Category: Startup

5 Ways to Make Your Fashion Business Profitable in Year One

This post was originally written for Create & Cultivate by me (Syama Meagher, CEO of Scaling Retail).  Create & Cultivate Is an Online Platform & Conference Series for Female Entrepreneurs in the Digital Space. Its such a useful post, I wanted to make sure my readers saw it.

Year one for every business can look very differently. This guide is for brands that already have a strong foundation (year 0) under their belt. Year zero is your startup phase and those startup costs should be considered separately. Some of those costs may include: Branding, Pricing, Website, Samples, Manufacturing, Marketing Plan, Sales Plan, Assortment Plan, and a Cash Flow Plan. While in year zero you are also determining if you will be a collection based brand (a brand that sells tops, bottom, dresses – a whole collection) or if you will be an item driven brand (a brand that focuses on making one particular kind of product – think Bonobos when they first launched). If you want to create a brand with a budget in mind, start with item driven products then expand later.

 

To make a business profitable your revenue needs to surpass your expenses.

 

  1. Know what you will spend money on this year, and cut accordingly. Make a list of all the activities for the year you think you will spend money on (marketing, photoshoots etc.) then start to rank them in order of costs and potential revenue (its tough to know exactly in year one what will make you money). Focus on only the top 3-5 opportunities. Brands waste a lot of money doing a lot of marketing activities poorly.
  2. Leverage networks to get things done and give yourself enough time to do it. When minimizing cost you need to trade off with time. Example: The less money you want to spend on hiring a graphic designer, the longer it will take to find a good one that is in your budget. This is especially the case when looking to leverage your current networks to execute on something. Your friend who is really good at X may not have the bandwidth to do you a favor for 3 months. So, plan accordingly. Star by making a list of everything you need to get done for your business, for this example we will use a selling campaign. You will need to hire Photography, Hair, Makeup, and Graphic Designers etc. Your next list should be everyone you know in your network, including Facebook Groups and other groups you are a part of. Finally have a list of things you can do for others. When writing the post message include your offer and see who is open to trades. The low end of a photoshoot done professionally can run you $5,000, so if you have the time to pull this off working within your networks, you might save a chunk of change.
  3. Don’t produce excess inventory unless there is demand. I’d rather you create demand through having a strong social media profile and 2-3 units on hand per item to sell online then to produce to your manufacturers minimum at a lower price and get stuck with aging goods. These days’ brands are launching with strong social media 6 months to a year out before the product launched. Why? To create demand, so when the products are available for sale, there is an audience. You do need some product to fulfill demand when your site launches, but wouldn’t you rather sell out and start to build demand, then have a lot on hand?
  4. Focus on Selling IRL. It takes time to build your ecommerce following, and to get picked up by wholesale retail accounts. I have noticed that my clients who focus on selling in real life at markets, friends and family events, trunk shows and through co-branded popup events see a far higher increase in sales right away. This is because people can touch and feel your collection and you can sell to them with your charm and passion for your product. Build each event with a 360* marketing strategy to take advantage of every dollar spent. Example: Have a friend at the event taking pics for social media, give shoppers 10% off if they follow you on IG, and sell samples/damages at a big discount to get rid of inventory you cant normally sell.
  5. Stop Treating Your Business Like a Hobby. Hopefully, since you are reading this, you actually want to make money in this business. This means you cannot have a 4-hour workweek or magically have a business you love. It’s just not possible. You should be clocking in 60 + hour workweeks if you are really hustling. If you have a day job, that means you are working on this nights and weekends and lunches. You need a plan of action. For every dollar that you spend and every hour that you spend on your business you need to outline the 3 ROI’s you are getting. Those ROI’s (return on investment) won’t always have financial implications, but they might have brand awareness implications and that absolutely will help you in getting sales. It takes the average brand 18 months of selling to really see a pick up in sales and to understand their customer. 18 months means 3 seasons of pitching, product development, sample making etc.

 

 

There is no magic wand to make your business profitable in year one, but there is smart planning and smart execution that can get you there. How you set up and manage your business goals and brand vision can bring you closer to profitability. But keep in mind, the industry is not set up so that the brands with the most exposure, press and sales make the most profit. In fact, many highly visible brands are in debt. But, by following the tips above you will keep yourself on the safer side of cash flow management and be a stronger, wiser CEO for it.

