Starting a Yarn Shop

There are two basic elements you need to contend with when starting your own yarn shop business: one is location, and the other is supplies.

A yarn shop is usually something that a hobbyist establishes; this stems from a passion for a craft that suddenly branches into a successful business enterprise.

Although this is not a real formula for business success, new business owners who show a certain passion and zeal for products or services they are selling usually creates giant steps to business boom. Besides, this type of business entrepreneur is the one most likely to stick it out when the going gets tough. Yarn stores may not be exactly as mainstream as, shall we say, the athletic shop in the corner or that trendy ladies’ shoes shop in the mall, but there are craft enthusiasts and knitting hobbyists who flock to these yarn shop businesses to get that colored wool yarn for that sweater or to re-supply their supplies of knitting yarn for hand-crafted projects.

If you are thinking of starting your own business selling yarn, here are two of the most basic things to consider:

Location for Starting a Yarn Shop

It is true that the World Wide Web plays host to a lot of great selling businesses. However, if you want sell yarns and other craft supplies on a per-piece basis, you may not want to establish your yarn shop business over the Internet. Unless your clients are willing to shoulder a more expensive shipping and delivery cost than the actual cost of your merchandise, you are bound to lose out on a lot of profits. We recommend you do the Internet set-up if you are willing to ship bulk orders.

If you are a yarn supplier entrepreneur starting a brick-and-mortar business, finding a great location is a key element of success. You need to find some place that provides affordable rent, a great selling area to showcase your merchandise, and a considerable amount of foot traffic. Most of the sales for this kind of enterprise come from browsers and window-shopper-turned-shopper. For this kind of shop, you can be assured that your utility bills should be low; you would need to be creative though when it comes to attracting potential shoppers to come into your shop.

Suppliers for Yarn Store

What comprises the main business resource of a knit shop? It’s the supplies of course. You may want to get a list of suppliers for the different kinds of yarns that are currently in demand. Since your merchandise is not easily degradable, you can order by bulk and store them safely in your shop. There are trends you should keep an eye on, though. There are seasons when one particular yarn would get more sales and you may even have to contend with advance orders (i.e. Cornish Organic Wool, Dyed Devon Alpaca, Polyester Yarn.)

Other supplies you may want to stock up on are: beads, flosses, instructional books, interlock knit ribbings, knitting needles, patterns, ribbons, sewing fabrics, threads, unique buttons, etc. The acquisition of larger materials like looms depends on the arrangement you have with your clients and your suppliers.


  • Judith Rudnick said on October 21, 2009
    How would one go about selling an already established, successful yarn shop?
  • lisa nemchek said on May 21, 2011
    I would like to start a yarn store in Stamford. There is not one yarn store, just a Michaels that sells crafts including yarn. I was thinking of purchasing a two family house, renting the upstairs apt and using the downstairs apt for a store. How do I write a business plan and approx how much $ would I need for start up? Thank you
  • fifi scarato said on July 7, 2011
    I have a dream to open a yarn store in Fenton, Mo. I would like to franchise a yarn shop and possibly combine it with my idea of a tea and coffee shop. Please contact me if interested or if you have any one that would be interested. I retired from teaching this year and want to pursue my dream of a owning a beautiful shop for ladies to laugh, love and enjoy time together! Thank you, Fifi 314-471-7781
  • dee said on October 12, 2011
    who is the best to go to buy knitting needles plus yarn for my shop thank you .
  • Debbie Henderson said on October 22, 2011
    Fifi, I'm with you. I just retired from teaching and I want a quilt/knitting/embroidery shop in Central NY. I would like to know how much I should plan on for my initial inventory. If anyone would share I would appreciate that!
  • kcpalswamy beginner adviser said on October 30, 2011
    @fifi scarato some our clients may appoint their dealers in out side india for terms pl mail

