Category Archives: Business Planning

Production Approach 1 for Small Fashion Businesses

I continue my series on production for small or independent fashion businesses over on my site today.  Learn how to run financially lean and avoid overstock.


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Understanding Whoesale Seasons

When you start wholesaling your fashion brand it is important to know two things so that you are not competing with the stores that place order for your product:

  1. What is the correct season to take orders for (wholesale order timeline).
  2. When your client will take delivery because this is when you can start offering that product in your retail shop too.

Let’s look into the correct season first.  Typically stores place order for product 3-6 month in advance of when they want the product in their store.  Once the product is in the store they want it to be relevant to the upcoming season for another 2-3 months.  This means that they will order for Spring 4-6 months before Spring actually arrives.  In the kids market Spring ordering starts in the Fall and ends in January.  You will need to have Spring orders ready to ship January to March with the bulk in Jan/Feb.  So if you are trying to sell a Spring collection in the spring and you are not getting orders it is because you are wholesaling the wrong season.  In Spring you should actually be trying to take wholesale orders on your Fall line. (Accessories have a different schedule as they fall into a gift market category but can also fall into the clothing schedule too.)

Once your orders start shipping you can then offer your line retail in your own shop.  Shops want to offer something new to their shoppers.  If you have already been selling it for 6 month it is less appealing to a store to purchase it from you.  There are exceptions to this.  I have had many stores place immediate orders for product I have listed in my Etsy shop.  Those orders are nice but they are few so if you really want to expand wholesale you need to get on the wholesale schedule and market your line to a broader spectrum of retail buyers.

Have a specific wholesale question?  Email me at

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A HUGE CHANGE: Selling Wholesale Direct

I am currently undergoing one of those segments in my life I love best.  A transformation period.  I have my cycles in life and they go something like this:

Curiosity, Learning, Implementing, Teaching, Understanding, Transformation, Curiosity, Learning….

I will forever be a teacher at heart, which is why I started this blog.  But I am not a traditional classroom teacher (though I have done that).  I really try to absorb the most I can out of life and extend my findings to others.  I learn with all my being, not just my brain but with my emotions and my intuition and then I share.  I think it is the socially responsible thing to do.  As a teacher I am also a life student.  Those that love to teach, love to learn.  They have curious minds and open hearts.  I have also started this blog because of what I can learn from you.  I really enjoy my interactions with my fellow designers.

Back to my transformation.  I have soaked up a lot in the last 2 years of working with showrooms to get my line seen on a wholesale level.  It has been to say the least a BIG learning experience for me.  It has consumed me in trying to learn and keep up.  It has soaked up my time and hindered my happiness.  It has led me to new level of understanding about myself and to make a HUGE decision.

I have come to understand that I feel so consumed by wholesale because it came at me too fast.  Because I was struggling to keep up on a path that I was still learning I was drawn away from my true identity as a designer and my heart’s passion, other people.  Because I was learning as I went I made a lot of mistakes that costed me time and money.  I understand that I wouldn’t change a thing about my path because it has brought me to where I am.

THE HUGE CHANGE  Last week I decided I would no longer carry my line in my showrooms.  I am taking the wholesale sales responsibilities back and in that allowing myself to design the way I want to design.  As I implement my new design cycles I will share them with you all.  But know this.  I feel in control again.  I feel empowered.  I feel that my loyal wholesale customers will have no problem with this and I feel new customers can be reached and will be excited about the new way I plan to sell to them.

It is transformation time which means I will be doing a lot about learning and sharing with you.  If you are in a position of wanting to sell wholesale but are doing it on your own with no showroom representation, stay with me.  You are going to learn a lot.

