Starting a Yarn Shop
There are two essential elements you need to contend with when starting your own yarn shop business: one is location, and the other is supplies.
A yarn shop is usually something that a hobbyist establishes; this stems from a passion for a craft that suddenly branches into a successful business enterprise.
Although this is not a simple formula for business success, new business owners who show a particular passion and zeal for their products or services usually create giant steps to a business boom. Besides, this business entrepreneur will likely stick it out when it gets tricky. Yarn stores may not be exactly as mainstream as, shall we say, the athletic shop in the corner or that trendy ladies’ shoes shop in the mall. Still, craft enthusiasts and knitting hobbyists flock to these yarn shop businesses to get that colored wool yarn for that sweater or to re-supply their supplies of knitting yarn for hand-crafted projects.
If you are thinking of starting your own business selling yarn, here are two of the most essential things to consider:
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Location for Starting a Yarn Shop
The World Wide Web indeed plays host to a lot of great selling businesses. However, if you want to sell yarns and other craft supplies on a per-piece basis, you may not want to establish your yarn shop business over the Internet. Unless your clients are willing to shoulder a more expensive shipping and delivery cost than the actual cost of your merchandise, you are bound to lose out on a lot of profits. We recommend you do the Internet set-up if you are willing to ship bulk orders.
Finding a great location is critical to success if you are a yarn supplier entrepreneur starting a brick-and-mortar business. It would help if you found someplace that provides affordable rent, a great selling area to showcase your merchandise, and considerable foot traffic. Most of the sales for this kind of enterprise come from browsers and window-shopper-turned-shopper. For this kind of shop, you can be assured that your utility bills should be low; you would need to be creative, though, when it comes to attracting potential shoppers to go into your shop.
Suppliers for Yarn Store
What comprises the leading business resource of a knit shop? It’s the supplies, of course. You may want to get a list of suppliers for the different kinds of yarns that are currently in demand. Since your merchandise is not easily degradable, you can order in bulk and store them safely in your shop. There are trends you should keep an eye on, though. There are seasons when one particular yarn would get more sales, and you may even have to contend with advance orders (i.e., Cornish Organic Wool, Dyed Devon Alpaca, Polyester Yarn.)
Other supplies you may want to stock up on are our beads, flosses, instructional books, interlock knit ribbings, knitting needles, patterns, ribbons, sewing fabrics, threads, unique buttons, etc. The acquisition of more extensive materials like looms depends on your arrangement with your clients and suppliers.
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redbeautytextiles@gmail.com || Consultant
redbeautytextiles@gmail.com || Consultant
If you visit one of my previous replies I give some basic advice about minimum setup for yarn (9/24/2015). You do not have to be open yet but should have your state tax license/resale certificate and a lease agreement to prove that you'll soon have a shop. Some yarn distributors are ok without the lease agreement but you *must* have that tax certificate.
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@Susan, It's unlikely that you'll be a distributor of any of the popular brands without a track record and at least 1Mil to invest. But I don't think that's what you mean, right?
Opening an online-only yarn shop takes a serious investment in time and money - almost as much as opening a brick and mortar store - plus, you'll need to be prepared for the inevitable push-back from well intentioned yarn distributors that think that not selling to you will somehow keep the small brick and mortar stores alive.
Identify the yarn brands you are interested in selling. Do a bit of research (ravelry.com is pretty handy for this), find the yarn brand contact info and contact them. Tell them you are starting an online-only yarn store and wish to get their wholesale information. Make sure to ask for their minimum amount and any selling restrictions (as far as sales or discounts) up front. Based on their reply, decide if you are still interested in carrying that yarn line.
Make a list of the yarn brands, then styles, then colors and how much this will cost you wholesale. You can check my previous reply (#29) for a baseline of how much to spend. Then research web hosting and selling platforms - you'll need a budget for web development, graphics, business cards, packing supplies, etc. so make sure you account for all of the things you'll need outside of the actual yarn supplies.
Get your resale certificate and business name and domain name and apply for those yarn brands you've previously singled out. Then call or web order the yarns you want using your new wholesale account credentials - remember that most of the time you'll also need to pay to ship they yarn to you.
