Hey guys, I'm new here in the Fashion For Business Forum but all the discussions here are about fashion advices. Which is great but I'd like to talk about fashion businesses. Let's start here! Tell me about your businesses if you're in the fashion industry.
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Ahmed-Sadman, sorry about the lack of response. Maybe one of these topics will help:
I hope those threads give you a bit more insight.
I've always been interested in fashion, and becoming an entrepreneur in the space, but what's steered me away is the fact that a) it's overly saturated and b) it's so much based on luck. If you don't have enough social media clout in the industry, then you probably won't go very far. All of the top fashion brands make so much money because of high demand and limited supply. It's really hard to figure out how to create that kind of demand aside from celebrity endorsement. But I have a lot of ideas and if I ever end up wealthy, I'll definitely pursue fashion just as a side-hustle.
Was in it years ago on a small scale. Had a few contracts with major us department stores. It’s become harder due to “fast fashion” Stores want product delivery in 5 weeks after presentation. It’s very hard to meet those requirements without scaling up.
In my last corporate job, I ran Global Innovation and the RFID business at the Retail Group of Avery Dennison, serving large brands and retailers like Adidas, Burberry, Levi's, Macy's, Marks & Spencer, Nike, Uniqlo, etc.
I concluded that the supply chain is badly broken, with extremely long supply chains stretching from East/South Asia and Central America supply for low cost, to EU/North American demand. This means that merchants need to guess about demand months in advance, and ~30% of the time they're too optimistic and need to discount excess inventory to make room for the next container load of product arriving from overseas.
Emerging brands struggle to earn space at established department stores, or pour millions into digital marketing campaigns where CAC (customer acquisition cost) is the new rent.
The situation is unsatisfactory for the demand side as well: shoppers have to guess which brands fit their size and style, and confirm with painful trial and error in stores 80% of the time. Online orders suffer 30-40% return rates, and many shoppers end up settling for barely "good enough."
Rather than chasing the female fashionista marketplace with yet another DNVB (digitally native vertical brand), I decided to take a contrarian approach that's fit for the 21st century.
THE SOLUTION: THE WARDROBE ESSENTIALIST is a 2-sided marketplace * for men who want to look great but hate shopping for clothes * for the apparel brands who need to grow their online business profitably
BEACHHEAD CONSUMER SEGMENT: 20-something men in the US who are transitioning into jobs where they can no longer dress like college students: ~30% who are in offices with Business Casual or Suit & Tie dress codes.
DEMAND-SIDE SOLUTION MVP (my.wardrobeessentialist.com) * Automated personalized assortment: “An Online Dress Shirt Shop, Built Just for You,” with no styling fees, subscriptions, or markups. * 30-second profile process drives proprietary algorithm selecting the best-fitting items * Text/image analytics clusters similar-looking items for easy visual browsing * Current production system draws from a selection of 80,000 dress shirts from 17 top brands, with up-to-date pricing & availability * Users find their best value in minutes, 10X faster than a trip to the store.
BUSINESS MODEL * Free to the end-user * Earn commissions from retailers on transactions we route to their sites. * Longer-term: earn marketing fees from brands by connecting them with their best prospects, based on first-party size and style preference data shared by users who have opted-in.
While our initial business plan delivers value by connecting men with the established brands that designed with them in mind, I'm actually most excited about the opportunity to help new brands reach under-served market segments, or bring entirely new styles to market, with much lower Customer Acquisition Costs that either brick & mortar or digital marketing currently allow.
Looking for your feedback
For me, I like the idea but I'm wondering what you see as your defensibility, or if you see any barriers to entry to enter your space?
Also, the reason a lot of consumer start-ups take off is due to a subscription model where customers are encouraged/made to return as part of the business plan. What would the retention curve (in terms of usage and revenue creation) look like with your business?
Really, you want to examine the 3 Year LTV (Lifetime Value, yes I see the irony but it's an industry standard metric in e-commerce) of a new customer acquired via your site vs the CPA of a new customer acquired from your site. If this high enough (>3x) then companies should be happy enough to pay you for some premium above a 3x LTV payback.
You're putting your finger on the critical question: can an open marketplace platform achieve critical mass that powers positive network effects (trusted user feedback on product quality, insights into team style norms by industry/geography/company, emerging brands based on what guys actual are buying vs. what Miranda Priestly is telling us to buy, etc.)
Concerning the subscription model, my personal assessment is that it's more appealing as a spreadsheet exercise than as something that really serves the needs of the average guy. You may want to ask the Corporate Development team at Nordstrom, who paid $350mm for Trunk Club in the summer of 2014, and then wrote down $200mm of the purchase price in the fall of 2016. I'm guessing the primary driver was customer attrition, which is not unique to Trunk Club. I recently had a conversation with a VC who's been very disappointed in the results of Bombfell's $7.5mm Series A three years ago. Here's a chart to ponder:
http://www.goodwatercap.com/wp-content/uploads/2017/11/stitchfix_retent…" alt="goodwater capital chart" title="Low Customer Retention Rates for Subscriptions." />
If you're interested in the category, the full report is worth reading Goodwater Capital Stitch Fix Analysis
Here's a question for you: my primary motivation in building this business is to solve a problem for men who want to look great at work but hate shopping for clothes. If the business were structured as a coop like REI (owned by the members) would this significantly increase the appeal to the guys I'm trying to serve, and therefor lower the cost of enrolling new users?
How REI’s Co-op Retail Model Helps Its Bottom Line
Hello, I am also thinking about fashion business which never ends. Soon I will open my fashion business because fashion is the only thing which will not let us down and Indian fashion academy Nagpur will always there to help you. Hope this information will be helpful for you.Best luck!!
I was involved with a custom window treatment company in NYC. Good business to be in, people routinely drop 10 grand on window shades and we'd pay around 2 in fabric 2 in workroom expenses and 1 to the installer. 50% sounds nice but the business is high risk high reward. If the installer slips up and does a bad job the consequences are brutal (bad review, remake fabric, lose money on job). It was a lot of fun because of the thrill in closing and beauty of our designs.
I own a woman's boutique retailer. For any retailer we get involved with, we immediately leverage their customer base and data to launch our own in-house brand and supercharge margin. It's the only way (IMO) to stay relevant VS Amazon. I also like pushing a more experience-heavy focus as opposed to competing on pricing/product range.
CLOTHES are DUMB and OVERRATED. I think NUDITY is more fashionable!
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