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Answering your Questions! Grow Your Clothing Brand Q&A—Pay Yourself, Custom Product, & Inventory
How to scale your business if you make custom pieces? What to do about too much inventory? Selling lots of products, but not being able to pay yourself questions that need answers?
In today's post, I'll answer the questions that have popped up in my DM’s over on Instagram and give you some answers, so you can take some action today.
Grow Your Clothing Brand Question #1:
Mira asks, business seems to be going well. I'm taking custom orders and making sales, but there never seems to be enough money to pay myself or reinvest in my business. How can I change that fast?
Answer #1: Profit First Method –Pay Yourself First
If you're selling a product and you're getting paid for that product but you don't seem to have any money or revenue or income, that you can pay yourself beyond the price of the product, it points to having a product problem with your profit margin.
Looking at your profit margin is the first thing you want to do.
You can look at this in several ways. You can look at all of the components that go into your product, like materials, trims, any of the details, buckles, belts, all of those pieces.
It might even go to your pattern-making sewist if you're not making something yourself. The cut, make, and trim, or CMT as we call it in the industry, everything that goes into making that product.
There needs to be at least a 50% markup and profit margin baked right into that initially so that you can pay for the materials and also pay yourself.
Do a Time Audit
The second thing to think about if you're not able to pay yourself but you are selling a product is the time that it takes you to either make your product or bring it to market. So often we think that the baseline if you're a maker or creator is $10 an hour, which is not a living wage, but at least you're paying yourself something out of that product. But the goal should be above the minimum wage.
At a minimum of $20 per item. If you're making a product yourself and you're not able to pay yourself, it might be that the time it takes you to create something is not in proportion to the price that you're selling that item.
Occasionally it's fine to sell something where there's not enough profit margin in there and that is equating to time. It takes you to make as well to put something out that in the industry we would call it a loss leader.
It would be enticing to your audience, but you don't expect to make a lot of money on that product. But those pieces should be very, very few and far between and not take up a lot of your inventory. Those would be the things that would grab your audience's attention.
You don't expect to make a lot of profit, but for most of the items that you're selling, you should not be using a lot of your time and energy out of proportion to what you're making and profiting on with those products.
Do a Money Audit
The third thing to think about if you're selling a product but you're not able to pay yourself is to look at where all the money is going. This can be hard to do, particularly if you're doing lots of things in your business.
If you're a solopreneur, you expect to be doing almost all of the tasks in your business, but it's easy for expenses to get out of line when you're starting and everything to feel that it's essential to spend money on.
The most enlightening thing that you can do for yourself as a new entrepreneur, and I learned this the hard way I'll admit it, is to learn how to pay yourself first.
There's a great book called Profit First, and if you're not making money or not able to pay yourself, it seems counterintuitive to take money and pay yourself first.
If you're not paying yourself then you're not in business, you're giving it away.
I encourage you to take a look at that book. It's empowering.
The shorthand way to think about this is if you make a dollar, a percentage of that dollar needs to go into your bank account first, a percentage of it needs to be reinvested in the business, whether that's new inventory or services, other expenses you need to keep the lights on in your business. Then a portion of that also needs to go back into your product, so that you have more product to sell.
Take a few hours or a day to figure out where the money is going in your business, and what you have coming in, and I promise you it will be game-changing.
Grow Your Clothing Brand Question #2:
Toya asks, I make one-of-a-kind pieces so it's not possible for me to make a lot of inventory at a time. How can I scale my business so it's worth my while to sell these pieces?
Answer #2: Choose The Best Products to Sell – Product Positioning
All of the tiers of products within your business. It doesn't matter if you are a business that buys a product that's already made and that’s private label product, whether you're printing your product, doing drop shipping, print on demand, or you're crafting and making your pieces.
You need to have tiers of products within your business that support your business.
Create Hero Product
The first thing that I like to have every brand consider is having a hero piece within their product assortment. So what is a hero product? A hero product is something that your business can become known for, is something iconic within the product mix.
It might be a signature piece, it might be a signature style, something that is tried and true in your business that you have some proof that customers respond to, that you lead within your business.
A hero piece for a brand like Tory Burch might be the iconic skimmer ballerina with the logo and that's something that Tory Burch comes back to season after season, but is very much an icon in the brand. If you're making one-of-a-kind pieces, having a hero piece that has great profit baked in, that is a signature piece that's easy for you to make is not overly complicated or perhaps it is, but it's a higher ticket point, that hero piece you can rely on in your business season after season.
