Entering the clothing business can be very tricky. I always advise new entrepreneurs to make good use of wholesale clothing suppliers offering low prices and superb qualities. You can save a lot of money starting your clothing business by buying wholesale clothing from reliable suppliers. Most of these suppliers are establishing their businesses in Asia, so the manufacturing and handling costs are generally cheaper.
Before you go deeper into the business, you need to know how to properly plan and manage the business. This is where wholesale formula kicks in; there is a certain formula you can use to make sure the business stays profitable at all times. You can also use the formula to assess and choose some of the best wholesale clothing suppliers to support your business and provide you with merchandises.
The formula involves seeing the overall costs of wholesale purchase. You may be tempted seeing the wholesale prices for clothing items available, but don’t jump into the purchase just yet since there will be other cost factors you need to consider. Keep in mind that merchandises need to be shipped to your location as well. The shipping and handling costs must be included in the formula when you are counting the profitability of your supplier.
Overhead is another aspect you need to take into considerations when assessing the business. There are costs such as electricity, phone, marketing, and operational costs you also need to take into considerations. These costs affect just how profitable you can be when running your business.
Now that you know the additional two factors, you can simply calculate the actual wholesale basic costs of your merchandises. If you buy t-shirts for $2 per piece with $3 shipping and handling costs and you know the overhead cost of your business (divided by the number of shirts you plan on selling) is $2, then you know that the actual cost of goods sold (COGS) is twice the total cost or 2 x $7 for $14 in total. This is the wholesale formula; the cost of your product is 2 x (actual cost + shipping + overhead). When you are looking for suppliers, make sure you use this formula to calculate the total cost of purchase.