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RESEARCHING A NEW CLOTHING LINE |
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Estimating Startup Clothing Lines
Part of your clothing line research will involve determining what your garments
will sell for at retail and working that back to the price you need to achieve
to be profitable long-term. As a startup, you must realize that the products
you will be competing with have the advantage of higher volumes and established
supply chains. It is unrealistic to expect profitability in your first year of
operation.
Your prices are defined by your channels of distribution, product differentiation,
and saleability within retail price points. You can work backwards from retail
by knowing that most retailers keystone (wholesale x 2) or even use wholesale
x 2.5 to achieve their margins. Ultimately, as a wholesaler, it would be realistic
to target a gross margin of 40%. Therefore, a garment that you believe should
retail at $60 would be sold at wholesale between $20 and $25 and would be purchased
by you from your manufacturer at between $14 and $16 including freight. Click
here for an informative article on this topic.
For more information on Style Source, click here or
call 910-399-2288. |
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