Mini-Batch Production
The next thing to think about if you want to scale your one-of-a-kind business is to have easy opening price point pieces within the mix.
If you make high-end pieces, this can often seem counterintuitive. It feels like you always want to have one-of-a-kind exclusive pieces that cannot be duplicated. But what this equates to is you always having to go to the workbench or into your studio every time you get an order, kind of breaking stride in your business and making that piece to ship out.
I recommend, even for high-end, custom, or one-of-a-kind designs, is to have something that fits within their product assortment that feels like it's a great fit for your brand, but that you can maybe keep a few pieces on the shelf so that you are comfortable promoting your brand and your products but you don't feel tied to actually making every piece right on demand.
This could look something like just having a few pieces of that hero product made ahead of time.
It might mean coming up with something similar to the hero product that is at a different price point. It's easier for you to perhaps outsource if you have another um, maker, or seamstress someone that you can use to help you build a little bit of inventory.
I think of this as mini-batching!
You're not asking to block the creativity and take away from your one-of-a-kind custom ethos that you lead with in your brand. I worked with a great client, Lisa, at Throckmorton Jones. I'll leave a link to her site here.
Lisa makes beautiful custom, one-of-a-kind bags from deadstock fabric.
You might be wondering how she can scale that business.
Together we looked at her customer and we also looked at her product category and we realized that literally everyone that has a tote bag has a little pouch in the tote bag.
Lisa was able to craft pouch sets that look beautifully aligned with her core brand message and DNA and have a seamstress help her to make them to her quality, so she could have them batched and ready to sell and a constant source of revenue for her business without having to stop all her activities and go and make one-off special bags every time she got an order.
This gave two revenue streams but still fits within the brand DNA and it's a way to grow your sales and scale your business.
Grow Your Audience
The third thing to think about if you want to scale your custom and one-of-a-kind business is to grow your reach and grow your audience of like-minded potential customers who are ready and waiting to buy your beautiful custom pieces.
There are two approaches you can think about: You can either sell more to your current audience or you can sell more to a wider audience.
These two strategies are great to pursue side by side, particularly if you're a custom one-of-a-kind business. But you can also think about growing your audience and potentially selling more to a wider audience of those beautiful custom pieces as another path to scaling your business.
You can either scale with more products or you can scale with more customers.
Don't think you have to do one or the other. You can do both, and one in a specific season of your business might feel like it's a better fit for you.
Those are my three tips to try and scale your custom and one-of-a-kind business today. If you want to learn more about creating a hero product for your business, I have a free three-part workshop that you can take now to learn how to do this in your business with a step-by-step plan that you can take action on right away.
Grow Your Clothing Brand Question #3:
Angela asks, I have so much inventory and so many products up on my website that aren't selling. How can I keep my customers interested without having to launch new styles? I can't afford to purchase inventory until I make some sales.
Answer #2: Drive More Sales – Unlock Revenue From Your Inventory
I hear this question so often and here's what I would recommend.
Boost Your Social Media
The first thing that you can think about doing is to step up your social media and email marketing. I’m sure you have a strategy in place to reach out to your audience to nurture your audience every week, perhaps even every day.
I want you to sit down and take a look at connecting what you're doing on social media to your products and try and draw a line between the two.
This might look like, for example, a style guide on how to wear certain accessories in the month that we're in. This month is November, we're going towards the holidays. It might be holiday styling tips for headbands for example or earrings for example.
Don't think in the first few posts or emails specifically about selling your products. Just think about nurturing the audience, sharing some goodies, and some tips that you have, and sending one or two posts or emails around that topic.
Then in the third and fourth emails, you are going to lead a trail of breadcrumbs directly to your products, because that is the solution to the problem or the need that you've just identified and shared value on.
Think about having your social media and your email marketing point towards specific products within your assortment.
Product benefits
The next thing to do is look at all the products you have on your website and make sure that your product descriptions speak to the benefits and the value to your customers.
This isn't about YOU, it's not about why you launched the product and feel so great about it.
It's about the problems that your product solves for your customer and to make sure that is visible and present on each product page and each product description.
Once you've developed that language, you can use it on social media as well.
