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The first question is, do you really know your product cost? Have you factored everything into your cost sheet that needs to be in your cost sheet?

Fabric
Trim

• Linings

• Buttons

• Zippers

• Labels

• Tags

• Tickets

Packaging

• Hangers

• Bags

• Boxes

Embellishments

• Screen printing

• Embroideries

• Appliqués

Cutting
Sewing
Working Losses
Damages

TOTAL COST

Once you are sure you know your product cost you then need to know your operating costs.

First what are your billing terms? Are you offering a discount off the invoice price for prompt payment? Are your terms “net” meaning no discount? What does the customer have to pay you on your selling price?

Second, what is going to be the cost of sales? What are you going to pay in sales commissions? What are you going to pay in other selling expenses? (Showroom costs, show event costs, sample costs, and travel costs).

Haven’t done a Dobizo Answers question on the front page of the blog in awhile, but I think this questions holds good merit. As a small fashion line owner your number one source of sales comes directly from your wholesale accounts or on a smaller scale of hand to hand transactions, and at such small volumes neither one makes for a profitable business, but it is definitely just part of the game in the beginning. Some newbie apparel designers don’t turn a profit from their business even after 5 years of operating. This is not just ‘how it is’, but depends on your setup, growth, timing, experience and the nature of your business.

Carl Wesley asks:

“On the level that I operate my business. The only way’s my company makes money is through Consignment/Wholesale from stores or from personal orders or online sales…

The question:

What are a few of the different way’s the big boys of the business earns income through out the year that would differ from a independent label?

Over the past 15 years our firm has serviced dozens of apparel companies from start-ups to companies doing $2 million $8 million $20 million $40 million $100 million $200,000 and even more millions.

We have had clients in the retail business, the restaurant business, the distribution business, and a number of clients in various service businesses or professional practices.

In 90% of the clients we have had, we have recommended to reduce the size of the offering. In nearly every account we have helped we have said, “Offer less product.” “Offer fewer services.” We have done this because we learned LESS IS MORE.

For garment companies fewer styles means:

• Design costs go down
• Sample costs go down
• Fabric risks go down
• Cuts get bigger
• Logistics get easier
• Documentation is easier
• Salesman find it easier
• Customers find it easier
• Sales go up
• Profits go up

And here is why this is the case.

Having the right fashion items at the right time is a good concept for making retailers money. There are 12,000 apparel companies trying to do this every week of the year and more than 10,000 of those companies have sales between $300,000 and $3,000,000 a year with little to no brand identity and little to no brand following. 3,000 of those companies go out of business every year and 3,000 new companies come into business hoping they can do it each year. This would indicate that it takes something more than “strong fashion” to build a business and make the retailer profits on a consistent basis.

Making retailers money on a consistent basis is about TURNING INVENTORY with some significant speed and continuity.

This means the retailer can get it in quickly, sell it out quickly, get more in quickly, sell more out quickly and through this process, make a lot of money using very few $$$$ dollars out of their pocket.

Understanding the business you are in is central to achieving your objectives. My experience with many many apparel, accessory and shoe companies is that more often than not, the owners and management do not have a clear understanding of the business they are in.

By this I mean, they do not understand the target, the main objective, the ultimate goal that would deliver to them everything they want. They don?t understand what they have to do to build a meaningful business that will sustain itself over time and generate profits with consistency.

Let us first agree on the definition of a business. A business is an enterprise created to generate profits or income with predictability and continuity.

This isn?t always clear amongst the business owners we have worked with. Many lose site of MAKING MONEY or EARNING PROFITS and get caught up in the contest of fashion, the excitement of PR, fun of promotion and the pursuit of sales and the thrill of product development. And while all those things are necessary, a business needs profits to sustain itself like a plant needs water and air. So it is critical that owners keep an eye on the ultimate objective.

The Meat and Potatoes Co. is a business catering to up and coming brands in the apparel industry (Think The Hundreds, Crooks & Castles, In4mation) offering a diverse set of services large and small for a small piece of equity in your brand at least that’s how most of their deals are setup. Not bad when you consider the owners (Duke Wu) history in the fashion industry one-half of the brains behind the Artful Dodger brand that sold for $15 million in cash last year to Iconix Brands and Jay-Z’s Scion LLC partnership startup. That’s where the idea for The Meat and Potatoes Co. came to life after realizing that’s what the Artful Dodger brand was lacking (back-office and logistical support).

