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Tips for Surviving the Fashion Biz

My children’s clothing line, Glamajama, has been in business for almost five years now.  Throughout those years I’ve seen quite a few designers come and go.  One thing that I have learned is that it takes more than just having a great product to make a company successful.  There are tons of great products out there and your staying power depends on your business skills- not your fashion skills.  I always tell people, I’m not a fashion business -I’m a business that sells fashion.  There is a difference.  Keeping your focus on the business and not the “glamour” of being in the fashion industry will help keep you from becoming just a passing fad.  Below, I’ve tried to list some tips for avoiding the most common pitfalls that can lead to failure.   

Think Marketing First

As I mentioned above, having a great product is simply not enough to create a brand with staying power.  The reality is, it’s a cluttered marketplace. To stand out from the crowd, you have to have a “hook.”  Don’t wait until you’ve already had samples produced to start thinking about that hook.  Ask yourself key questions at the beginning, “What makes my line different?  What’s my niche?”  As you continue to brainstorm concepts for your line, try to envision the logo, tagline, sales pitch, etc.  How would you sell this to customers?  Who is your target customer?  Pick out your favorites and then solicit feedback from friends, family, and most importantly- complete strangers that belong to your target demographic.  Which strategy garnered the most interest?  Pick the winning marketing concept and make sure you incorporate that message as you fine-tune your line.  Being able to effectively communicate your unique selling points is vital to stand out from the competition.

Focus on Cash Flow

Cash flow is hard for any business and especially hard for a fashion company.  The sales cycle usually looks like this: make samples-write orders based off samples-manufacture line-three month’s later ship the finished product to customers-get paid.  The problem lies in that you will need to pay for production upfront with a letter of credit to ensure that deadlines are met, but you won’t receive payment until the line ships three months later.  Also, if you allow your customers to pay Net 30, it could now be four months before you get paid.  The key is addressing this early on in your business plan.  Can you add additional pieces that are non-seasonal to balance out your seasonal business?  Can you secure a large customer early on that will allow you to finance their invoice to pay for production?  Can you offer a discount to stores who agree to pay a deposit on the line when the order is written?  Solving your cash flow problems on paper before the line launches will save you a lot of sleepless nights later on.

Perfect Your Pricing

Pricing is always difficult for new designers.  The initial product volumes are low which translate to higher production costs.  After the initial mark-up to cover your overhead costs such as marketing, utilities, and salaries plus the 2.2 mark-up for retail pricing, the product is often priced far out of what the market will bear.  If the product is perceived as being priced too high, you won’t achieve the sales volume you need to garner the lower production costs.  If you can’t lower your production costs, it will be difficult to be profitable.  Without profits, the business won’t be viable.  Welcome to the downward spiral!  Pricing is arguably the most important component for your line’s success and also one of the hardest strategies to commit to.  There are far too many variables to take into account when pricing your line to cover them all here.  I can, however, suggest reading Frances Harder’s book, Fashion for Profit .  She has a great chapter on costing and I would highly recommend reading it before solidifying any pricing strategy.

Get Noticed

Sales are the lifeblood of your business.  To make those sales, customers will need to know you have product available.  Tradeshows are critical for establishing your brand and letting the industry know you exist.  Contact tradeshows in your industry and ask to be included in any “new exhibitor” marketing they do with their attendees.  This often includes premium placement at the tradeshow, inclusion in press releases, and mentions in their direct mail campaigns.  There are often special discounts on tradeshow services and advertising extended to new exhibitors as well.  The next step is to create some “buzz” that will label your line as a “hot item” for buyers.  Craft a press release announcing the launch of your line and send it to relevant magazines, newspapers, trade publications, websites, etc.  Make sure you have 300 dpi pictures (both modeled and product shots) to send if requested.  Once you start getting some publicity, be sure to let your customers and prospects know about your success.  Email campaigns and direct mail postcards are great ways to spread the word.  Once you start building momentum with your publicity campaigns, don’t stop!  Getting noticed should always be a top priority.


As always, please comment below with any questions and I look forward to hearing from all of you!  Contact me directly at heather@glamajama.com

 

 

About the Author: Heather Schuck

Heather Schuck is a passionate entrepreneur who lives up to her "Lil' Firecracker" nickname. While she may joke about her "fun sized" 5'1″ petite frame or her nationally celebrated 4th of July birthday, she's serious about bootstrapping, inspiring mom entrepreneurs, [...]