Real-Life Math
A fashion buyer's job is to buy clothing that will sell in a particular
store. The buyer has to make sure not to buy too much of one thing -- or too
little.
Buyers also have to ensure what they buy keeps the store in
business. Items bought at wholesale prices are marked up to retail prices
so the store can cover its overhead (cost of doing business). The wholesale
cost of the clothing is dependent upon such things as the cost of the fabric,
the expense of manufacturing, border duties and shipping. Each time a piece
of clothing has "added value" (or something done to it), the cost of the piece
goes up.
"The markup that we put on the clothing depends on our costs.
We mark up 100 percent, which is extremely low for a clothing store," says
Karlene Pryce.
The amount of clothing she purchases depends on the
previous year's sales and how sales are going this year. "If last year we
had $20,000 of sales in 4 weeks in January, that would be a guide for buying
this year's stock." She also looks at the sizes sold -- for instance, how
many pairs of black size 12 pants were sold in 4 weeks in January.
You're
putting together your clothing orders for next January. Your record keeping
reveals that the previous January, your downtown store had $23,467 in sales.
To cover costs, your store marks up goods at 100 percent. So far this year,
retail sales have been 4 percent above last year's.
This is what your
orders look like for January so far (wholesale prices):
Pants
(various colors): 100 at $32.50
Sweaters: 25 at $ 43.50
Shirts: 75
at $39.95
Cruisewear: 30 at $64.90
Skirts: 50 at $34.99
If
you've got the budget you'd like to buy some pieces from a new designer, but
you need to make sure you have your "standards" in stock first. You'd like
to buy 25 blouse-pant suits at $67.99. Do you have the budge to include the
new pieces?