“It’s a very expensive hobby,- designing and producing menswear…”
Although I’ve said this since launching my men’s apparel business years ago, it has never rung truer than in recent months. Since I haven’t taken a salary and pay by 1099s, I have no payroll but still pay taxes. Payroll Protection does not cover 1099s.
I sell to many small retailers who buy my product for specific customers whose tastes they know. It’s all very personal and heart-warming but 1/1/1 does not meet my factory minimums. I feel for these special retailers: they are passionate about their business, truly appreciate my work, and many have become like family.
So, I accrue inventory. I sell without considering the full extent of my expenses because I know what the market will bear. I’m forced to order sizes that I don’t need or else lose sales on sizes that don’t reach a six-piece minimum. Occasionally, factories offer me the opportunity to pay a surcharge that negates any margin. I infuriate catalogs who don’t realize that only 300 pieces of a style guarantees exclusivity.
I pay for 100 percent of my production six to eight months before my retailers eventually pay me. Additionally, if one customer wants a July delivery and another October, I have no choice but to get it all in at once. If there’s any problem, I’m forced to accept it: I have little recourse with a factory that shipped me months ago, and that I’ve already paid.
All this aside, when a retailer places an order with any manufacturer, we must produce and deliver it on time. Money, time, overhead, and much creative research are already invested; we must give our factories a deposit upon ordering.
Granted, no one could have predicted this plague but canceling now when we’ve been holding merchandise that should have shipped four months ago is unreasonable. Is there no room for negotiation?
Perhaps retailers and designers should agree on a nominal deposit. After all, deposits are required for many purchases and services: shoe repair, the dentist, a home, a car, vacations, planning an event—even ordering a birthday cake! A deposit simply allows the vendor to recoup a fraction of the cost if there’s an unforeseen cancellation.
I understand retailers negotiating with their vendors. But we don’t get to negotiate with the government about tariffs and duties, or freight carriers, customs brokers, truckers, etc. Especially on bills we’ve already paid.
If retailers need to negotiate, do it for future goods or orders just placed, not orders late in the season that are already being worked on or previously produced and delivered merchandise. That way, we at least stand a chance of going to our factories to negotiate as well. Otherwise, retailers will surely put out of business the more interesting, less widely distributed brands that could differentiate their assortments from the cookie-cutter looks now filling up outlets at severely slashed prices.
I believe we need each other. Let’s help each other through this!