The Preordering Model that Scaled a Hobby Into a Business
Sarah Resnick fell in love with all things fiber when she was given a pair of knitting needles at the age of seven. As she progressed through life, she made her own clothes, learned how to spin wool and weave textiles. In 2017, Sarah took the plunge and threaded her experiences together to launch Gist Yarn. For this episode of Shopify Masters, Sarah shares how preorders and systems thinking helped her to scale a hobby into a profitable business.
For the full transcript of this episode, click here.
Show Notes
Getting crafty with your childhood passion
Felix: Your journey starts way back in your childhood. Tell us more about that.
Sarah: I have been interested in fabric, yarn, and knitting since I was quite little. A good friend of mine, her grandmother, taught me how to knit when I was seven years old. I learned various fiber crafts throughout my childhood. In my early adulthood, I was working on a farm out in California where we had a bunch of sheep. We were raising them for meat, but there was a lot of wool in the barns from them over the years. That started my interest in spinning wools. I saw this floor loom in the barn that I was really curious about. The following year, I moved to Toronto and I had an opportunity to take a weaving class. The rest is history.
I loved the methodical and creative mix of being a weaver and choosing the yarn and materials to make fabric with. I’ve been a weaver for about 14 years. I started my company, Gist Yarn, four years ago, in 2017. My goal was to find and sell beautiful materials and yarn to weavers. We’ve evolved a lot and grown since then. Now a big focus of our company is making our own lines of yarn. We work mostly with farmers and textile mills in the US to produce patterns for weavers. We have a podcast on the topic and we’re really focused on building a community for makers and weavers. That’s what we do.
Felix: Yarn and weaving has always been a passion of yours. What directed you toward the business aspect of this world?
Sarah: I had worked before in sewing manufacturing, and was learning my way around the textile mill scene, and cut and sew factories in the US. I knew that there were beautiful quality materials that were being made here, and they weren’t easy for weavers–at that time–to access. I wanted to be part of that link. I wanted to work with textile mills to make their products more accessible to weavers, and to get weavers more excited about working with local, beautiful materials.
That’s what I wanted to do and e-commerce seemed like the best way to do it. Weaving, as you can imagine, is pretty niche. It’s not like I could open up a store on the corner and find thousands of weavers in my neighborhood that would want to buy yarn. But the internet is a really wonderful place in the respect that people in small niches can come together. I was really lucky. On the first day I opened my shop, a number of people bought from us, and really we’ve been supported by our community ever since.
Felix: What key takeaways have you learned by building a business out of your hobbies? Are there pros and cons to taking this kind of approach?
Sarah: I think it’s mostly pros. I can’t imagine running a business about something that I didn’t care about. It would be boring and it wouldn’t keep me motivated. One of the cons people often talk about is that if you turn a hobby, or something you love into your work, it can make the hobby less fun. I don’t spend my days or really any of my work hours actually weaving at the loom anymore. The hobby is still quite different for me. I’m really lucky to have my work be adjacent to one of the things that I love to do, and that adjacency is making yarn and working with our great team to develop patterns and content for our community.
Being a consumer helped to create products that justified a higher price point
Felix: What are some of the greatest advantages that you think you had, starting off as a consumer in this space?
Sarah: One of the things that I was not so afraid of right from the beginning was creating a product that would have a higher price point. I knew what I wanted to do, which was work with a lot of organic fibers. We’re working with a lot of domestic producers, making yarn in small batches, which is more expensive. I knew that there was going to be a higher price point there. Because I’m a weaver, and because I know how many hours go into weaving and designing one scarf, shawl, or blanket, I felt confident. I know the community of weavers. I felt confident that people would be willing–and even excited–to pay a little bit more to have materials that they really knew the story behind, were excited to support, and were of a really high quality.
You can only really imagine or be less afraid of building out a higher price point if you have a good sense of the community and of the market. That is really what has allowed us to grow. We’re not afraid to say, “This is really high quality, this is exactly how we make it, and who we make it with. This is why it’s worth the premium price point. We’d love for you to join us if you’d like to.”
Felix: Being a consumer in that space certainly gave you insight into price points and consumer compatibility. What were some of the skillsets you really needed to develop when you transitioned from passion to business?
