Do you have design ideas, but no money for production? Do you want to produce a line, but afraid your inventory won’t sell? Adopting a pre-sale model allows you to sell your design before it’s produced! It’s also proven to be one of the most financially and environmentally sustainable approaches to running a fashion business.
Why are Pre-Sales Necessary?
Based on traditional e-commerce sales models, designers produce their collections before initiating sales. They produce several units in each size and do their best to predict demand- either based on customer feedback or previous sales history. While this works for some, the traditional sales model is often problematic as it leads to a surplus of unsold inventory. Though this method proves to be financially and environmentally wasteful, many designers succumb to our consumer era of immediate gratification. The traditional sales model is problematic as it leads to a surplus of unsold inventory. Though this method proves to be financially and environmentally wasteful, many designers succumb to our consumer culture of immediate… Click To Tweet Pre-stocking their collections allows them to ship out orders as fast as possible at the cost of leftover garments being devalued over time- season after season. The excess yields an enormous waste of both money and material. Fortunately, within the past few years, this model has been challenged. In this era of pre-sale business models, designers are reclaiming control of overhead production schedules and costs.
Why Use a Pre-sale Model? How is it Financially and Environmentally Sustainable?
Clients Will View Your Designs with Greater Value
By definition, a pre-sale is a sale held or made before an item is made generally available for purchase. Hosting a pre-sale allows your customers early, uninhibited access to your garments without having to worry about them selling out. The experience of having “limited edition” items also adds worth, value, and desire to your designs.
Pre-Sales Help Pay for Over-head Production Costs
Ultimately, your decision to move forward with production relies on budget and confidence that your product will sell. Hosting pre-sales limits the risk involved and provides money to pay for production up front. This is extremely helpful, especially for fashion designers who are swimming in upfront costs for patterns, sourcing, sampling, fit models, and marketing before sales and production can even be considered. Gustin’s crowdfunding campaigns and Moda Operandi’s deposit-driven, pre-order format are both great examples of pre-sale models.
Lean, Zero-Waste Production
Estimating demand based on past seasons’ performances is gradually becoming a thing of the past. Traditional retail costing is always inflated to circumvent the probable markdowns for excess supply. A pre-sale prevents financial loss from over-production. Take Gustin for example. Gustin uses crowdsourcing to let consumers decide which items they produce. First, the sample designs are photographed and posted on the e-commerce shop as a campaign. Each campaign requires a minimum number of backers before production can begin. Only the styles selected by the backers are produced. Think of it as an “in-house Kickstarter.” The crowdsourcing creates the supply and demand for each design- removing the potential costs of markdowns and storage for unsold inventory. This creates a zero-waste production cycle and better prices for your customer.
Production After Pre-Sales: How to Produce with Less Waste
After reviewing the pre-orders, you can be conservative with the number of garments you produce. We recommend not ordering fabrics or grading your pattern until after you’ve received orders. Once you know the exact sizes and quantities to make; you can assess where to cut down on costs and materials needed. Let’s use grading for example. Grading is the process of sizing your garment incrementally based on your sample pattern. If no one orders a size small or large for a certain style, then you don’t need to spend money grading those sizes. We don’t recommend ordering fabrics or markers too early on for the same reason.
Lead Times for Pre-Sales
When accepting pre-orders online, it’s crucial that you provide an accurate ship date so the client can know what to expect. A typical lead time can be anywhere from 4-6 months. Ordering fabric alone can take up to 45 days depending on where it’s coming from, whether it’s readily available, or if it has to be made. It’s important that you give yourself enough time for quality production as that will make it all worthwhile for the client in the end. You definitely don’t want to miss a shipping deadline as clients will lose trust in you.
If you’re considering adopting a pre-sales model for your fashion business or need help wrapping your head around the production process, I highly recommend our Production Like a Pro Online Course. It covers everything you need to know from costing to marking and grading, and quality control- to make sure your production is pristine and shipped out on time!
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