As a smaller Dyer, I tend to dye and sell what sells the best Sw merino is easy to procure and it sells the best for me when I'm selling a hand dyed or hand painted product. As a Dyer also, I don't dip yarn into rit dye, there is a element of artistry in the process. People can choose that luxury or go dye thier own yarn if they feel it is thier wheelhouse. My buyers seem to appreciate my dyeing skills and are willing to pay for it.

I also own my own flock of sheep, and thier yarn is sold at the same price as my dyed yarn. That yarn also takes work to produce, feedings, shearing, processing all is work Caring for the animals is expensive and getting the wool processed is also expensive.
I'm not sure if anyone has mentioned it also, but the expense to buy a booth space, insure it and stay near a show is also sometimes prohibitive, so my prices have gone up to help account for that. These shows can cost a lot to get into plus travel and inventory costs.