What does it cost to make a skein of hand-dyed yarn?
S1E2: also, shop update coming on Friday, April 1st.
Thanks so much for being here! We are still in Covid-times, and my studio is still running on more limited hours, as I care for myself and my family, sink into the joy and creativity of private making, and also adjust to all (waves hands in the air) that’s happening in the world right now.
I hope you are likewise able to take good care of yourself and your precious creativity.
In this newsletter episode, season 1 no. 2, you’ll find:
A longer-form article on what it costs to make a skein of hand-dyed yarn
Shop hours for April
Reveal of the February edition of Kindred Spirits
A terrific link pack
What does it cost to make a skein of hand-dyed yarn?
One of my most popular ever Instagram posts was this one where I explained what it costs to produce a handmade knitting project bag. Today, I do the same thing for yarn: explain what it costs to create a single skein of hand-dyed yarn.
In industry conversations, many small indie dyers talk about their costs as simply the cost of the base yarn. But true cost is so much more.
Most indie dyers think their cost to make a skein of yarn is around $6, which is the wholesale price of a typical fingering weight skein of undyed yarn. My cost is $17.40, which is actually about what it costs most dyers as well, whether they realize it or not. (Pigeonroof Studios, who is no longer dyeing yarn, realized a similar true cost in a well-known blog post where she explained that she was actually losing money by doing wholesale yarn orders at 50% of retail price.)
Let me break it down for you.
To make a skein of yarn, there are the costs of the materials (base yarn and actual dye used), plus the value of the labor, plus shared overhead (all the things that have to be paid in order for an indie yarn business to function).
Materials: My undyed yarn costs between $6 and $9 per skein. The per skein cost of dye is pretty negligible, so I don’t use it to calculate materials costs. Rather, I include the costs of keeping a full array of dyes in my shared overhead. I mostly use primary colors, but I keep small jars of 50 to 60 dyes on hand for speckling.
Labor: Labor is quite simply all the skeins of yarn you can dye in a day divided by your hourly rate. Many indie dyers don’t pay themselves per hour, and some don’t even pay themselves at all (yet), but whether it’s paid or not, the value of labor is embedded in each skein. I value the labor to produce a single skein at $8.50.
Shared overhead. These are all the things that have to be paid in order for a dye studio to work: the rent (or mortgage) for the space you’re using to dye yarn, electricity, water, cost of dye pots, cost of ball bands, website hosting fees, photo editing software, test yarn and your time to create new colorways, etc.
I’ve calculated my overhead costs at about 20% of each skein of yarn. If I dyed more yarn in a day, say, with an 80-skein dye cabinet, then my overhead percentage would decrease. But I don’t dye 80 skeins in a day. My maximum, given my body and my dye style, is 48.
Materials ($6) + Labor ($8.50) + 20% overhead ($2.90) = $17.40
Retail cost $30
If I were to wholesale this yarn at a typical retail discount of 50%, I would lose $2.40 for each skein I dyed. Pigeonroof Studios said it beautifully when she wondered why she was always tired and always broke.
There are lots of ways to move the levers of this formula. One can negotiate lower labor costs (pay people less), be vigilant about overhead (operate as leanly as possible), increase production capacity, negotiate a better wholesale percentage. But the formula itself can’t be changed. There will always be shared overhead and labor included in the costs, whether an indie dyer realizes it or not.
One more cost that is often forgotten. I am in the United States where we do not have single-payer health care covered by our tax dollars. I do not know any small indie dyers who include the cost of health insurance in their yarn costs. I don’t either. (My health insurance comes from my husband’s employer, and I make a conscious decision not to try and value and include it. It would simply price my yarn beyond what the market would bear — and thus means that privilege allows me to dye yarn, where makers without a partner or who run a 100% family business are faced with including this cost or foregoing health insurance altogether. And, yes, I know of many indie dyers who do not have health insurance, which, to me, is frightening because dyeing is a very labor-intensive process. Your body is the one piece of “equipment” that should be cared for above all.
What happens to the profit? Should there be profit? Many indie dyers are solopreneur shops, like mine, and some of them might be happy just paying themselves the labor cost, above. But, that’s a hobby business. A business that’s intended to support you needs to generate profit. Profit gives you working capital (which can be used to pay a collaborator in advance, or purchase yarn stock, or have dyed yarn in inventory). Profit lets you hire help so that, one day, you won’t be the single source of production. Profit pays for your time as the business owner to photograph yarn, market it, set up your website — or pay someone to do these things. Profit lets you be generous, profit lets you take time off, profit lets you build a safety net for yourself if you become injured and can’t work for a few weeks. It helps reduce worry and stress, and it creates a cushion of well-being for you and all those in your community.
When you’re purchasing a skein of hand-dyed yarn, take a moment to appreciate the artistry, beauty, and value that’s embedded in it.
Shop open: April 1 to 4
I am delighted to be opening the shop for an Anne of Green Gables-themed update, starting Friday, April 1 at 12:00 noon Pacific Time. The shop will be open through end of day on Monday, April 4, and I’ll begin shipping on Tuesday morning.
I have so much yarn and beautiful things ready for you!
(The following links will work starting at noon on Friday, and they expire at end of day Monday.)
There will be rainbow mini-skeins, drawn from my Kindred Spirits colorways. (Do you see the no-yellow rainbow, above, together with my Anne-inspired puffed sleeves?!)
New colorways of Targhee Sweater yarn, so start thinking about a worsted-weight sweater you’d like to make with the delicious Targhee Sweater.
Picture book colorways for socks
Many of my Kindred Spirits colorways, as full skeins on my Dream Sock base
Beatrix Box kit re-issues (Savor shawl! Agaric! Nourish! all in kit form, ready to cast on)
Kindred Spirits yarn club
My yarn club is a surprise skein of yarn, delivered to your mailbox, every other month. I’d like to share the most recent colorway that went out to club members, Windy Poplars.
This gorgeous watery, speckled blue is my take on the period of Anne’s life when she would lay in green grass, look up through leafy trees at a blue sky. It’s speckled and hopeful and joyous. I have about 10 more spots available for the April skein, if you’d like to join us. (Subscriptions will be open until they sell out or April 4, whichever comes first.)
Here are some things that have been delighting me lately:
Friday Night Lights, available on Netflix. It’s from the early 2000s and is superbly nuanced and full of optimism.
Word puzzles: I do Wordle and Spelling Bee every day. Oh, gosh, how I love these puzzles! Call me bougie or grandma; I don’t care. These lovely little word puzzles give me a feeling of accomplishment every day.
Culture Study newsletter by writer Anne Helen Peterson. Especially this piece. I feel very seen and understood in these times of Covid, democracy-in-peril, and European war. Maybe you will feel seen too?
Take care, friends, and until next time.