Why Sometimes LESS is MORE When it Comes to Merchandising a Collection
When it comes to merchandising your collection, sometimes less is actually more. Now what exactly do we mean by that you may wonder. Let’s dive into this topic in more detail.
When you are first starting out you’re probably not going to be selling thousands of units right off the bat. This is why it’s very important to limit yourself when it comes to designing and creating new styles.
Designers can often get caught up in designing too many pieces because they want to ensure they have enough styles to offer all different types of customers.
However, unless you are working with a supplier that allows very low minimums chances are you’re either:
A) paying a high surcharge to buy less or
B) having to buy excess inventory that you haven’t sold yet.
In terms of growing your wholesale business, of course you’ll want to allocate some inventory and set some aside for possible re-orders or online business, but you never want to get pigeonholed into purchasing too much inventory.
This is why you must repeat this mantra when you are first starting out.
Less is more.
The reason less is sometimes more is simply due to basic math.
Let’s say that your goal for the season is to sell $50,000.
If your average wholesale price is about $150 that means you’ll need to sell over 300 units to get to your $50k goal.
Let’s also say that you have a total of 24 pieces in your collection and the MOQ is 100 units per style/color.
This would mean that in order to sell through at least 70% of your inventory you would need to sell over 1,600 units if you bought every single style. *The reason we choose 70% is because you don’t want to be leftover with a ton of inventory each season unless you plan on carrying the styles forward for the next season.
Your goal should really be more like $240,000.
If you’re actually OK with that sales goal, then by all means press ahead with 24 pieces.
However, if you’re saying “there’s no way I can sell that much per season”, then you really need to re-think the number of styles you have in your collection.
Now, you may be saying: “I’ll just make the sample and if it doesn’t sell I won’t buy it”.
Many people take this approach.
The problem with this approach is that you’re essentially splitting your sales. If you think you can only sell $50k or 300 units per season, and ten customers come in and buy one or two of each style across 24 styles, you will then need to buy all 24 styles.
Either that, or you cancel their orders, or you get them to switch their orders based upon what you buy.
This is what we mean when we say splitting your sales.
Granted, if money is not a factor and you know that you will lose money for the first year or so while you build your customer base, well that is a whole other story. By all means, buy that inventory and create a huge collection.
But, we think you probably fall into the bucket of trying to save as much money as possible.
And inventory is money. Repeat that. Inventory is money.
If the inventory you purchase cannot be sold off, it’s just money sitting around in a warehouse.
This is why less is sometimes more.
Now you may be thinking, how exactly am I supposed to sell a cohesive collection with minimal styles and inventory. This is where there is a fine line of finding balance and your merchandising skills need to come into play.
You need to forecast and determine what you think you can sell the most of and what the bread and butter of your business will be.
There are always going to be items that sell more than others.
The main thing to remember is to be as minimal and diligent about adding styles to your collection as you are to adding clothes to your closet (only New Yorkers will get this joke).
You want to make sure each and every style has it’s place, nothing is going to be duplicated and therefore split sales and nothing is added because “you just like it’. That’s a big no-no.
Never add styles because you yourself want the item. If you think the item will sell out, by all means, add it! But we’ve all been guilty of personally wanting an item in the collection for personal/selfish reasons. Trust us, don’t do it!
So to wrap it all up the main takeaways and things to consider are:
#1 Figure out your realistic sales goals.
#2 What are your sales goals based on your MOQ’s (without surcharges)
#3 Re-look at your collection to determine if it can be cut down in order to avoid inventory overload.
We hope that helps you out a bit in terms of planning your next collection. Take a few moments and really think about each of these factors in terms of your current collection and planning for next season.
We get that the designing process is the best and most creative part of this business, but we also don’t want you to go broke either. ;-)