How Do You Usually Price Handspun Yarn?

The question of how to price handspun yarn is coming up again on the various spinning mailing lists, so I’m taking an opportunity to repost my standard thoughts on pricing methodologies here.

The question of pricing, and discussing it, is a challenging one in some respects. There are numerous philosophies, and there are people who want to talk about them and people who don’t. With handcrafted goods, professionals sometimes find themselves competing with hobbyists, who have other means of support and aren’t looking to earn a living from selling their wares, enabling them to charge lower prices. This sometimes means the bottom falls out of a certain market, removing a professional’s livelihood, and a hobbyist’s lack of sensitivity to this can make professionals less willing to discuss the subject publicly.

Most hobbyists, and some professionals who are just starting out, are not setting out callously and with evil intent to undercut people who are looking to make a living; but they don’t know how to price things yet, they don’t know what the market will bear, and they often undervalue their work… or sometimes, overvalue it, though this is less common and tends to be limited to specific, trendy products.

Professionals, too, sometimes find themselves unenthused about helping hobbyists bring products to market because of the question of quality. In some — though categorically not all — cases, hobbyist wares are not as well-made as professional wares, and some professionals worry that simply having them on the market as hand-produced goods may have an overall negative effect on public perception of how good those products are on the whole. With the fiber arts this can be a particular sticking point, because it may require a trained eye in order to detect the difference.

Still more professionals flatly feel that they’ve spent years working on coming up with ways to turn a profit doing what they do, and put lots of work into it, and that’s not information they’re going to give away just because someone thinks they might be interested in it.

So, when asking for advice on pricing handspun yarn or handwoven, handknit, hand-crocheted items, be aware that you may be jumping into heated debate, whatever your scenario, whatever your expertise level, and whatever your goals.

For me it is essential to have and use a firm model, and to track what I do. I am also philosophically opposed — very opposed — to underpricing handmade fiber goods, as I feel that contributes to an overall cultural devaluation of textiles. So, I urge anybody getting into the selling game to talk not only to folks selling yarn or fiber, but folks selling handmade goods of all varieties, like furniture, pottery, wrought iron, you name it. Although the market has the final say, suppliers of goods on the market set the starting point.

People new to selling their wares would be well advised to look closely at the specific market which they’re entering, and consider where they’ll fit in it and how they’ll affect it, as there is a strong likelihood that this will have a great impact on their relationships with their peers and colleagues.

Abby’s Pricing Theory

There are two different questions here for me: how I put it up if I’m going to sell it, and how I price it. My pricing is based on cost of materials, time to produce, and “operating overhead” so to speak. By and large this is a pricing methodology that I learned as a child, with my friends selling woven items to tourists in Peru. There’s another angle on it, which involves figuring out what the market is, what’s selling at what price, and producing to meet that demand, but that’s a separate question.

It’s my belief that people need to price to pay textile producers a living wage, end of story. If I determine the market won’t pay what I’d need to make on a given object to earn a living wage for producing it, I don’t sell it. In my opinion, no independent producer of goods can really afford to price himself or herself out of a living wage.

Purely hypothetical scenario:

First, I want to stress that these scenarios use fictional numbers, and are intended to help you think about your baseline cost for producing a yarn; this does not include your cost for selling that yarn. I don’t want to tell you how to price your yarn, give the exact dollar amounts that I use, or tell you how to run a business; but I do want to provide you with food for thought about the cost of production alone. These examples also do not include more complicated overhead costs such as the cost of space in which to produce the goods; these are simply starting point examples. Also not included in the model described here are: how to handle unexpected losses from theft or damage, insurance, bookkeeping time, consulting time, project management costs, development costs, market research, and many more things that are very important for a businessperson to think about.

What I’m trying to get at here is this: Don’t sell your handspun yarn for less than it costs you to produce it. Even if you don’t make a business of this in earnest, if you do make a habit of selling your goods for below cost, you’re likely to have a negative effect on the market for such goods on the whole.

Anyway, you can use this formula to determine your baseline cost and break-even point for production, regardless of what you’re producing. It doesn’t matter what the numbers are in the example; substitute your own, to determine your cost, then base your pricing on your cost.

Let’s say I have a fiber that costs $10 a pound. I have equipment that would cost $1000 to replace. I want to pay my spinner (me) $10 an hour. I can produce 400 yards of single-ply yarn from 6 ounces of fiber, in an average hour. I expect the lifespan of my equipment to be 4000 hours until service or replacement is required. In addition, it takes up to 10 minutes per skein of 100 yards to measure, wash, label, etc, so let’s factor that in, but leave it as a separate item in case someday down the road we’re employing a put-up person who doesn’t have to be a skilled spinner, who makes a different wage.

