Your problem here is that 'sed' is expecting a filename as an argument. The string you are providing ('$varin') does not happen to be a filename. If you want sed to work on your string (as opposed to a file whose name shares the value of your string), you can do a few things...
e.g.
Pipe the string into sed...
echo "$varin" | sed '1d'
Redirect the string into sed...
sed '1d' << !!
$varin
!!
You can wrap the code above with $() or ``, or use 'read' if you want to assign the output to a variable.
Note:
The second example will pass $varin into sed exactly as it is stored. The first example however needs "" (i.e. "$varin") to prevent 'echo' tokenizing the input string and outputting with a single space delimiter (which is why echo $varin is all on one line but echo "$varin" is not).
Try...
echo a b c
echo "a b c"
echo "a
b
c"
Furthermore, note that if you used single quotes ' ', you would output the literal '$varin' because single quotes would prevent the shell evaluating and expanding $varin to the value of the variable with that name.
HTH