What can they offer your company?

* Clearing customs
* Warehousing
* Allocation and factoring
* An extensive production connection

Niche 212 Showroom is looking for a sales intern for their multi-line accessory New York location.

Requirements:

• Highly motivated
• Detail oriented
• Very social and outgoing
• Strong computer and phone skills
• College student or recent graduate
• Must live in the tri-state area

They make a note that this internship would be good for the (fashionista) that is interested in the business of fashion. (Most likely the creative mind of a designer would be bored)

If this sounds like the opportunity for you then send your availability and resume to rosa@niche212.com otherwise check out Niche 212 online.

Popularity: 4% [?]

Boosting sales- there is no better time to do it then holidays by creating promotional incentives to drive new customers and get the usual shoppers to spend even more. Even the big guys like Nike are in on the gamble releasing exclusive Valentines day sneakers as they do every year for women and sometimes men.

Brands like Johnny Cupcake have made it big off of taking popular themes, monuments, or holidays and flipping it to their advantage. In October many clothing companies had special sales one reader of Dobizo blog actually sent me an email about how all t-shirts were only $10.31 until Halloween a simple strategic move like I mentioned will entice customers to spend more and they appreciate when you help them save. That’s where word of mouth and self promotion lives.

What I’m talking about is nothing new just not taken advantage of by the smaller guys that don’t have the big budgets or cash flow to give away thousands in promotional products, but that doesn’t mean you can’t join in on the fun.

What role do social networks like Facebook, Myspace, Bebo, and Blackplanet play as far as in online marketing for companies in the fashion industry or any business? If I forgot any social networks sorry your important also!

I remember writing an article about marketing on Myspace and how to get thousands of visitors back to your site or landing page it had a more then moderate response from online blogs and networks compared to most articles on Dobizo that just receive comments, but not many linkbacks due to the nature of the blog. You can see that previous article by clicking here.

I was reading through the Dobizo Answers page looking for some interesting ideas for topics or questions to answer when I ran across:

Jezzy Asks:

“How can I find out if someone has the same name as my clothing label?

If someone already has the same name I intended to use for my clothing label/company but not legally registered as a business will it affect me if I register my label, get a tax ID and license under the label name someone else has?

Something we as the apparel industry don’t talk about openly is delinquent retailers and unpaid accounts or the many stores that just have a history of not paying for merchandise on time or not at all. Many don’t know that their are companies that are out there that make a habit of taking advantage of newbie designers with payment terms that weigh heavily in their favor and most are eager so they take what they can get usually ending up empty handed. (No merchandise, no payment)

I personally have retailers that still owe me funds to this date from Atlanta, Ga all the way out to Texas where Six Figgaz clothing are making major moves as a young entrepreneur.

Many of us don’t focus on is researching the retailers we work with. There are businesses who will do background checks on retailers small and medium to let you know about their payment history and if their are any debts owed to customers so that you can reduce the risk of not being paid, which is critical to a startup business with a small amount of capital or cash flow.

I thought this was a great question from the Dobizo Answers page. Even though it is a basic question it is still very confusing when you’re starting to design your first garments, but I think this question refers to tops more than anything else.

9th CC asks:

“I did research all over the place and I really am lost when it comes to finding a source that teaches the designer how to indicate where the design is to be placed on the garment as far as measurments are concerned. Trust me I know you hate laziness but I honestly cant find something in Laymens.

9th CC

Csup Clothing”

Well I could definitely relate to this problem because I actually remember getting some of my first season shirts/hoodies designed and trying to determine the size/placement variations for the different sizes. Mostly because I had a range of sizes from m-4xl and where a design would sit/look on a medium shirt might not be suitable for a 4x-Large shirt.

This is a combination of Global Fashion Network Member of the Week and a great article topic because Shop Bellari came up with the idea, which I personally think makes for a great discussion.

Basically a member asked why they chose their company name and logo. Many do it for different reasons from family references to the logo resembling something or just a complete custom logo from a sketch.

I personally chose my company name after thinking about what I wanted my company to “be” or represent. Scout Union means Superior Clothing Original Urban Taste. Really I wanted it to represent the best and that is also why the logo is black and gold which are royalty colors. Every garment comes with the blk/gold patch for authenticity of original Scout Union Apparel and it is incorporated into most of the designs.

Logo:

Here are some of the questions I would like to know about your company and logo: (You can include a logo link or picture in your comment if you like)