Round numbers (everything up to the nearest 10 cents)

  • Materials cost for a 100-yard/1.5 oz skein: $1
  • Labor cost for spinning: 15 minutes at $10/hr = $2.50
  • Labor cost for finish and put-up: 10 minutes at $10/hr = $1.80
  • Equipment cost: $0.10

My break-even is $5.40 a 100-yard skein, in this case.

Second Purely Fictional Scenario

In this case, my raw material costs $20 a pound and I can produce 200 yards of it in an hour, not including put-up and packaging. Skeining, measuring, washing, and labeling will be done by a different employee earning $8 an hour. Everything else stays the same.

  • Materials cost for a 100-yard/1.5 oz skein: $2
  • Labor cost for spinning: 30 minutes at $10/hour = $5.00
  • Labor cost for put-up: 10 minutes at $8/hour = $1.35
  • Equipment cost: $0.15

Break-even here is $8.50.

If I want to give away the labor, or the materials, I can adjust accordingly. The same goes for pricing a job where I don’t have to pay for the fiber, but I do require time, and will put wear and tear on my equipment.

Please note that this is the break-even point; the point at which I am not operating at a loss on simply producing the yarn. This is the point below which I’m actually paying money to sell the yarn, if I sell it at such a price. This is not my final sales price if I’m bringing the product to market, storing it, advertising it, shipping it, and so forth; this is the point below which, if someone else is going to absorb all those costs, I cannot afford to sell the product. It’s a rock bottom wholesale price.

I think I’m somewhat unusual in my pricing because I do include equipment maintenance or replacement cost, something I generally don’t see people do. But you’re out of business without the gear and it does take a beating if you do production work! I also think that generally, folks don’t view it as “I have to pay my spinner (me)” — but I was raised by often self-employed parents and have had it drilled into me to consider my time payable by the operation, whatever it is. 😉

As far as put-up: by default, I pull things off the bobbin and skein them with my counting skeiner, so I know how many yards there are. If something is for general sale, I will leave it in a skein; if it’s part of a special order or something where someone requests, I can put it up in center-pull balls (but I don’t do that in general). For my own storage purposes, I skein, wash, dry, then either store if I don’t have a likely immediate (in a couple of months) use in sight, or put it in balls if I do. Size of skeins: I have found that in general, 100-yard skeins, measured by yards, of varying weight, are more popular than by-weight skeins. Think about it: as a yarn user, you are more likely to care how many yards than how many ounces.

So, I put up by the yardage, and charge based on production cost given materials, time, and equipment. Then, as a retailer, I have to figure my retail costs into the equation as well, in order to calculate my markup, profit margin, and so forth — which I figure separately from the baseline production costs.

17 thoughts on “How Do You Usually Price Handspun Yarn?

  1. Thanks for your take on this often discussed subject.

    I am a hobby spinner with several “perfectly nice but I will never in a million years get around to knitting them up” skeins lying about. I contemplated putting them up for sale/swap on one of the lists with a disclaimer that I was not trying to make a living from my spinning, just trying to recoup some of my fiber and postage costs. Out of respect for those who do try to make an honest living from their fiber pursuits, I ultimately decided to send them off to a charity. I figure I got my money’s worth out the fiber in the pleasure/learning oportunities in the spinning process.

    Related to this blog entry and a previous entry in which you wrote about quality handspun yarns vs. the general public expectation of what “handspun” looks like: I hate it when poorly made yarn is sold at premium just because it is wearing a “handspun” label. I have been quite blunt in educating some non-spinning knitters as to the quality of the “wonderful handspun” that they were swooning over.

    I may be donating some of my “learning process” yarns to charity, but the birds got some stuff of better quality that what I have seen for sale.

  2. So far, so good Abby!

    But you have allowed no time for acquiring the fibres and any preparation before spinning. The costs of production space etc. What is more you have allowed no time for the marketing and distribution time or costs. This includes any advertising, time travelling to outlets, and all the time costs spent on accounting for your business. Unsold stock has a high rent cost. In my experience this is equal to a third of the final price, or 50% more than the amount you have calculated.

  3. I am guessing that if you are charging 5 dollars for a 100 yard skein.. you are talking about singles. I am wondering how you would charge for plied yarn? Takes so much longer.. but does the average yarn consumer recognize that? Or are they just looking at the number of yards?

