Who sells the most at market -and why

Every Friday, the California Apparel News newsletter contains ungated links to free content. Last Friday’s edition had numerous articles about the recent MAGIC and satellite shows in Las Vegas. The one element that is increasingly common -practically a clamor now- based on interviews with attendees and exhibitors alike is that immediates are selling best.

This isn’t anything new, I’ve been saying immediates (meaning, product delivery within 4 weeks) are the singular advantage you have over everyone else but DEs, in their struggle to be as profitable as the big guys, are copying what they think is most profitable about those models when what they’re really doing is copying the most obvious. This is a mistake. If the big outfits could, they’d try to be littler in terms of shortened delivery windows, smaller lots and higher prices. DEs are ideally suited to produce immediates; you can get more money for them because they are rare. Cutting to order prevents a stockpile of inventory diminishing the value of your product that you are forced to sell -and probably for less than you anticipated. Zara never has a sale, their inventory turns in two weeks or less.

A lot of DEs are making up product in advance of orders. Unless they have a track record and proven distribution already, most of them go broke. At best, they bleed money until they get lucky but most don’t. Get lucky that is. Making it is never a question of luck! Most DEs who adopt this model fail but their failure is invisible because they don’t last long enough to serve as a warning to other startups. DEs only see the outliers that get lucky enough to peg the market just right which builds the expectation that if you only hit the trends, you can make it too. In this way, the rare performer becomes the norm that everyone tries to copy. Worse, DEs aspire to producing large lots. I can’t tell you how many people say they have to make do with producing domestically until they get the numbers to go overseas when a different perspective could change their entire plan for the better.

Like it or not, people who will thrive in the coming environment are those who can produce for themselves. I realize this makes me unpopular but more of you seriously need to think about ways you can start producing for yourselves. The idea of a DE opening their own sewing factory faces two psychological hurdles and no one even realizes it. These two hurdles are what I describe as the franchise mentality and the second can be loosely defined as the desire to keep distance from production because it is repugnant and distasteful -only no one wants to admit that because it’s not politically correct.

The franchise mentality is an outgrowth of productivity myths. Are you familiar with Moore’s Law? Moore’s Law is an observation that computing power doubles (an order of magnitude) every two years. People think this is also true of productivity; one example being the lauded four hour work week. Over the past five years, it seems more people are looking at clothing production as MLM or a franchise; a turnkey operation they can do in a few hours after dinner. This is not a reasonable expectation. If your contractor were only working four hours a week, your stuff would never get done so the very idea that one holds this expectation for themselves but an entirely different yardstick for someone else strikes me as hubris.

Okay, so let’s consider the alternatives if you’ve decided to pursue producing your own stuff instead of doing the franchise thing. What are your barriers? Here’s a short list of possibilities:

  • You don’t have the money
  • You don’t have the skills
  • You don’t have the time

You don’t have the money. Of them all, this makes the least amount of sense. If you don’t have any money, why are you doing this? You obviously must have some money or you couldn’t batch order a big quantity in advance of orders so you are finding money somewhere. Be honest; you’ve decided it’s worth paying for the batch order but you don’t want to invest in your own operation. The logical solution is to quantify what your decisions are really costing you versus what you really need. One reason people think a big order is okay is because accounting rules say inventory is an asset. Ha! In the rapid cycling apparel industry, inventory sitting on your shelf is a liability. It’s worth less the longer it sits there. Ideally, product comes off the sewing line and is put directly in a shipping box.

Let’s say you write a check for $20,000 to pay production costs for an item for which you have no orders. If you’re very very lucky, you’ll sell 40% of it in a timely way. 60% goes into the trash or into secondary resale markets that serve to lower the value of your brand. You lose money on this deal. You are much better off buying two new industrial machines (@ $1,600 ea), setting them up in a spare bedroom and hiring someone to come over to sew orders for you as they come in. You don’t have a place to cut? No problem, get a storage unit and do it there. Even if you only break even, you still have something to show for it -two machines you can resell. In real life, you make a little money, build relationships and credibility and put the money into the next round. Worst case scenario that nothing sells, you’re only out the loss of having to unload the two machines for less than what you paid for them rather than 20,000 bucks for inventory nobody wants.

You don’t have the skills. ~Yawn~ So what, join the club. Most people (75% or better) don’t have any skills when they started either. You can learn. My best performing companies (many of you send me articles about them not knowing they got their start here) were started by people who taught themselves to sew at the same time they started or were running their businesses. Let the people you hire teach you. That’s what the most successful companies do. How come you don’t copy that? They hire better talent as their budgets increase, bringing in people who have skills they want to populate across the company. Besides, who says you need to learn to sew? What you must learn is to facilitate the work of people sewing for you. A manager’s job is not to tell everyone what to do. It’s to establish targets and clear the path of whatever problems there are so people can meet the targets and standards you’ve established.

You don’t have the time. Unlike the first two, this is a real problem. You’ll have to find the time or wait until you do. I know that in general we say it is more efficient to hire someone if you have money but not time but it doesn’t work so well in manufacturing -this births the franchise mentality. I’ve worked for people who have money but no time and they easily wasted the most money. Worse, they didn’t go anywhere for all their efforts. You should only hire for the skills you lack, not for time you lack. An hour you buy of someone else’s time is rarely worth what you pay for it, especially if you have lots of money. People see you coming; if you don’t have time to do it, you won’t have time to keep tabs on them either. Buying time only works in limited ways, like paying a babysitter $10 an hour so you can go out and earn $20 an hour but you’re not buying their skills because you can watch your own kids best. If you can only afford one, buy skills, not time. The return on your investment is better.

