Where can you buy Vellux fabric by the yard?

It is unavailable by the yard. Currently you can buy it as a blanket from JCPenney, Walmart and Amazon, though the quality has been variable. There are cheap imitations being sold as "bead mats" in bead stores. Good quality Vellux type swatches available in Ben Franklin Craft stores and from Bead Cottage of Virginia Beach (ask for large 21" square pieces, not BeadSmith 12" ones in the online catalogue).