Originally Posted by QKO

OK, from the inside, here's what's happening with fabric prices.

First, there are the grey goods, that's the base fabric before it's printed and finished. China has been undercutting the grey goods market for years, artificially holding down the prices with government manufacturing subsidies, until finally they have forced manufacturers in every other country out of the weaving business. Now almost all grey goods are manufactured in China. Now that they've cornered the market in grey goods, they're raising the prices astronomically and incrementally, since even people in China now want to make more than 12 cents an hour.

Next, there's dye prices. Printing dye costs have been steadily increasing as have the chemicals used for finishing. Wax used in manufacturing batiks has also increased radically in cost. And so it goes.

Also, as most quality fabrics are printed in Korea and Japan, they have to be shipped by ocean freight. You all know what's been happening with fuel prices, right?

What all this means is that as retailers, we've seen our wholesale prices increase dramatically, this year especially, as the Chinese have put the squeeze on the gray goods market. Also, there's now a world-wide shortage of cotton due to droughts in several large growing areas.

It's not a case of LQS being greedy, they're trying to survive. Bear in mind that the quality of goods at your local quilt shop and in high quality online stores is considerably higher and thus it is more expensive than the stuff that's sold at Joanne's, Walmart and other chain stores. LQS and quality online stores pay roughly double at the wholesale level what the large chains pay for fabric when shipping is figured in. Manufacturers also make "special" lines for the big chains, stated another way, they make cheaper goods to retail just in chains, using lower quality gray goods and lower quality printing and finishing. They also are having the goods printed in China where the cost and quality of printing is much lower. Most top quality fabric printing is done in South Korea and Japan. Check the ends of the bolts next time you're in a fabric store, that will tell you a lot about the quality, just based on where it's printed. Most quality small retailers are quilters themselves, and we check the quality before we buy the fabric, and if it's lower quality than expected when it arrives, we send it back. Then it goes to the big chains and the big chain online retailers at closeout prices.

Also, your LQS provides a place to hang out, quilt, take classes and visit with your friends. Can you do that in the big chain stores? Not in any I've ever been in... And the space that that requires costs money.

An earlier poster or two mentioned the fact that fabric in the USA costs a lot less than it does in most countries in Europe, Australia, etc. This is true. People can order from online stores in the USA, pay high shipping costs, and still come out ahead on prices. One of the reasons for this is that most of the design houses and large distributors are still in the USA. We sell a lot of British designed fabric to people in England. Why? Check a map sometime. It's a lot farther from Korea to England by boat than it is from Korea to the USA, and the VAT and other taxes added on to goods at each stage of manufacturing add tremendous costs to the product in those places.

The bottom line is that with rent, advertising, furnishing, heat, electricity, phone, transportation, wages, government compliance costs, business licenses, supplies, equipment, and myriad other overhead items in addition to the fabric and shipping costs, $10/yd barely covers the costs of operation of a brick and mortar LQS. I, quite frankly, find it amazing that any of them can stay in business and indeed, dozens close down every week. With slightly lower overhead, we in online-only stores can make a profit at that level, but especially when faced with ruthless competition from huge online retailers that are willing to take a loss to drive competition out of business, we're being forced to operate at unprofitable levels just to survive. Many LQS have opened online stores that support their brick and mortar operations.

Not to put too fine a point on it, there is no greed here. Shop owners, both LQS and online, try to do everything they can to hold prices down. I don't know anyone in the industry that artificially increases prices, and I don't know anyone that's getting rich selling fabrics at the retail level, except maybe the big chain retailers.

Running a store is a crap shoot, you buy and pay for product up front and hope that you have a selection that people like, if you don't, or if people don't know that you have it, you sit on it for months and years and then finally sell it at a loss.

Like we always say, "We lose a little on every sale, but we make it up in volume." :mrgreen:

Hey, support your local quilt stores, and your family-owned online shops. It might cost you a little more, but you know they'll stand behind the product, sell you higher quality goods, give you better customer service, and if you support them, they'll be there for you in the future. And the bonus is, the product we sell will last a lot longer and look a lot better than the low-quality and second-line stuff you get at the large chains...

[Note: I realize that we're new here, with just a few posts, but this is a subject that needs to be discussed from both sides, the customer side and the retailer side. Maybe when we all understand each others' problems and the realities of the business, we won't have as much animosity and distrust among us. Let's hope...]