Sarah: Our business has grown and changed so much over the years. It’s been different skill sets that I’ve had to learn and stretch for in different times. If I’m thinking pre-launch–and in the first year–the biggest thing I had to learn was digital marketing. I had never worked in this space before. I had been working for nonprofits as a community organizer. I read a lot about digital marketing. I watched a lot of companies that I admired to see what they did, but it was definitely a learning curve to figure out the right ways to get traffic and build a sense of community around a company that was entirely online.
One of the things that I did off the bat–and that we still work really hard to do–is be really clear about who we are and the size of the company. Now we’re a team of five people, but when it was just me, I used mostly the first person in our marketing, because it was just me writing everything. I showed people photos of where we were shipping from, I invited people along on the journey of how our business was growing. That helped build a sense of community around it. So that was more of the soft skill of figuring out how to really tell the story of what we were doing in a compelling way. I also learned about paid traffic acquisition–some successful, some unsuccessful–but we worked a lot with driving Pinterest traffic, building out lead magnets that would get people over to our website, learning about email marketing and email marketing automation. Those are the more hard skills, as opposed to the softer skills of storytelling. I had to learn both of those in the beginning.
Prioritize transparency and let go of traditional marketing tactics
Felix: I think a lot of people just starting up think they need to be very professional and buttoned up when it comes to their marketing communications. What advantages do you think you gained by being very transparent with your customers about the size and scale of the business?
Sarah: Maybe everyone says this–and obviously, I’m biased–but we have the most amazing customers. People really have been excited to support us and to see what we’re going to work on next. That’s a big part because they have been part of the story of our company from the beginning. One of the things that we did about a year into our business, when we launched our first own line of weaving yarn, is we had pre-orders and we invited people to invest in a product line that was going to be six or seven months later. People were really excited to do that and we were really lucky to raise enough money.
Felix: How did your community grow because you were transparent about your business?
Sarah: People are just excited to know what is really happening behind the scenes of a business. You want to buy from people, you don’t want to buy from a company. You want to know what their values are, and what kind of quality they’re working with. It’s as simple as that.
Felix: You mentioned one of your learning curves was learning digital marketing, that you learned a lot in those early days. How do you think that improved your business operations in the beginning?
Sarah: I think everything. I had no experience in e-commerce, really. I listened to your podcast a lot. I listened to other podcasts, and heard people in different industries share what they did. Then I’d think to myself, “Oh, we could try something like that for our niche and see if that works.” I don’t think that much of this–or at least much that we have done–is extremely hard to figure out or complicated. It’s really just thinking about what’s going to tempt a customer to want to get on our email list, and where can we find them so we can tempt them? For us, what’s been really successful has been creating guides about weaving, with lots of free patterns to download. That’s what can help get people interested in learning about our company. In terms of the where, we often find them on Pinterest, and through Google search.
How this brand grew their email list without paid ads
Felix: You mentioned something that I really want to highlight, which is how you sought to emulate leaders in different industries. A lot of people tend to look at their own industry, but you say go beyond. How did taking this approach influence your business?
Sarah: Heavily focusing on building our email list, delivering content that people were excited to open and engage with and purchase from has been my goal from before the company was open. The strategies that we’ve used to build out the email list are different resources–called lead magnets–that people can use. That’s something that people use in lots of industries that I learned. We’ve used different strategies over the years. In the beginning, digital marketing was a big part of it, especially cold prospecting through Pinterest. As our company has grown, I’ve shifted our focus. We’re spending less money as a percentage of our revenue on Facebook, Pinterest, and the big tech companies, and more towards our own team, other designers, and to create content. We’re basically using content to power our growth. I’d always rather hire someone great to weave a pattern than give money to the big advertising platform. As much as possible, we’re trying to use our content to grow now. There’s different phases of a business and you can leverage growth in different ways.
Felix: You mentioned two forms of lead magnets: the patterns, and the guides. Can you speak a little bit more about that?
Sarah: Yeah. So we sell to weavers. A weaving pattern is a digital download that shows photos of something you can make, and gives you instructions for how to make it. Then we sell the yarn to make it with. We have published many dozens of patterns over the years. Some of those are free and some of those are paid. Free patterns are a big part of what brings people to our site, helps them learn about us, and trust us before they move on to purchasing from us. That’s one kind of lead magnet.
The other thing that you mentioned is a guide. So helping people figure out what weaving equipment they want to start with, or helping them learn the technical names of different sizes of weaving yarn. Basically, we’re working to demystify this hobby, craft, and art, to welcome as many people in as we can.
Felix: These lead magnets ultimately set the customer up to purchase, eventually. How did you come up with the strategy or basically creating content to encourage customers?
