Twisted Jute Startup

So the guy I used to buy yarn from when I started making rope is no longer in business. I found this out when I contacted him to buy more yarn. He referred me to the guy that he had passed his jute mill contact information. I contacted that guy and bought yarn but he only had 3 of the 6 colors I needed plus a violet yarn in place of the purple. We talked and I told him I was interested in splitting the cost of his next order and he was very open to that idea saying it would allow him to order yarn a lot sooner. I checked back a few months later and he said that he was still interested. In the meantime, I ordered additional yarn on one or two occasions without any issues other than him being really slow to send an invoice and ship. After about 18 months from our original conversation, I sent an email saying I needed more yarn soon and simply asked what colors he had in stock. I didn’t bring up anything about splitting an order since he no longer seemed interested in discussing that. Well, that was in December and he never replied. In February of this year, I sent him a text message saying I needed to place an order. I sent a second text message the same day with the order information and asked him to send me an invoice. He never responded to the text messages.

At this point I’m in a situation where my supplier will no longer communicate with me so I cannot order the yarn needed to continue operating the business. Even if he does sell to me, he doesn’t have all of the colors that I’m out of nor the colors I want to add. With the yarn inventory running very low and popular colors depleted, I started looking for a new source for yarn. I’ve communicated with jute mills and brokers from both India and Bangladesh. There are significant difficulties with ordering directly from Asia. Many of the mills want to ship by the container load which is 12 to 15 metric tons (12,000 kg to 15,000 kg). At $1.80/kg, that’s a big investment and an overwhelming amount of yarn! Then comes the cost of shipping it which is between $8,000 and $10,000. Some sources, probably exporters or brokers, will ship smaller quantities but still in a sea container so the cost of shipping is way more than the cost of the yarn. An empty shipping container costs about as much as a full shipping container to ship! I need a way to ship smaller quantities without paying for a whole container. There are freight forwarders that can consolidate several smaller shipments into a single container and reduce the shipping costs of each order. I haven’t found a good source for that option yet but I’m continuing to look.

While researching in some forums, I found a possible yarn supplier in the United States and reached out to them but it was slow going and he passed me off to his partner. They were willing to sell me yarn at a really good price but the shipping seemed to be a huge obstacle. The last yarn I purchased cost me $16/kg after shipping. This source was asking $2.50/kg before shipping which should have been about $3.50/kg. So I was really excited about buying yarn at $6.00/kg after shipping! But the supplier was very very slow to respond to messages.

Finally, after a few days of not hearing from the supplier, I suggested I might be able to drive to Texas to pick up the yarn in person and I got an immediate and positive response for that idea. So, I arranged for travel and went down to Dallas, TX to buy yarn. I increased the original order total from 100kg to 250kg as this would lower my cost per kilogram by spreading the travel costs over a greater number of units. So, I spent $625.00 for 250kg of yarn and another $816.00 on travel expenses including car rental, lodging, fuel, and food. The grand total for the trip and yarn was $1,441.00 which means the yarn ended up costing $5.90/kg! That’s way better than the $16.00/kg I paid last time for much better quality yarn.

The downside is that none of the yarn is colored so I will need to color match and dye yarn myself. I’ve began researching the process I’ll need to follow in order to dye my own yarn. It adds a step but given the overall cost savings, it is a good trade. Additionally on the trip, the supplier provided valuable information about importing yarn from India directly which could result in lower costs and fewer supply shortages.

I’ll be opening a second Etsy shop soon which will offer unprocessed natural rope at a very competitive price. The shop will not be linked to the original shop so customers will not know they are the same owners. This will allow us to sell inexpensive rope in larger quantities which will provide better positive cash flow without lowering the premium expectations of the original shop. We don’t want people to question the premium prices for our premium products by directly offering a budget product in the same shop. Basically, we’ll be offering a generic line of products through the second shop. This would be the same as the grocery store brand of canned fruit coming from the same supplier of the brand name canned fruit. The only difference is basically the label on the can or in our situation, the label on the rope.

When processing rope it has to be singed to burn off the the excess fibers from the rope to make it smooth. To do this the rope is pulled over a single burner camp stove. The stove screws onto the top of a 1lb propane tank. These tanks are convenient but cost between $5.50 and $8.00 each.