Always start with the product. Always think about how the customer can benefit from using it, what it brings to her life, how it helps him feel stylish, whatever those benefits are!
Maybe those benefits are comfort, versatility, use in certain situations, maybe it's weatherproof, warm, whatever the real value is, and then share that out with your customer.
It's easy for us to forget the obvious as we know so much about our products.
It's easy for us to forget that the customer often needs to hear your message multiple times before they say “YES, that does solve my problem.”
So, think about looking at your product descriptions and making sure there's benefits as well as value there.
Inventory Review
The third thing to think about is perhaps it's time to let some of those products go.
I can't tell you how many times I've worked with clients and done a brand audit or a website audit and found a product that's massively out of season if it's very seasonal or it's old product and doesn't align with where the brand or the brand owner is currently going or thinking currently or the pricing doesn't work anymore or the product just seems sort of outdated based on what's happening on the rest of the website.
In the corporate fashion world, there's a name for this: We call this aging inventory!
You should know that in the fashion world when we launched a product, we launched it with a lifespan already baked into the timeline. We knew that when the product launched it would be full price. We knew that 30, 60, 90 days later the product would then be marked down potentially depending on the category.
We knew that the product would then go to final sale, and when it would come off the website and go to an outlet, or outlet company that would then take that stock.
Product has a lifespan. We shouldn't expect it to live forever.
When you're an entrepreneur you don't have to adhere to those same corporate rules and that time cadence of a product lifespan. But it's valuable to think about it when it comes to your business and it gives you a little sense of relief that you shouldn't have to hold onto product forever.
But what do you do when money is tied up in that inventory?
There are several things that you can do to kind of unlock some revenue from that aging inventory:
The first thing to think about is putting that product on sale or moving it to a sale page on your website so it doesn't detract from all of the other great stuff that you're leading with and launching next. Some brands just have a sale that's only up for a certain amount of time, so you don't have to feel like that sale page has to live there forever.
You might think about creating a final markdown or final sale page so there are no returns on the product, but you slash the prices even further and don't feel bad about that. There are high-end brands like Vince that do this, um, each season and that final sale, final markdown, no returns page, you know, doesn't live on the website all the time, but it's a great way to move that product off and you can tell your email list about this and go on social media and post about it to drive some momentum specifically to those pages. It's not going to hurt your other business if it's only up for a certain amount of time
Then the last thing to think about is either to take that product down off your site or have some kind of physical sample sale. You might do this in your community. I've had clients who have done this in a Facebook group, like an online sample sale where they invited people to watch and they sort of did a show and tell and then had people messaging and saying they wanted certain styles.
These are a few of the ways to work through your product if you're a small business to make sure you can still unlock some sales and revenue out of that aging inventory, but only you are going know which products, uh, have reached the end of their lifespan.
Hopefully, this tip will give you a way to kind of move through that product so you can unlock some money, invest in the new, and refocus your energy there.
CONCLUSION:
What are my key takeaways from today's Q&A, before I share how you can ask me your own questions about your business and get one-on-one feedback.
The first thing is to make sure you have enough profit margin baked into your product when you're making custom one-of-a-kind or selling anything in your business.
The second thing is to understand that there are several ways to grow and scale your business. And you don't have to follow anybody else's path.
Growth doesn't always need to be about large quantities. It can also be about selling mini-batches, on small quantities to a larger audience.
Know that inventory has a lifespan. Products shouldn't live on your website or in your store forever.
Plan to manage your product from launch through its lifespan and you'll be able to make money from your product at every stage.
So how do you ask me your questions about your business and get one-on-one feedback on a complimentary call with me? I have a limited number of discovery calls available each month, but they do book out fast. I'm going to leave a link below.
PS: Let me know if you want to run your product questions by me!
We can hop on a complimentary strategy call!
You can book that FREE call HERE!
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ABOUT THE AUTHOR
Trudi Roach specializes in helping small and emerging fashion and accessory brands scale successfully - even without any prior business or fashion industry experience.
A former fashion executive and merchandiser (aka the real Business of Fashion) she led product development for multi-million-dollar fashion brands, crafting a strategy with the Marketing, Sales, and Finance teams. Trudi learned how to run a business, from top to bottom the hard way, through hands-on experience creating products, working with vendors, and launching products, from test quantities to million-dollar programs … every month!
As a fashion brand consultant, Trudi can help you get there too.