Sarah: Well, our customers tell us what they want to hear. Luckily, they’re in contact with us all the time. They ask us questions about weaving. So technical questions that helps us figure out things to answer. So we hear from our customers. And we also work with some really great writers, who are weavers, and also writers and teachers, and they guest write blogs for our website, and do a really good job of explaining different weaving techniques. So yeah, it’s a mix of the really good ideas that they come up with, and the questions that we see coming up again and again through our customer service channels that we use for our blog.
It’s never too early to start building your email list
Felix: Once you have an idea for a lead magnet, what does the development process and timeline look like?
Sarah: This is one of the instances where being a member of your own niche is really helpful. I had learned to weave seven or eight years earlier. I thought about what would have been most helpful for me to know, and the biggest questions I had in the beginning. Then I wrote up some guides. I then promoted those through Pinterest. In the last year Pinterest has been really good for our niche. I would run promoted pin campaigns, trying to get people to click into the website. When they would click in, they could download the guide for free and then we would email them in the future if they wanted to be on our email list. It’s totally possible, even if you’re just starting out, to do all that by yourself. That’s what we did. As our team has grown, our creative director and our ecommerce strategist think through a lot of topics with some of the writers and weavers we work with. But at this point, it’s really just about answering the questions that our customers have, and then the other benefits to our website traffic arise from that.
Felix: Did you start building out this email list before you even have products up for sale?
Sarah: That’s one of the biggest pieces of advice I would give to somebody starting out, is to start before you start. I built an Instagram account and a free MailChimp account before I started and had the newsletter sign up in that Instagram profile. From there I just started sharing with people what we were going to be doing, and what was coming. From there I made sure to comment and engage with other people in the weaving community. That happened for about six months. I can’t remember the exact numbers, but I think we had an email list of a couple hundred people by the time we launched. We had a really successful first day. Anybody who has opened a store knows those first moments of wondering if everything you’ve been working on is going to come to something, if you’re really making something people want or not. It can be so validating to have that list upfront, and to have people buy in on the first day.
Felix: Are there any particular things you did during the launch to funnel people into your email list?
Sarah: Just telling the story of what you’re up to and trying to find the people that are interested in being a part of it. I don’t think it’s really more complicated than that. At least, it wasn’t for what we were working on. I shared photos of the yarn that I was sourcing. I shared stories of where I was sourcing it from, and photos of me weaving with it. I asked people to support and join if they wanted something like this to exist, and they did.
Felix: What kind of content do you find is the most helpful with driving traffic back to the website?
Sarah: It’s really the patterns. So we are lucky to just be working with a really great bunch of weaving pattern designers this year and we have some pattern designers internally on our team, and some externally that we hire as contractors. And they put together beautiful projects that inspire people to want to weave with our yarn. And that is really one of the big things that keeps our sales engine moving.
A simple formula to make your marketing spend profitable
Felix: I know you’ve shifted away from paid acquisition recently. Is that a strategy that you would revisit in the future?
Sarah: That’s a little bit hard to answer because these digital platforms change so quickly. To be perfectly up front, we’re not able to get the same results at the same price on Pinterest that we were able to four years ago. It’s a lot more expensive than it used to be, and that changes the calculation of how to reach people. If I were going to do it again four years ago in the same landscape, yeah, it worked well, and I would do it again. If I were launching a company now, and if that’s what people listening to this are thinking about, it’s really about trying things. I tried Facebook a lot and couldn’t make that work affordably. I also did a lot of networking with people. That was successful. Am I saying that you should go to Pinterest right now? Maybe, maybe not. It depends on your niche and whether that works for you. Just keep trying until something works well, and then keep running that through as long as it works basically.
Felix: This approach can be almost methodical–trying different things, pursuing what works, ditching what doesn’t. How do you know when it’s time to try something new?
Sarah: The methodical part of it is having a really good sense of your finances. This is the other thing that’s really important very early on in a business–understanding your cost of goods sold every month, your profit, and your other expenses. Unless you have big pocket investors, which I did not, you have to stay in the black. You have to have enough money to keep going. The methodical part of all of our advertising was always if you’re spending more on advertising than you’re making in revenue, minus the cost of what you’re selling, then you definitely need to scale back. I look at my numbers every week–sometimes every day–related to expenses and revenue, and keep a close eye on that. It’s always good to be trying new things, even if some things are working really well, because things will always ebb and flow. You’ll have new things that are in the works as older advertising channels may start to slow down. With all of the changes with privacy updates on Facebook and other platforms, I definitely feel lucky that we don’t have all of our eggs in that basket.
