Tuesday, March 15, 2011

Costs of Launching a Collection

Without going into details about the costs of starting up a fashion design business, which are significantly higher than those of "merely" launching a collection, I thought it might be useful to discuss some of the costs involved in launching a modest collection and give a sense of the global amounts. It is possible to do things for less, by cutting corners and relying on friends and acquaintances for a lot of the upfront tasks, but to do the job professionally involves engaging a certain level of investment.

For my initial launch, I will have about eight outfits on display ... I say this with some hesitation, because what I'm offering doesn't fit within standard categories, but let's say that it will be the equivalent of eight outfits, more or less. Eight outfits is a very modest collection - a recent fashion show by a major Montreal designer involved about 40 outfits, and these were "seasonal", aimed for the Spring/Summer period, whereas mine are an "Annual" collection, again a choice for a startup.

The minimum global cost of launching a new line of about eight garments is about 50K$ (50000$). This, in general, excludes the manufacturing costs of the garments themselves. The money is used for organising the fashion show and photoshoot for the website - the cost of photography, video production, organisation, and paying the models, as well as paying the team of people involved in the effort - stylists, make-up, an announcer, music, etc. The reason one pays for all this, is that the fashion show "buzz", the website and the video footage all contribute to driving sales in the initial period. A bill of 50K$ is actually quite low - for larger collections and bigger events, the bill will be much, much higher.

As a "newbie" designer and business man, I found it very difficult to obtain reliable estimates of the costs of doing business before actually embarking on the process. I rather naively thought we could "introduce" new garments on an adhoc basis as the business grew. But although this is always possible, there are timing and marketing issues that affect what generates the best sales, and the "adhoc" approach is often not the best approach. A structured campaign with appropriate marketing will, in general, drive stronger sales that the ad hoc introduction of new elements. This is why people use the "collection" so consistently within the fashion industry.

Finding the right strategy to follow for a start-up company is tricky. Remember, they say that nine out of ten business start-ups will fail. There are lots of "shoals" to wreck the ship in - it requires careful navigation to get through the coral reefs of the start-up process. Underestimating the funding required is just one of the larger dangers that loom!

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