How much can you spend the first year?

Meghan asks an interesting question:

In response to your posting How much can you make the first year? I have a counter question — How much can you spend in the first year? More specifically, how much would be an average amount of money to spend coming up with 6-10 samples to bring to market (leaving production costs for later)? And to be more specific, I’m talking about samples of women’s apparel (shirts, pants, skirts, dresses). I just thought I’d throw that out there since not much attention is given to start-up costs first getting into the business.

I figure you guys will have a field day with this one. Try to limit your comments to the range of costs particular to product development rather than the cost of goods which can vary greatly.

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13 comments

  1. Judith says:

    Thankyou for posting this Kathleen. I would so dearly like to know this. I would like know any information about this. I have been trying to figure this out myself. I don’t know where to begin.

  2. J C Sprowls says:

    My questions are:

    Are we looking for a topside (i.e. SWAG) estimate of what to risk as venture captial?

    Or, are we looking for something a little more concrete, like:

    How much did you spend on R&D for last season’s line?, or
    How much did you spend to produce last season’s line?

  3. Mimi says:

    I preface this by saying I do not know the answer to this question – but I’d also like to add that I doubt this question can be answered here. Here is my reasoning:

    What is a skirt? A top? A pant? There is no definition that encompasses all of the design details, construction techniques, types of labor and fabrics one could use. I think the only way to find out is to get specific about your product, interview the people/companies who provide the services you will need, and learn how their fees work.

    Any answer given here is likely to be too broad to satisy a burgeoning designer.

  4. Kathleen says:

    I’d really like to see this topic fleshed out some more. Does anybody care to volunteer some sketches that we can use for costing purposes? Like Mimi says, what’s a blouse or pant? On too many web sites, I’ve seen t-shirts described as “women’s blouses”.

  5. I thought the idea was something much more concrete and feasible: sort of like Zoe’s answer to the complimentary question.

    i.e. rather than answering “how much CAN you spend,” andswer “how much I spent…” with links to a website showing the clothes from the relevant season. Anybody willing to do that?

  6. J C Sprowls says:

    Jinjer,

    Good idea. I’ve started an email to Kathleen, offline, to ask if I can participate re: this topic.

    I’m in process of finishing a men’s dress shirt block system which makes up in to 5 styles. And, I’ve attached some rudimentary costs to the tasks I’ve performed so far (e.g. 6 hrs drafting, 6 hrs proving, + inputs, + changes, + re-proving, etc).

    My website will not be functional by the time I finish this project (this weekend). But, I would be in a position to post pics to the bulletin board if Kathleen approves my proposal.

    My disadvantage is that I sketch poorly, which is why I delve so deeply into the technical verbosity of patterning and other sew tech geeky stuff (highly technical terms, all). But, I will be attending a class with one of our noted members (ahem…), soon, so I can break through that mental block.

  7. Hil Davis says:

    JC Sprowls:
    How much would labor and production cost total for a made to measure shirt (so every shirt is different)in Canada?

    Thanks

  8. Hil Davis says:

    Sorry, for asking another question in this posting, I did it by accident.

    To answer your question though, I think you need to do a complete analysis of all your overhead costs from bills to travel to patterns to shipping, etc. Then make a honest revenue forecast based on number of items sold multiplied by the revenue per piece. Then assume a COGS margin and then apply the inverse of that, the profit margin to the cost of your business as detailed in the above advice.

  9. J C Sprowls says:

    Thank you for the feedback, Hill.

    To be honest, I wouldn’t outsource MTM – I’d keep that in house. Why? Because that’s how I want to administer that side of my business.

    If I were to take on MTM, that would require sufficient staff to bring a portion of RTW production in-house, too. But, that’s another discussion. I haven’t committed to producing RTW, yet.

    For the purposes of this discussion, I had hoped to generate some real numbers for R&D of one shirt style, then illustrate the economy of scale by distributing the cost across 5 styles because of using a block system.

    Though, a more thorough discussion on R&D needs to be done in terms of range of cost. Unfortunately, that would require a side-by-side comparison of several proto garments from various designers (e.g. dress shirt compared to sheath dress compared to structured garment, etc).

  10. DacusB says:

    How do you take orders at tradeshows?

    I intend to exibit at the MAGIC in 2007. What is the process of taking orders and what is the necessary paprwork to have?

  11. Sarahs says:

    IMHO Consider:
    PATTERN MAKING costs charged either by the hour or piece.
    SAMPLE Fabric, Trim, Notions costs (you could be surprised if you don’t work with your chosen fabric-style combo)
    FIRST SAMPLE made by you or your sample maker then sent to your manufacturer. Most production houses can take the sample you sent + fabric to recreate the garment for costing. Typically 3x’s eventual cost per unit. 30$/hr is very fair, esp. if that includes cutting-ask. A simple skirt may only take one hour. You could count on your production being a third to a quarter since they charge a full hour even if it is just a portion.
    ORDER FABRIC, TRIM, NOTIONS make sure you get the cut width (RTC roll to cut(?)) on the fabric for markers.
    GRADING & MARKERS much info in blog
    MISC. labels, hangtags, promotion, shipping, thread, trim, notions.
    Do as much as you can yourself. It saves you $$$ and makes you smarter. So you can’t do the cutting, but you can source. People charge a lot for it. I would, cos it takes valuable time away from other very important duties.
    The more units you make the more costs get spread out.
    Biggest costs are patterns and samples for a small DE. Try to be very exact with your measurements and numbers.

    Cheers

  12. colleen says:

    Kathleen recently did a report on Patternworks, a patternmaking/grader/marker company based in CA. Their website, patternworksinc.com, includes a price list which clearly details work performed and cost. This will give you a starting place for product development costs.

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