  4. Thank you for this post. I’ve wondered quite a bit about pricing handspun yarn and am considering opening an Etsy shop, or selling my handspun at local yarn shops. BUT – I’ve seen handspun yarn listed for both what I consider to be astronomical prices and for dirt cheap and am somewhat confused as to what appropriate pricing would be. Although I’d start out as a hobbyist, my goal is to make it a full time, paying career. I suppose if I had to err while pricing, I’d err on the side of a higher price, not astronomical but definitely enough to be worth my while. Otherwise, I’d keep my yarn for myself!

    Sorry this is so long-winded. :o)

  5. If I’ve done my math right (a shaky process at best) you’re charging 5 cents a yard. That seems way too cheap to me. I charge 10 cents a yard for sport-weight or thicker, and up to 25 cents a yard for lace-weights. I think you’re selling yourself short…

  6. I have to agree with Ian – this is a good start, but for a professional there are many other costs involved. I have a website which involves a lot of maintenance and constant updates, I regularly pay for advertising, I have boxes to pack and ship, I spenf time procurring material, I do daily dye pots, and there is constant accounting. I put in well over a 40 hour week – often working 7 days a week to keep my website fresh. I spend a lot of time corresponding with my customers. I do very labor intensive yarns that require a lot of stop and go spinnning. I have energy costs for doing dye pots and spinning out and drying fibers. $10 per hour is barely above minimum wage. I could not live on $5/100yards of yarn produced.

  7. Unless I am misreading Abby’s calculations, she is NOT charging 5cents/yd or $5/100yd. skein. I believe that she is saying that this is her COST to produce a skein of yarn using hypothetical values; in other words, she appears to be using these figures as examples, not what she herself actually charges.

    This said, I found the discussion, both Abby’s original description of ONE way to look at how to price handmade yarn as well the commenters’ perspectives, to be quite valuable. As a hobbyist who is looking to enter the realm of the professional handspinner, I tend to shy away from asking questions of established artisans such as Abby and Lynn. To me, that smacks of the tourist who comes to town and wants to know about the “secret” fishing hole: disrespectful and unlikely to get either a useful answer OR an invitation back. Instead, I try to glean information from looking at how others are actually pricing their yarns, and evaluating their turnover to judge if the prices were realistic. Occasionally, when I feel that I have established a relationship with a spinner, like I have with Lynn, I ask a question or two.

    I want to respond to the issue raised by several commenters as to yarn “quality”. I use quotation marks because I feel it is not just a technical issue but also a subjective issue of aesthetic. It bothers me when one spinner evaluates another spinner’s yarn and deems it of poor quality when in fact it is simply a matter of perception of what a handspun yarn “should” be. Although I would agree that there are certain objective standards a yarn can be judged by, I think often when someone deems a particular yarn as inferior it is more a matter of taste than of quality. If someone doesn’t like my yarn because it isn’t what they would spin or would knit with, I have no problem with that, but I hate it when someone sees my *intentionally* lumpy-bumpy, thick-and-thin, buly artyarn and criticizes it for not being evenly spun laceweight. I believe quality, like beauty, is in the eye of the beholder. Maybe that “overspun” skein I saw was actually *intended* as an energized single? I try to bear that in mind when I feel the urge to judge someone else’s yarn.

    Thanks for the thought-provoking post, Abby.

  8. regarding the quality of yarn, i started spinning in early 70’s to help me survive quitting smoking, I did not knit or crochet (now do both) so I sold even my beginners yarn. when I became skilled and was spinning even, lace weight and sport weight merino (I was in Australia) the craft shop told me know one wanted it because it looked store bought…they wanted slubs, over twista, etc…so i had to relearn begginers yarn….that is much harder than it sounds.LOL, now I just spin and knit sweaters, ,scarfs ,socks ,and shawls for family and friends, I would rather gift it than under price it and in my erea, red heart s the only affordable yarn!

  9. I just KNOW that everyone has read the part in bold where all numbers are fictional, right? Right?

    Because if Abby really was selling 100g of her handspun for 5-10 dollars, I would OWN her. She could live in my basement.

  10. Great logical and though provoking post Abby. As a photographer I can really understand, identify and empathize with a lot of what you are saying here. Especially as digital photography now means that everyone and anyone thinks they can be a photographer and are happy to give away work to magazines and newspapers, who will print rubbish and now pay sweet FA for quality work by trained professionals.

    (…And some people need to learn to read fully AND comprehend at the same time before commenting. In particular those who sell crap and call it art. Just sayin…)

  11. I don’t use most of the yarns I spin (though I do use some – it would be a little foolish imo to not work with what you spin at least a little bit to get a feel for any errors in trying to create an FO), so I try to sell them. There is of course a learning curve, as one becomes quicker at spinning better quality yarns, so pricing beginner yarns would need to be different than those from professional spinners. If beginners priced by the hour with their startup costs factored in they would hands down be WAY more expensive than professionally handspun yarns, which if purchased would have a bigger effect on professionals. Underselling starter yarns is ideal in my mind because it’s a few dollars on yarn that perhaps a beginner knitter, crocheter, or weaver would be taking from higher quality stores. Just my 2 cents, though.

