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Development Costs
1024 683 Zack Hurley

A Deeper Dive into Development Costs: Part 2 of the Budget & Pricing Mini-Course

This is part 2 of a 4 part mini-course on budgeting and pricing for designers working on their first clothing line. Sign up here to be emailed the remaining 2 parts and we’ll also give you access to the costing template we use for all of our customers! Read part 1 here.

Let’s dive into the development costs that will go into your development and production budget.  It is crucial from the get go to learn how to manage cost of your garment. These 7 important factors will help you understand sample and production costs as well as your eventual pricing.

Development Costs 1: Fabrication

60% of your garment cost comes from the fabric chosen. When designing and planning pieces, the most important element is the fabric price point per yard. As an example, if it takes 2 yards per shirt and fabric is $8/yard, the cost for fabrics is $16 per shirt.

The trims are another important factor. Being aware of the price added by each buckle, bow, and binding placed on the garment will help you control costs from the start. For example, if you’re making a button-down shirt, you will need:

  • Fabrics
  • Buttons
  • Interfacing

Each of these items will have a specific price per unit that will need to be added to the overall cost of each garment.

Development Costs 2: Additional product elements

Fabric, cut, and sew are obvious items to include but don’t forget about things like care or size labels, hang tags, and poly bags. Also, think about the interior of your product. Is there interfacing or a stabilizer needed to hold shapes or a button placket? Make sure to  include every tiny item into your costing!

Development Costs 3: Construction

Taking into account the finishes, specialty stitches, and amount of seams within a style will help to control your price point.There will be times that the more seams you add to a piece the price will increase (in labor cost), and sometimes the lack of a seam will cause a higher price (in fabric consumption). Adding in French seams, baby merrow stitches, 5 needle flat locks, all take specialty machines. These types of construction, also dictate where your line is produced.

When it comes to construction, it’s likely you’ll need to work with a professional pattern maker with experience in creating production ready garments. The pattern maker should have access to work directly with the sample team to ensure that pattern specifications will be executed correctly. For example, you could budget $15/hour for easy cost calculation and start by allocating 40 hours to create the first pattern and first fit sample. If you have ten styles, multiply the cost of of the pattern and sample by 10.

Development Costs 4: Location

Fully lined garments with inner support construction, and hand work will most certainly be produced in a different factory location than a 4-way stretch legging with 5-needle flatlock seaming. Identifying a factory that specializes in shirt making, for example, before you hire a technical designer or pattern maker is good business practice. It is not uncommon for sewing factories to not have every kind of machines and skilled labor. The more efficiently the factory can make a shirt, the better pricing they can offer your brand in production.

Alternately, you can partner with a full-service production and manufacturing house to help you source pattern makers and manufacturers. The price may not be higher than doing the legwork yourself since the business will have in-house employees and established relationships with specialty manufacturers. They may be able to offer some of the benefits of scale that you as new designer lack.

Development Costs 5: Quantity

The amount of items that you are purchasing from a contractor will always affect the price of that garment. The higher the quantity, the less the price. Learning how to produce apparel with your intended aesthetic, fit, finishes, and market level, while simultaneously staying within your price point, are invaluable to a designer’s success.

Development Costs 6: Packaging

Are you selling directly to the consumer, through resale channels, or both? If you’re selling direct, you’ll need to account for packaging costs. Whether it be a hanger or polybag for an apparel item, custom boxes, tissue paper, ribbon, brand information inserts, or luxury mailing containers, there is a cost. There will be fewer packaging costs if you’re going through resale channels, but of course the middle retailer will also take a cut of your profit margin.

Development Costs 7: Shipping

This industry is global, so your fabrics and trims could be coming from Japan, Italy, India, or any number of places. Without knowing the exact price of shipping, you can always take the total cost of your materials and multiply it by 10%. This estimate will work initially. When you get your final invoices from the vendors you can update the price per yard or piece with the actual amount, including shipping.

Once you understand these 7 items, you’ll be able to start putting together a cost for your sample – and look into cost-saving alternatives. Next comes the equation for pricing your garment. Sign up here to be emailed the next two blog posts in this budget & pricing mini course. Plus, we’ll give you access to the costing template we use for all of our customers! Read part 1 here.

first clothing line
560 315 Jesse Dombrowiak

Your First Clothing Line: Part 1 of the Budget & Pricing Mini-Course

You have an idea for your first clothing line. You know what you want your collection to look like, and you are ready to make the dream happen. Next comes the uncomfortable step that most creatives dread: how do you budget and price your first clothing line?

