Question

if i want to start a company or a small business in fashion industry, what will be my fixed and variable inputs in order for my business to start and operate?

let's assume a company that is similar to h&m or zara

Answer 1

In short run fixed inputs are those which do not change with the change in number of units you sell while variable cost change with the number of units you sell.

Thus Fixed cost of fashion industry is:

• Building cost or rent, it would be very high as the building they have is luxurious.
• Employees salary includes salesman, accountant on cash counter, sweeper etc.
• Insurance cost
• Electricity bill
• Maintenance and Repair cost
• Advertisement cost

Variable cost includes:

• Transportation cost of more clothes and accessories from outlets to your showroom.
• More staff required to manage the unfolded clothes in try room such that they are always folded and ready for display.