Profit Margin Selling Knitwear
Is there really any way to make money on selling your knitwear? Here’s a quick calculation of my profit margin selling knitwear.
It’s Not Easy Calculating Profit Margin Selling Knitwear
One of the amazing vendors I’ve met at craft shows is Celeste of CrankCraftSox. Last I saw, she sells a pair of hand-cranked/hand-finished socks at craft shows for $35. What are her costs?
- Per-Product Costs
- Packaging supplies
- Craft show costs
- Cost of table
- Labor time setting up and selling
- Display (tables, table cloths, lights, display mannequins, shelves, bins, etc.)
- Travel costs
I don’t know what she pays for sock yarn for a pair of socks, but I’m sure it varies a lot. She buys cones and wholesale lots and sale yarns. She even combines leftover yarns into “frankensocks” that look great. Let’s say she’s incredibly resourceful and she averages $5 yarn cost per pair.
Depending on the type of sock, let’s say she’s incredibly efficient and can cast on, crank and hand-finish an average sock in 1 hour. That’s $7.25 minimum wage in Pennsylvania. Her packaging supplies are minimal. Lets’ say 5 cents. With a $12.30 cost per pair, she earns $22.70 per pair.
Finally, to keep things simple, let’s say she’s already earned back all of her display cost on prior shows. WIth a table cost of $75 per day (estimate), 9 hours of set-up and selling at $7.25 = $62.25 for a total cost of $137.25 per day. That means she’d have to sell about 6 pairs of socks per day just to break even.
Real Profit Margin
If I were to replace the best-cast scenario numbers above with more realistic numbers ($7 for yarn, $15 per hour wages and 1.5 hours per sock), she’d make $5.45 per pair, she’d have to sell at least 25 pairs of socks just to break even.
People should be begging to get hand-cranked socks at this price. I’ve gotten pretty talented at my sock knitting machine, but I could never make a profit selling socks.
Also, calculating profit margin for one product is straightforward, but still not easy. Doing the same thing for the many and varied items I sell is truly impossible.
In general, if I can sell a simply-made item for 3 times the cost of the yarn, I consider it a win.
I also have the philosophy that I don’t need to make a living doing this. It’s more for fun and showing off my talents to the public.
Product Inventory Cost
And to take this a bit further, I just got two orders of sock yarn.
The equivalent of 21 pairs of socks for less than $9 per ball. Which I consider to be a very good price.
Current Crochet and Knitting
Despite taking a day off from blogging on Wednesday, I am still working on the April Showers Shawl.
I am down to 20 “raindrops” in my latest row. So I really am almost finished. And it will be gorgeous. But honestly, I could NEVER expect to earn back any labor costs on this beauty. Not quite sure how I’ll price it.
I also started work on a new baby blanket design.
It’s a simple vertical band design, using Millamia cotton/soy yarn. I’m liking it well enough to finish the blanket. I will also knit a border for it when the body is complete.