The week, I was asked if I would post by a friend on the guest lecture I gave last week at the local college on apparel sourcing in the Carolinas. Below is the basic handout I gave if anyone is interested in getting started as a designer manufacturing their line in the US. Note this is geared towards someone just starting out so it is a guideline, not a detailed answer list. I had 2 follow-up Q and A questions people asked:
- How do I figure out the price to pay my manufacturer to make the pieces of my line from my wholesale price? You normally use the same math you used from retail to wholesale price to get to manufacturer prices. The range is generally one-fourth to one-sixteenth the store retail price based. This is the biggest incentive retail stores have to cut out designers and create their own private label with sales agents as many designers are seen as expensive.
- How do I work out payment with the shop or factory I am working with? If you are doing orders under $5,000, you normally need to pay up front and provide a purchase order to get the ball rolling. New designers buying a few hundred simple pieces at a time in the $1,000-3,000 range rarely are given credit unless they have brick and mortar stores. Orders over $5,000-25,000 depending on shop/factory size may be broken down in a 50% deposit and 50% COD (cash on delivery). Orders over six figures may have terms, but depends on your credit. When you pay up front it is important to give the shop a delivery date in writing for when you need the goods in hand as this can vary a lot from one brand to another. Some brands source weeks out, others are montbs, or seasons. You must make you timeline clear to the factory. Do not assume.
Apparel Sourcing in the Carolinas
By Dara Page
Background: What is apparel sourcing?
Apparel sourcing is the process of a designer acquiring physical goods for a line to sell at market. This can either be the entire overall finished garment, which is called “package,” or the individual components, which are broken down into the material components, called “fabric sourcing,” and actual manual labor (cut-make-trim or CMT).
What types of apparel are good for a designer to try to source?
Common items or techniques are easiest to source while complicated methods that require high skill or specialized equipment are hardest to source. You want to think of designing your line like running a bakery. A bakery will often display bridal cakes in its windows as show stoppers to attract people’s attention, yet most people who come into the store will actually buy smaller items, such as cookies. It’s a lot easier to source someone to make the cookies than the cakes. Because people look at cakes but buy cookies, 99% of foot traffic comes from one-off cakes, but 99% of revenue comes from batch cookies. Bakeries need both to successfully merchandize their products. As a result, they may dedicate 15% of a line budget to the custom or high-end items and 85% to batch cookies.
In the apparel industry, bridal cakes or show stopper items translate to one-offs that are often called custom, MTM (made-to-measure), bespoke, tailored, MOV, bridal, or couture. Cookies or things made in, batches are called “section work” and may also commonly be referred to as piece work, RTW (ready-to-wear), CMT, package, PO orders, off-the-peg, factory orders, linesheets or wholesale.
One of the big problems many designers face in trying to make one-offs is they are competing against theater, film, factories, shops and established firms. General sample-making for designers is $25/hr. Union film/costume design rates start at $36/hr. Bridal and tailoring can be $40/hr. New designers often want to pay $10-12/hr. In large cities it is not unusual for talented sample makers to command rates in the $75-85/hr. range.
Haus Page Freelance Apparel and Accessories Patternmaker Rates:
$100 Accessory Pattern
$150-250 Clothing Pattern
$75-150 Pattern Grading
$75 Tech Packs
Samples Sewing $25/hr.
How Do I Find People to Make Cookies… (Cough) Do Piece Work for Me?
First you need to determine if you need entire garments (package). If you are going to focus on selling to retailers, will you source the fabric and trim yourself and hire people to just sew for you (CMT) or will you hire one contractor to do it all? There are over 200 separate processes to make and sell an average garment in the industry, which is a huge knowledge pain point. It requires trust between the designer and contractor to do package. Extending package is a sign of respect that you are interested in a long-term relationship.
CMT has control over the production process but not the sourcing. You order the material components from another source. This prevents contractors from knock offs and also gives you access to less skilled/cheaper workers. The most common examples of this are factories like Levi that order all the fabric and cut it in-house in their design shop, and then send it out to be sewn (CMT) at the end. CMT is considered the lowest quality level of manufacturing and a short-term relationship.
As a textile state, North Carolina has over 100,000 people in the business with over 5,000 factories plus a large number of shops. Your patternmaker will have contacts available for you as well as people they can recommend they’ve worked with. You can also purchase lists from companies such as Maker’s Row, Apparel Manufacturer Union and SEAMS.
What Is the Average Order Size?
The average order size in the apparel business that a shop will take is between 200-300 pieces of one style. Dollars this works out to $1,000-3,000 for small simple runs on average. Some shops will break this down further and give you four colors and four sizes. The lowest number a shop will accept is generally 100 and only in the off season, which runs January to February. The lowest order for a factory ranges from 1,000 to 10,000. They do not like orders under $25,000-50,000.
How Does Order Size Translate to Price?
Shop or factory orders are priced as POs or purchase orders. A purchase order is the number of pieces a shop or factory is making for you times the actual price of each good. Most shops don’t like orders under $1,000-3,000 for a small run. Average sale retail sale price of apparel goods in stores is $15-125. The average wholesale package price a factory or shop will give you should be one-half to one-fourth of that. Same for wholesale to manufacturing pricing. Most factories in the US refuse to go below $2/item on orders under 10,000 as a practical matter.
What Is Tiered Pricing?
Because people are humans and not machines, there is often a setup cost involved in making an item that must be paid at the BEGINNING of an order regardless of how many pieces you are ordering. Stitchers like to be paid in WEEKS of work, not minutes. Asking the shop or factory manager for tiered pricing can save you a lot of money as you scale or grow your company over time.
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