Slideshare teaching start-ups about the costing variables and design process between small and large companies.

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3. 1. Wholesale: Selling products to other retailers to sell. Lower
profit margins. Wholesale market structure can provide larger
consumer reach.
2. Retail Brick/Mortar: The development of a store that sells only
your product. This allows for better control over MSRP.
Operating expenses are high for smaller companies.
3. Online Sales: Selling product through internet via Etsy, Ebay,
and etc. This allows for lower operating costs on retail profit
margins.

4. ! Over 6 billion transactions will be done via internet by 2018
Criteo.com
! MasterCard is researching new methods of turning the mobile smart
phones into the actual financial device: December 2015
Mastercard.com
! 131.4 million users will have made 1 purchase via a mobile device by
the end of 2016: Statista.com
! Cloud Computing will become new mode of working on internet.
Apple is already moving forward by negating headphone jacks &
possibly usb drives.

5. ! Online Stores: Having a website with your
own store.
! Mobile Apps: Selling products via secure VPN
apps is the future of creating a branded online
shopping experience. Various large retailers are
using apps already to ease the experience, and
generate more secure financial transactions.
(Spaceagetechnologies.com DEC 2015)

6. ! Lower operational costs.
! Better control with MSRP: If your brand wants
to have pricing control, the online price will
designate what a wholesaler must enter at to
remain competitive with brand direct website.
! Profit Margins provide better growth potential.
! Forecasting feedback is faster and more direct.

7. ! #1 reason for failure is accounting & finance-
Forbes 2015
! Market research
! Product relevancy: To late/ To early on release
against trends
! Poor Design: The 3 F’S - Fit, Fabric, and flow.
! Quality Control: Poor Sewing, Fit, and wash.
! Lack of business structure- Unorganized
planning can result in knee jerk business
choices.

8. ! Costing will define
your wholesalers
price and retail price.
! Correct costing will
define line
development budgets.
! Allow for a profit
margin that will allow
for next season
production.
! Costing allows for
better tax filing. For
example, R+D tax ride
offs.
! Defines financial
historical for annual
growth.
! Allows financial
institutions to see
financials for
investments.

9. COSTING
Budget
Production
Minimums
Textile/Trims
Minimums
Defined
Market of entry
TaxesQuality/ testing

10. COSTING
Budget
Design
Textile/Trims
Minimums
Taxes
Quality/ testing

11. SMALL START UP
EXISTING LARGE
COMPANIES
! Production & textiles should be
selected first for budget and price
structures. Usually the production
facility and the textiles will have
purchase minimums that must be
considered.
! Based on country of origin, tax must be
considered under HTC codes.
! Design around what company can
afford based on production & textile
minimums. Good design lines, with
fabric selection can allow for best use
of budget.
! Allow production facility to develop
patterns/ samples for best cost against
approved quality, considering the 3 F’s.
! Design/ trend/ and art work is
considered first. The process is more
costly and requires more people for
development on all fronts.
! Textiles, prints, and etc. will have
minimums and taxes to consider for
production. Once selections and
pricing have been provided the
design team narrows down best
option for budgets.
! Large companies have more ability
to create new fabrics, and etc for
growth.

12. ! Define Style: The more buttons, fabrics, and trims,
graphics, added to a garment will allow for mins to
be defined.
! Type of production needs. Working with sewing,
made product, and full package enterprises to
define minimums & pricing.
! Is production to small?
! Quality Control

13. ! Quality of fabric: Inspect fabric for flaws. Is
fabric correct for design?
! Quality of sewing: Is stitch correct for fabric?
Does stitch work look professional
! Finishes & Washing
! Allow for loss of product, generally 10% will be
non-sellable based on issues with various parts
of construction
! Sizing: Does product meet defined specs?
! Is quality worth the selling price?

14. ! Do you know what
government requires for
certain apparel markets,
washes, treatments and
etc?
! Is product application
tested for the consumer
safety?
! Global export tests
! TSCA- Works with FTC,
EPA, OSHA, and other
arms of government.
! SDS Sheets: Required by
TSCA
! Quality of long term
performance. Wash test,
light test, and etc.

15. ! Sales Tax: Defined by state the item will sell in.
! Duties for global exports & imports: Defined by
HTC. FTC & Customs work to define these.
Understand trade laws such as NAFTA, CAFDA,
etc. Updated annually
! Tax on income: Quarterly taxes reported.
! R+D budgets- Accountant that specializes in this
subject may be of use.

16. ! Quick Books
! Excel
! PDM/PLM Systems
! Accountant

17. ! Cost Sheet: Individual sheets used for each style.
Must set production values first for best costing
practices.
! BOM: Bill of Materials: For entire collection. This
will incorporate multiple styles that use similar
textiles, findings, trims, and sundries.
! Cut tickets: Used for manufacturing costs
! Additional paperwork from production facilities.

18. ! Cost Sheets are a form that will define each
individual styles cost for everything.
! Provide a historical for a style. Useful for
reinvesting in a popular product seasons later.
! Calculate production costs. A good cost sheet
will include fabrics, interfacings, trims, tags,
bags, hangers, delivery, and taxes.

20. ! All pricing will be defined by production.
Important to define this first, before designing.
! All design has limitations based on budget and
cost. Define minimums will allow for more
cohesive execution.
! Start-ups should work at a slower pace to build
supply chain, and work with production
companies. This is important for quality
control.

21. ! Define how many need
to be produced by
manufacturing
company. Example 150
units.
! Multiply all yardage,
trims, and etc by this
number. This will give
ordering prices.
! Divide price for
production/ textiles,
and etc by 150 UNITS.
! 500 yards of velour
ordered @ 1.65 a yard. =
$750.00. 750/150= $5.00
per dress.
! Man hours for
construction of one unit
multiplied by 150 units.
1.25x150=187x15.00=$28
05 / by 150units = $ 18.7
for construction.
! Taxes. Total cost / tax
rate= tax per piece

22. ! Understand what fabric
weights work well
together.
! Understand stitchwork
needed to make long
lasting product that
looks finished.
! Define acceptable
standards for sewing,
with samples,
techpacks, and etc.
! Define acceptable specs
via spec sheet found in
tech pack
! Look for stains from oil
pans, cleanliness, and
loose threads.
! Check labels and inside
garment for
professional
workmanship.

23. ! Quality control helps maintain branding image.
However loss will happen.
! Plan for 10% loss of product based on quality
issues.
! If a cut/sew facility is not delivering on goods
in a timely fashion, discuss discounts. Also do
not use a manufacture that has delivered poor
quality. Get a contract.

24. ! Washability
! Colorfastness
! Tensile strength (active
markets)
! Flame Retardancy
(home décor, kids,
outdoor event,
electronically based
wearable)
! Formaldehyde
! Pigment dyes: lead
! Acetone levels
! Heat: graphics
! Review TSCA
! Review Prop 65:
California
! Understand
Classification of
Apparel. This directs
you to what law
requires for testing.

25. ! Use made product like t-shirts to create direct
branding with graphics or embroidery. Most
inexpensive way to get your name worn. Make it
relevant.
! Accessories: Low cost margins & high mark-up
depending on item.
! Pop-up shops, or working in collective.
! Protect you business by ensuring no laws are
infringed upon. Patent laws, testing for safety,
contracts, copyrights on branding, and etc.

26. Thank you for taking the time to learn about how
costing works. If you have more questions
please contact KS Apparel Design.
! Katy@ksappareldesign.com
! www.ksappareldesign.com