Duh, I’m going to sell my product and collect the money.
Let me tell you a little story about a designer I know and, believe me, this is only one of MANY stories like this I could reveal.
This designer, I’ll call her Linda, is very talented. I’m talking off the charts oozing creativity. She knows how to make a wonderful product of high quality and deliver it on time. The problem is that she cares more about how her product looks than about making a living. Of course, that’s not how she sees it but it’s true.
She is such a perfectionist that she’ll spend 6 hours on the perfect neckline finishing (which she does by hand because “no sewing contractor can do it right”) even though there’s NO possibility that she can recoup that cost. And she doesn’t really care – as long as “the dress is gorgeous and the client is happy!”
Except that she does care because she can’t make the rent. That’s why she came to me. And it’s causing her a lot of stress to constantly be so close to the edge of going out of business. Not to mention she’s tired. Really exhausted from so may years of working so hard for so little.
Can I offer you a cost sheet?
So when I costed out of a few of her pieces, we sat down together. Lo and behold the retail prices were WAY higher than what she’s currently charging. She was pretty shocked to look at the true COGS (cost of goods sold) when it was all laid out in black in white. But Linda is smart and she wanted to find a better way to do business.
We discussed options to improve her profit margins, including:
- Charging more for her product, keeping the high-end finishes she loves, and appealing to a different customer
- Simplifying her designs and labor to be more in line with her current pricepoint
- Designing backwards – meaning designing with production in mind and only doing what can be done for a certain price
- Considering different fabric choices (she’s an admitted “fabric snob”)
- Cutting pieces from the line that are really out of whack
Linda and I also talked about how, in a way, she’s been treating her business like a hobby. Ignoring the fact that you’re not making money from your business is not OK. Even if it’s for the sake of “your art”.
Right now Linda’s back in her studio working on finding ways to design pieces that look expensive but are easy to produce and still get her creative juices going. And she’s thrilled about it. She told me, “When you have to work within certain parameters it does add an exciting twist and a little more challenge”.
Amen to that
If being profitable is, for Linda, a new and exciting “parameter” she’ll work under, I say AMEN to that. She’ll enjoy her business all the more when she has some cash in the bank.
And if you’re struggling with your costing and pricing, join me and Boaz David for a FREE Webinar about “How to Cost Your Fashion Product”. It’s happening Friday, August 24, at 1 pm EST. You can register here: http://costingwebinar.eventbrite.com/