Fashion lines are typically developed on a 6-month cycle. It takes six months from concept to floor. For new designers who are usually developing fewer pieces on a smaller scale, that timeline can drop down to 6 weeks.

Even so, A LOT needs to happen between the design and delivery of the question. The truth of the fashion business is that you will incur many costs before you see any revenue, so budgets are king – and how you price your garments queen. This is part 1 of a 4 part mini-course on budgeting and pricing for designers working on their first clothing line. Sign up here to be emailed the remaining 3 parts and we’ll also give you access to the costing template we use for all of our customers!

What can you afford for your first clothing line?

It might seem elementary, but the first step to a budget is to look at your finances and determine how much you can spend in total. Lots of new fashion designers will say they do not have a budget, but that they are ready to spend whatever it takes to get their first clothing line up and running.

Let’s be honest. Most of us do not have an unlimited pile of cash to funnel into a new business. So sit down and take a look at your finances to see just how much money you are willing to invest in your new brand. Fashion designers generally look to three different possible sources of funding for their first clothing line.

Equity

An equity investment is an investment that others make into your business in exchange for part ownership. Equity investors will expect some level of decision-making authority after they buy in.  While angel investors, like friends and family, may be easier to land, the best equity investors will also give you expertise and contacts and serve as high-level advisors to your growing business.

Debt

Debt financing, otherwise known as a loan, means you need to pay back any money you borrowed plus interest according to the fee schedule you arranged with the bank or institution. If you decide to take on debt, it means you will have upfront money without giving up any control of the business, but you will have an additional monthly expense in the form of interest payments.

Other Income

Of course, there are many other options for financing too. You might start your fashion line as a side hustle and be able to finance it through another line of work, whether it is a full-time job or part-time consulting or freelancing gigs. As well, there are many awards, competitions, and grants available to new designers. The benefit of this financing is that you do not have to give away control. The drawback, however, is that these commitments can sap your time and energy and slow down development of your business.

Whatever you choose, it is important to get comfortable with an element of fundraising from the beginning. The more successful you are, the more your funding needs will grow. You will take bigger orders and need more cash upfront to front collections before buyers or customers pay you. If you want to expand aggressively, and who does not, money earned from previous seasons will not be enough to fund the next round. Even if you can finance your first collection from your own bank account now, this may not be true in the future. Every new collection will pose a challenge, and you will need some financing to bridge the gap.

The three major expenses of your first clothing line

Once you have an overall budget, the next step is to understand how to allocate your funds. The first step is to split the budget into three main buckets, product development, production, and marketing. With international production and larger orders, these buckets get more complex, but we will assume you are starting small and your first clothing line will be USA-made.

Product Development

For product development, you can use our in-house process as a guide. For fabric sourcing, trim sourcing, pattern making, and cut and sew for your samples, clients typically spend between $1,500 to $2,000 per sample. We recommend that you devote at least $2,000 to each sample to create a quality product that will be successful in the marketplace.

Product development costs depend on a few factors, including how many products you are producing, each product’s complexity, and the quality of the materials you are using. At the end of the development process, you will understand exactly how much your cost per unit – and how much you plan to price your items – as you move into the next big stage: production.

Production

Development has a cost separate from production. Development means getting your samples perfect; production means manufacturing them at scale. Unfortunately, there are no simple guidelines for manufacturing costs. Manufacturers are famous for charing retailers different costs even for the same products. Ultimately, the price depends on volume, leverage, and even relationships. The general rule is that volume is king. The more you buy, the cheaper the cost per unit.

That said, you shouldn’t produce more just because you get a lower price per unit. For designers working on their first clothing line, lower volumes are important. You need them to test demand, experiment with marketing, and create buzz. You will end up paying more, but you also don’t risk having unsold inventory. That, more than lower margins, is the largest challenge you will face – and it won’t go away as your brand grows.

As in most any industry, relationships in fashion are crucial to pricing. Building relationships with buyers, retailors, and manufacturers will help you negotiate better prices. Of course, it takes time to build relationships, but a great network is a valuable piece of the pizzle. Ultimately, keeping down costs is a constant balancing of high and low volume prices while keeping in mind the margins you need to keep the business healthy.

