tips for lowering startup cost

Starting a high quality clothing brand intended to last the test of time comes with many costs, however there are a few ways that you can reduce them significantly.

In this article we break down the key areas which make a significant difference in reducing the cost of starting a brand without, negatively affecting the quality of your product.

SELF PRODUCED, ORGANIC MARKETING

Often times, new brands will invest a significant amount into hiring a fashion photographer, models, locations & marketing agency because they believe it will guarantee a successful launch.... this is not the case.

While marketing is important, you as the brand owner are far more capable of executing these tasks yourself.

The latest generation of phones can capture extremely high quality product & model shots for social media.

Friends or budget friendly freelance instagram models can achieve the same as a $2k model from an agency.

Free locations or budget friendly rental spaces will work as well as an expensive destination.

You will always be the best option to manage your social media presence & marketing efforts, because you have the truest understanding of the brand vision.

START WITH A PARTNER

Finding a business partner to start your brand with will not only cut startup cost in half, but also the work load.

When considering a business partner to start your brand with, ensure that you’re both on the same page about each aspect of how the brand will operate, your goals and of course the overall vision for the brand.

Optimally, sit down together before brand inception to build a cohesive brand concept & identity, this way your vision will be aligned from the beginning.

Having a brand partner is a great way to divide cost & work load, but also to experience the journey together.

LOW MOQ

Ordering lower quantities of inventory will save you initial startup cost, as well as mitigate the risk of overstocking supply which has yet to prove saleability.

There are many high quality suppliers which offer low MOO, as they typically understand the nature of a startup brand.

You will end up paying a higher price per piece when ordering low quantities, however it will be well worth the risk reduction, and you will be able to scale up as sales increase and your brand community continues to grow.

Overstocking inventory too early is a very common and costly mistake for startup brands, mitigate this risk by scaling up slowly and gradually with each collection.

FOCUS ON DTC

In today's market, we are starting to see much less value in physical retail as a channel of distribution.

Physical clothing retailers typically want at least the standard keystone markup of 50% gross margin or 100% markup on a product, which is a massive cut of the profit from your brand.

For example, if you sell a $100.00 luxury shirt on your online store, which cost you $20.00 to produce & ship, your profit will be $80 (gross margin 80%)

If you want to sell this same product through a retailer (wholesale), the retailer would typically take $50.00 (50% gross margin), and your brand would be left with 30$ profit or 30% gross margin, which is a profit loss of almost 3x.

With shopify & alternative e-commerce platforms, it’s easier than ever to set up a solid online storefront where you are able to reach and sell to customers on a global level.

Focusing on direct to consumer e-commerce is essential, by avoiding retail alone you can increase your profit margin on every product by 2-3x, which means faster growth to scale.

Disclaimer : this is not business advice, only reiteration of our research & experience working with clothing brands. Use information at your own discretion.