I’m pleased to announce we have a new author joining us on Fashion-Incubator. This would be none other than Mike Cerny (pronounced chur-nee) of Fit Couture. As you may recall, Mike wrote an entry for us entitled Optimize your name for the internet. I paste in his bio from that entry:
Mike and his wife Amy started FitCouture.com featuring stylish women’s fitness and yoga clothing in 2003… Sales came in the very first day and three years later, Mike and Amy are still trying to catch their breath. While Amy oversees the creative aspects of the business (design, patternmaking and photography), Mike is responsible for sales & marketing, production management, and day to day operations. 95% of Fit Couture’s sales are direct to the consumer via FitCouture.com, making it a pure-play Internet designer-entreprenuer.
As with many DEs, Mike’s background is not sewn products. His career was in high technology startups, holding positions from programmer to CEO in several VC based companies. Likewise, Amy got into sewing later in life. She became inspired to teach herself to sew after having joined a gym and becoming dissatisfied with the availability of attractive fitness apparel. She is a landscape architect.
I’m sure you’ll agree that Mike is a great contributor resource and I hope you’ll extend a warm welcome to him. Welcome Mike!
Welcome Mike and Amy. I read your article on optimizing the name and was glad to see I was doing the right things and I learned a few tips. Good advice. Thank you.
I have several questions regarding in-house production. I understand you don’t subcontract it to other companies. How have you set up your system? Did you hire stitchers, pattern maker/ sample maker, etc? What about the equipment? Do you own it or they have their own? Do you have a set location for your production or do they work from home? I’m looking into taking orders online and having each one produced by sewers with their own machines (I don’t know if I will have enough orders to rent a location and have them come in daily and use my machines, but that’s an option too), but that is essentially sample making and of course, the price is higher.
How do you set the pricing? I do not see retail stores listed on the website. Do you retail only online? Is not selling to stores an advantage because it balances the cost between the higher COG (I’m assuming) and not pricing for the store’s mark-ups? Or do you run your own factory operation and production costs are what would cost if you hired a contractor? If you do, do you find managing all these aspects challenging?
Do you pre-make stock and then sell it, or take orders and then produce?
How do you market the line and how many orders is realistic to expect? Generate sales since the first day is an accomplishment, how did you do it? Aside from posting on different fashion boards and groups, Ad Words and listing in online directories, I don’t know what would boost the sales.
Thank you for the insight.
Whew! That’s a heck of list of questions. Probably too many to answer in a comment block. Most of them I’ll try to cover in future topics here.
But, I’ll take a shot at a few.
We have a factory and full time employees. When we started, our factory was the upstairs of our house, and we had no employees. As we grew, we hired. We don’t like to spend money and commit to higher overhead until we have no other choice.
We own all our equipment.
For all practical purposes, we don’t outsource anything.
Having sewers work from home is problematic for a lot of reasons. There are tax and legal implications involved. We tried it early on (briefly) and were unhappy with how it went. Your mileage may vary.
When we started, we identified the brands that we wanted mentioned in the same breath as ours. Our pricing originated there.
We do sell to stores, but its not our main business. Using the Internet as our primary channel allows us to differentiate by offering a much larger number of products and options than we could if we strictly wholesale.
Our internal production costs are currently in line with what North American outsourced production would cost, and dropping. With further infrastructure investments, we could drop our cost structure significantly.
Right now though, cost is not the biggest driver, per se. I don’t view our manufacturing in terms of what it costs. I view it in terms of how much output can I get how quickly and with how much flexibility. I also don’t really view manufacturing as separate and distinct from the rest of our operations. Its a big topic.
We maintain a small inventory of finished and partially finished goods. We don’t take orders in the way I think you mean. We don’t exhibit and tradeshows and we don’t have any reps.
The stores that do place orders found and contacted us. When they want something, they give us a call and we put their order into the same queue as the retail orders. Most of them are quite small – looking for something to differentiate themselves against the larger stores and commodity brands.
Online marketing is a topic in and of itself.
