Fashion is the industry that everyone tends to turn to you and say “oh, so nice! Fancy!” but the truth is that fashion is not fancy. Fashion is numbers, investment, a business mindset, and marketing. This is not news around here. I have been saying the same thing for a while. Now, how these numbers and investments happen and how to build your fashion budget is something that should happen at the very first steps of your collection development.
Ok, that building a fashion budget is no rocket science is not news, but building your budget, working on costing, sales plan, and figuring out an overview investment and return based on your collection, is something that should happen at the very early stages of your development AND you should work on along the way.
The very early steps of product development are selecting your final styles, sourcing materials, creating tech sketches, and pattern/sample making. That is when you will know the first investment needed to get your collection going. Once you have patterns and samples, you can start looking into production quotes, digitizing and grading quotes, and fabric quantities. No, none of these numbers will be 100% accurate until you are done with development and have your fabric order placed, but that is why adding 10% room for error and estimating an overall budget will, not only keep you organized but will come with fewer surprises like “oh, I had so much money, where did my money go?”.
One of the hardest things during the development is the fabric order. Early during sourcing I already start looking into fabric/materials costing and estimate how much fabric it will be needed for production. Sometimes, when you are doing custom fabrics, there is no way you can avoid vendor minimums (depends on the vendor can be 2000 yards of fabric) and, obviously, as a result, your budget will increase because if you will HAVE to order a certain amount of fabric, you will (most definitely) want to use that fabric and produce as many garments as you can. That helps to increase your budget, not only in materials but manufacturing costs as well.
Estimating fabric quantity needed for production based on vendor minimums is hard. To be honest, it is one of the hardest things during development. It is pretty much like this: calculating yards per garment based on garment samples and vendor minimums, dividing that for the sizing of production, making sure your calculation fits on the fabric width and there will be no waste. Yes, exactly! It is as weird and as complicated as it sounds right now, lol (but for real). When you are not ordering custom fabrics and can work with lower MOQs, everything tends to run smoother (and cheaper) than ordering custom fabrics. Not only because it makes it easier to control manufacturing costs/quantities, but also because it reduces your timeline.
Quantities of styles being produced, materials, and timeline are the main factors that affect your budget. The budget which will also give you numbers for costing per garment and costing per garment will tell you the selling price - which means that you will know what your return looks like and if that is coherent to your first investment.
As I mentioned in the beginning, your budget is something that you work on along the way and accurate numbers will show up according to your decisions. It is important to keep your feet on the ground when it comes to working with numbers. The behind scenes in this industry is all about business and being able to see the bigger picture (which means “total investment”). The greatest designers (aka Karl Lagerfeld) and fashion icons (aka Anna Wintour) are not their own CEOs because they are not good with numbers, they are good at being creative. But, after all, the first step of deciding styles and materials starts with them and that is when the bigger team comes together with the numbers - with the true reality behind the fashion scene.
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