Being an entrepreneur is an exhilarating roller coaster ride! One moment you’re killing it, and the next minute you are asking yourself why you got out of bed that morning. We all have those specific challenges that can knock us down. Here at Stitch Method we encountered some we didn’t even see coming. When we started looking for office space, for example, we thought “this will be fun! Looking at real estate is awesome!” Wrong. Looking at real estate IS fun. But it takes time out of your day when you need to be working on other things. It takes more time and more money than you thought to find the perfect place, pack up everything, move everything, organize all the people involved, set up the phones – and it goes on and on! It was exhausting.
We talk to a lot of new design entrepreneurs and everyone has their own set of struggles. Since I had my own line, I can relate to so many of these. Here are the top three that we hear the most:
Bridging the calendar from retail to wholesale.
A lot of designers start their businesses selling direct-to-customer. This is a great way to get your product out there and do some initial market research. As things start picking up, however, a lot of designers wish to also start a wholesale business. However, when you’re selling to boutiques you need your samples ready months before you do for direct-to-customer sales. Making that jump leaves many designers exhausted trying to chase down the calendar and determine whether or not to skip a season to make it work.
One way to help make the transition easier would be to clearly lay out a calendar with deadlines for your direct-to-customer sales as well as development of a wholesale product line. You will need to start working on multiple seasons at once, if you’re not already. This will be a bit of a juggling act at first, but after a season or two your wholesale orders and direct-to-customer offerings can be produced at the same time.
Finding the perfect materials for your product.
Starting small as a new designer is smart. However, when you start small that means you only need a few hundred yards of fabric, or only 200 buttons. There are great vendors that will sell low minimums to new emerging designers, but there aren’t many of them. This means that the options are limited, and this can make it very challenging to find the exact fabric or the exact button that you have in mind.
One way to solve this challenge would be to switch the order of your design process. If you design your line with very specific fabrics or trims in mind, it may be exhausting to search for these items only to find out that you need to produce far above what you want just to meet minimums.
Materials can be inspiring! Before you put pencil to paper and start sketching, visit your favorite fabric and trim vendors to check out their current lines. If you are using the fabrics available at lower minimums to inspire your collection you will know you can easily order and produce without breaking the bank on high minimum goods.
Pricing garments at the right price for a profit.
The cost of fabrics, trims and manufacturing decreases as the amount ordered increases. For instance, it costs more to cut and sew 20 shirts than it does to cut and sew 1,000 shirts. This means that when you start out with your 20 shirts, each shirt will cost more to make than it will when you produce 1000 shirts. Due to this, it can be hard to juggle the correct profit margin and still sell at the price point that a target market demands.
One way to ensure you are pricing your product correctly is to use an accurate and updated cost sheet. Make sure you know exactly what it costs you to produce one item before you set your retail price. When you are selling only direct to customer you have a little more flexibility with your margins. Take the company Everlane, for example. They are very transparent with their pricing structure and they sell direct-to-customer so they are able to sell their products at a margin that makes sense for their business.
If you do want to sell wholesale and have your products in traditional retail stores, then you’ll want to plan for that in your pricing. Work with the numbers you have now. You can’t anticipate with certainty when your business will grow from 20 shirts to 1,000 shirts. So we would recommend that you price your product for sale at the price that it costs you to produce now. In the future, it may be easier to lower your price than it would be to raise it, if you find that is a necessary step.
These are the main struggles that we encounter when we meet new designers. Our job is to help you solve these problems! We want to hear from you. What other challenges do you encounter?
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