I am currently working on achieving my fashion certification with Parsons x Teen Vogue, where I must accomplish a series of assignments in order to pass the course.
This post is dedicated to my assignment “Production Costs” under the Understanding Fashion Production Module. For this task, I am to take the accessory I made in the previous module and calculate what the cost would be to produce it.
How the Mock Fashion Accessory Was Made
The accessory came from an assignment in which I had to base it on my Pinterest vision board and craft it using unconventional materials. My vision board consisted of vivid New Jersey boardwalk signs and earthy hues seen within the natural wonders of the beach.
I created a 26-inch necklace based off of an image of pink pastel colored signage that spelled out “Funnel Cake Factory”. Amusement rides can be seen in the distance behind it, and it sparked feelings of summer, excitement, and joy.
The necklace features twine, mini clothespins, and pink and white diagonal striped birthday candles. The twine serves as the cord to go around the neck, and the clothespins were used to make the candles into slide-able “beads”. I used the candles as the decorative embellishment for the piece, which I thought really captured the playful vibe of the boardwalk scene.
I love the idea of twine and the wooden clothespins because they are the same color as sandy dunes along the shore. Furthermore, the clothespins reminded me of driftwood, and the twine reminded me of nautical rope used for boating.
Calculating Production Cost for a New Fashion Accessory
Now, if this necklace were to go into real-life production for consumers to buy, what would it cost?
I chose this assignment to challenge myself, since math is not my strong suit.
Using the formula explained in the assignment instructions, I calculated the numbers below for two scenarios: selling the item one at a time vs. selling it mass produced via wholesale.
Following the Cost Formula
First I had to figure out the cost of each material. I aimed to do this realistically in terms of exactly how many pieces of material I used.
This took me quite some time to calculate, and I had to search the items online since I had forgotten how much they were when I bought them.
Instead of using the total cost of the item sold in one package (Candles are $1.50 for a pack of 24, for example) I figured out how much each candle cost in the pack when separated out (one candle is $.06).
Note that in my sample necklace I used five candles, but for this exercise, I pretended I used 6.
I did the same for the clothespins and the twine. The twine was tricky because I didn’t know how a necklace was properly measured. Was it done by circumference or by length? After some quick research I found that it’s measured by length, and used that to calculate the cost per 26 inches of twine.
I built out the numbers using Google Sheets, going off of the calculation table example shown in the assignment instructions.
Next, I needed to determine how long it takes to create the necklace, and how much the labor for that would be.
I imagined that it took five minutes to assemble the necklace, and with today’s wage rates, a person working at a clothing retailer would earn $14 an hour. (It helps to use time in decimal. Times the decimal by the hourly rate for work)
Those figures were added together, and then multiplied by the profit percentage, which is 20% in this case (Production cost times .20).
I estimated the retail price to be $4.50 for the necklace. With this price point, I would make about $2.50 in profit for every necklace sold!
Figuring out Production Costs for Wholesale
Next, the assignment called for calculating production costs for selling the necklace wholesale. I needed to figure out how to produce the necklace for less than $2.06 to allow the retail stores selling the necklaces to also make a profit, and allow room for markdowns.
For this scenario, I pretended that I could get the birthday candles much cheaper from another supplier. The candles were the most expensive material, so I would want to find another good quality candle for less.
I then imagined that my factory got a cutting machine that sped up the process of measuring and cutting the twine by hand, which reduced the time to assemble the necklace to four minutes instead of five minutes.
These decisions brought the total production cost down almost 50 cents. I could now sell the necklaces in bulk for $1.83 and still make a good profit.
See the above calculation changes in red on the right table.
After much thought, I raised the estimated retail price higher after building out my table and numbers. I realized the estimated retail price I originally had, which was $3 instead of $4.50, wouldn’t have made as good a profit when it came to the wholesale side due to needing room for the retailer’s profit and possible markdowns.
What I Learned and Takeaways
This exercise was fun and I really learned a lot about figuring out production costs for fashion items. I would use this formula as a reference in the future if I ever sell my own fashion designs.
The big takeaway for me was understanding how much each material cost, and that decisions must be made to meet price points. I felt like I really stepped into the shoes of a designer for the first time.
I also had no idea how retailers come to acquire their product prices for clothing and accessories. But now I know! All thanks to Parsons x Teen Vogue.
Now on to the next assignment! xoxo