Saturday, January 15, 2011

Price Increases Expected next month, Feb 2011

Something we all don't like, but is a necessary part of business is raising prices, and next month, Wool2Dye4 will raise our prices. Right now we are working with our broker to establish the prices and when they are ready, I will send out a newsletter with the news.

Lots of customers have been writing to us to say that they dye yarn and sell it to local yarn shops, or to online retailers. These are their wholesale customers, and some of my customers have decided that their customers will not be able to afford to buy handdyed yarn if the prices increase. I am here to say that the yarn shop owners are already dealing with new price lists from every single one of their suppliers, and this is because they know something that not everyone seems to realize.

That is that prices for fiber have increased all over the world. All around the globe mills are raising prices just to stay in business, and they are battling the same demons that my handdyers battle. No one can afford to run a business at break even for very long. We have to raise prices as our own prices are raised on us, so if you are fearful of losing business when you raise prices, I want you to start learning more about business in general, and your business in particular.

Consider the taste for cashmere and silk and how it has ballooned in the past two years! These two fibers have become among the most expensive fibers in the world, and just in December, the cost of cashmere skyrocketed ten percent. That is huge. Now, here we are in our tiny segment of the fiber world market, handdyers very close to the source of the goods, really. We get our yarns and fiber before the commercial yarn companies get theirs and ours are a bit more raw, too. So imagine the price increases those companies are figuring. At their end of the fiber market, setting prices is an ongoing study.

One difference between commercial yarn companies and individual hand dyers is probably best thought of in terms of who has a better grasp on the true cost of getting dyed yarn into the hands of the wholesale customer. Entrepreneurs have a habit of counting up the costs of their materials and shipping and office supplies, but forgetting to calculate the value of their time, and of unsold inventory they are sitting on. They must be counted to get a picture of profit. When we know the real figures, the numbers that describe our success, or struggles, we are better able to make wise decisions.

We all need to invigorate our attitudes towards our businesses, and should seek out help before we need it. There is a wonderful free resource for entrepreneurs called the Small Business Development Center network. Each state participates in the SBA program and has counselors at the offices of their partners around the state, covering territories. Partners might be the local chamber of commerce or community college system. Google Small Business Development Centers and your state name and you will find out how to get in front of a business advisor. Reach out and learn more about business and act from the point of knowledge as you operate.

1 comment:

momwhoknits said...

Thanks this was very informative and helpful.