Fashion Designer Fashion Designer Branding & Fashion Business 2 — Questions and Answers
Question 1: What is a 'cost of goods sold' (COGS) calculation primarily used for in fashion business?
- Determining the markup needed to set a profitable retail price (Correct answer)
- Measuring customer satisfaction scores
- Tracking social media engagement
- Calculating shipping distances
Correct answer: Determining the markup needed to set a profitable retail price
COGS represents the total cost to produce a garment, and designers use it to set retail prices that cover expenses and generate profit.
Question 2: A fashion designer who licenses their name to a manufacturer in exchange for royalties is using which revenue strategy?
- Licensing (Correct answer)
- Franchising
- Crowdfunding
- Angel investing
Correct answer: Licensing
Licensing allows a designer to earn royalties by permitting a manufacturer to use their name or designs on products, without direct production involvement.
Question 3: Which fashion industry event is specifically designed for buyers and press to preview next season's collections?
- A trunk show
- A trade show or market week (Correct answer)
- A fashion film festival
- A pop-up shop
Correct answer: A trade show or market week
Trade shows and market weeks (such as MAGIC in Las Vegas) bring together designers and wholesale buyers to place orders for upcoming seasons.
Question 4: What is the primary purpose of a 'line sheet' in fashion business?
- Outlining production timelines for manufacturing
- Presenting wholesale product details and pricing to buyers (Correct answer)
- Sketching new design concepts
- Managing employee schedules
Correct answer: Presenting wholesale product details and pricing to buyers
A line sheet lists each item in a collection with style numbers, color options, minimum order quantities, and wholesale prices for retail buyers.
Question 5: In the US fashion retail landscape, what does the term 'open-to-buy' (OTB) refer to?
- A store policy allowing returns without receipts
- A buyer's budget available to purchase new merchandise for a given period (Correct answer)
- A seasonal discount on unsold inventory
- The store hours for private shopping events
Correct answer: A buyer's budget available to purchase new merchandise for a given period
Open-to-buy is the planned inventory purchasing budget a retailer has allocated for a specific time period to meet sales goals.
Question 6: Which strategy involves a fashion brand releasing a small, exclusive batch of products to create demand through scarcity?
- Capsule collection drop (Correct answer)
- Mass production rollout
- Seasonal clearance
- Private label expansion
Correct answer: Capsule collection drop
A capsule collection drop is a limited-quantity release designed to generate urgency and buzz, often selling out quickly.
Fashion Designer Fashion Designer Branding & Fashion Business 2
What is a 'cost of goods sold' (COGS) calculation primarily used for in fashion business?