As an aspiring fashion designer, creating patterns and designs is fun, creative and for some – a relatively easy process. But, consistency of sales and strong demand forecasts is the most difficult aspect of starting up a fashion business. Here are some obstacles that you will have to overcome in order to achieve a sustainable business model.
You will need an initial capital investment to produce your first collections. You will either outsource your production or open your own studio and you will require funding. But, the fashion industry is high-risk, capital intensive and highly seasonal. This is one of the main reasons why banks don’t easily hand out loans or lines of credits to support independent fashion start-ups. You will have to rely on your personal savings and assets or borrow money from friends and family.
Then, you need to decide on the production method that works best for you. If you are outsourcing, consider the shipping costs, lead times and the minimum requirements for each order. Unless you have paid in advance pre-orders that can secure a large production batch, it is best if you start with smaller quantities to avoid holding a large inventory. Also, the location of your manufacturing facility is important; closer to home means quality control trips are easier and more affordable.
Forecasting your demand is a daunting task. Big retail chains and established fashion businesses can easily forecast their demand by using historical data and predictive algorithms. However, when you are just starting up in the industry, you don’t have the historical data you need to build such forecasts, nor do you have a known brand that will guarantee you the traction of sales. So, the biggest question remains: how do you know exactly which products are going to sell and in what variations (sizes, colors)?
There are several steps you can take at any stage of your business to better understand your demand. First, determine who your customers are and get to know them by asking questions. Go beyond your close friends and family, as you are most likely to get positive reinforcement anyway. Start with your professors, peers and go to local meet-up groups – you will receive criticism and unbiased opinions. Then, generate a conversation on forums and on your Twitter and Facebook pages. Grow a customer following that will provide you with real-time feedback.
In a way, you are “Crowd-sourcing” your designs, by learning what your ideal customer is most likely to buy. Always network with your peers, search for support from your local fashion incubator and don’t sign away rights over your designs. The fashion industry is not very regulated when it comes to design protection; you want to ensure that when selling on a third party’s website, you retain rights over your designs.
Our mission at Luevo is to change how aspiring independent fashion designers do business. We want to help independent fashion designers streamline their production processes, minimize financial risks and increase the success rate of fashion start-ups. Click here to learn how we plan on achieving this!