I am an owner of a LYS, and I do sell on consignment as well. I do believe it is a reason I am making it so far, NOT everyone that comes to town knits, but they like hand made items. They come in to look, and remember to tell their knitting friends. I only carry quality high end items, nothing cheesy.
The finnished itmes are often displayed next to the yarns from which they came
, which help sell the yarns to the knitters.
I suppose i would consider my store a Fiber Arts supply and studio store.