Originally Posted by
klswift
A person can not make a profit on any fabric item if they go to a LQS and pay off-the-shelf price.
Respectfully, I can & do make a profit selling quilts that are made with LQS (often organic) fabric. It depends on your market. It's true that most mug rug/coasters would fall into the inexpensive gift category & even $6 sale fabric at JAF is bordering on too expensive ... but there are fiber artists out there who have found niche buyers who are looking for something specific & are willing to pay a lot more.
What determines how much a businessperson should spend on materials should be market demand. If the market is telling you that it won't support items (e.g., mug rugs) that are more than $2.50 a piece, then everything (including packaging & displays) needs to come in at less than $1 and you need to be able to be a lightening fast quilter. If the market is looking for unique "luxury" items, the demand for mug rugs in the form of unique pieces of usable art might command a price of $10 a piece, in which case the owner could invest either more time or more money in her product and still be profitable.