Fashion Unraveled - Second Edition - How to Start and Manage Your Own Fashion (or Craft) Design Business

Will the unit cost be higher? Yes. It’s okay to pay more per unit as long as the new COGS is low enough to ensure at least a 30 percent gross margin on those items. You’re essentially paying for the time you’re saving. I believe it’s worth it and will arm-wrestle any CPA who says otherwise.

If a city area has only new buildings, the enterprises that can exist there are automatically limited to those that can support the high costs of new construction. These high costs of occupying new buildings may be levied in the form of rent, or they may be levied in the form of an owner’s interest and amortization payments on the capital costs of

Fixed Expenses ÷ Net Margin per Unit = Breakeven Unit Volume $1,500 ÷ $9 = 167 units sold to reach breakeven point each month

the flip side, companies that can mark up their goods in a big way—a luxury retailer such as Tiffany, for example—can afford to have more capital tied up in their assets because they make up for low asset turnover with high profit margins.