+    if project_is_path(project):
+        if not os.path.exists(project):
+            raise InvalidProjectError(project)
 
-        # process unpacked sources
-        name, version, diffs, metadata, doc_files, license_files, vendor_tarball = process_project_local(
-            project, patch, patch_foreign, vendor
-        )
-        return name, version, diffs, metadata, doc_files, license_files, True, vendor_tarball
+        if project.endswith(".crate"):
+            # project points at a local .crate file
+            crate_file_path = project
 
-    if project_is_path(project) and project.endswith(".crate"):
-        # project points at a local .crate file
-        crate_file_path = project
-        # determine name and version from the filename
-        name, version = parse_crate_file_name(project)
+            # determine name and version from the filename
+            name, version = parse_crate_file_name(project)
+
+        else:
+            # project points at unpacked sources
+            if store_crate:
+                log.warn("The '--store-crate' flag has no effect for unpacked sources.")
+
+            name, version, diffs, metadata, doc_files, license_files, vendor_tarball = process_project_local(
+                project, patch, patch_foreign, vendor
+            )
+            return name, version, diffs, metadata, doc_files, license_files, True, vendor_tarball
 
     else:
         # project is just a crate name