Gone are the days when small or family-owned businesses are actually small. The idea of a small business has been changing, especially for the past year. Family-owned does not mean you cannot produce a massive quantity of products, neither being a “small company” with 8 employees means you cannot make millions every year. When it comes to new fashion brands, the “small business” have been taking over and new brands with particular markets have been growing and conquering their space.
The fashion industry has been giving so much more attention to start-up brands. NY Fashion Week is the proof of that. Every year new designers present their collection at the event and every year there are more and more names on the runway. A few clients who launched in 2020, even during the pandemic, had successful launches and sold out their inventory. How? Well, first of all, let me go back to local production and smaller quantities (like I mentioned in prior posts). Some of those clients were producing 30 pieces per garment and launched with 6 different styles. That might seem very little, but they knew their target market and focused on what matters: quality and making the sales.
The idea of a small business doesn't mean you are not going to become successful or make money. The opposite! Several small brands are successful in NYC, still, hold on tight to small productions and capsule collections, are recognized by their products, and have successful sales all over NYC. You might not know those brands outside America or in other States, but does that mean they are not profitable or recognized in their local communities? Knowing where your customers are, what do they like and what they can afford is the main point of a successful business, not the size of your brand.
A great example I like to use as a family-owned business that grew to be gigantic is The Balm cosmetics. For those who do not know, they sell pretty much anywhere in the US and all over the world. Whoever sees their brand would think they are a massive corporation, but they are actually family-owned. The family lives somewhere in Jersey/Connecticut/ Long Island (something like that) and pretty much the entire production and distribution are outsourced. A “small” brand that is a great example is SierraMora. An Uruguayan leather goods brand which is owned by a girl, probably younger than me (FML), who started producing custom pieces, then outsourced local manufacturers that could produce her pieces. She is still local in Uruguay, but has more than one store location and sells worldwide on her online store - which is not her goal either brings her the most profits, but kept the option of going worldwide open while not producing a massive quantity of merchandise. Now tell me, do any of these businesses look small to you?
Yes, everybody dreams of being Chanel. But becoming successful, satisfied, and happy at what you do is not the point anymore? Well, you might never be Chanel, but it does not mean you are not as good as any haute couture brand. Gisele used to be the best and most famous supermodel in the world. Her name will be remembered forever. But then a new generation of Kendal Jenner, Bella Hadid, Hailey Bieber came and took over Gisele status… there is always somebody and some brand which will pass you, this is life. But it does not mean you are not awesome or you will not make a name for yourself.
I know we all want to be Chanel, but even though we will not be Chanel, we can still make a name and become a successful haute couture brand. But, as I mentioned in my previous posts, everything depends on the budget you are willing to put up with and the marketing you want you to present to your customers. Local development and local productions tend to be more expensive, but quality control and lower quantities are an option. Offshore production is cheaper, but quality control and lower quantities are not really negotiable. Rebecca Minkoff, an NYC designer, is another great example of this. She is no Hermes, but she started as a high-end leather bags brand, made in the USA, and grew her brand worldwide (she eventually needed to move her production to China because of the massive growth of the company). Fun fact, one of the manufacturers I work with is the manufacturer which created her first bag. Proud moment! (lol, but for real)
Smaller new brands which have targeted their customers correctly and used the right marketing tools have had successful launches even during a world crisis. Of course, you need to know what your investment will look like and build up your budget, but investing in a small production with quality products can result, not only in sales but in certain profits. Do not forget that producing offshore might be cheaper, but minimums are also higher, and you will need to invest in a marketing campaign that will sell the 5000 MOQs of inventory sitting on the fulfillment center which is charging you a certain amount per order received (plus a flat fee for setting up your SKUs). Your room for error here and fail sales is higher, compared to a smaller production of 500 units, a smaller marketing campaign targeting your specific customers, and using influencers which will result in sales (not only content).
Revising your budget, building an acceptable timeline according to your product, and building up your brand image is the first step to know which market you should go in. Even though you might have all the money needed to do anything you want, nobody likes to throw money out of the window for nothing. So, knowing your products, the development budget, and the marketing budget, will help you to strategize a plan that will make you understand the size of your first production, make the sales and 100% profits. In this case “go big or go home” actually means “be successful or go home”.
Comentarios