Satin Sales

Hey, hi, hello, it’s me again… coming at you with yet ANOTHER Parsons x Teen Vogue assignment. I’m so close to being finished with this course, I can’t believe it!

In today’s assignment, we were asked to look at the logistics of the article of clothing we made. Now, I kind of cheated a little…. but with good reason. The assignment called for a 36″x54″ piece of fabric. Since my chubby ass couldn’t fit into ANY combination I tried with that piece and I had no friends available to be models, I used a slightly wider piece, 48″x54″. Crossing my fingers I don’t get dinged for having a larger than sample size body!!

Our next assignment is to use the cost of materials for the piece we constructed, and figure out what the MSRP would need to be if it were to be a profitable piece.

Anyway, here’s my piece:

IMG_5048.JPG

I used $10 total for the satin fabric, along with another $1.50 for the woven cord straps. I already had some black thread at home in my sewing machine so I didn’t count that in my calculations. For materials, it was a grand total of $11.50.

The assignment stips us that we need to add the cost of one hour working in a retailer(as to simulate the person making the top), which for this example I’m going to use $11.00 as that is the minimum wage here in Washington.. It also tells me that I’d like to make a 20% profit minimum on my top. At this point, it would cost $22.50 for materials and to actually make the top, 20% is $4.50, which puts us at $27 for materials, creation and profit. Here’s an easier to read breakdown:

Materials: $11.50

Seamstress: $11.00

20% profit margin: $4.50

Cost plus Profit: $27

MSRP: $35

Now selling these for $32 and getting a $4.50 profit would be alright if we were just making a few. But the assignment doesn’t end there.. It now asks us to dig a little deeper… Now it’s wondering what we would have to do if we wanted to sell this on a mass level to retailers. Basically at this point, you’re streamlining your process and finding a cheaper source for materials so you can sell your product to retailers at a wholesale price, which is typically 50% off MSRP. It costed me $22.50 to make the top, which means I need to find a source for materials that will only cost me $11.25 per shirt.

Lucky for me, I only needed to chop off a measly 25 cents! For the sake of the assignment, let’s say I found a satin that was $5/yard vs. the $10/yd I paid originally. For the 48″ I need it would cost me $6.65. Now, my material costs sit right at $8.15. If I can find a way to make my shirts in, lets say, 20 minutes instead of the 60… I’d only be paying my seamstress $3.63 per shirt. Materials and production now cost $11.78. Lets update the above information:

Materials: $8.15

Seamstress: $3.63

20% profit margin: $2.36

Est. Cost(Including profit): $14.14

MSRP: $35

Wholesale price: $17.50

As you can see, I’m now selling my shirt for wholesale at $17.50 and actually pulling in a profit of $5.72 per sale, which is more than my original 20% window. This margin will allow for my top to be sold in multiple channels through multiple retailers and still give the retailer a cushion for markdowns and liquidation. Numbers aren’t my strong suit, but I gotta say this assignment really helped me to break down the logistics of profitability. I know I’ll be coming back to this post when I’m trying to price my lingerie.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s