A guest post by Gretchen W. Harnick
Winter is coming. A very long, cold winter.
As a designer, you buy more wool, add more jackets to your line, and hope the retailers heard the same forecast you did.
But how do you forecast quantities of inventory to produce? And before that, what about buying the right amount of raw material needed for your base line production, or gauging how to forecast what items will be most popular?
Many beginning fashion designers wonder about the magic and peculiar aspect of forecasting. Especially when it’s your first few seasons gaining traction, you recognize how critical it is to keeping your budget tight.
A Few Forecast Types
If you are a knitwear designer, interest does peak for your work in the colder months. Warmer months mean lighter cotton and silk knits, and a lot fewer accessories than you will produce and sell in the winter. Forecasting for a loss of seasonal retailers makes sense, and so does bulking up for Fall/Winter with more styles and product selection. Building a reasonable forecast for seasonal ebbs and flows carries you through the calendar year with fewer surprises.
Congratulations! The media loves your story and work. When magazine and blog editors or other influencers go nuts over you, they will feature certain pieces of your collection in their editorials. Use this interest level forecast to boost your production on the key items being featured, and be certain to push this knowledge to your buyers. You may choose to create a special Key Trends line-sheet to send or leave behind on store visits. You’re in sales now, so make it easy on the buyers by informing them which key items they are going to want to buy.
But keep your cool! Sometimes the media makes promises they can’t keep. It’s not about your brand, so just take that news with a little caution. Don’t go quadrupling your orders if you are new in business – that can be putting all your eggs in one basket, so to speak.
Do you have any carry-over product – pieces you produce season after season that are good sellers? Perhaps you’ve added a feature or new color; as long as it’s a good seller, add 10% or more to your production of these items, depending on the demand. Carry-overs are already proven for this season and next as well, meaning they carry a lower risk that you’ll get stuck with inventory. They can be an easy entry for a new customer as well, so they are good to have on hand throughout the year.
Plan to produce a small surplus of carry-overs and intended best sellers for in-season re-orders from your retailers. This can be risky, however, if you feel your retailers have already bought the right quantities. If you feel they were all behaving cautiously then go ahead and hold a little bit of inventory for them, but be sure to let them know you’re holding back stock.
Pro-Tip: Send a check-in note to the retailer 2-3 weeks post shipment. Ask how their customers like it, and remind them of back stock you have available. Most designers never do this. If you can, schedule an email to go out to all your retail customers; it’s totally easy to do. Try using the free scheduler tool Boomerang HYPERLINK TO http://www.boomeranggmail.com/ for Gmail. You maybe be very surprised at the loyalty, attention and reorders you receive from a 5-minute task.
Where are your raw materials coming from? Chances are you have a few suppliers. Are they domestic or overseas? What are the import tariffs or delays you encounter with these shipments? Is it better to purchase multiple seasons from one vendor and get a bigger discount? What relationship do you have with suppliers? Will they be accessible if you need a rush re-order in season?
In the end, it’s about the margin you make. It’s not about the volume you sell. It is also about the relationships you are building and the reputation you are building that will keep you afloat year after year. A loss you may take from cutting prices only gets worse. Worse in your books and worse in running your business.
Good luck this season! I’d love to hear from you. Connect with me on Pattern to Plan and sign up for our free “Idea to Action” class, allowing you to take that dream idea into action today!
Gretchen Harnick is a Digital Marketing Consultant, Professor of Fashion Marketing, and Founder of Pattern to Plan (P2P), a business skills support community for fashion entrepreneurs. Follow her on Twitter at @ProfGretchen.