How to Plan for Your Photoshoot

Your brand hinges on amazing images to communicate the lifestyle, brand and products you are selling. This is one area I never suggest cutting corners. You can do this on a budget, but don’t go all the way cheap.Planning  for a photoshoot is a daunting task, but one you have to do it at least twice a year. Here is my checklist for a successful photoshoot.

  1. Plan in advance, especially if you have a budget.
  2. Develop your mood boards on pinterest or ppt. There should be one for hair/makeup, one for models, one for photoshoot art direction and one for locations if you are looking to do it somewhere specific.
  3. You will need in total around 200 images. Thats a combination of lifestyle shots, product shots, behind the scenes, and photos to use for social media. You should make an exact list though: #of pics for website, # for social media # for lookbook etc. Communicate this with your photographer beforehand so you can negotiate pricing.
  4. Budget costs appropriately.
    • If you don’t have any amazing photographer friends, not many of us do, then you should plan on $2,000 for a two day shoot with a good photographer. I’ve spoken about this in the past, and its true that you get what you pay for. You should expect 30-50 edited pictures at the minimum from a 2 day lifestyle shoot, and a higher amount of pictures if you are in studio.
    • There are lots of places to find models, but you probably want good ones. That means that you won’t want to just put up a post on Craigslist. If you are on a budget plan to spend between $250-$500 per day on a model that has experience and can move in front of a camera. Make sure you meet them in person and do fittings before the shoot. Don’t make decisions just based on their cards.
    • Hair & Makeup. Try to double up on this. Find someone who has both hair and makeup experience to work with you the entire 2 days of the shoot. Shoot for $500/day.
    • Assistant. Yes, you will need someone to help you prep, grab coffee’s keep everything organized. Don’t underestimate the power of help. You won’t be able to manage everything. If you have a friend that can help, amazing. If not, plan to spend $10-$20 an hour.
    • Food/Transport/Location. If you plan on shooting at a hotel, you might need a permit, double check. Any Uber’s that you and the team take around town, guess who is paying? Coffee, candy, sandwiches – anything you need to keep everyone pepped and happy.
  5. Prep everything you need for the day of at least 4-5 days in advance. Make sure you have things like: tape, safety pins, hangers, clamps, bobby pins. Its the little things that can trip you up on the day of.

Good luck on your next photoshoot! You are making a great investment in your brand by deciding to do this well.

Foundation: CEO Advice & Management Tips

Hello CEO’s!  Some of you might be resistant to accepting that you are the heads of your businesses, but you are.

So again, Hello CEO’S! and you say “Hello Syama!”

In the final week of Launch My Brand we go over CEO Advice & Management. This topic is so critical,  and it is essential that you develop an approach towards the management of your team, even if it is a one person team.

As a new CEO my first piece of advice is to think of yourself as a consultant to your own business. If someone were asking you how to run their business what would you tell them? Would you suggest they just work around the clock and plough through as much as they can? Probably not. A calculated approach is always the best. You are the boss and need to have plans, schedules, and budgets for new hires, production costs and operating costs. This means you should set aside at least 3 hours per week to do management related tasks.

Management Tips:

  1. Set goals and expectations for any project you are hiring for in advance. When you do interview for the position make sure you know exactly what your needs are and make them clear.
  2. Plan for the year and the month, and make sure you and whomever else you work with is clear on the goals so you can make progress towards it.
  3. Don’t be afraid to say no, play hardball or negotiate. This is your money and your business, you cannot assume that everyone is going to give you a fair price or has your best interest in mind. However…you do get what you pay for. So if someone doesn’t budge on their price, there might be a reason why they are charging it!
  4. Implement smart tech tools to optimize operations. Some of my favorites are Basecamp for project management, Boomerang for email scheduling and Streak for tracking email opens.
  5. Don’t over schedule your time. There is a tendency to jam pack things in down to the minute. Trust me, I know,  sometimes I do it too!  But, the best days are the ones where I have 30 minutes set aside for a lunch and a hard stop at the end of the day.

Alright CEO’s, here is to your success!

To read the other posts in the Launch My Brand Series, check out the list below:

Launch My Brand is a 6-Week Program on Fashion Business Basics for the Startup Fashion brand. Each week I go over important topics that are essential for success in launching your brand smart.
Week 1: Cash Flow
Week 2: Assortment Planning
Week 3: Customer Demographics
Week 4: Competitive Matrix
Week 5: Sales (Wholesale & Ecommerce)
Week 6: CEO Management Tips (we are here)

 

 

Foundation: Selling Tips + Videos!