  • kcpalswamy beginner adviser said on October 30, 2011

    @debbiehenderson, pl mail to me for terms for our clients

  • Debra Schmidt said on October 31, 2011
    I would like to open a yarn store in Saranac Lake, NY. The closest place to buy yarn is an hour away at a Michaels. I am interested in know how much money should I plan for my start up inventory.
  • LindaB said on January 12, 2012
    Like Debbie Henderson, I am also a resident of Central NY who is semi-retired and thinking seriously about establishing a yarn shop. Debbie, have you gotten any further information?
  • Nabin Shrestha said on February 3, 2012
    I would like to open a yarn store in Kathmandu, Nepal. i would like to export in foreign country. would u like to buy ours yarn. if yes then please reply.
  • diane wimberley said on September 23, 2012
    I, too, am interested in starting a yarn shop in northeast arkansas. The only place to purchase yarn is Wal'Mart. My dream is a shop with yarns of various quality and prices, perhaps offering yarns spun by women´s coop´s worldwide as well as the synthetic and more economic yarns. I would love for the shop to evolve to a woman´s gathering spot and safe space for friendship, support, etc. How much stock should I plan on purchasing?
  • Shelly Downes said on December 12, 2012
    I am in Southern California and am planning to start a yarn shop with a coffee bar, as a retirement project. My question is, how much money should I plan to have for beginning inventory?
  • Daphne Morrison said on December 31, 2012
    I want my own yarn shop so I can make beautiful things to put on the shelf. I need the funding to get started.
  • jes said on February 12, 2013
    There are a few choices as far as yarn in my area, but nothing with a broad range of price (you either go to a chain, or to a specialty shop that is far too expensive and out of the way) and nothing within the walking area that is Midtown Sacramento. I'd like to take my knitting circle out of a cafe and into a Midtown shop with reasonably priced but interesting fibers. A place with classes and a comfortable atmosphere.
  • nic said on January 24, 2014
    i want to start yarn shop in much money i need to start.
  • ALEXANDRIA said on April 6, 2014
  • karen billideau said on May 8, 2014
    i am wondering if there's a company that allows you to sell yarn thru "home parties" like tupperware used to be. anyone know?
  • joseph said on May 27, 2014
    I want to start tea distributor business tell me the formality for that
  • kathy said on June 22, 2014
    I have started a small yarn and fabric shop. I also have ribbons. I have a hard time find wholesale yarns. Where is the best place to help me build my inventory?
  • Alison said on July 18, 2014
    I have been thinking about starting a mobile yarn/knitting/crochet shop but have no idea how to begin planning this.
  • Lorry said on August 5, 2014
    I would like to start a yarn shop in walla walla Washington. Would like to know startup cost and funding options plus where to find wholesale yarn. thank you
  • Sekai said on November 28, 2014
    Me too I'd also like to start a yarn shop in Harare. I want to know start up costs and help with a business plan and wholesale suppliers of yarn. Thank you.
  • elizabet said on January 14, 2015
    Hi! I am very much interested to start a yarn shop here in the Philippines. I needed help on how to start, start up cost and suppliers. Thank you
  • Jeri Hansen said on June 6, 2015
    I live in Key Largo Fla. The closest yarn shop is an hour a way. There is nothing for women to do in Key Largo area. I thought of yarn, various supplies a coffee bar. Knitting classes or groups to meet other women and share ideas. I have no income at the moment, so I would need help with financing also. Dreams are possible. Anyone interested please contact me. Starting small with growth opportunities. Thank You
  • Jeri Hansen said on June 6, 2015
    Key Largo Fla 33037. 90 miles no of Key West. First key going south on US1
  • Jeri Hansen said on June 6, 2015
    Key Largo Fla 33037. First key after the stretch road from Fla City Fla Approx MM 97.5 Prefer a close area for the shop. Thank you considering my idea
  • alaguraja said on June 13, 2015
    i want to start yarn trading and marketing business in tamilnadu. i needed help on how to start this plan and i want to know start up cost and business plan
  • Regina Napolitano said on July 21, 2015
    Levittown, NY. I wish to open a cozy yarn & stitchery shop & café. Instead of my stock being the pricey yarn, I'd rather mix it up. I want to use only Long Island-based yarn suppliers to help their growth, and to boost the local economy, and I want to tap into Red Heart, Lion Brand, Caron, Yarnspirations, Premier, plus the best selection of stitchery they can afford to buy. I am looking for a 1,000-1500 sqft space. I am 46 years old, got steady job that I hate (school bus driver), certified to teach crochet, no kids, and a loving husband that only wants me to be happy. I want a shop close to home I can walk to or bike to. And I can bring my little dog to hang out. I like the late hours, too. People can drop by after work to shop, or to hang out, have a hot cup of coffee and a snack. I have a basic business plan, and I guess I need to contact an SBA office for a consult, and to find out if I am eligible for a loan? Help? I personally don't have a lot of $, but my credit's good...
  • Booth beginner adviser said on September 24, 2015
    Starting a yarn shop is not for the faint of heart.A lot of queries here about how much to allocate for inventory.Your first consideration would be for how much space you will have.Impossible to plan for inventory until you know you will be able to showcase it.Your store might have space taken up with a knitting table and room for classes. Second consideration is what brands you'll carry. Most of the big distributors have a minimum first purchase of $1500 or so and no minimums for succeeding purchases. But. $1500 doesn't go a long way towards fully stocking your shelves. Plan on allocating around $3K-$6K for each brand if you are planning on 3-5 styles per brand, initial investment. You'll need to go out on a limb as far as color choices for your first orders until you get to know your customers better. Buy at least two bags (10) of colors you think will be popular. There's nothing worse than re-ordering and getting a bunch of different dye lots and not enough to knit a sweater. Be careful of solid black, dark blue, dark wine because these colors get super linty and look dirty quickly after being handled, ditto whites and pastels. Watch out for leases that give you a break for the first two years then have a high renewal rent after - lots of yarn shops are just getting settled after the two year mark and the hike in rent can kill you quickly. As far as yarn parties? Most manufacturers will be ok with this as long as you have a brick and mortar as well. Not having a brick and mortar will restrict you to a subset of popular brands. No Cascade, Blue Sky Alpacas, Shibui Knits. Rowan you should check, anything by KFI, Lion, or Spinrite should be ok. If you have your heart set on a particular brand coupled with style of discounting or location make sure to check with the distributor first. Many yarn brands restrict distribution by location (Rowan is an example). Also plan for who will be in your shop when you're taking a break and how you'll handle extended hours (like open late on Thursdays). || Consultant

