Industry Lingo

The creative industry Acronyms and Abbreviations. 

When you start moving about in a new industry very fast the specific industry lingo will get you. The Creative industry is one of it's own, especially the fashion part. We love to create our own acronyms and abbreviations - simply to do things different. Let us help you see the forest through the trees and explain some of the weird words and letters going around. 

Sidenote - We can't get a filter to work here, super sorry - we get there ; ). For now just Ctrl+F and type your word in, when it's there you'll find it. If not please let us know, then we can ensure someone will explain and add accordingly. 

B2B (Business to Business)

Business to Business - Sales by you to a Business who sell it onwards to their customers (see - Reseller/Buyer)

B2C (Business to Customer)

Business to Customer - Direct sales to customers (by you)

BOM (Bill of Material)

The BOM is the part in your tech-pack where you find all details of your product materialistic needs and usage. 

COGS (Cost of Goods Sold)

COGS includes all of the costs and expenses made directly related to the production of the good. But, exclude indirect costs like overhead, sales and marketing. 

COO (Country of Origin)

Country of Origin states the source of production. This is needed for custom papers, care labels etc. Note that this doesn't necessarily reflect where your raw materials come from.

FOB (Freight on Board)

FOB price is simply said - the price a retailer pays to a supplier at the factory to acquire the products, without shipping and import fees.

Grading (Size Spec)

When you sell products in different sizes (clothing, pottery, etc) this is where you highlight the details on size specifics (part of your Tech Pack). Don't forget to highlight the tollerance, as in - how much do you accept the production to be 'off' spec. You do need to confirm these tollerances with your supplier. 

LND (Landed Cost)

Landed Costs - the total cost of acquiring (FOB) and shipping a product until it lands in a customers hands.

Margins (Product Profit)

Product Profit Margin is calculated by the percentage share of the Projected Revenue (RRP) on the COGS. It's different per brand, and related to many factors - but ensure that you hit at least 75/80% on a direct product profit margin. Don't forget this should pay ALL your bills. 

Mark-Up (Production)

Product MarkUp is the difference between the costs to make a garment and the amount for which it will be sold. I rather recommend to work with profit margins here - the markup system is rather old, and doesn't give you true clarity on where your money goes. (personal reccomendation)

Mark-Up (Sales)

Sales MarkUp is the differnece between the RRP and the RBP - Current mark-up rates are between 2.5 (middle EU) and 3.3 (Nordix). These can sincerely make you get into trouble - as it's hard to relate to. So always make a pre calculation to what extend you can go. And maybe even make a decision that you won't sell a certain product to resellers as it's just not worth it. 


Minimum Color Quantity - the minimum SKU quantity you need to order in total per color. 


Minimum Order Quantity - the minimum SKU quantity you have to order in total. 

PPS (Pre-Production Sample)

Pre-Production sample is the guideline for production to produce on. Correct fabric, correct trims, everything!

RBP (Recommended Buying Price)

FAQ 1 The price a reseller pays you. 

RCP (Recommended Commission Price)

The price a commissioner pays you.

Reseller / Buyer

Individuals, Stores, Businesess who on-/offline sell your goods as a middle man. (You sell to them, they sell to their customers)

RRP (Recommended Retail Price)

The price you recommend to sell your goods for to a direct customer.

SKU (Stock Keeping Unit)

A much needed article number that helps you track your goods. Every unit (product, colour, size) with one RRP, has one specific SKU number. Let's say sweat navy in size M will have a different SKU number than sweat navy in size S. Note that resellers could manage their own SKU system. This will not replace your SKU, they will just map yours against theirs. Please make sure you don't update your SKU numbers, and if you do - communicate this well through your full supply chain (from supplier to retail)

SL (Sleeveless)

Sleeveless (tshirt)

SMS (Salesman Sample)

The sample set you sell with from your showroom, or you hand out ot your sales reps, or simply have in the back of your car ; ). Remember, no sample no sale - and eventhough this is an older saying, it's still true. Make sure you don't go out with a sketch of something and let them imagine... 

SSL (Short Sleeve)

Short Sleeve (tshirt)

Tech Pack

Your product bible - every product has one tech pack, where the BOM, Size Spec, and Prototype comments are locked. The holy grail of your production. This takes out 'most' biases, assumptions and streamlines communication internal / external. 

TOP (Top of Production)

A top of production sample is taken from the actual production run in the middle of the production to check whether the factory is following the standards set by the PPS.

How to apply this lingo? Try Koai Lab now. 

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