As far as inventory? That's pretty much up to you although my caution is to go easy when starting out - there's nothing worse than falling in love with a beautiful yarn, buying a ton of it, and finding you're the only person that likes it. Clearance sales in your first year of business are not good.
Most yarn comes in bags of 10 skeins and most wholesale pricing is roughly half the regular retail pricing. So if a yarn sells for $12/skein you can expect that a bag of ten costs $60. Double wholesale is a convention that most fabric and yarn retailers adhere to because it makes your life easy - no one wants to count in shipping, utilities, web hosting and divide the overhead up per skein. Doubling the wholesale amount usually covers your expenses and, with enough sales, guarantees that you'll make a profit.
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@Lisa Goins, check out my answer (#35) to your questions. Feel free to reply...
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@Teri, As you've surmised, the "where" to open will be critical.No-one can advise you for your specific market but there are some general things to check. Look for a need that is going unfilled:
-Research the yarn stores that already exist.Opening up a shop specializing in Noro won't work if two blocks away is a similar shop.Also be aware that some yarn brands "regulate" the proximity of other yarn shops with their brand.
-Research yarn "deserts." Is there a median or above income neighborhood without a yarn shop? Or within easy driving distance?
-You'll need physical space foryour yarn - make sure the spot you're considering has enough space for showcasing and inventory storage.
-Your demographic will be mostly older women, over 55 with an upcoming group of millennials around 30. View the 2014 TNNA report and make sure driving distance neighborhoods have your demographic.
-Be good to your demographic. Craft Industry Alliance just published an article about how to court the millennial crafter - many younger folks complain of being ignored or not taken seriously by established knit shops. Also don't devolve into a shop with a table of knitters that are fixtures in the shop - many people feel turned off by this.
-Research pricing and brand/style. I've turned down plenty of yarns because of oversaturated discount pricing; I would just not be able to make my target price selling competitively. Figure out your basic yarns - you will need at least three, "always sell" or bread and butter yarns that you can count on. Most physical yarn shops stock Cascade 220 as one of their basics; you almost can't go wrong with this yarn.
-Make sure you have pattern support! Gorgeous, pretty yarns need a pattern to go with them. Don't overestimate your ability to create enough patterns for the unusual yarns you wish to carry. The majority of knitters will start with a pattern, then look for a yarn. Explore trunk shows or near-to-you contract knitters that can knit up sample garments. Folks need a way to visualize how the yarn will look made up.
-And then the lease - do not settle for some hard to find location, even if it seems like a great deal. You must be allowed decent, prominent, large signage; if folks drive by once or twice and don't see you they'll give up. Be careful of commercial lease terms that include a high maintenance; find out what NNN stands for. Also do not lease right next door to a fast food restaurant or one with a big grill - the smoke will contaminate your shop and yarn.
If you're buying you'll need to make sure the zoning laws allow for light commercial and signage - remember that any food service has it's own set of regulations.
-Reply #39 has some info on distributors. Know which yarns you'll be selling before you finalize your location.
-Be careful of dealing with unknown Chinese or Indian yarn sellers - someone selling cheap cashmere or silk might be too good to be true - I've gotten burned on a silk yarn purchase with about half the purchase what I ordered and half some really shabby yarn.Also make sure you understand customs/import duties and ship charges- these can be quite high.With a new seller see if they'll work through an escrow account so you can be sure of the quality before releasing money.
redbeautytextiles@gmail.com || Consultant
@Anna, You're so optimistic! Yarn mills, plural.
There is a single large "base" yarn distributor in the US. They havethe yarn milled locally and outside the US. If you find other base yarn distributors they are either buying from China in quantity or reselling from Henry's.
Call Henry's Attic, 845-783-3930, ask them to send you samples, email a price list and minimums.
Your best bet for starting out will be to dye your own. You can inquire with Henry's to see if they dye (they have the capability, they are the company behind Galler Yarns) but almost all hand dyers start with some of Henry's base yarns and go from there.
If you decide to try a Chinese manufacturer make sure to get references!
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