  • Giselle said on October 21, 2015
    I live in Kuala Lumpur,Malaysia.I would like to open up a yarn shop to help my communities to find a place to stop by and find their interest to involve it.Basically the most important that there is a place for them to spend with it.
  • Michelle said on October 26, 2015
    How do you go about finding all the companies that sell supplies for a knit shop. Is there a mart like for clothing and furniture? Thanks, Michelle
  • Booth beginner adviser said on October 28, 2015
    @Michelle The simplest way is to go to a yarn store, pick the yarns you might wish to carry, then note their manufacturer and/or distributor.For example, Noro Yarns, the popular Japanese brand, is distributed in the U.S. by Knitting Fever Incorporated, Canada by Diamond Textiles, etc.The route I usually take is by lurking on Ravelry. Ravelry has pretty much all the yarns, with photos, details, projects. You can usually find out about a yarn this way then visit the yarn's website which usually yeilds the distributor or a contact form.The other way which is a bit more expensive, is to attend trade shows. The biggest and industry standard is TNNA (The National Needlearts Association). It's a little over $200/year to join and there are two huge shows per year.The problem with TNNA is that if you are just starting out you will most likely not meet their requirements for membership as a yarn retailer. They want business references, receipts totaling over a certain amount, etc. If you also design patterns or spin your own yarn and have a business footprint the entry restrictions aren't as strict and it might be good to join this way at first.Before doing any yarn contacts get a resale certificate for your state. This is the tax collection license that you would use to remit your sales taxes. Almost all vendors want a photocopy of this before releasing pricing data. Even if you don't have a business yet or a name get one. You can always get another when you settle on your real name. || Consultant

  • Susan said on December 2, 2015
    How would I go about opening an online-only yarn shop as far as becoming a distributor and delivering the yarn? I notice that many yarn makers require a brick-and-mortar store, and they do not drop ship. Can you give me any advice in this area? I know how to set up a website with ecommerce capabilities. I just don't have a clear idea of how to establish distributor relationships and manage inventory. Thank you!
  • Lisa Goins said on July 10, 2016
    I live in Florida, and would like to open a small shop. Don't really know where to start, but the types, and amounts of yarn to carry is where I want to start. Also how do I go about finding out if the name I want to use is not already inc? Will I have to have a shop to order bulk yarn and supplies? My contact info if anyone in south Florida is also interested in a knit cafe start up.
  • Booth beginner adviser said on July 18, 2016
    @Lisa Goins, for finding the name you should check both online and physical - you would not want to get a great name only to find the Facebook name was taken. and are two decent, free, name checkers. Once you've settled on a few choices you'll need to visit your county court of records and do a search for your chosen name among the businesses already operating. Then you'll get your DBA (Doing Business As). Most states/county government websites have online tools for doing the search.