The propane tanks that are used to fuel the generator are 20lb tanks and cost about $21.00 to fill. So that’s a lot cheaper per pound. But there’s a problem with powering the generator with 20lb propane tanks. As the tanks get low, there isn’t enough pressure to supply the generator with enough fuel. So the tanks end up with a pound or two of fuel that can’t be used. The propane industry doesn’t really care how much is in your tank when you go for a refill or exchange. It’s $20 for the refill or exchange regardless of how much was already in the tank. So it’s beneficial to get the tank as empty as possible before you go to buy propane.

So the generator wastes propane by not being able to use it all and the camp stove uses expensive tanks. There is a lot to be gained by refilling the 1lb tanks. The cost per pound savings is already very attractive. Add to that the savings to be had by simply getting the unused propane out of the 20lb and it seemed like the only reasonable course of action was to buy a refill adapter.

Using this adapter I’ve been able to refill the 1lb tanks multiple times. Due to the low pressure in the 20lb tank it’s not quite possible to get the small tanks completely full but every refilled tank is a savings of at least $6.50. $5.50 for the 1lb tank and $1.00 for the leftover propane in the 20lb tank.

The refill process seemes to have damaged the valves in the 1lb tanks so a little propane leaks out over time. This is not desirable since it wastes fuel and it can lead to a dangerous build up of explosive gas. 1lb propane tank screw on caps have been ordered to resolve this problem.

Here we are at the end of the first quarter and already Etsy revenue is nearly at the year end numbers for 2022. When you factor in the recent transaction through PayPal then we’ve far surpassed last year’s umber already.

Thats the good news. The majority of the sales this year have been from two sources. The guy in Japan will soon have 30 hanks in addition to the 16 he ordered before so I expect it’ll be a while before he orders more. The orders for the Sacramento area may soon dry up too. The business relies heavily on new customers. Rope is a durable good so it can be a while before it needs replaced.

The next step is to setup a stand-alone online store in addition to Etsy and advertise it directly. There isn’t a huge incentive to advertise the Etsy shop with the fees being so high there.

So I bought a yarn winder a couple of years ago and I printed an adapter for it to hold the paper tubes that hold the yarn as its run through the machine. It has plastic gears but the don’t have much wear and it had worked very well. I even upgraded the spindle for it. It gets used a lot. Just in the last week it’s wound 62,000 feet of yarn. So I started to imagine what would happen if it were to break. There’s 3 gears made of plastic, 3 axles, the spindle, a handle, a clamp, and a winding arm that could break or otherwise wear out.

The winder cost $53.23 in 2021. I decided to buy a second one just in case it became unusable. I can’t wind yarn without it so no rope can be made until it’s repaired or replaced. So I went to Amazon to look at my order history and the exact model I purchased previously was no longer available. I was disappointed that I couldn’t get an exact duplicate but I did order a very similar one for $40.53. I didn’t even realize it was $13 cheaper.

The design is nearly identical. The included spindle is the same and attaches the same. The clamp and handle are the same design. The only real difference is that the new one has metal gears. So I’m really glad I ordered this winder. I’ll make it the primary winder and store the old one as a backup. Can’t believe the new one has metal gears and cost $13 less than the one I got 2 years ago.

Decided it was time for the yarn winder to get an upgrade. The tubes fit too loosely so a wad of yarn had to be placed between the tubes and the blue spindle. I redesigned the spindle to include a ridge at the bottom and a groove to fit an O-ring. Overall the new spindle was slightly too big but a little sanding and it is good. I generally like the blue better but functionality is more important.

In the photo it’s clear that the new spindle isn’t the same as the blue one. I must have picked the wrong model to work on. I’ll work with this one for now but it isn’t as sturdy as the blue one. It’ll be fine until I can modify and print the right model with more structurally sound print settings.

So 30 hanks of rope is a lot. It will deplete our supply of natural yarn and more will need to be ordered soon. It requires spools of 991 feet to make 30, 8.5m hanks. The yarn ball in the photo on the right is 312′ which is the length required to make 10, 8m hanks. Did a little math and we should have enough of this natural yarn to complete the order.🤞

So we have a customer in Japan that has ordered rope in the past. They’ve already received 16 hanks of custom size rope from their first 2 orders. Etsy has raised its seller’s fee from 5% to 6.5% in addition to the 3.5% payment processing fee. So every sale made on Etsy, we lose 10% in fees automatically. Sometimes there are additional fees for marketing and miscellaneous “services”.

