The “Cottage” Industry

The Cottage Industry is currently is the largest user of North American alpaca fiber and is made up of felters, spinners, crafters, artisans, and many, many others. There are numerous venues and many more are available each year as the imagination of alpaca owners is put into play. 

Typically this use of alpaca fiber is time intensive and has the potential for high value. If time is considered an expense, the profit may be low. 

a) Example of Cottage Industry potential profits using mini-mill strategy and assertive farm store selling:

Let me share my personal numbers with you and see how this helps you. (name available on request)

• Shearing cost per alpaca - $20.00
• Net 5.6 pounds per alpaca (not including thirds)
• So roughly $4.00 per pound for the shearing.
• Help and other shearing cost ( food, bags, labor) $9.00 per alpaca (average) or $1.60 per pound.
• Sorting, Carding (Labor) $2.50 per alpaca or $0.45 per pound.
• Total cost per pound prior to processing - $6.05 per pound.
• Average cost per pound for natural yarn (no dye) $20.65.
• Average cost per pound for dyed yarn $23.50.
• 360 pounds natural yarn $7,434.00
• 250 pounds dyed yarn $5,875.00
• Note: I get felt out of this as well. I am not including batting, rovings into this they are cheaper but I don’t make much of that anyway.
• (you have to remember there is waste to account for and you do not net 100% back, you have to figure that loss into your cost).
• I sell my natural yarn at $8.00 per 2oz, $10.00 for dyed.
• Thus I get $64.00 a pound for the natural and $84.00 for dyed yarn.

5. Custom Mills

Custom mills offer various services and may have differing requirements to process alpaca fiber. Contacting mills and asking questions avoids disappointment and offers some assurance you will get what you envisioned or expected. Some points to determine are:

• Maximum/minimum length the mill is accepting.
• Is de-hairing equipment available and at what cost.
• Is waste fiber returned (which may be useful for felting) and cost of return.
• Does the mill have sample cards of the yarns they produce.
• Get references from other producers who have used the mill.
• Ask for a price list.
• Do they offer felting and at what cost.
• If you are considering an alpaca blend yarn, ask if the mill supplies the fiber to blend with your alpaca, i.e. wool (could be Merino, Polworth, Romney, etc.) mohair, silk, etc., the price and the percentage the mill recommends adding to your alpaca fiber.
• Consider combining similar colored fleeces such as white, beige, fawn; they must also be similar in length and grade of fiber. The larger the lot that the mill has to work with the more products you will end up with. If you have a large amount of fiber to be processed, ask if the mill has volume discounts.
• If possible visit the mill and discuss the possibilities for your fiber, taking into account the mill's capabilities. They may have suggestions and samples of yarns that would work well for the fiber you want processed.
• Take or send samples of various yarns to the mill to showcase your ideas. The samples don't have to be made from alpaca yarns. You might bring a yarn that you saw in a yarn shop that you would like your alpaca fiber made into. Finished garments are also good examples for your mill so they understand how you see your yarn as a 'finished garment'.
• Ask whether the mill is processing Suri fiber, if applicable to your business.
• Determine if your yarn will be returned to you in skeins or on cones. Let the mill know which you prefer and the amount that you want in each skein - the norm is 50 or 100 grams per skein and cones are normally kilo or half-kilo.
• Ask the mill to record the yardage (YPP - yards per pound) or meterage (meters per 50 or 100 grams). These measurements are familiar to most artisans that will work with your yarn.
• Ask for an estimate of turn around time from receipt of your fiber to delivery of your product and timing of payment(s).