Why we don’t have new styles, yet
Despite mocking up at least fifty new styles of all lengths and weights, Chivaz continues to still only have the original nine style that we have had for the last couple of years.
Talk about doing a disservice to your loyal buyers. Believe me, everyday I wish that we had a much better selection than we have.
I would say that one time a week someone approaches me with a great idea for a sock design and a new market that Chivaz should be tapping into. These suggestions are not falling on deaf ears. They are welcomed and they usually spark great discussion. Unfortunately I have not been able to put these into play. I thought I would explain a few reasons why here.
My hope in putting these thoughts into blog format is that it will clear them from my mind, which in turn would create some room for solutions to the issues that have kept Chivaz from expanding into some new styles and directions.
Today I will focus on the most pressing issue: finances.
ISSUE #1 Financial:
In order to place an order for high quality socks from the same manufacturing company that we have used in the past, we would want it to make financial sense.
The minimum quantity of socks per style that the manufacturer would like us to order is 1200 pairs. Chivaz has not sold 1200 pairs of any style of sock so far in our short existence. I could probably talk them down to 900 pairs, but we haven’t even sold 900 pairs of any style either.
Let’s say that we were up for ordering 1200 pairs of a style. On the cheap side, these socks would cost $3.50/pair. That is the price of them to make them, with label and embroidery and get them to a boat. This price does not include freight across the ocean, unloading at the dock, or customs. All of those costs add up to some significant numbers. For back of the envelope purposes let’s call it $1.00/pair.
That means in order to just do one pair of socks, Chivaz needs to have
1200 (pairs) x $4.50 = $5,400
Our coffers right now have about $4,000 in cash and our expenses every month are about $600.
Ideally we would want to order at least three new styles of socks as well.
So the way I look at it, if Chivaz can have $16,200 in cash + six months of cash bill paying ability ($3,600), we could order new socks. That’s $20,000.
I guess, the real question here is how can we get $20,000 ahead of the order without doing another Kickstarter campaign?
Solution #1: 1,333 pre-orders or commitments to buy a pair of socks for $15/pair
—This is tough because even setting up pre-orders on the site is a difficult thing to do, then comes the harder part which is finding enough people to order 1,333 pairs. It could be done but it will take a full commitment to a new strategy.
Solution #2: 1,333 orders of current socks we have now for $15/pair
—This probably has the most potential, but Chivaz sold less pairs than that in 2014, and 2014 was our best year ever.
Solution #3: 2,666 order or socks at $7.50/pair (wholesale prices)
—Where do I start on this one? I need some good contacts with some good retailers or big teams.
Solution #4: Get cheaper socks made, charge the same — have to sell less pairs
—I really don’t want to reduce the quality of Chivaz. There is nothing better than when people put them on and tell me it is the most comfortable sock they have ever worn!
Solution #5: Get more expensive socks made, charge more — have to sell less pairs
—I just don’t think people want to pay more. Only a few people have ever commented that I could be charging more.
Solution #6: Find a different manufacturer
—This is a pain, I have definitely looked into but no one has been able to match the technology, price, generosity and flexibility of the place that I use.
Solution #7: Take out a loan
—Ummm. No.
Solution #8: Find an investor/partner
—This would be great, but I generally don’t know how to meet these kinds of people. If you have ideas, I am all ears.
Considering that Chivaz is my only source of income for the moment (for much of Chivaz history I have had a full time job), I am a being a bit stingy with spending my money. None of the above options are looking so great and I have not been able to find the proper partner fit since the guy who was my partner for a year left.
It is a bummer. I love Chivaz and I think that Chivaz has so much more potential than I have been able to exploit from it. I am going to keep working at it to the best of my ability. We shall see what happens, but honestly if you have an idea, don’t hesitate to get into a conversation with me about it!