So our Japanese customer contacts me wanting to order 30 hanks of custom size rope! That’s a lot of rope. Like 837′ of rope. This is by far the largest order we’ve ever had. Last order I quoted him $24/hank but gave him 10% off for the large order and repeat business. Every customer receives a coupon code for 10% off future order when they receive their goods so this wasn’t exactly a deep discount. It turns out that the custom size rope actually requires less yarn despite being longer than a standard hank. This is because it is 0.5mm thinner in diameter. In fact, after the 10% off the $24/hank the rope was still more than the calculated price based on actual yarn required. So we didn’t lose anything with the discount and the customer felt good about the transaction. The $24/hank, which is $1 more than for a standard hank, was determined because it is a custom diameter and length. I’m pretty sure if anyone else was willing to make the special size that he would have ordered it closer to home.

$24 X 30 $720! 10% off brings us to $648 plus $120 for shipping. The total would be $768. Etsy gets $76.80 and didn’t do anything but provide an existing customer a way to contact me. So I asked the customer to email me so we could discuss his order in detail. He did and I asked him if using PayPal was okay for this and future transactions. That he could simply email me with orders from know on. He agreed.

PayPal charges 3.49% for basic accounts. There’s a couple other account types that have lower transaction fees but a flat monthly fee is required. That might be an option in the future but this is literally the first invoice sent on this PayPal account. The invoicing system is decent on PayPal and allowed me to put discounts in and all his information will be saved for future transactions. Since the fee using PayPal is 3.49% instead of the 10% at Etsy we get to keep more of our money and I decided to give the customer an additional 3.5% off for using PayPal. After the additional discount, we’re still right at the calculated price based on yarn required per hank. So no loss from the discount and less loss on the fees.

So the guy paid and thanked me for the discount. And PayPal put the funds on hold! Whaaaaaat? I’ve never had funds put on hold before so why now. I just had hundreds of dollars in PayPal transactions last year for car parts without any issues. Oh wait! I don’t use that account for business anymore. Twisted Jute has its own PayPal account now that has one automatic monthly transactions for $2 for web hosting. That’s literally the only activity on the account for the past two years. So this is the first payment received on this account. The funds will be held for 21 days. The company has money to pay for the shipping for the order and to order more natural yarn since this order will use most of what is in stock. Was hoping this transaction would get the bank account to the threshold to start paying back the additional capital added to the company after it was formed.

I added $1,000 of capital to the business to avoid bank fees for a less than $500 balance. I added another $1,000 to buy yarn last Fall. Any week that the business checking account has more than $2,000 and no liabilities to exceed $100, the business will repay $100 of that added capital. Once the $2,000 has been repaid then a paycheck will be issued to the operating business member each week that the same criteria are met.

The digital counter on the machine is kinda cool. It doesn’t just count the number of times the machine rotates but will shut it off when it gets to the number that’s programmed in. We’ll I manually turned the machine and measured how much rope was made to get me a turn per inch ratio to calculate from. It’s actually 1.543478 inches per turn. Asleep yet?

Well wake up! The manual I found online for the counter is in Chinese so I really have very little understanding about how it really operates and I can only mess with it while the machine is on which is only when the generator is burning fuel. I hate standing in the workshop trying to figure something out while the generator is running. Like how much fuel did I waste?

Today I decided to burn some fuel and play with the counter. I was able to enter a new screen where I can change the increments the counter counts by. I accidentally changed it to 10 and when I started the machine it started to count by 10’s! So I changed that from 10 to 1.5435. I ran the machine a bit and sure enough, 60 on the counter was 60″ on the winder.

So now I can eventually change that to an even more useful number like feet or even meters.

So I started working on the gears required to build a machine that will work the rope back and forth over itself to soften the rope and remove loose fibers. The automatib reverse gearing moves back and forth yet advancing a little each cycle. Two steps forward and one step back!

So Etsy started a thing where sellers that maintain high customer satisfaction get a badge.

This is supposed to give shoppers a better feeling for your shop and they say your shop will be featured more often. There are some criteria though. You have to maintain 95% 5 start rating, 95% response to messages, 95% ship on time, and 10 orders and $300 in sales for 90 days.

This could result in higher revenue for the shop.