"Wool is so expensive these days". Familiar phrase? Maybe you've thought it yourself while stroking all the beautiful yarn on shelves. Knitting and crochet were always a 'cheaper' way of making clothes, right? Only today's prices could mean spending upwards of £30 for a children's sweater and a whole lot more for an adult one. So why is yarn so much more expensive these days?
The simple answer is: it's not. The price has risen with inflation only our perspective of the cost of clothes has changed.
But the reality is more complicated than that because our perceived value of something plays a big role in whether or not we are willing to pay for it. Why knit a jumper where the materials alone can come to almost £100 when you could pick one up in a shop for less than £20? The £100 doesn't even account for time taken to knit or in fact what you would pay for the skills to make a sweater bespoke to your body.
You can of course make a jumper with 100% natural fibres for around £35. One of my most treasured finished projects is a Kate Davies design knit in Lopi yarn which came to around that price point. The same pattern knit with different yarn may cost a whole lot more. When working out the cost of yarn and whether or not it has increased, and therefore more expensive these days, we have to look at the changed market place as well. There's more choice, more people hand-dying and definitely more care given to the provenance of yarn.
But how do yarn-makers and stores come to these price points? And why?
Michelle Gregory, The Loveliest Yarn Company, kindly shared her views on the price of yarn and how she prices stock in her online store:
"I stock either hand-dyed or commercially dyed yarn and my pricing is either market or supplier driven.
"For hand-dyed, I price the same (or slightly more) than the dyer if we both trade in the same currency – for example, the Knitting Goddess charges £18 for her Britsock, then so do I. It’s not really by arrangement but I wouldn’t ever try to undercut handdyers. I also looked at what other yarn stores are charging because I want to stay broadly in line with them. I always feel lucky to be able to have handdyed yarns!
"For commercially dyed yarns, including those that are higher end, like Baa Ram Ewe, the wholesalers set a Recommended Retail Price and then allow you to work within that making your own decisions. Some of them are more strict because they don’t want retailers undercutting one another and undervaluing their brand whereas yarns that come through wholesalers are much less strict. For those, I tend to price in line with RRP with some exceptions where I want to come closer to Love Knitting and Deramores – so my customers are happy to buy a yarn from me that they don’t stock but also to add a yarn they do stock because I’m reasonably close on price."
There certainly seems to be an unspoken arrangement where there is no 'quickest to the bottom' pricing structure. Businesses all have their overheads whether online or as a physcial store. Online stores will always have lower overheads but the market needs physical stores for both sets of businesses to thrive.
But even this isn't as clear cut as Michelle says: "From an online perspective, I have lower costs than bricks and mortar businesses but I don’t want to be about price and undercutting physical yarn stores so I try to focus on stocking yarns that not everyone has or that I have creative uses for that inspire my customers.
"I think there are three types of online yarn stores: those that are part of physical yarn stores recognition that they need online; those of us who’d love a physical yarn store as well but it’s not viable so have an online store; and the online super stores that are price driven.
"There is a place for them all but the online super stores are the biggest threat to ‘ordinary’ physical yarn stores in my view because that seems to be where the biggest stock overlap is – for the higher end, destination yarn stores, I think they are much safer – I own a yarn store but wouldn’t miss an opportunity to go to Loop London, YAK, A Yarn Story, Wild & Wooly, Purl Soho & Stephen and Penelope"
Fiona Hamilton-MacLaren from A Little Bit Sheepish, is a hand-dyer and talked to us about how she comes to the end-price for her yarn before she sells direct to customers or a shop:
"The majority of my pricing is based on materials costs. Base yarn is always the biggest cost, wool prices have increased lately which has caused a resulting jump in base yarn prices. I stick to British wool products, which does limit my choices somewhat when hunting for base yarns but supporting the local farming industry is something I am passionate about.
"Once the base yarn is covered there are the other materials and resources: dye, fixing agent, gas, labels etc. to consider. Having worked out the cost for all those I tend to apply the typical method of doubling the materials cost to generate the sale price. This has to cover time as well as all the other bits that tend to be forgotten, from web hosting to show fees and insurance.
"Once I reach a price based on all that I will check the going rate for similar products with other retailers. The price selected needs to be reasonable and competitive, if it is too high its not worth developing the product line so I have to look at alternatives or ways to reduce costs and bring it inline with others. I do try to keep prices down where I can, I want hand dyed yarn to be accessible to as many people as possible so they can share the yarn love."
But many handdyers need to get their products into local yarn stores to make their business viable. They cannot sell to the end customer at the same price as to the yarn store as this would not make the offer of wholesale worthwhile for a physical shop with greater running costs.
Normally a wholesale price will be around 50% discount on the price you see in the shop. This allows the shop to make enough profit from the yarn to make it worthwhile stocking. See this article from A Sheep Shop for the reality of running a yarn store in the UK.
