As a small soft furnishings business grows selling fabric is the next step to making some more money. There are costs involved though and the intense competition from the internet to consider.
The profit you make on a fabric sale (margin) varies from fabric company to fabric company. Generally the best deal is RRP - 40%. They will quote you -50% but that is a price excluding Vat so effectively you are buying at 40% cheaper than RRP. As a small fish though with low turn over you may find with some companies the best deal you can get will be as little as 20% cheaper than RRP.
Add to this the intense pressure from customers to discount because “I can find it cheaper on the internet” and delivery costs (see below). You may find your effective margin is around 20-30%. Remember you also have to pay for the sample books (which aren’t cheap).
Delivery is charged by the fabric companies (usually £10 to £15). This is easily absorbed on large fabric orders but has a very big impact on small orders. For example if you order 1.5m of £40pm fabric for a blindCustomers RRP = 1.5 x £40 = £60
it cost you (1.5 x £24) plus £10 delivery = £46
only £14 profit on a £60 sale (23% margin not 40%)
You need to try and incorporate the delivery cost into the price you are charging on these small fabric orders.
The general business model is you buy sample books and can then sell all the fabrics from a company’s range. They will also send you samples for free. The books vary in price usually £30 -£200. Beware the fabric Reps always quote you the Exc Vat price for the sample books and delivery will be charged on top.
You will get visits from the Reps coming to show you the new collections (they will want to sell you more books).
Some fabric companies refund the price of sample books when you make an order but they are the exception. Some books you buy you will do well from (usually the plains) others you will never get your money back. Your business will only be able to support the purchase of a certain number of books due to the volume of fabric you sell. The big fabric suppliers are always launching new ranges and it can get quite expensive if you buy their books every time the Rep visits . With the larger companies they will eventually phase some ranges out so the books will have a finite shelf life.
Set a budget and try and be disciplined about which books you buy.
WHICH FABRIC TO SELL?
The trouble with fabric is that there are just so many choices and variations. Get some good Plains. Customers always need plains and you will find those books pay for themselves many times over. Smaller niche fabric companies aren’t always releasing new ranges so they generally are a one off cost on the books and are much easier to get. Some of the curtain sundry wholesalers also sell ranges of relatively cheap fabric. However beware of the cheaper fabrics. These tend to be sold at reduced prices on the internet, as they are not so expensive to buy rolls of.
HOW DO I GET AN ACCOUNT?
You can’t always get an account. Sometimes a company may think you are too small there are too many accounts already in your area etc. The only way is to phone up and ask. A large company will generally send a Rep to visit you, smaller ones will send you an application form asking for trade references.
Visiting TRADE FAIRS & SHOWS is a good way of viewing the ranges of a large number of fabric suppliers in one go and setting up accounts.Some Trade Shows
- October Fair
DO I NEED TO BUY THE SAMPLE BOOKS?
Usually companies will want to see a commitment from you in the form of buying the books. However to avoid the cost of setting up a library you can always approach other curtain makers, fabric retailers etc in your area who have the books already and ask if they will let you work with them, using their books and accounts. Very often they will be happy to come to a mutually beneficial arrangement where you both make money. You won’t get the full trade discount (they will have to take their percentage on the sale) but you won’t have to invest in books and will be making profit from fabric sales straight off the bat.