When we release a new piece, we have no idea how many we’ll sell. We don’t even attempt to forecast. We do a small run and if it sells well, we make more. If it doesn’t, we close it out and move on to the next style.
Reducing our “concept to sales” timeframes is one of our key drivers – we’re always working to improve it. Its also a pretty big topic that deserves separate treatment.
I liked your previous article. I would like to know more about online marketing ideas. It may be beyond the scope of this particular blog, but I think start-up fashion businesses face a lot of competition in this area. My keywords are extremely competitive ($0.50-$2.00/click to get ranked in the first 1-2 pages of a search). Are there any ways to overcome this without going broke?
I’m happy to hear that you’ll be writing regularly for F-I! Elizabeth already asked my question (how do you forecast production?). You make it sound easy.
Is your production facility still in your home? Somedays I feel like I’m starting a business out of a tote bag!
I look forward to reading more about your approach to this business. Thanks
Yay, this can only mean more for me to read! Welcome from one (ex) Houstonian to another.
Mike, thank you for answering my lengthy inquiry. Sorry to take up so much of your time.
“We have a factory and full time employees. When we started, our factory was the upstairs of our house, and we had no employees. As we grew, we hired. We don’t like to spend money and commit to higher overhead until we have no other choice.”
So you started from zero, and you did all the work yourselves- design, sourcing, patterns, samples, production, retailing, shipping etc.
“Our internal production costs are currently in line with what North American outsourced production would cost, and dropping. With further infrastructure investments, we could drop our cost structure significantly.
Right now though, cost is not the biggest driver, per se. I don’t view our manufacturing in terms of what it costs. I view it in terms of how much output can I get how quickly and with how much flexibility. I also don’t really view manufacturing as separate and distinct from the rest of our operations. Its a big topic.”
That’s a very good point you made in terms of output. I’d love to learn more and though I understand being in the same price range with similar companies (competitors), I still have trouble grasping how to determine the cost per piece/ hour and the how much time it takes to produce x- garment. I apologize; I do not come from a factory background.
“Online marketing is a topic in and of itself.”
I am sure I am not the only one who hopes you can write an article on this topic. I also have the same question Esther did regarding the keywords.
Hope I haven’t asked too many things again.
Thank you Mike- and Kathleen.
Welcome! Welcome! I’m very excited about everything we will learn. I learned so much from your last article. I’m also thankful for your willingness to sacrifice your time to help us.
Adwords is designed to reward those who write more compelling advertising copy with lower ad rates. I’d recommend a primer like Andrew Goodman’s book. Its a little dated (Adwords changes often), but its still a good basic primer.
That said, its unusual to lower the cost per click so much that you’d go from “gag” to “no problem!”
If the PPC advertising costs are too high in your niche for you to be profitable using that channel, you’ll need to make some changes somewhere. It could be lowering costs, raising prices, narrowing focus, expanding product line, improving website, etc. But, if other companies can afford the advertising, I’d start by looking at the ones most similar to you and try to figure out how they do.
It is easy. We don’t even attempt to forecast production. We just make a small run and see how it does.
If you sell wholesale, you should be taking orders and setting your production runs based on what orders you’ve gotten – so no forecasting needed in that model either. (I’m just parroting Kathleen here, I don’t know much about the wholesale model since it isn’t what we use.)
No, we moved out of the house a while ago. At our peak, the dining room, three upstairs bedrooms and our entire garage were completely devoted to the business.
We moved out of the house a couple of years ago and spent 18 months in the cheapest space we could find near our house (it was awful, but cheap!). We outgrew that this summer and moved into some larger, nicer, space.
Correct. Add accounting, web site management, advertising, photography, graphic design, etc. We are still very hands on. Our employees are production – their focus is to make products. Amy and/or I do everything else.
There really isn’t anyway to know without experience. Amy sewed all of our garments at the start, so to figure out costs, I just asked “how long did that take to make?”
Welcome, Mike! Thanks for being so generous with your time and answering people’s questions.
Thanks, Kathleen, for adding another great guest blogger to the F-I blog team.