Marketing

Marketing is another topic that should be addressed from the beginning, no matter how uncomfortable. Luckily, marketing a first clothing line these days does not have to be expensive. Websites through Wix, Shopify, Squarespace, or WordPress are fairly inexpensive to set up and maintain. As well, it is possible to test ads on social media networks like Facebook, Instagram, and Pinterest without a large outlay of cash.

If you have already identified influencers that cater to your audience, reach out to them and see what they charge. We also recommend signing on a free or inexpensive email marketing service, like Mailchimp, so you can start list building. No matter what, it is important to allocate some amount of money to marketing, so you can start building an audience and testing the market.

You made it! This is just part 1 of a 4 part mini-course on budgeting and pricing for designers working on their first clothing line. Sign up here to be emailed the remaining 3 parts and we’ll also give you access to the costing template we use for all of our customers!

clothing design
560 315 Zack Hurley

Get started with our one-stop guide to clothing design & development

It’s one thing to dream of being a fashion designer, and another to take the first steps towards making that dream a reality. The truth of clothing design and entrepreneurship is that a lot goes on behind the seams (see what we did there?) and top fashion designers do a good job of making it look easy even when it’s not. But, that doesn’t mean clothing design has to stay a dream. Clothing design – like anything else – can be broken down into steps, and we’ve written up a 2000-word primer on getting started. If you want the quick and dirty version, download our one-page cheat sheet. Once you have that ready, you’re ready to approach development houses and manufacturers to get started on your first fashion collection.  

What do you mean by ‘development’?

Development is one of three stages that goes into producing a fashion collection. The first is design, which we cover here under the assumption that you didn’t graduate from design school, the second is development, and the third is production. The difference between fashion design grads and people like you and me who didn’t graduate from design school – but still want a collection to call our own – is that design and development get more blurred.

Here’s an example. A fashion school grad will arrive at development with fleshed out designs (never mind that they’ll undergo a lot of modifications). A woman who already has a career in finance but wants to start an athleisure line might approach a development house with just a concept or idea – and the development house will work with her on setting the stage for development. The challenge is that the financier might not know how to get started on those specifications, and that’s where this guide comes in.

Let’s put it this way: design is the summary of specifications that describe your collection, development is the building and engineering of your designs, and manufacturing is producing designs affordably at scale. Consider this guide technical design for non-designers, a nitty gritty guide for the rest of us. Let’s get started and, if at any point, you need to take the dog for a walk or start dinner, you can always download our cheat sheet in an instant.

Inspiration For Your Clothing Design

Get your inspiration together. Whether it’s Evernote, Pinterest, or a scrapbook, start collecting the bits and pieces that will describe your brand and first collection. Be methodical about gathering your inspiration and honing your idea. You’ll want:

  • Colors – what colors will define your concept? Do you have a sailor motif with navy blues and whites, or is your swimsuit line playing homage to spring with soft pastels? Go as specific as possible with Pantone color codes, but also get ready to be flexible if superior fabrics in other colors prevail. Either way, have a color palette in mind.
  • Construction – how do you see your styles being constructed? A navy motif might require jackets to be double-breasted, a maternity line will need extra give at the waist. Are you inspired by the zipped up propriety of the early 60s or do you prefer the loose lines of the 90s?
  • Fabric – what fabrics are you in love with? Your athleisure line may require moisture-wicking polyesters, your male beach line might be a natural fit for the briskness of linens, or your eco-friendly line might need all materials to be locally and sustainably sourced.
  • Trims – whether it’s convenient pockets or frilly lace, start collecting examples of trims that are essential to the designs that inspire you.
  • Reference samples – Reference samples, or physical examples of colors, construction, fit, or fabric, will be immensely helpful. Maybe a dress from Zara’s summer line captures the fit you want around the hips, or a thrift store jacket gets the collar you want exactly right. Don’t be afraid to go out and hand-pick clothes that inspired your collection and bring them to your development team.
  • Artwork – do you want to incorporate graphics, appliques, or embroidery? If you don’t have anything specific in mind, at least have a general idea of what you’re looking for so a development time can help you source it.

Throughout the process of gathering your inspiration, you might note that designers or specific themes and pieces pop up repeatedly. Pay attention to those: the designers will help you understand target market and marketing strategies; the themes and pieces will help you put together your collection.

