Download The Fashion Designer Survival Guide - Mary Gehlhar PDF

TitleThe Fashion Designer Survival Guide - Mary Gehlhar
File Size2.1 MB
Total Pages196
Document Text Contents
Page 1

The Fashion



Revised and Expanded Edition
Start and Run Your

Own fashion Business
Mary Gehlhar

Page 2




One Piece of Advice

The Reality

You Survived the Bad News

The Plan

Elements of the Plan

Setting up the Business, by Melanie Jones

How Much Do You Need?

Where to Find Money

Factoring, by Tim Moore

Know Your Customer

Have a Point of View

The Trends

The Collection

Signature Items

The Quality Standard

It Must Look the Price

Commerciality and Show

Learn First

The Challenges

The Sources

Once You Order

The Production Plan

Sample Production

Tips and Considerations When Hiring a Patternmaker, by Sally Beers
Production Options

Production Management

Factory Management

Be Your Brand


Press and Sales Kits

Other Marketing Materials

Page 98

Understand the price range for your market. Before you establish price, compare the items in your

line with similar collections to establish a range that makes sense in the marketplace. Even established

designers send employees to the stores regularly to research the price of competitive items and use that

as a guide for their own product. If a designer is starting to produce leather coats, she will search for a

leather coat that is similar in quality and image and plan to price in the same general range.

Many new designers are positioning their product in the contemporary market alongside brands

such as Rebecca Taylor and Catherine Malandrino. This positioning requires high quality at a lower

price point, which you must be able to sustain from season to season.

Be ready to explain your price point to the buyer and how the qualities of the fabric, production, and

construction define the cost. Never underprice your product to get into certain stores. Stores buy you

to fit a certain price point, and you can‘t adjust that later. the loss you take from underpricing will only

accumulate as your orders grow.

Page 99

Covering your costs. One of the biggest mistakes new designers make is not charging enough to

cover their costs, much less provide a profit. the price must cover the cost of goods sold, as well as all

other indirect expenses.

Cost of goods sold (COGS) includes all expenses related to producing the items ordered by the

stores. This covers the obvious expenses tracked throughout production, such as buttons, zippers,

marking, grading, fabric, construction, and shipping.

Indirect costs include design and development costs and sales, as well as general and administrative

costs. Design and development costs include all the expenses of the sample collection, such as fabrics

and first patterns, as well as research and development expenses, such as trips to fabric shows.

Remember to account for your own labor if you make the patterns or samples; otherwise, the pricing

Sales, general, and administrative costs include the costs of running the business, selling, and

promoting the line. These include overhead, including rent, bookkeeping, salaries, and telephone;

sales expenses, such as lookbooks and trade shows; advertising; and public relations. Markdown

allowances, discounts, returns, and canceled orders are sales expenses, and if they apply to you, your

pricing must cover them.

Cost of goods sold is attributed to each specific item, but design and development costs and sales,

general, and administrative costs need to be divided up and allocated across the entire collection. The

process takes time, and designers become Excel wizards as they work to allocate costs correctly.

Calculating wholesale price is not an exact science and can become complex. If you work with a

sales representative, ask the rep to help you. Several pricing methodologies exist, but one of the best

approaches is to apply the same markup margin the retailer uses to the cost of goods sold. The markup

will cover all indirect costs and provide the profit margin.

Retail pricing strategies may vary by store, but generally, retail markup equals double the wholesale

price plus 20 to 80 percent, referred to as 2.2 or 2.8. Apparel is at the low end of the scale; jewelry and

shoes are at the high end. Markup can be as high as 3.0 for product made in Europe because of the

extra cost of duty and freight. To price product with the same markup margin as the retailer (or 2.2 in

this example) the math works like this:

COGS = $50

Wholesale price = $110 ($50 × 2.2)

Retail price = $242 ($110 × 2.2)

At this stage, return to your research and determine whether the resulting retail price makes sense in

the marketplace. If it seems too high, it means the wholesale price and COGS are too high. To save

your margin, you must find a way to simplify the item design, use less expensive materials, or gain

production efficiencies with larger runs to bring down the COGS. When manufacturing in Italy

became too expensive, shoe designer Kristen Lee moved her production to Brazil to keep her pricing

in line with the contemporary shoe market. Examine the resulting margin to determine if it is

sufficient to cover your rent, salaries, and other fixed costs. If not, again you may need to alter the


Generally, the goal is for pricing to leave roughly 15 percent net profit margin after all direct and

only way to increase your margin is to increase your price or lower your costs. As you are in the

business longer, you will build in efficiencies, and some costs will go down. For example, you will

accumulate patterns that can be used again or adjusted just by switching out sleeves or collars. You

will meet the minimums for cheaper production and discounts in fabric and materials. The margin will

increase as the business grows.

Page 195




Sustainable fabrics

Swap outs


Target customer

Tax liability







Trade shows



Trunk shows

TSM Capital


U.S. Patent and Trademark Office

Unique selling proposition (USP)


Vanity investors

Vertical manufacturing




Women business owner loans

Work schedule

Praise for The Fashion Designer Survival Guide
Women‟s Wear


Margaret Hayes, President, The Fashion Group


-and- New York

Daily News

-by-step guide to

succeeding on Nancy MacDonell, News Editor,, and

author of the Classic Ten: the True Story of the Little Black Dress and Nine Other Fashion Favorites



Page 196

Fashion Wire Daily

-read for anyone in the world of fashion. Gehlhar offers practical tips and strategies to

Soma Magazine

Rebecca Taylor, designer

This publication is designed to provide accurate and authoritative information in regard to the subject

matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal,

accounting, or other professional service. If legal advice or other expert assistance is required, the

services of a competent professional should be sought.

© 2008 by Mary Gehlhar

Published by Kaplan Publishing, a division of Kaplan, Inc.

1 Liberty Plaza, 24th Floor

New York, NY 10006

All rights reserved under International and Pan-American Copyright Conventions. By payment of the

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invented, without the express written permission of the publisher.

July 2008

10 9 8 7 6 5 4 3 2 1

eISBN: 978-1-4277-9977-7

Kaplan Publishing books are available at special quantity discounts to use for sales promotions,

employee premiums, or educational purposes. Please email our Special Sales Department to order or

for more information at [email protected] or write to Kaplan Publishing, 1 Liberty Plaza,

24th Floor, New York, NY 10006.

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