First of all, I don't know how you even got this stuff at this time. It's so early in the game it's ridiculous.
SECOND, you're missing valuable information. You can't dye wool.
You dye yarn, and only with herbs that say you can dye with it. You can also dye yarn with certain fruits. To make yarn, you have to purchase the yarn maker from the junk shop, which is a whopping 4,000G. You should be saving up and not worrying about wool or yarn.
THIRD, I have a tip for you. Non-dyed yarn [especially special yarn] sells more than colored yarn. Coloring it will seriously reduce the value, because yarn not dyed alone is worth 1,250G.
FOURTH, I would like to point out to you that for your sheep to win in the Sheep Festival [You get the Baa Baa note if you win] you need to NOT shear it and leave it a full coat. You also need to have a lot of hearts for it.