    If you visit one of my previous replies I give some basic advice about minimum setup for yarn (9/24/2015). You do not have to be open yet but should have your state tax license/resale certificate and a lease agreement to prove that you'll soon have a shop. Some yarn distributors are ok without the lease agreement but you *must* have that tax certificate. || Consultant

  • Booth beginner adviser said on July 18, 2016

    @Susan, It's unlikely that you'll be a distributor of any of the popular brands without a track record and at least 1Mil to invest. But I don't think that's what you mean, right?

    Opening an online-only yarn shop takes a serious investment in time and money - almost as much as opening a brick and mortar store - plus, you'll need to be prepared for the inevitable push-back from well intentioned yarn distributors that think that not selling to you will somehow keep the small brick and mortar stores alive.

    Identify the yarn brands you are interested in selling. Do a bit of research ( is pretty handy for this), find the yarn brand contact info and contact them. Tell them you are starting an online-only yarn store and wish to get their wholesale information. Make sure to ask for their minimum amount and any selling restrictions (as far as sales or discounts) up front. Based on their reply, decide if you are still interested in carrying that yarn line.

    Make a list of the yarn brands, then styles, then colors and how much this will cost you wholesale. You can check my previous reply (#29) for a baseline of how much to spend. Then research web hosting and selling platforms - you'll need a budget for web development, graphics, business cards, packing supplies, etc. so make sure you account for all of the things you'll need outside of the actual yarn supplies.

    Get your resale certificate and business name and domain name and apply for those yarn brands you've previously singled out. Then call or web order the yarns you want using your new wholesale account credentials - remember that most of the time you'll also need to pay to ship they yarn to you.

    As far as inventory? That's pretty much up to you although my caution is to go easy when starting out - there's nothing worse than falling in love with a beautiful yarn, buying a ton of it, and finding you're the only person that likes it. Clearance sales in your first year of business are not good.

    Most yarn comes in bags of 10 skeins and most wholesale pricing is roughly half the regular retail pricing. So if a yarn sells for $12/skein you can expect that a bag of ten costs $60. Double wholesale is a convention that most fabric and yarn retailers adhere to because it makes your life easy - no one wants to count in shipping, utilities, web hosting and divide the overhead up per skein. Doubling the wholesale amount usually covers your expenses and, with enough sales, guarantees that you'll make a profit. || Consultant

  • Booth beginner adviser said on July 18, 2016

    @Lisa Goins, check out my answer (#35) to your questions.  Feel free to reply... || Consultant

  • Teri said on August 15, 2016
    Hi. My name is Teri, I am in Washington, DC, and I have been thinking of transitioning my online based knitting class business to a brick and mortar shop. Knitters over the years have often asked if I would have my own knitting store. And, knowing how pricey starting up a business can be and not know how to contact yarn distributors has placed this idea and desire on the back burner. I want to partner with a coffee and or tea shop with comfy chairs and sofa with a place for crafters to come knit, socialize, ask questions and partake in coffee and tea. We currently meet at a local Starbucks, recently we were in Eastern Market, but not certain this is the best area for my company. I have a large contingent of knitting in both Virginia and Maryland as well as local DC knitters. And, I need guidance with contacting distributors. I want to focus on local yarns to sell, as well as balance my international professional experiences with a nod to international yarns such a Noro, cashmere from China, my favorite camel from Mongolia, silk from Nepal and alpaca (which can easily be found locally) along with Icelandic local yarns, and so much more. I am thinking of possibly buying a HUD house and having a yarn store downstairs. Just need guidance on where. Thank you!!
  • Booth beginner adviser said on August 17, 2016

    @Teri, As you've surmised, the "where" to open will be critical.No-one can advise you for your specific market but there are some general things to check. Look for a need that is going unfilled:

    -Research the yarn stores that already exist.Opening up a shop specializing in Noro won't work if two blocks away is a similar shop.Also be aware that some yarn brands "regulate" the proximity of other yarn shops with their brand.

    -Research yarn "deserts." Is there a median or above income neighborhood without a yarn shop? Or within easy driving distance?

