A.C. Baker Apparel

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Sunday, February 26, 2006

Evolution of a handbag pt 3...the leap

Well, I didn't need ANY marketing materials at all. Great. Kate at the Garden Gate loved the bags, gave me great feedback. Mostly it was that the bags needed more structure (see Fashion Incubator tutorial coming up...more on this in a minute), more pockets, a hard bottom. Well, I couldn't accomodate all of what was expressed, but I did make some changes. I added webbing to the straps (very sturdy), I added fusible interfacing to the shell so it will stand on its own, and I added a zip pocket large enough to fit keys and a cell phone.

Now, anyone who knows me knows that as a designer (and future retailer), that I hate consignment. No really, I H-A-T-E it. I think it's a pernicious practice thought up by satan himself to screw manufacturers. BUT...in the case of the Garden Gate, it is a necessary evil. Why? you ask.

1) Kate is a fabulous woman who has a great reputation and is well...just great
2) Because I've never wholesaled my bags, neither of us could really figure out a good price (I wil elaborate)
3) See number one..oh, and I trust her
4) In a previous life she made the most fabulous jewelry and sold it...so she knows
5) I would do this for no one else...well, except for my friends with boutiques cause I love them

Warm fuzzies aside, this is a really valuable opportunity to test market my bags. Apparently in the retail world handbags are as mercurial as seasonal lipstick shades. One of the first things that Kate showed me was all of the bags that bombed. Thankfully, having had a healthy background in retail, it was obvious when she pointed them out. Still, I offered to make 5 completely different handbags and agree to 2 price points...one high and one a little lower (I'm not gonna tell what they are, you have to go and see for yourselves).

When it comes to figuring a wholesale margin (I won't bore you with all the math) there is the standard mark up and then there is what you can sell it at. It is a very delicate balancing act of your market, your cost of goods, and your number of units to break even. At times this is a simple calculation but often it's really difficult. The reason is that, were I to take the standard margin, my cute little AC Baker Bags would be about 90.00. I don't think the market can bear that price point, nor do I want it to. If I wouldn't pay 90.00 for an AC Baker Bag (and I made it) why should I expect anyone else to? Many "crafters" discount too far. Personally, I don't consider myself a crafter, I consider myself a manufacturer and I need to do this for actual money. The bottom line is that if Kate and I can determine a price, then I know what profit margin I can take and that will inform everything else...So hats off to Kate for letting me do this in her store, which, BTW is on the Plaza in Arcata CA.

A note about consignment....Since I was so adament about hating it, I should say how I came to that conclusion. The basic line here is that the logic doesn't amount to much. You extend merchandise with no obligation from the retailer or control over how it's sold, you are completely liable for any shop wearing, or damage (a good retailer will pay, but most don't), and you have your money tied up for 30-90 days with no guarantee that you will be able to make anything from that item!! In return, the retailer gets to stock their store with items that they are not responsible for at all.

To be fair, some stores are great...but why go there. When you wholesale something they get the benefit of owning it, paying a little less for it, and you get your money. See, when you manufacture something your money is tied up for anywhere from 3-8 months on a normal selling cycle. When you consign, your money is tied up in that item for another 60-90 days...it doesn't work for me generally speaking. Part of the reason (other than test marketing) that consigning these bags for Garden Gate is okay is because it's a cash out deal. I paid cash for the materials and made them myself. I am supplying 5 bags (not 25). That's why this case is so different...in case you all were wondering.

On to other things...I will be setting up an ebay store in the near future, so look for news about that soon.

As soon as I figure some stuff out, I will be posting my craft show schedule, so look for that too.

Here are pictures of 2 of the five bags to go to the Garden Gate. The geisha lining fabric goes with the black and red swirl bag, the blue lining goes with the brown dot bag...I think that I am going to call these bags circles, dots and swirls...

Let's see how techno groovy I am today...I may need to post the images in a separate post.

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