    Pricing for what I believed my yarns to be worth, based on your calculations, yardage calculations, or comparitive calculations all got me absolutely zero sales. There are other factors, of course, but I recently turned instead to ask my LYS if they were interested in purchasing my yarns for sale. They were, and that’s quite a bit better than having a bunch of unused skeins sitting around collecting dust (plus I find people are WAY more enthused about buying yarn they can touch and squeeze rather than view online only)! At the very least, it allows me to make back cost to purchase more fiber and improve the skill. My question at the end of all of this, however, is how might one price yarn for wholesale? If I charge what my time, equipment, and product is worth ideally, it is disadvantageous for both the shop and the buyer and I probably won’t have much luck selling them more in the future – since after the profit the shop would tack on a buyer would be better off buying direct, which they weren’t from me in the first place. I would love to make a living on spinning one day, but in the meantime, the cost of the hobby is taking its toll on my ability to continue it. Ideas?

  12. Wow, I can’t believe how many people can’t even read or comprehend this article. Commenters don’t understand what BASELINE means even though you explained it Abby!
    Yet they jump to the conclusion that you personally are selling your yarn too cheap. Reread the article folks.
    Besides that, there is no secret fishing hole of how to price yarns. Don’t worry about offending anyone just take a class called “Small Business Management 101.” You can take it online or at any local college or university in your area. Abby is totally right in her calculations. In fact she is just starting you off in the direction of where you would ADD to the calculations. I am just guessing she is trying to open your mind to the idea of including wages and equipment in the first place.

  13. The only real affront here to spinners/handcrafters is the shocking inability of any of them to read! Sweet Jesus.
    Bothering to post on an article that you clearly did not read in it’s entirety, about how disgruntled the lack of information leaves you? The handcraft community is in a sorry state if this is the intellectual barometer.

  14. I am thankful for such a thought-provoking post. I also heartily second all those responders who call for more careful reading of the article, before criticizing it. I understand busy people rushing through, but don’t assume you’ve got it clearly understood if you don’t agree the first time you read. Have the humility to look at yourself first.
    Having said that, I find that I’m still stuck with knowing how much to charge. The extreme focus on consumerism in this society is driving prices, and I don’t want to contribute to that. I also think that any artisanally created material should be priced according to quality. But the prices I see on Etsy – 36.00 for 2 oz of handspun art yarn, for example, are very dismaying. It’s not just a question of what the market CAN bear, but what it SHOULD bear. Fiber arts are a time-consuming craft to produce, and making one’s living off of handspun yarn seems like a difficult undertaking to me. I will be working in 3 different crafts to produce saleable product, including spinning yarn, but I want to price my items in such a way that it’s not just the wealthy who can afford to buy them. I don’t want to negatively impact the market for those gifted spinners who create gorgeous, high-quality yarn by pricing my yarn too low, but at the same time, I believe that what I do will impact very few others – I simply don’t spin enough quantity to be able to take customers away from other spinners.
    Now, another thought – I’ll be selling yarn and my other 2 products in a farmer’s market. I have a hard time believing that I can sell 4 oz of yarn for even 20.00 – I know I look a lot at what other people sell at the farmer’s market, but if I think it’s too high priced, I just walk on. I am still wrestling with my need to price in line with my convictions, but I can’t afford to price competitively with store-yarn. Just the roving alone cost more than store-bought yarn. So, where do I start the pricing? Abby’s formula is extremely helpful in this, so I’ll be sitting down to do some figuring…. Thanks, Abby!

  15. As a grower, I see too many of my colleagues pricing their raw fleece at far below the cost to produce. When I point out the numbers to fleece buyers, I’m told my prices are too high, they’ll never pay what I ask when they can get it cheaper elsewhere. I wish alpaca breeders would stop hurting the commodity prices here in the US!

  16. I really like this blog entry and wish you’d do an updated version for 2012. I’d like to send a link to it to a number of other spinners in my area. I am irked (to say the least) by new sellers who are charging prices that can only cover their supply costs. I am irked by store owners who say, “People can charge whatever they like.” Yes, they can, but some of these same people talk about raising minimum wage (for example) while they support people who are actually making NOTHING on their yarn. It seems like it takes too much thought for people to understand what goes into the making of yarn. . .

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