How to start a fashion brand. Part 2.
Last week we discussed the basics of starting a fashion line, and things to know before writing a business plan. Today I am going to share the process of clothing manufacturing. If you are a fashion designer or would like to produce the original designs, this guide is created to help you when you start and hopefully make it easier.
Clothing production is one of the most globalized processes. Take, for example, your favorite wool sweater: the wool is first collected from lambs in Australia, then it is processed in Italy, knit into a garment in China, packaged and shipped to the United States, then distributed from the warehouse to your favorite store.
As with the other types of businesses discussed last week, there are many different ways you can sell clothing. Ultimately, the quantities you need to produce will depend on your goals. Since we talked about it last week, let’s get into what you need to make a decision on.
The 4Ps
These basic concepts in marketing apply to the clothing business:
Product. What you will be selling, whether it is womenswear, menswear, childrenswear, all three; one product or a full line; suits (although not as popular right now), bridal, occasion wear. It is beneficial to be very niche at the beginning to test the market.
Price. There used to be about 8 price points in fashion (haute couture, designer, bridge, better, contemporary, moderate, mass market, discount). Now they interlap, and new categories have been added such as “affordable luxury.” While the retail price decreases with each level, the number of goods produced increases, and the profit margin decreases. If you would like to learn more about the pricing strategy, there are many books written on it.
Place. It is how you are going to sell and reach your audience. Do you see your clothing being sold in department stores like Macy’s or would you prefer to have an online store? You can do one or the other or both. Many brands have a ratio of about 20% wholesale, 80% DTC because it is a great way to have control over the branding, pricing and to have a presence in bigger retail platforms like FarFetch.
D2C, DTC, or direct-to-consumer means that you will have your own physical stores or/and online store to sell branded merchandise. If you haven’t, I highly recommend taking a “Build a DTC brand” course from the BoF. The pros of the DTC are higher profit margins, full control over the branding, direct communication with the consumer, faster lead time, which makes it an easier way to pivot and make changes. The cons are that if you are just starting, it may be difficult to get the word out there.
Wholesale is the process when your clothing is sold by retailers. In this case, the retailer has full control over the final price, how and where the goods are sold. There is usually a contract between the supplier (you) and the distributor that helps you protect your brand image. If you are just starting, the conditions may be less favorable for you. As you build a reputation, then you can modify the contract. I highly recommend hiring a lawyer. The pros of wholesale are that you produce clothing after you receive an order from the buyer, not vice versa, have access to a bigger audience with the possibility to grow quicker. The cons are zero to no feedback on how your product was perceived by the audience. The retailers do not like sharing their data with suppliers, so you rely heavily on their orders. Another con is that if your product is not sold, then it is going to go on sale, clearance, and then outlets, which can damage brand identity.
Promotion. There are many ways you can promote your fashion line. Are you going to have fashion shows or sell on Instagram? Maybe you are planning an endorsement by a celebrity or influencer. Perhaps you want to have drops and notify your customers about new products via email. Whatever you decide, possibilities are endless.
Now that we looked into the basics, we can dive into the fun part. Let’s create an imaginary brand Waterlily, a swimwear for mermaids. It is a DTC brand that sells through its online store, has contemporary price points, and promotes through social media and micro-influencers.
Raw materials. There are certain countries that specialize in particular raw materials. While synthetics are widely available, natural fibers are produced in particular parts of the world. Some fibers are more sustainable than others.
Fabrics. Since Waterlily is a small brand, it can get away with preexisting fabrics. In order to find the fabrics, trims, notions, there are many trade shows to attend such as WWDMagic and Première Vision. You can also source directly from the manufacturer if you know exactly what you are looking for. The trade shows give you an opportunity to see what is out there all in one place. Another way that is highly popular nowadays is to buy deadstock. There is so much fabric, that you may be able to find something that fits your vision. Once you find the fabric, don’t forget about the costs of shipping it to the manufacturer.
Packaging. Before the clothing is produced, a tech pack needs to be sent to the manufacturer, which in addition to garment construction specifications also has labels, folding instructions, and packaging. A country or factory to source from is also an important decision to make. Say Waterlily wants only recycled plastic bags and hangers for its swimwear. It is quite pricey, but it is sustainable and matches the brand identity. The packaging is also shipped to the factory.
Manufacturing. Your quantity affects where the clothing is produced. Waterlily has decided to produce all its swimwear in the USA. It is good for a brand like this because it can have better control over the production process. It can also deliver the goods quicker to the US customers, and as it happened during the pandemic, it may be possible to avoid stock shortage. Since Waterlily’s packaging is made in Finland, and the nylon fabric is produced in Italy, the company pays US import tax on materials.
Logistics. As you can tell with fast fashion, logistics is undoubtedly the most important part of the process of clothing distribution. Waterlily prefers to maintain limited inventory and sells via pre-orders and drops, it hires a company that manages the inventory and processes returns. It works for it because it has an office in New York.
I hope you found this Part 2 useful. I am planning to add more information on communication with the factory. Stay tuned by signing up for the newsletter.
Modeliere