Wholesale Series: Production Planning

As I get into this wholesale series I am going to start with how my journey into wholesale began.  Some of you know this story already so I will keep it precise and brief.  In 2008 I opened my Etsy shop when I was 3 months pregnant and laid off from a nice paying job.  Unable to find a job I decided to take the plunge into the creative career I had always wanted.  I started by dusting off a sewing machine in my closet that I had never touched and equipped with the sewing teachings of my grandmother when I was a child and my computer (gotta love google!) I got to work.

I started with baby blankets and burp cloths and soon after I added faux fur children’s ponchos.  My ponchos were noticed by a shop in Japan.  (They found me on Etsy.)  The shop said they wanted to place a wholesale order and I was surprised when they ordered 60 ponchos for their first order.  I sewed every one myself.

After 3 more wholesale orders that season from that shop and another in Japan I gained the confidence to take the plunge into designing clothing.  I created my first collection based on the boutique styles I was exposed to on Etsy but I created my own patterns and designs.  I used designer woven cotton material.  I had the collection photographed, created a line sheet based on my own research and made a list of local shops to target.  I also sold this collection in my shop.  I then set out to find manufacturers.

Little did I know I had already made 2 major mistakes.  Do you know what they are?

  1.  I created a collection that would be expensive to produce.
  2. I marketed a line off season that I would be selling before it would ship to clients.

So let me get into mistake #1 today and I will pick up with #2 tomorrow.  So mistake #1 really has some other hidden mistakes (or learning opportunities for my fellow optimists).  While I did get some orders getting them through production was a huge learning curve for me.

a.       I didn’t understand how my garments would be produced on industrial sewing machines.  When I designed the collection I sewed my samples on a home sewing machine.  I had no idea how industrial machines worked or how my garments would be produced in a production line.  Most home sewing pattern using designer cotton require a large amount of top stitching.  Single needle work is time consuming and adds cost to production.

b.       I didn’t check on fabric supply prior to selling.  It was a sad day when I got another order and had to turn it down because the mill was out of fabric.  I did order wholesale direct but it turns out the mill stopped making that fabric line and I got the last bolts.  No they did not tell me this when I was ordering and being a rookie I didn’t ask.  Hard lesson learned as I could have had better profits with better planning.

c.        I didn’t budget a cut shop.  Or really even think too much about one until I met with the sew shops.  I figured they did it all at the sew shop but most sew shops are not full service and require you work with a cut shop.  Luckily I was referred to a very flexible cut shop that not only worked with my low minimums (though I had to pay extra for it) but they also made the master cut sheet for me using my paper patterns so I didn’t have to pay to have my patterns digitally reproduced.  This only worked because I had already graded all my patterns by hand.

d.      I used expensive fabrics.  The price of cotton has gone up substantially over the last few years but even prior to that it was expensive.  I was working with fabrics that were upwards of $6/yd wholesale.  Boutique children’s patterns with a lot of ruffle require 1.5-2yds of fabric on average.  So fabric alone was costing me $9.00/dress.

e.       Low minimums = high cost  I had to order labels at low minimums so my labels ended up costing me almost 50 cents each based on the design I picked.  Packing and shipping supplies and costs also added up quickly.  The sew and cut shops charged me more because my run was under 100 pieces per style.  All of this added up to costing me about $18/dress to produce.  I wholesale priced them at $24.  Not a good profit margin considering there are other overhead costs in running a business.

I had the idea in my head that as my volume went up my cost would go down but this was not the case in my first seasons.  I ended up making most of my money on the retail side of my business (my Etsy shop) while I worked on building the wholesale side.  This first production run using sewing shops may sound like a flop the way I described it but in the end it all turned out well and gave me some great knowledge and tools moving forward with future collections.

Here is what I want you to take away from my experience:

  1.  Gain an understanding of wholesale production.  You do not need to go to school you can simply do some online research and talk to people in the industry.  To get you started here is a post I did on finding sewing help and an overview of the production process.  https://thefashionbusinessmentor.wordpress.com/2012/01/23/finding-sewing-help/
  2. Be sure to ask about fabric stock before you design your collection.  Check out point 3 in this post to learn more about what you should ask and fabric planning.https://thefashionbusinessmentor.wordpress.com/2013/01/16/want-the-gritty-truth-my-top-3-flops-of-2012/
  3. Be sure you have a proper profit margin and if you don’t redesign and resource supplies and labor before you start selling.

In my next post I will cover planning for wholesale sales/seasons and designing and selling to not compete with your wholesale clients.  Until then…yours in success, Katie TFBM

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