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A New Way of Doing Business

This morning I caught a news segment featuring Gabrielle Reece plugging her new book, My Foot is Too Big For The Glass Slipper. She summed it up that is about her step back from her career to find balance in her life and that she shares some unpleasant truths about her life to help her readers. She made one comment that resonated with me. I am ad-libbing but it went like this, “Where did women get the notion they should have it all. There is a certain sacrifice required to keep a family and career intact.”
Fast forward to this evening. I pulled out my last 5 issues of Marie Claire that I haven’t had a chance to read yet and started with the Fall 2012 @work issue. In the editor’s comments at the front of the magazine she states in this issue she is offering up “women who have not achieved necessarily balance but big lives that accommodate work, family, dating, travel, hobbies, and the pursuit of happiness whatever form it takes.”
I call these moments “life lessons beckoning”. When more than one unrelated source is delivering the same message at the same time, LISTEN!
One thing I lost in trying to grow my business was my role as a mother and wife. I am working ALL the time. My mind is on work when I am not working. It is hard for me to be present with my family. I resent this but can’t help myself. Somewhere in the business of fashion I have lost myself.
So I have a new plan. A plan that will change the way I operate my business and the way I design my collections. It changes the standard way of wholesaling and the relationships I have with my retailers. It changes everything. It is exactly what I need right now. I have a new plan to move forward with my business in a way that will allow me to be present with my family, live by my principles and own my own fashion company!
I have realized that while the wholesale fashion business has a certain way of operating, it doesn’t work for me and my business. I still want to be a part of it but I have to create a way of operating that works for me and invite retailers to be a part of it. Somewhere along the way I forgot that I offer something special and unique. It is something people want to buy. I have let showroom reps and market sales dim my confidence. I have let production woes burden my design time. I have let bad ordering and payment protocols of the industry put my family in struggling financial times.
But no more. Big changes are coming for kangacoo designs in the coming months. I have a plan that I think will work for all small designers trying to make it in the fashion industry. I am keeping it under wraps as I put it in place for my company and test it but along the way I will be sharing bits with you.
In the meantime I am working on 2 new and exciting blog segments. A Social Media Marketing workshop where I will introduce you to women that can help you grow your audience and teach you how to engage the audience you have. And a Supplier Virtual Tradeshow where I introduce you to suppliers of the materials you already use to broaden your sourcing arena.
Stay tuned and hold on! We are going onward and upward…together!

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Cash Flow: New Kid in Town

OK so I just finished a conversation with my husband that feels a bit like groundhog day. Once again it’s time for stores to take delivery of their orders and wholesale customers are falling off the radar or making excuses to not take the order.

OK I have to get this off my chest.
Rant: If you place an order for something you are committed to buying that item in any other case it seems but wholesale fashion. I don’t understand how stores can place an order, allow a manufacturer to pay to make a product and then just not pay for an order.
Thank you I feel better.

Reality 1: There will always be a percentage of stores that don’t take an order. Stores will close or not ever open. Those you have to factor in and if you have a good sales rep you will almost always be well aware before starting production.

Reality 2: Stores will over order at market. They get excited and place lots of orders optimistic about the next season. However when sales are down and cash flow is low for them they don’t take orders. And guess what orders they don’t take? It’s not the established lines they have been selling for years. it’s the new line they wrote. Yours. So now you have merchandise that you paid to produce and no payment. Hardly fair.

Reality 3: Your showroom reps will not take any financial responsibility for the orders stores don’t take. And they will still want full showroom fees.

Solution 1: You have to protect yourself from what I like to call the “New Kid In Town Shaft”. Your orders should look like contracts that customers must sign. Your showroom reps need to be on your side and clearly communicate that writing an order is a contract to take delivery and that there are consequences for not taking orders. You need a good follow up plan with stores that place orders as you go into production. These are just a few things I assumed were in place when I hired a rep but now I realize I should have clarified these things up front. I love my reps but I now realize I need to have a meeting about how exactly their order writing and follow up procedures are set up so I know where I need to step in or ask for more.

Solution 2: Reacting quickly to sell undeliverable merchandise (canceled orders) is key. Call your good wholesale customers you have already delivered to to see if they can use more inventory. Post a sale online for your retail customers. Move the product!

I just wanted you all to know you are not alone if you are experiencing this and if you are considering wholesale production you need to factor this into you financial planning. This happens to everyone and it is one of the biggest cash flow setbacks for a small fashion business.

