Question
In 2021, Stella sold 40 pairs of swimwear - she didn't keep track of whether it was bikinis or swimsuits for men. In 2020, she
In 2021, Stella sold 40 pairs of swimwear - she didn't keep track of whether it was bikinis or swimsuits for men. In 2020, she sold 18 bikinis as she was not yet making men's swimwear. Stella spent three weeks designing and experimenting with different fabrics, cuts, and patterns. Once perfected, she started to build up her inventory. Uncertain of how to begin selling her products, she noticed her local Farmer's Market that used to be held in the town square on Saturdays had been moved online. She reached out to the Farmer's Market and they agreed to host her store virtually for 15% commission on each piece she sold. Having an avenue to sell her product , Stella started to produce enough inventory to post and sell through the Farmer's Market website. She didn't read all the terms, but she believes there was a line in the agreement that said she is not able to sell her products on any other platform online. The contract will last until December 31, 2022. Not knowing the full cost of her materials, time and overhead, Stella assumed a retail price of $59 per piece was a good starting point. During 2021 and 2022, Stella leisurely made items whenever she had time or got bored. She worked from her apartment (rent of $1,350 per month). She was able to find cheap fabric that sold from $3.50 to $8.75 per yard. Each bikini took about to of a yard of fabric to create. Men's swimsuits took about 1 to 1.5 yards of fabric.
Stella is also wondering what her sales budget would look like. Historically, she has sold on account with 30% collected in the month of sale and 70% in the subsequent. Sales are cyclicaland higher in the spring and summer and lower in the fall and winter.
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