Target Market

As you look over your inspiration, you’ll start to understand who you’re designing for. Pay attention to this because it will become the foundation of your future marketing. Is it linen suits for vacationing, well-to-do men? It is a party line for partying twenty-something women? Is it eco-friendly, organic clothes for toddlers? Your target market, especially in the beginning, should be as specific as possible, and can help you hone your collection in the beginning. Ask yourself, what do men vacationing in the Hamptons look for in their summer wardrobe? How can you help a woman stand out at an LA club? What do eco-minded mothers who like to dress up their kids look for in clothes? Encourage this back and forth until you hone a collection that both inspires you and makes sense to your target market.  

Competitive Research For Your Clothing Design

Now, take those designers who keep inspiring you and ask yourself two questions: how well are they doing and what can you do better than them? What are the competitors price points, trends and value propositions. Review your competitors success as a brand along side your potential sales and market potential.

Hone it

Now it’s time to come up with a collection plan. You want to approach your development team with a cohesively designed collection of possible outfits. While you don’t necessarily need good sketches of all the garments – a full-service development team can help you with this – you will need a detailed concept.

Timeline

Now, let’s take a step back and get into the nitty gritty. What’s your timeline for development and production? Every project needs a goal. Fashion collections are typically developed over 6 months in time to be ready for the new season. To get moving towards your goal, you’ll want to have a sample delivery date, a production delivery date, and you’ll want to time these with any investment rounds or marketing initiatives you have planned, for example a website launch or a Kickstarter campaign. As always, work backwards from important events, but make sure to allocate at least 6 weeks for development and 6 weeks for production. If you approach a manufacturer in May looking to launch a swimsuit collection in June, the manufacturer will first laugh at you on the inside and then charge you exorbitant rush fees.

Priorities

Decide, what are your priorities for your line? Price, quality, or speed. Rank them in order of importance and recognize that any two will require you to sacrifice the third. If you must have that swimsuit collection in a month, go big or go home, you’ll likely sacrifice price and to some extend quality. On the flip side, if you approach a development house in December for your summer line, you won’t have to sacrifice quality and you’ll be able to manage costs too. Ask yourself, what’s most important to you and what are your priorities given your timeframe?

Word of advice: “Always care for high quality and don’t compromise the sewing process.” -Meir Yamin, Founder of Donnatella Dresses

Budget

This is the hard part and requires a deeper dive which we will be releasing soon – sign up here to receive it. What’s your budget? Are you self-funding your collection, raising angel funds, or doing a crowdfunding campaign? Put another way, how much are you willing to risk on a new venture? Once you have a number, you can start putting together a development, manufacturing, and marketing budget.

Production Numbers

How many styles will you produce and how many units of each? A word of caution – it’s always better to start small and test your market. Even with competitive research, even with target market feedback, even with crowdfunding campaigns, there are a lot of variables that go into marketing and selling a new collection and you can never be certain how your first launch will go. It’s better to sell out than get stuck with extra inventory. Of course, the smaller the run, the more expensive your cost per unit, so you will want to find a happy place that gives you the data you need while allowing you to take advantage of some economy of scale.

Sizes

How will you size your collection? Does your collection require 10 sizes, or will a baseline of S, M, and L suffice? For new collections, simpler is always better.

Style 1

Now is the time to get into the specifics of your individual styles. Repeat this step for each style you’re planning.

Name & Description

Give it a name. Give it a description. This will smooth communication and guide your team.

Target Retail Price Point:

The simple yet not so simple question which must be answered: what is your customer willing to pay for your product? Here’s where the above market research comes into play by looking at other products in your market, their price points and the people who buy those products. Once you know your retail price points you can start to build out a budget for manufacturing costs, operations, marketing, and more.

Manufacturing Target Cost

Generally, the manufacturing target cost is a standard fraction of how you retail price each style. To arrive at manufacturing target costs, you can look to your competitors to see how they price their pieces and then work backwards to a cost. These numbers will help guide you as you choose materials, trims, and more.

Reference Sample

Reference samples are existing clothing pieces that are similar to what you eventually want to design. Whether you have one or several, reference samples can help shorten the design time-frame and speed up development, especially when you approach a development team with a concept rather than refined specifications. The reference sample can guide you in:

  • Base sample size – what a small or size 2 will look like
  • Sample fits – how your first sample will fit
  • Fabrics and trims – target materials for sourcing

Think of your reference sample as a baseline for your designs.