    -You'll need physical space foryour yarn - make sure the spot you're considering has enough space for showcasing and inventory storage.

    -Your demographic will be mostly older women, over 55 with an upcoming group of millennials around 30. View the 2014 TNNA report and make sure driving distance neighborhoods have your demographic.

    -Be good to your demographic. Craft Industry Alliance just published an article about how to court the millennial crafter - many younger folks complain of being ignored or not taken seriously by established knit shops. Also don't devolve into a shop with a table of knitters that are fixtures in the shop - many people feel turned off by this.

    -Research pricing and brand/style. I've turned down plenty of yarns because of oversaturated discount pricing; I would just not be able to make my target price selling competitively. Figure out your basic yarns - you will need at least three, "always sell" or bread and butter yarns that you can count on. Most physical yarn shops stock Cascade 220 as one of their basics; you almost can't go wrong with this yarn.

    -Make sure you have pattern support! Gorgeous, pretty yarns need a pattern to go with them. Don't overestimate your ability to create enough patterns for the unusual yarns you wish to carry. The majority of knitters will start with a pattern, then look for a yarn. Explore trunk shows or near-to-you contract knitters that can knit up sample garments. Folks need a way to visualize how the yarn will look made up.

    -And then the lease - do not settle for some hard to find location, even if it seems like a great deal. You must be allowed decent, prominent, large signage; if folks drive by once or twice and don't see you they'll give up. Be careful of commercial lease terms that include a high maintenance; find out what NNN stands for. Also do not lease right next door to a fast food restaurant or one with a big grill - the smoke will contaminate your shop and yarn.

    If you're buying you'll need to make sure the zoning laws allow for light commercial and signage - remember that any food service has it's own set of regulations.

    -Reply #39 has some info on distributors. Know which yarns you'll be selling before you finalize your location.

    -Be careful of dealing with unknown Chinese or Indian yarn sellers - someone selling cheap cashmere or silk might be too good to be true - I've gotten burned on a silk yarn purchase with about half the purchase what I ordered and half some really shabby yarn.Also make sure you understand customs/import duties and ship charges- these can be quite high.With a new seller see if they'll work through an escrow account so you can be sure of the quality before releasing money. || Consultant

  • Rozee said on August 23, 2016
    I'm in Cape Town, South Afica and interested in starting a yarn shop. I want to cater to the needs of low income previously disadvantaged individuals of all ages. We have a desperate need to improve the employability status of our community. I believe a woolshop could help. Offer group gatherings daily for teens to pensioners. Quality yarn at affordable prices and knit/crochet lessons. Yarns I'm interested in are Charity, Budget, Lollipop, Zigzag, Pullskein and Elle stretch (for socks)from Wolmart Afrika, Pretoria (prices are the best at present). The store has to be spacious and close to local shops and schools. Sourcing unsold/redundant stock from our larger stores might also be an option. Knitting/Crocheting for charity would also be an offering at the store. It might turn out to be more of a "not for profit" store, but I would be happy in retirement.
  • Anna said on August 25, 2016
    I live in New York City and I'm interested in started an online yarn shop. Starting small with some hand dyed yarns under my own brand name. I've done some basic research but am having some difficulty. I am trying to locate yarn mills that are relatively close and who are willing to sell wholesale and if possible be able to hand dye to specifications. Any suggestions would be appreciated!
  • Booth beginner adviser said on September 5, 2016

    @Anna, You're so optimistic! Yarn mills, plural.

    There is a single large "base" yarn distributor in the US. They havethe yarn milled locally and outside the US. If you find other base yarn distributors they are either buying from China in quantity or reselling from Henry's.

    Call Henry's Attic, 845-783-3930, ask them to send you samples, email a price list and minimums.

    Your best bet for starting out will be to dye your own. You can inquire with Henry's to see if they dye (they have the capability, they are the company behind Galler Yarns) but almost all hand dyers start with some of Henry's base yarns and go from there.

    If you decide to try a Chinese manufacturer make sure to get references! || Consultant

  • Debbie Crump said on September 30, 2016
    Hello, I'm interested in starting my own yarn and thread shop. Not sure how or where to get started. I live I. Austin, MN home of the the very famous Spam Museum. But I love working with yarn I do a lot of loom knitting. I'm open for some suggestions. Thank You.


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