Types of Businesses

Fashion Industry Segments Primary Market: includes the business that grow and produce the raw materials that become fashion apparel Secondary Market: includes businesses that transform the raw materials into fashion in the merchandise production phase Tertiary Market: includes retail businesses

Primary Market Textiles: largest segment of the primary market Produces fibers, fabrics, leather, fur, plastic, metal, paper, and any other substance involved in production

Secondary Markets Manufacturers Wholesalers Contractors Product Development Teams

Tertiary Market Retailers Off-price, specialty stores, department stores, discount stores, variety stores, outlet stores, non-store retailers

Support Industries Advertising Agencies, Accounting and Financial services, computer support industries, website design houses

Types of Fashion Business Organizations Sole Proprietorship: one owner Minimum license, complete owner liability Owner owns all assets Taxed as personal income Most common form of business in small business

Types of Fashion Business Organizations Partnerships Based upon an agreement between two parties on how organization will be run, profits/loss split Each partner is taxed separately Each partner liable for debts Ends at the death of one partner Corporation

Types of Fashion Business Organizations Corporation Formed with a charter which is a legal document Stocks and shareholders Taxed as a separate entity Limited liability for the owners Corporation exists as a separate entity

Fashion Risks Types of risk: Economic risk Human risk Natural risk Pure risk

Other Risks Types of risk: Speculative risk Controllable risk Uncontrollable risk Insurable risk Uninsurable risk