Tomorrow I’ll lecture (sorry) about the second psychological factor that prevents people from opening their own sewing shops, namely the repugnance factor.

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18 comments

  1. Amy says:

    This is so encouraging. I have spent the last year and a half setting my two story barn up as a small factory – design and cut upstairs and everything else downstairs. I finally feel ready to start producing a small line but I admit to having moments of panic because my sewing skills are just not there yet and maybe no one will buy…either way I would like to try.

    One thing I can’t find too much information on is packaging and shipping. Should everything be shipped on hangars in those U-line wardrobe boxes..? I feel ridiculous not knowing. Do you have any past posts on packaging standards and expectations from retailers?

    Thanks for a great post and I look forward to reading tomorrows!

  2. Rocio says:

    In addition to immediates selling best…. Made in America is HOT!!!

    Most of our accounts have doubled their orders for this season, but we have one whose volumes have increased to almost 300% from last season…

    In California it’s illegal to employ sewers and set up shop in a residential area, so our clients rely on us to keep deliveries under 4 weekes…. We even have one account that is working on a 2 week cycle!

  3. Jody says:

    Another cool thing about this model is that it is far more conducive to keeping production at home. I’m a strong advocate of local economies, even semi-local. Personally, I apire to the day when I can contract with 5-6 trusted in-home sewers in my local community, helping them support their families like I was able to do when my children were little. Then again, I’m a tiny operation with a little different definition of success than I imagine most DEs have. I don’t want to be a big operation b/c I have a day job that I like really well. If I can be small and profitable at the same time, that’s my definition of success (for me anyway).

  4. Thomas Cunningham says:

    boxes – try RHE container – 201-804-8300. They have boxes optimized for apparel – much better than u-line.

  5. vee says:

    I’ve read the blogs and articles and realized I have started manufacturing my own jewelry, hats and scarves in my basement with one sewing machine. I have been sewing since I was 14, mostly learned from my mom, friend and watching sewing shows and also spending alot of time in the fabric shops. I would go to all the sewing shops with my mom . It’s amazing at what time J.C. Penneys and Hudsons sold fabric and there are not alot of places that sell fabric.

    Everytime I travel, I drag my husband into the fabric stores because I always find different fabric. Last year I retired and decided I would sell my own products to supplement my income because I am too young to get my S.S.I. benefits. But I’ve had my business license for the last five years. While I was working I occasionally would sell items I made.
    I had naysayers that stated I was too young to retired and I had never planned on working forever for someone else. I worked enough to get pension and health benefits. I am creative and became bored at my job.

    I still have one friend as last week that stated if I do not have the right product no one will purchase items from me. I do not let those comments bother me. Although I have professional degrees I have great inspiration to work for myself.

    I joined the Made in Michigan campaign that was held in Northville, Michigan approximately three weeks ago. It felt good to have a table in the Mall with the fashion show a wink from my table and have a signed that my products are manufactured in Michigan and sold in Michigan.

    After reading your article on the RN , I immediately order my rn that night at 3:00 am and have since called the 1-800 number to order the book. Yes, the document is on line but it’s so easy to flash through the book and highlight your selected information. I am currently working on my labels. So I guess I am on the right track.

    They are all manufactured here in Michigan. I am only selling at bazaars, craft shows and plan to launch a website by the end of the year. I will now invest in an industrial machine by the end of the year. Give me information on what type of industrial machine to buy.

    Thanks for all the information from you and all the readers.

  6. vee,

    If you buy Kathleen’s book (button towards the top right of this page) you can join the forum. You can explain your requirements and discuss the best industrial machine for your needs with other forum members.

  7. Lesley says:

    Are there not OSHA regulations regarding someone working in your home? I am not sure if this person would be considered a contractor or an employee…can get tricky. This would be an interesting avenue to research before delving in. My house is a warehouse and would surely fail every possible OSHA requirement. My children have narrowly escaped injury from falling bolts of fabric and I don’t thing another person could physically fit into my sewing room/office/junk room. If that doesn’t scare ’em off then surely my pet rat would!

  8. Raquel says:

    I’m trying to understand this. I have seen Zara and store that turn around stuff every 2 weeks have sales. I have bought from the sales actually. Can you enlighten my confusion? Is it just the economic times we are living in?

  9. Kathleen says:

    The US Zara isn’t the same operating model as Spanish Zara. Here they’re selling more fill-ins, items designed to full out their merchandising mix. About 20% of Zara’s product is the longer lead time stuff, denim, sweaters, accessories and what not, cut and shipped from Asia. Like anything developed 9-16 months in advance, there will be some dogs to offload.

    I don’t know how successful Zara will be at importing their full bore SOP into the US. They need dedicated contractors and fabricators, infrastructure that was built over 30 years outside of La Coruna.

  10. Evie Seifu says:

    This is the best advice I have heard in years. It’s funny to me that not many out there think of this even the “seasoned”. I have been a designer for 18 or so years and worked for many companies. When I started my “own line” this is exactly how I set things up…I hired a sewer, who was able to also help me in many ways, from patterns, sewing small cuts, even shipping. This way I was able to focus on design, sales, and the all important allocation of monies!

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