Tag: cash flow

7 Characteristics of Fashion Brands That Sell

7 Characteristics of Fashion Brands That Sell

There are several new, bestselling brands that seemed to have come out of nowhere to turn into “overnight successes”. They’ve learned how to cleverly leverage everything from distribution to cash flow to catapult sales. Let’s take a look at the seven characteristics these fashion brands share so you can apply them to your business.

1. Flourishing Brand Loyalty

The best brands that thrive – season after season – are the ones that create connections with their customers through consistent brand touchpoints. Brand touchpoints can cover social channels, pop-up shops, event marketing and both print and digital paid marketing.

The Arrivals NYC

The Arrivals NYC

Two brands who are doing a clever job at taking press and flipping it into paid digital are The Arrivals NYC and American Giant. The Arrivals NYC is doing a kick-ass job with paid marketing on Instagram. I love how they are taking one piece of press (a write-up from Vogue) and using it to drive conversion through the platform. The Vogue write-up was based on buying your new perfect leather jacket. American Giant has also done an amazing job of leveraging a write-up on Slate and using it for advertising on Forbes. The write-up was about American Giant having the most in demand, perfect sweatshirt.

2. Slow and Steady Distribution

Drop shipment and consignment can make it easy to be in many retailers at once, but this won’t pay the bills. Deliberate distribution can be the difference between having the cash flow to continue production season after season or running out of funds.

Mansur Gavriel

Mansur Gavriel

Mansur Gavriel launched smart. They started selling at Capsule trade show and instead of letting retailers dictate payment terms they asked for a percentage down with the balance on NET 30. Retailers that couldn’t hang, didn’t, and that hasn’t slowed down this hot brand.

3. Strong Leadership

There are so many decisions that need to be made when running a business. Without a competent leader, there is no head to the ship and responsibilities can be deflected very quickly. Businesses that have multiple founders need to be very careful. It’s important not to have too many redundancies in core competencies. While you all may want to chime in on a particular decision, someone eventually needs to make it and they need to be empowered to do so.

Rhode

Rhode

Fashion brand Rhode is an excellent example. Founded by Purna Khatau and Phoebe Vickers, this team divides work and conquers. With one half focused on designing and merchandising, and the other half focused on business development and sales, this team has been able to triple their sales in just a year. If there was no autonomy, how on earth could anything get done?

4. Organized, Strategic Operations

Have your shipping and logistics on lockdown. Brands that sell know how to ship. To scale up orders and get repeat customers make sure your packaging is on point and you have a distribution center set up. Don’t prematurely move to a 3PL (third party logistics) provider until you have a sales/marketing/PR strategy in place (so you know’ll when to anticipate sales).

Do your research so you know who you want to work with when the time is ready. Have at least three conversations with logistics providers. If you get stuck, shoot us an email at hello@scalingretail.com, we’ve got a kick-ass ops consultant to set you up properly.

5. End Game Aware

Do you want to sell the brand? Will you always be the head of creative? Understanding where you want to take your business will help you make the right decisions. Brands that want to sell to national department stores versus boutiques take different steps to get there. In order to be a brand that sells and is successful, you have to know the end game so you can make it happen.

6. Consistent Messaging

Yes, there are lots of things your brand could be, but stick to the main message. If you are focusing in the environmental sector be clear about what that means to the brand. Your brand story should be able to hold the collection and marketing for seasons to come. Create a brand bible and reference it as often as you need to get to know the difference between your preferences and how the brand develops its own identity.

American Giant

American Giant

Five years down the road you may have a brand that develops a strong following, but your own personal aesthetic may have changed. Your customers may not be ready to grow up with you, so a tough call will have to be made. Risk losing them or continue to create what you know will sell. Brands that stick to the key message become staples.

7. Money Smart

You don’t need to be a CPA to know that money in the retail industry is funny. It’s funny because wholesalers always ask for discounts, they don’t always pay on time, they sometimes cancel orders and you have to invest money into production of samples and production way before you see a penny of sales. E-commerce money is also very risky; you are placing your own buys against sales on your site, so you’ve got to have a plan to get those sales. Do it right and you may see a 70% full price sell-through, do it wrong and you may need to have a steep markdown season to clear out merchandise.

Unlike the restaurant industry where you can get cash in hand the same day, the retail landscape requires balancing a tight rope of cash. In fact, even companies that sell $200M a year (a la The Honest Company) aren’t even profitable. To be a brand that sells you’ve got to have a grip on what cash you need to survive. If you don’t have cash to produce, you can’t sell. If you don’t have cash to produce content and to market, no one will know you exist. Understand money and prepare- this is the key to longevity.

So there you have it, these are the seven characteristics of brands that are selling like crazy these days. Get to work on transforming your brand – step by step – and you’ll really start to feel the results!

Foundation: Finances & Cash Flow 101

 

 

It can be awfully frustrating to project expenses for your company within the first 3 years of launching. There are lots of unexpected costs and if you are self funding you might be unsure about what is essential to succeed and what is the extra mile. I’m going to share with you a couple essential areas of your business you need to budget for.

  • Digital Marketing. As you pick your channels to drive traffic to your ecommerce site choose ones that have a paid advertising component. Set aside at least $300 a month on advertising for one platform.
  • Photography. This is a critical part of your branding. Don’t skimp out on this. Your wholesale buyers and online customers rely on photographs to make critical decisions about your brand. A decent photographer will start at $500 a day. If you are shooting lifestyle and stills two times a year plan to budget $2,000.
  • Samples. As you are developing your collection and looking at different manufacturers it can be an expensive process. While I can’t tell you how much to allocate for your particular collection, I will say take whatever you estimate and double it. Sample makers get things wrong and you may need to try different manufacturers.
  • Professional Fees. Chances are you will need to hire a lawyer, maybe a production consultant, retail consultant, bookkeeper, and tax accountant. Get a quote on all these services and plan on these costs yearly.
  • Office Expenses & Printing Costs. These can sneak up on you. Plan these out in advance and don’t over buy. Yes, business cards do depreciate in value over time. A famous Syama quote “if you don’t have a place to hand out your business cards, don’t print them”. Think of all your branded assets: postcards, packaging, notecards, stickers etc. and plan for it. Do some shopping around before to get some quotes before you need to buy.

There are many aspects of finances and cash flow to consider. How often are you producing your collection? What resources do you have access to for free? Projecting your sales and developing an accurate flow of sales channels in relation to marketing. Understanding your gross margins and properly building out your company cash flow versus your product sales projections are essential. Launch My Brand has a class specifically on finances and cash flow. In fact, the very first class we go over a financial projection template and discuss how to build out custom projections for your brand. Learn more about Launch My Brand at our FREE webinar 2/16/16. Sign up here!