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TNNA Survey Says: Recipe for a Profitable Needle Arts Retailer

Posted By India Hart Wood, Hart Business Research, Tuesday, August 02, 2016

TNNA Survey Says is a biweekly series of articles featuring useful business advice based upon the TNNA State of Specialty NeedleArts 2016 surveys of more than 15,000 fiber artists, retailers, and wholesalers.

TNNA Survey

Recipe for a Profitable Needle Arts Retailer

If a retailer is not profitable the business can make a number of changes to become profitable. About 60% of needle arts retailers indicated they were profitable in 2015. Here is the yarn retailers’ recipe for profitability:

  • Higher pricing
  • Less discounting
  • Larger store size and higher sales volume
  • Wider range of business activities (online store, finishing services, product design, house brands)
  • Solid marketing expertise
  • Wider range of marketing methods
  • Less credit card debt and less use of personal assets to fund business
  • Increased sales volume relative to store size and inventory spending, resulting in
    • Higher inventory turn
    • Higher sales per square foot

These factors together create an upward spiral of sales growth, improved cash flow, less need for debt, lower per-unit business costs, and so on.

Percentage of yarn retailers per characteristic (profitable versus not profitable retailers):

Retailer characteristic Profitable retailers Not profitable retailers

Markup average greater than 2x

29% 23%

20% or more of sales discounted

16% 27%

Store size (median)

1,500 s.f. 1,239 s.f.

Sales more than $200,000

41% 17%

Business activities

Online store 52%
Finishing 38%
Product design 45%
House brands 17%

Online store 36%
Finishing 26%
Product design 39%
House brands 12%

Main business obstacles

Cash flow 10%
Debt 5%
Weak marketing 19%

Cash flow 40%
Debt 18%
Weak marketing 30%

Source of funds

Cash flow 93%
Credit cards 39%
Personal assets 18%

Cash flow 79%
Credit cards 60%
Personal assets 59%

Inventory turn

1.1 0.9

Sales per square foot (median)

$133 $74

Data is from a wide range of survey questions regarding 2015 retailer financial data and activities. This article uses only yarn retailer data, as there were not enough responses on the 2016 survey from needlepoint and counted thread retailers for a comparison between profitable and unprofitable.

  • Source: TNNA 2016 Yarn Retailer Survey Results
  • Freshness: Yarn Retailers surveyed February 23 to March 28, 2016.
  • Respondents: 293 yarn retailers, 57% of which were profitable

More information:

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