Sales are the lifeline of your business. No sales, no business. So its very important to develop your sales strategy. Your strategy might include ecommerce, wholesale, popup shops, consignment, and drop-shipment amongst others. This blog post we will discuss the 1st step to selling ecommerce and the 1st step to launching wholesale. For more advice on increasing sales, and growing your business check out Scaling Retail TV or schedule a consultation.

1st Step to Selling Ecommerce

Make sure you have a presentable site that is optimized for sales. Your website is your first impression- so do it right the first time!

Backend: SEO optimize each page, SEO optimize each image, make sure your social media links actually go to the right pages and click out of your site. Review your shipping and return policies, and your FAQ’s. Make sure you integrate your email popup with your email provider.

Front End: Do you have your Instagram images integrated to your site? Do you have enough photographs to change your homepage each month? Are your product pages easy to read? Are your pictures high resolution and zoomable? Do you have an editorial merchandising strategy for each month? Get all the juicy details of your products and your “about” statements out in a clear and concise way.

Videos >>>>>>

Ecommerce 

If you need a step by step guide to building your site pick up a copy of Creating Fashion Websites that Sell. 

1st Step to Selling Wholesale

Wholesale is scary and hard work. You are constantly pitching and retailers are comparing your brand to others. Your brand that you have spent a lot of time and energy building! 

My #1 to getting started selling to buyers is to master this formula: Product + Pricing + Persistency + Proof.

Product: Get your product down perfectly, know that they have an audience and you should have some selling history in small selling arenas.

Price: Make sure you are competitively priced. Look at your competitive matrix.

Persistency: Develop a thick skin. Not getting a response doesn’t mean no, just not right now. Keep emailing, mailing out postcards and calling.

Proof: Build your social proof. Instagram should be your #1 Channel to develop right now. Post 3x a day and make sure its a combo of lifestyle, brand and product. Don’t forget how importance of engagement! Buyers want to see that you have a market.

Videos >>>>>>

Wholesale

If you need a more indepth overview on how to start wholesale, sign up for the How To Sell to Barneys & Boutiques Webinar.

 

Good Luck with getting your sales strategy off the ground, and let me know how it works for you!

 

Choosing the Right Shipping for your Business

Lillian Anselmi is part of Modalyst an online distribution platform specializing in dropshipping for independent brands. Their technology allows e-commerce stores to easily add products, receive real time inventory level updates, and automate the ordering process. With their Shopify App, online stores are able to manage hundreds of suppliers from all over the world.

Recently she wrote an article on the Modalyst Blog about choosing the right shipping strategy for your online store and I thought it would be helpful for some of you who may be struggling with this decision. 

If you are an online retailer, you better get your ship together or you will certainly lose customers.

In all seriousness, shipping should be considered as one of the most crucial elements in your online strategy and should be analyzed like any other business decision.  A customer’s experience is influenced as much by the products you are offering as it is by the shipping costs associated with those products.

In fact, a UPS study shows that shipping is the number 1 reason customers abandon their carts. Say what?! Yep, the number 1 reason. So lets get down to business.

How do you determine which type of shipping policy is going to keep your customers interested but not at the expense of your business? Let’s go through some different scenarios.

#1 ) I am an experienced online retailer with a loyal customer base and predictable sales

Firstly, congratulations. Not an easy feat. This allows you some flexibility and creativity with how you want to deal with shipping. This is a great opportunity to offer free shipping. Of course as a business, nothing can actually be FREE, so be sure you are making up for it in another way.

For example, Wild Dill, a successful online baby boutique, offers free shipping when you sign up for their newsletter or follow them on Instagram. While the store will likely lose money on the first transaction, they have captured the customers information to use for direct marketing campaigns making the chances of a return visit very likely.

Screen Shot 2016-01-14 at 2.28.26 PM

 

Another popular e-commerce site BOUTQS, offers qualified free shipping. For example, if a customer purchases $100 or more in products, they will ship for free. No doubt this incentivizes the shopper to add more items to their cart, so this can be a win-win. However, the key is to know the difference between your average order size and your free shipping threshold. For example, if your average order size is $75 and you need an order of $100 or more to cover free shipping, it seems likely you can get them to buy $25 worth of additional items to reach that threshold.