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A Fly on the Wall in a Showroom

Today I drove up to the LA California Market Center to my showroom to drop off my Fall samples for market. Market started today so I was a little behind the ball. (Oh the joys of fashion and delayed production.) It turns out my timing hiccup actually played in my favor.

I stayed to help hang and display the line (a nice luxury being so close to my LA showroom) and while I was there a store was placing an order for another collection. Once they finished with that line the rep offered to show them another well known line. They store owners kinda hummed sayng they carried the line before and that the price points were a bit high but said to show them a few things anyway. They looked and commented that the items were cute and asked for prices. Then they commented that the items were darling but designed to be layered and really only “darling” when they were layered. They went on to say that one you put the layers together to make an outfit the customer ends up paying over $100 for one outfit and in this economy it just doesn’t make sense.

They are right.

Look I struggle with cost vs profit margin. It’s tough. For most of my items I don’t make the normal “double your cost to get your wholesale price” spread. I often work backwards. I look at what a fair market price is and then try to get my labor and fabric prices down to increase my profit margin. I do this in hopes that stores will pick up the line in this economy and that it sells well for them. If I can get loyal customers now by catering to their needs (designing at price points that fit our current economy) then I know they will be loyal customers when the economy turns around and then I can reintroduce higher price point items.

I encourage you to look at your prices today. Do they fit the current market/economy?

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What I know about Cash Flow…or lack thereof

OK so this post is way overdue! I have to admit that sometimes I hesitate to write on a topic because I haven’t completely figured it out yet. BUT I have reminded my self of my committment to my readers to not share all the answers but what I have learned so far on my journey that may help others. So here it is my list of what I know about cash flow and a fashion business.

1. It sucks. But it must be mastered if you want to run a successful profitable business.
2. You need a line of credit but most banks won’t give you one in your first couple years until you show increased profitability and a certain level of income from your business. This means you have to rely on credit cards with usually higher rates in the meantime.
3. When you are ready to apply for a line of credit be sure you have: a tax return of the most recent year. A profit and loss sheet showing you are not spending more than you are making. Banks want to loan to people they know can afford to pay them back.
4. Be smart about what you use a line of credit for. Using it for production costs until your customer pays for the order (since you front production costs) is a smart way to use the line of credit. Buying all of your materials up front so you can receive a discount is another smart way to use your line of credit. Redecorating your studio is not a smart way to use a line of credit. Wait until you have cash in the bank for something like that.
5. Know your terms. If you have to pay your line of credit back every 30 days you need to make sure you are managing your production and cash flow effectively. If you are not good with numbers hire a bookkeeper. Yes it’s an expense but much less costly than all the interest fees and potential loss of your line of credit.

Ok so all this talk of line of credit. Do you really need it? Why should you consider it?
1. You have opportunities to go into larger ventures. Often deals with larger companies have net terms and high volume. If production is going to cost $5000 dollars and you won’t get paid on your order for 60 days the line of credit bridges the gap.
2. You currently buy your supplies in small quantities and as such pay a higher price for goods. With this you run the risk of the supplier running out of your material when you need more. However you can’t afford to buy more at one time due to cash flow. This really applies to businesses that wholesale and plan their seasons 6 months or more in advance. Cash flow aside (If you pay $12 a yard because you buy less than 15 yards at a time consider that you can buy 30 yards for the same price at wholesale. Start calling the direct manufacturer if you are currently buying from a distributor.)
3. You are having a hard time paying for both your household expenses and fronting the production costs for your business.

My husband was in banking prior to joining kangacoo designs and still I was denied my first time I asked for a line of credit. It’s very important to find a bank that deals with small business start ups and will take the time to tell you the requirements they have for offering a line of credit. Not all banks have the same requirements so shop around.

Cashflow really goes hand in hand with production managament, sale management and also in making smart choices when buying services to help you atart up your business. I will talk more about this in the coming months. In the meantime I welcome your questions on cash flow. Email me

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