“If you’re spending more on advertising than you’re making in revenue, minus the cost of what you’re selling, then you definitely need to scale back.”
Felix: Tell us about your journey with hiring and investing in your team.
Sarah: The first two people I hired, they’re both still with us, they’re names are LaChaun and Emma. LaChaun was producing a podcast for us. Emma was working with weaving designers to design patterns out of our materials and publishing blog posts. Both LaChaun and Emma were publishing blog posts with the content that they were making. Both of those things at once started to be a game changer and bring our business into the next stage of engaging with a lot of people in the community, and having a lot of content that people were super excited to tune in to. We’ve been able to continue to grow each of those avenues over the last few years. That was the best thing we ever did, was to start investing in growing the team and the content that we make.
How Gist Yarn doubled revenue, year over year
Felix: How fast has the business grown since you’ve gone full time with it?
Sarah: We have a little less than doubled every year. I don’t think we’re going to do that this year. We’re still growing, but our growth is going to slow quite a bit, which is normal, healthy, and fine. I’m not trying to run a global domination yarn company. I want to run a business that I’m really proud of with materials I’m proud of, and make a work environment that we’re all excited to work in. Some growth is necessary for that. Last year, in 2020, a lot of people were staying home to be safe, and it brought a lot of new people into weaving and crafts. We were honored to be part of people’s at home journeys. We shipped a lot of yarn as people were staying home last year.
Felix: You mentioned a big factor when building your email list was the need to create a community. Tell us what community means to you, and how you incorporated it in your email list.
Sarah: That’s definitely a word that’s thrown around a lot, and there’s different layers of the community. Part of being a community is in what we do, being in contact with a number of people who are teaching this craft of weaving, being in touch with a number of the mills and vendors who are making yarn for this community, and weaver’s who are designing for it. There’s different ways. Some of them are jobs, and some of them are hobbies that people engage with. It’s about being part of those conversations, and having real honest and growing relationships with lots of people. We use our Instagram channel and Facebook channel. We try to open up conversations. On our podcast, we’ve hosted a lot of conversations about weaving, the history of weaving and textiles, the way weaving and textiles are part of contemporary movements for political change. We really take a big picture look at art and textiles in the way we think about community on that podcast. There’s different layers, which is the long way of answering a short question.
Navigating the transition from reselling to in-house manufacturing
Felix: How does your community and email list fit into your pre-order strategy?
Sarah: When we started out, we were just buying yarn that other people were making, and selling it at wholesale prices, then selling it at retail. A year and a half into it, we decided to launch our first line of in house weaving yarn. That was just a much bigger financial commitment. I went from ordering 50-100 pounds of yarn, to looking at needing to order 2,000 pounds of yarn. There’s obviously much bigger costs associated with purchasing and storing all of that yarn. I knew that I wanted to do this. I knew that I had a strong hunch that our customers would love it. I also knew that I did not have the cash to pay that up front. The options were to not make a big leap like that, put it on a credit card, try to find a bank that would loan us money–but that was probably not going to happen one year into our business–or to get our customers to invest in us. That is what we decided to do.
We shared about this first line of yarn we were making, what was in it, and the colors we are planning to make. We asked if people would be willing to pre order it and help get this new line of yarn off the ground. I was blown away by the support that our community gave us. We raised enough money to fully fund the milling of that first batch of yarn, and that got us going. Since then, as we’ve launched new lines of yarn, we’ve used that pre order model again. Anybody who is running a rapidly growing inventory based business knows that getting ahead of cash for new product lines that have a significant investment can be hard to catch up. It’s hard to make the cash flow that you need to launch something new. It’s expensive. Ore orders have let us do that. It’s our customers investing in us and getting yarn back.
Felix: What does your product development process look like? How do you validate a new idea?
Sarah: We do a lot of testing. Members of our team will weave with it. Sometimes we will send it out to customers or other people in the industry and have them give their honest feedback on it as it develops. That’s for the base yarn. We’ll also think through as a team what color lines we think would go with the yarn. So there’s definitely a lot of testing, and then there’s also some amount of guessing and hoping that you make what people will want. Being as close to your customers as possible is the best way to guess right as often as possible.
Felix: You transitioned from reselling to in-house manufacturing. What did you have to do while making that transition?