 

Screen Shot 2016-01-14 at 2.06.54 PM

 

#2) I sell one of a kind / unique items to a niche demographic

If you are in the business of selling novelty items, you have one major advantage that offers you a guaranteed win on shipping. Due to low competition, you have relative flexibility in your product pricing. This allows you to embed the cost of shipping into your MSRPs and still offer “free shipping” while making sure your costs are covered.

#3) I offer a variety of products / price points to a wide audience

In this case, you may want to be careful. If your orders are unpredictable (in terms of type of products and price points) it will be difficult to devise a strategy that works site wide. In this case, calculated shipping is likely your best option. Try embedding a shipping calculator on your site so the rates are accurate and you can avoid cutting into your margin as much as possible. Otherwise, simply charge what you pay to ship the item. This requires a little more work as you will have to price out the shipping for each item but is well worth it.

#4) I am a specialty store selling similar size products

If you are a jewelry site, for example, you are most likely sending the same size box to each customer. Use this predictability to your advantage and offer flat rate shipping on all orders. Choose a standard box size that fits a certain amount of your average size items so that unless they choose an unusually high amount of products, you should be covered. Customers will like the transparency and easy to understand policy. Don’t forget to always adjust rates based on current pricing outlined by each carrier.

For example, HERE is a great guide on the new pricing announced by USPS for 2016.

 

Screen Shot 2016-01-14 at 7.58.10 PM

 

In conclusion, there is no one size fits all for shipping policies and it is best to take a deep dive into your customer base and understand what will work for them and for your business.

If you are interested in joining Modalyst, please sign up for a FREE TRIAL here. Modalyst is offering the Scaling Retail community a discount on membership so mention Scaling Retail in your sign up form to be eligible. Email Lillian@modalyst.co with any questions.

Foundation: The Competitive Matrix

“I Have No Competitors” Why a Competitive Matrix is important.

 

I cannot tell you how many times I’ve heard brands say, “I have no competitors”. I just cannot believe this; simply because at the end of the day your “customer”, either the wholesale buyer or the direct customer, has options on where they want to spend their money. This means that while your product might be very unique, you still have competitors. Building a competitive matrix will help you understand the landscape of what your customers are choosing from and how your brand sits next to them.

 

Here are a few ways my clients use the Competitive Matrix

 

  • Indexing pricing
  • Identifying potential wholesale accounts
  • Website and branding cues: use of white space, image types, email popups
  • Inspiration on copywriting: types of writing
  • Evaluating how many businesses are new or heritage
  • Identify where brands are manufacturing
  • How many styles/skus are being produced
  • Social Media cues: patterns, messaging etc.

 

 

Now how should you be comparing your brand? What brands constitute a competitor and how do you find them?

 

Occasionally I hear new brands say they want to be the next Balmain when they have a small budget and little resources to launch. How could Balmain then be a direct competitor? They are a heritage brand that makes millions each year. Now, you can have Balmain be an inspiration brand, but to make the competitive matrix useful for you I suggest choosing brands that have launched within the last 15 years.

 

Finding your competitors isn’t as simple as doing a Google search. We all know that Google works through algorithms with backlinks and page ranking and that you may never find a cohesive list of the brands you are looking for. I suggest starting with the stores you want to be sold at and checking out what other brands they carry. If finding stores are a tough task then take to Yelp. All small boutiques and large boutiques can be found on Yelp. This won’t account for the ecommerce stores out there, but it’s a good start. Other places to look: Angel List, Tech Crunch- they will list out new ecommerce companies occasionally. And if you want to outright buy a list you can checkout companies like WeConnectFashion.

 

Lastly and most importantly, keep your matrix organized and neat. This means you will want to color code, add appropriate boxes and make it as easy to use as possible. In fact, you may need to have multiple sheets if the one becomes too large.

 

Competitive matrices are a critical part of your business and you should treat it as part of the foundation. If you have trouble creating them you may want to sign up for the Launch My Brand workshop to get fashion business foundation training or schedule a one on one consult with me.

 

 

Good Luck!

Foundation: Identify your Customer

Identifying your customer will help you with your marketing, sales strategies and overall development of the direction of your assortment. Whether you are a startup who needs to identify your customer to properly position for marketing or an established brand that is evaluating brand direction, your customer is king and queen.