Sourcing

You will do the physical sourcing of fabrics during the development stage, but the more you know about the particular fabrics you want, the better, especially if your reference samples don’t quite capture it. Pinpoint information on any of the following:

  • Main fabrics including color, weight, composition, and type
  • Contrast fabrics including color, weight, composition, and type
  • Dyeing or washing directions
  • Trims, i.e. buttons, closures, and elastics

Word of advice: “To save time and money during the design phase, don’t work with too many fabrics or trims.” -Meir Yamin, Founder of Donnatella Dresses

Labels

Would you like your label to be printed or sewn in? What about the care label – should it be tear away or something custom?

Artwork

Is any artwork essential to your styles? If so, specific in much detail as possible what you’re looking for:

  • Type, i.e. silkscreen, sublimation (custom dyeing), patches, embroidery, or something else
  • The location of the artwork
  • The size of the artwork
  • Graphics or colors

Pattern Making & Fit Instructions

This is where you’ll share with your development team how much you want your final design to differ from your fit reference sample. What kind of changes do you want to make to it? Do you want to change any shapes, add or reduce length, remove or add details. At the end of the day, the reference sample is just a reference sample. Why did you pick it and just how meaningful is it to your final designs?

Construction & Sewing Notes

Do you have any final notes on style construction or sewing. Do you want to add or remove any seams, or match how sewing is done exactly on the reference sample?  Do you want to add or remove any details, like pockets, zippers, drawcords, or patches? Are there any details that are non-negotiable? Different sewing methods have varying time

Decide on your team

Now that you have a good idea of your styles, it’s time to get your team in place for development. Generally, smaller businesses can go one of two routes in choosing a development team: they can select and coordinate their team by hand or go to a development house. There are, of course, pros and cons to each:

  • Team: a team should include in the least a patternmaker and a sewer/cutter, preferably in one place to save on time and money. The benefit to putting together your own team is that you will save money; the drawback is that it is inherently riskier and will require much more time and management. You’ll need to oversee everything and design a system that encourages good communication and minimizes costly mistakes. This can be extra challenging if your first collection is a side pursuit in addition to a full-time job.
  • Development House: a development house is an in-house team of experts in sourcing, pattern making, cutting, sewing, and printing, etc. The benefit is that they likely have a wealth of experience and established relationships within the supply chain. They will be able to consult with you while expediting the development and manufacturing stages. The drawback is that they will be more expensive, but they’ll also be less risky.  

Next up? Development of your clothing designs!

Once you have all of this down, your development team can get started on the hard work of sourcing and preparing samples of your styles – and you will start the hard work of guiding the whole process until your vision becomes a reality. That’s what we call development! At the end of development, you’ll have a tech pack, or final design specifications, and a salesman sample. Are you ready to get started? Download our cheat sheet today and start channeling your inspiration into your very own fashion collection.

540 300 Jesse Dombrowiak

Meet Indie Source Trim Specialist: Johnny Quintero

This series highlights the talented and committed people who power Indie Source.

In our interview with Indie Source’s trim specialist Johnny Quintero. He shares his wisdom, experience, and excitement for what’s next.

What inspired you to work in fashion?

I would have to say the artistic part of fashion. I’ve always been attracted to fashion growing up. Seeing people express themselves through clothing always puts a smile on my face!

What advice would you give an aspiring fashion designer?

Do your research and think your design through to the end. Think about how your garments will be produced in production and design thoughtfully! I’ve seen so many times, designers “make it happen” or alter trim, sewing or cutting for samples and when the garment goes into production everyone scrambles to figure out how to reproduce the sample. You do not want to sell your garments one way and then in production find out you can’t do the same.

JQ2-for-webWhat has your career path looked like? 

Most of my experience has been in production. I started out as an assistant for development and production, then a production trim specialist, to domestic production manager and import coordinator. What brought me to Indie Source was the opportunity to be part of a development team again. I love working with a team to bring peoples designs to life.

What sets Indie Source apart from other places where you’ve worked?

The wonderful people here! Everyone has an entrepreneur attitude and we all work so well together. It’s a great team to be a part of.

What’s the best aspect of working at Indie Source?

The best aspect of Indie Source is meeting like minded people and always developing new and exciting garments! Every client is different and the work is always changing.

Any amazing Indie Source moments? 

Right now is the most memorable moment! We are growing the company and partnering up with so many great brands. I can’t wait to see what next year has in store for us!

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