Sarah: You have to learn a lot about manufacturing, which I knew a little bit about in general, but not much of anything about yarn manufacturing. It required a lot of humility, doing the research, and not being afraid to ask questions of the manufacturing partners that you’re working with. It’s a big learning curve to learn how to work well with a manufacturer. It’s one of my favorite parts of my job, learning about and getting to partner with the really wonderful people who create high quality products. I love sourcing and making new products. It’s stressful–obviously–but it’s also just a huge learning opportunity.
A facelift for your business: What you need to know about rebranding
Felix: Let’s talk a little bit about the website. How has it evolved from the beginning until now?
Sarah: We started a rebranding, refreshing, and redesigning of the website process in July of last year. We worked with a really amazing designer named Maggie Putnam, who developed a new refreshed brand identity for us. Our first brand, I made our logo in Photoshop and I’m no graphic designer. She created a beautiful new logo for us, and she really worked deeply with our team and stakeholders to understand our brand and design and create a new version for us to use.
In terms of photography, our creative director, Emma, worked with two really amazing photographers that we have ongoing relationships with, who do the lifestyle and product shots for our website. We rebuilt, we used the turbo theme. We did some custom development for some kit bundling. We worked with developers and also built a lot of it in house. The Shopify platform is really great for that. You can do a lot without having a ton of technical knowledge.
Felix: How did you as the owner help facilitate the rebrand and create the brand identity?
Sarah: It depends who you work with. The person who we worked with is really just exceptional. Her name is Maggie Putnam. She wanted to understand a lot about the values of our business. She wanted to understand a lot about where we had come from and where we were headed, about the opportunities and the concerns that we had about rebranding. It was way, way deeper than I expected going into it, which would maybe be like, “Oh, these seem like some good colors for a company like yours. And let’s go with these fonts.” What she came out with many months later, really reflects our brand. It’s allowed our creative team to really run with that brand, and continue developing what we do like that.
Felix: When you started the rebranding journey, what was the moment you knew this was something you should really invest in?
Sarah: Our company had really outgrown our brand identity. We were making these really beautiful products. And designers were making these beautiful pieces with our yarn. And it just didn’t all fit together visually. And we’re an arts and crafts company, so aesthetics are just so important. We knew we needed something new. I don’t really know how else to put it. I think probably, we needed something new even earlier, but this was when we could afford to take the leap.
Use email capture to capture more than email
Felix: When you think of the website, are there certain elements that come to mind as important pages for the success of the business?
Sarah: Specific to our website, I would say the patterns and the resources about weaving do the best. A really good “about” page is important, so people can understand the story and people behind the company. And this is obvious, but the homepage. You want people to land on it and feel like, “Oh, I want to hang out with these people. I want to just settle in and see what’s up here.”
Felix: in your email signup flow, you not only capture emails but also the kind of weaving the customer is interested in, and their birthday. What was the motivation behind that?
Sarah: Suzie–who set these up–has been testing lots of different popups. This has been the most successful one for us so far. But we love using Klaviyo to test different creative and different options for pop-ups. We ask about different kinds of weaving because we intend to segment our lists based on that in the future. We ask about birthdays because we send you a present on your birthday.
Felix: You already mentioned Klaviyo. Are there any other apps that you use or that you rely on that you recommend for other people to check out?
Sarah: Yeah. This is specific to our site, but we use something called Boost Product Filter and Search. If you have a large catalog and you want to have people be able to sort it by drop-down menus, we love that app. It also has a really good search component as well. What other apps? Like most stores, we use too many apps, but chat is a good one. We like talking with our customers.
Felix: What has been the biggest lesson that you’ve learned over the last year that you want to apply moving forward?
Sarah: The biggest lesson is about our team. We transitioned to all working remotely with the start of the pandemic and over the course of the pandemic, also hired people who are not even local to us. So we can’t work together physically in the future. I’ve been so impressed at the flexibility that the other four women on my team have to roll with everything, and really build a sense of community and camaraderie on our team through Zoom, Slack, and all of these digital channels. A lot of the ways that I thought about work are changing, but it’s still really important to make a work environment for your team that feels nurturing, challenging, and creative. Keeping that top of mind while operating in a new format is something I’ve been learning about and still have a lot to learn.
Felix: You mentioned you have a podcast called “Weave.” What is it about?
Sarah: We interview artists, mill owners, farmers, and all sorts of people that relate to weaving and textiles, and talk about the threads that bind us together.