Business Sense

Inventory, Supply and Demand, Commodities, and the Trouble with Baby Camels

Behind the scenes of every yarn company, there is a delicate balancing game of inventory management. Just like our retailers, we face many of the same issues: The dreaded order minimums, shipping costs, running out of yarn, and a yarn that has been on the shelf for way too long that no one wants anymore. In our situation, it’s just happening on a larger scale. 

Each year we meticulously plan for the upcoming busy season, about the end of July to the first week of April – give or take a week here or there. We comb through sales reports of each yarn by color and compare them with our on hand inventory and figure out how much of each yarn in each color we have to order to maintain inventory for the coming season. Then we compare that number to our order minimums we must meet with our suppliers. When a yarn shop orders yarn from a yarn company, they usually are required to purchase 5 or 10 skeins of yarn at a time, or one “bag.” Some yarn companies have a minimum dollar value that they require their retailers to meet when placing an order as well (we don’t). The same goes for purchases from the mills we work with, but instead of 10 skeins of yarn we might have to order 40 kilos, or 400 skeins of yarn, per color. And we may not be able to reorder a color if we run out mid-season because, even though we’d happily reorder 400 more skeins, we would also have to meet the spinning minimum for that fiber blend, which might be as high as 500 kilos (5,000 skeins). Once we know how many kilos of which colors of which yarn we need to order, the next part of our planning process is pure guesswork. Say we sold 200 skeins of Canopy Fingering in the color Jacaranda in 2015, do we think we’ll sell more or less in 2016? Have we sent that color to a designer recently? Are sales of Canopy Fingering up or down from 2014? Do we think that trend will continue? Is there a new, competing yarn on the market, or did we introduce another purple that is performing better? Is there something out there we don’t know about yet that will affect this decision? And what if we make all of our decisions, place all of our orders, and in October we realize we’ve miscalculated because of something we didn’t know about, and we’ll be out of one color that was supposed to last 6 months in 6 weeks. 

Add to this mix the sourcing of specialty fibers on a large scale, and you’ve just entered a world of pain. This is when we have to think about the supply and demand of commodities. Think of it this way: We all love raspberries (the commodity). At least, my son does. It is, honest to goodness, the only fruit he has ever eaten in his entire eight years of existence. It started when he was a toddler, and we’d walk along the Schuylkill River Trail and he’d pick and eat wild raspberries right off the bush. He loved them, and picking and eating them became a beloved summertime tradition. We would happily anticipate the time of the summer when all the plants burst into bloom, knowing that soon he will once again eat something that is not a peanut butter sandwich. A couple of years ago, I decided to surprise him buy purchasing raspberries at the store in the dead of winter. I swallowed my pride and forked over the 5.99, or whatever ridiculous price it was, for a few ounces of the most precious, air freighted, organic berries. He hated them. They didn’t taste right. They were too big, they were too cold, they weren’t sweet enough. And when summer came again, he wasn’t that excited about the raspberries anymore. Because there is a demand for raspberries year-round, the market has found a way to ensure that you can purchase with them whenever you get a whim, even if it’s February, but you have to make a sacrifice on the quality of the raspberry (and possibly threaten the likelihood of enjoying raspberries mid-summer, when they’re actually in season).

There are some things worth waiting for. In fact, there are still some commodities that cannot be tamed by the whims of the free market, because they are confined by the limitations of their own production.

Road to China Light is a blend of baby alpaca, baby camel, cashmere, and mulberry silk. It is truly a delight to knit with. It has also been a top selling yarn since Kate and I started Kelbourne Woolens in 2008. No matter what other amazing yarns and patterns we release, this yarn cannot be stopped. And, every year we reel from the amount of yarn we project that we’ll need for the following year, and every year you, you wonderful people who knit beautiful things, best our predictions. 

Camel fiber comes from the two-humped Bactrian camel, which live in the colder regions of China and Mongolia. The camel has a coarse outer coat, and a delightfully soft, warm, and lightweight undercoat that begins to shed in early spring. This thick undercoat is shed in large clumps, and a new undercoat is grown each year in the fall. This undercoat fiber is softer (micron count 17-19) in a younger animal, and more highly prized. After a 13 month gestation period, most baby camels are born between late winter and mid-spring. There are only so many baby camels born each year, and they only shed a finite amount of fiber (a camel is considered mature at age 3-4 years), and only in the spring. There are no other camels producing fiber in other parts of the world that can match the infrastructure and distribution channels that are already in place where the camels are naturally.

I think that our warehouse manager, Meghan, loves nothing more than telling shop owners that we are back ordered on Road to China Light because we are waiting for the baby camels to be born. This news is always met with joy, rather than frustration. Sometimes, being out of stock of a product is just Mother Nature’s way of reminding us that everything in this world has it’s time. Sometimes we just have to wait for the baby camels to be ready. 

And so, each winter we anticipate our annual sales of Road to China Light for the upcoming year, and send our projections off to the man who sources our baby camel fiber. We eagerly await the arrival of longer days, signalling the start of the calving season, so those adorable babies can start to grow and shed their delightful fiber. We wait for our year supply of baby camel to be collected, and shipped to our mill so we can spin the next batch of Road to China Light. We are now anxiously counting down the days until our 2016 delivery of Road to China Light, which is due to leave the mill on May 13th.

Read more about baby camels, and their amazing fiber in the Fleece & Fiber Sourcebook, as well as the Knitter’s Book of Yarn, and my personal favorite source for interesting fiber facts, Wild Fibers Magazine. – CK

3 thoughts on “Inventory, Supply and Demand, Commodities, and the Trouble with Baby Camels

  1. Kim Barlow says:

    Fascinating story, thank you for sharing!

  2. lisaj says:

    What an interesting piece. I loved it!

  3. Celine says:

    Oh wow! I love hearing about this part of the process!

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