Analyzing sales by size pt.2
Continuing from yesterday and the discussion of having a balanced sizing scale upon which you can more closely estimate fabric purchases, the most ideal sales per size proportion is 1:2:1. This means that for every “medium” you sell, you’re selling one small and one large. Again reiterating from The Entrepreneur’s Guide (Production Cutting: Making Markers pgs. 114-120) The smalls and larges are paired together in the marker, the smaller sizes are leaving extra room the larger sizes need in order to fill the marker efficiently. Again, review figures 4.7 (mediums only), fig. 4.8 and fig. 4.9 on page 116 of the book. In real life however, it’s rare to sell only 3 sizes and it’s equally rare to generate sales in such even proportions. As an aside, you can force perfect ratios by placing limits on how many larges you’ll sell of any given style, proportionate to the number of mediums for which you’re willing to accept orders. As it is, you must have a quantity cut off, particularly as a small company. It’s untenable that you wouldn’t have limits on the quantities of units you’re able to produce. The unanticipated success of a particular style can kill you quicker than faltering sales. Trust me.
As it is unlikely to only sell 3 sizes, here is the ideal ratio of sales by size for a wider range of sizes:
In other words, you’d sell one of your smallest size which would correspond to the one unit sold of your largest size -filling your marker efficiently. Then, you’d sell two of your next smallest size in ratio to your two next largest size. The threes in the middle balance each other. This is the most efficient way to fill a marker which reflects the highest utilization of your fabric meaning less waste. If you consider these ratios in more definitive numbers, it’d look like this:
| % of
From this chart, you can see that sizes 10-12 constitute 50% of your total production count so it stands to reason that using the allocation based on the combination of sizes 10-12 will be the most accurate figure to use when figuring out how much fabric you need to buy. This is why you have to mock up a rough marker before you can figure fabric purchases. Likewise, you’d still have to add in a little for overlaps. Now, when you calculate allocation per unit, the best standard I’ve ever found is that chart I printed on pg 81 of my book. I’ve never seen that in any book. Rather, that little chart comes directly from the factory floor. In the company where I found it, it was plastered everywhere. On bulletin boards, table tops, taped to book covers and notebooks. It was everywhere. It should be similarly ubiquitous in your workplace. Nobody should ever have to hunt for that allocation chart. Simple and sweet, it’s a rule of thumb that’ll save you plenty of money and guesswork.
Now, returning to the chart above, you can begin to see why the selection of your stock or block size is important. For example, a lot of fashion forward companies use a size 8 for a stock size but that can be a mistake. For one thing, the size 8 only reflects 17% of sales so how can you use that figure to calculate fabric purchases? I think it’s better to use the sizes 10/12 because sales of those sizes represent 50% of production. Now, if you’re using a block size 8 and are aware that it is inaccurate for costing purposes, this means you’re going to have to grade the pattern up to sizes 10/12 to get accurate allocation. Personally, I think having to grade at the costing stage is a waste of money. The reason is that you should never grade a pattern until after you’ve taken orders for it because if it doesn’t sell, why should you have gone to the expense of grading it? You shouldn’t spend money on grading unless you know you’re going to cut it. What if the style bombs? Your money would have been wasted. Therefore, I think you should use a larger stock size than an 8 which will save you a whole lot of money. You won’t have to grade a style in order to get a good fabric estimation.
In summary, use a good stock -also known as block- size. Your stock/block size should be such that sales of that size constitute a good basis of estimating fabric purchases for all the other sizes. Similarly, it may be necessary to limit sales of your larger sizes in order to get good utilization, forcing a ratio of 1:2:3:3:2:1. I realize some of you may worry you’re not in a position to put a cap on the number of units you’ll sell in the larger sizes but I really don’t see the difference between doing that and putting a cap on how many units you know you have the capacity to produce. Buyers in the market are more than aware that every manufacturer has a limit or cap on the number of units they’ll produce for any given style. That’s why buyers line up for hot lines. They want to get their orders in before production closes for that product line. I know a company that routinely sells all their fall production slots within the first two weeks of when the markets open in January. One can only hope that you will become similarly successful.