 

This post is two pronged. The first section is dedicated to startup companies who are struggling with identifying their customer based on either a lack of sales or because you are in the process of launching. The second section is for brands with selling history that need to analyze their customer base to make strategic decisions.

 

___________________________________________________________________________________________

 

Part I

 

Please, never ever say, “my customer is between 25-40, female, makes $80K a year and lives in urban areas”, how general and simply not true. This is a rookie mistake when starting to think about your collection, brand and marketing efforts. You need to start to get inside the mind of your customer. I ask of you to start to look at your competitive matrix, and start to look at whom your direct competitors are pitching to. Where are they getting press? Where are they being sold? Who are their followers on Instagram? The purpose of this exercise is to come up with a real profile of outlets and customers that actually exist. At the end of the day your customer profile might look more like this, “Reads Flaunt Magazine, shops at Flat 128, follows celebrity DJ’s on IG, follows brands like A Peace Treaty, Claire V. on IG”.

 

Your list should effectively yield a target list of brands that are competitors or potential collaborators, blogs, influencers and magazines that are actually relevant to your customer, and potential stores you will be selling you. You should also check your price points to make sure you are within reason of what your customers will spend. This means double-checking your direct competitors to do apples to apples comparison.

 

As your brand grows your customer will self identify by purchasing and engaging with your brand. If you have been selling for three seasons with no traction, its time to re-position your brand and look at your pricing, assortment planning and branding

 

Check out the Launch My Brand workshop to get in depth coverage on how to identify your customer and market effectively.

 

_________________________________________________________________________________________________

 

Part II

 

If you have selling history on your brand, you might be wondering how to maximize this information.

 

This is what I would do:

  1. Analyze what is selling by category, color and price point. Develop an assortment plan for future collections based on this and then layer on the creative direction and inspiration.
  2. Review where the most sales are coming from. Etsy? Ecommerce? Wholesale? PopUp Shops? Leverage this information to get in front of your customer more by being where they are. Develop a strategy to maximize these channels.
  3. Communicate with customers so you can introduce new categories and products. It’s essential when scaling your brand to grow in ways that your customer will support. So before you take the time to produce outerwear when you are known for dress shirts, ask your customer what they want and give them what they need.

 

Your selling history tells you what is working and what isn’t. Making money is the litmus test to tell the success of a business, otherwise you would be running a charity or this would be a hobby. For more ideas on how scale and develop your brand for the next 5 years contact me (syama@scalingretail.com) and we can set up a consultation.

 

How to Write a Buyer Pitch Email

How to sell to Barneys NY, Saks and Neimans? Write a killer pitch email to get buyers talking about your brand! Simple easy template to get you talking to the write buyers.

Did you find this video helpful? Need more tips? Leave a comment below, so we can chat!

Thank you for watching.

For more tips and exercises for building a fashion website check out
Creating Fashion Websites That Sell by Syama Meagher and Nicole Giordano: http://www.scalingretail.com/product/creating-fashion-website-that-sell/
Check out Scaling Retail website for more business ecommerce and retail tips, reviews and more: http://www.scalingretail.com/

Contact Syama for any questions: Syama@scalingretail.com

Follow us for here
Instagram: https://instagram.com/scalingretail/
Twitter: https://twitter.com/scalingretail
Facebook: https://www.facebook.com/scalingretail
LinkedIn: https://www.linkedin.com/company/nyc-retail-consultant

How to Create your Line List for Wholesale Buyers

 

Stuck on how to create your line list? Watch this. I’ll walk you through each column and tell you exactly how to build it. What you will need:

1. MS Excel
2. Photographs of your product
3. Pricing
4. Materials Content

…and a couple other things that I will share.

If you are ready to launch your brand then set up a consultation. Email: hello@scalingretail.com. Scaling Retail is the consulting firm for retail globally. Specializing in startup and growth stage ecommerce, brick & mortar, and wholesale.

For more tips and exercises for building a fashion website check out
Creating Fashion Websites That Sell by Syama Meagher and Nicole Giordano: http://www.scalingretail.com/product/creating-fashion-website-that-sell/
Check out Scaling Retail website for more business ecommerce and retail tips, reviews and more: http://www.scalingretail.com/

Follow us here
Instagram: https://instagram.com/scalingretail/
Twitter: https://twitter.com/scalingretail
Facebook: https://www.facebook.com/scalingretail
LinkedIn: https://www.linkedin.com/company/nyc-retail-consultant