But it is often too small a margin for a handdyer to discount to 50 per cent. There is a strong argument here then for handdyers to charge more for their work, something which Michelle at Loveliest Yarn Co. wholeheartedly agreed upon. If those making our yarn cannot account for their time, materials and overheads while also being able to sell wholesale, are we truly paying for the yarn's worth? Again, this is an issue of perspective as many would argue that at the high-end of the market hand-dyed yarns are often beyond what most may want to spend anyway.
"I will offer wholesale on yarn," said Fiona, "but a 50 per cent discount, standard for most wholesale products is not something I can achieve. It would wipe out any profit and leaving me working for free. As a compromise I offer a higher rate, typically around 80 per cent but give the shop the option of charging slightly more for the yarn than the online selling price (usually around £1). Buyers in the shop do not have to pay postage, so usually the overall price they pay is lower."
"But," continued Fiona, "I offer patterns and accessories at the more typical 50% wholesale as these are able to support the discount."
In terms of how hand-dyes are priced Michelle has considered how she would price, "I have thought about my own hand-dyed and for me it will be based on ‘Cost of Yarn from Wholesaler’ + ‘Cost of Dyes’ + Something for my time balanced with ‘My experience’ and ‘prices of equivalent hand dyers’. I think yarn bases are probably the starting place for a lot of hand dyers."
It is the concept of pricing time and skill that can be problematic for indie yarn-producers. They do not want to price themselves out of the market but why shouldn't their time be covered like in any other business?
Fiona explained her approach to this: "While I am mindful of the time associated with the processes (from dyeing to web management) I don't typically log hours and assign them to products. I think 'working until its done' is common with indie businesses and perhaps something to work on."
Interestingly, while talking to shop-owners and dyers about this, I met La Bourgeous who owns Sew Steamboat in Steamboat Springs, Colorado, USA, which is run under a partnership agreement. Instead of employing staff the partners agree to donate a certain number of hours to the store. It is a business model that is not often employed in the UK but does have its benefits in terms of yarn pricing.
"We are lucky enough that our gross profit currently covers our cost of doing business," said La, "and even allowed for a small disbursement to the partners this past year. Since we have eight partners who each agree to contribute labor, we do not have to spend any money on employees. If that were not the case, then the disbursement probably would not have occurred."
La also makes her own yarn: "For the yarn we created, we purchased fleeces and then took them to our local fiber mill (located about thirty miles away in Craig, Colorado). For the first batch, we did no dying. We added the cost of the fleeces to the total cost of processing the yarn. Then, we divided that number by the number of skeins we received and used 100 per cent mark up to create the skein prices"
In La's case her pricing is completely linked to the material and processing costs because she runs a different business model.
When asked about for their views on the popular opinion that yarn is more expensive these days, La said: "We stock a wide variety of yarns from acrylic to cashmere in order to serve the broad client base we serve. The ski resort and summer activities bring a wide variety of tourists to our area along with our strong local supporters. While cost matters a little more to the locals, the tourists are always looking for something local and/or luxurious to knit or crochet while on vacation. This means we have activity throughout each price level of our stock."
Fiona added: "I hear this a lot in person at shows, particularly if attending any that are more of a general craft fair, rather than a specific wool fair (visitors to those tend to be familiar with the going rate of hand dyed yarn). If I get the chance I will try to explain why the wool is the price it is, I am not sure I make many converts but it feels good to try.
As a knitter I am a big fan of the right yarn for the job, sometimes I will use bargain acrylics, sometimes luxury hand dyed, so I really do feel there is a place for the whole range of yarns."
In conclusion, it is partly true that commercially dyed yarn has not increased massively over the years when you take inflation into account. You can get some fabulous mid-range yarns that do the job more than well enough.
But we have a new breed of yarns, high-end hand-dyed yarns. These are without a doubt much more expensive as yarn. Even some commerically dyed yarn are still high-end because of the animal welfare, time and care put into their production. Call them heirloom yarns or call them the gold standard, these yarns are more expensive because of the time and skill put into them and as a result, you get that quality associated with the price point.
While doing things for 'love' is seen as a given in any creative industry, dyers are still providing a service of their skills for a product that we want, else the market would not exist in the first place. Do knitters and crocheters have a full understanding of what goes into their yarn to get it to them? And, perhaps more importantly, do they care? Let me know your thoughts in the comments
A great way to fully appreciate the cost of hand dye is to have a go at dying your own yarn. (Plus it is a cheaper way to make some lovely yarn). And if, like me, you are toying with the idea of hand dying, Michelle has a fantastic blog post about her inital attempts here: http://www.theloveliestyarncompany.co.uk/blog/hand-dyed-tried/