Fashion Startups: Building Your Brand

‍Emily Lane 00:09 

Welcome to Clothing Coulture. I'm Emily Lane. 

Bret Schnitker 00:12 

I'm Bret Schnitker. 

Emily Lane 00:13 

We speak with experts where we explore the global dynamics that shape trends in the fashion industry, 

Bret Schnitker 00:19 

Brought to you by stars Design Group, a global production and design house with over 30 years of industry experience. 

Emily Lane 00:35 

Well, welcome back. 

Bret Schnitker 00:36 

Thanks, Emily. 

Emily Lane 00:37 

I'm so glad you're here again, today, Brett. 

Bret Schnitker 00:39 

I can't be anywhere else. It's COVID. 

Emily Lane 00:45 

I have you trapped for another podcast. Well, today, we are going to talk about the fundamentals of starting a business and apparel and building a brand. This is something that almost every day, we get phone calls and emails of people who have their sights set on starting their own brands. And, and I understand it's, it sounds like a really sexy business to get into fashion and, and, you know, designing and seeing your clothes online and on store in a store. You know, from your perspective, what would be the first thing you would tell somebody? 

Bret Schnitker 01:25 

Run. I think it's super important, again, to really think about setting in a business plan, understanding kind of the long game in building a brand. You know, the the theory of I think we mentioned another episode, you know, I build it, they will come. It's rare in this industry. And so you mentioned a lot of people get really enamored by this business. And we're finding this massive trend of more and more people getting involved in, in, in the apparel business. And I think that part's exciting. They've got, you know, opportunities to fill into niches or speak to, you know, their talents within the industry. But it's something that's generally treacherous, if you don't really think through it well. 

Emily Lane 02:16 

Sure. So, you know, obviously, starting out with a business plan is kind of like this, you like that is a necessary first step. And I think we have some good resources that we can certainly share in our show notes, some great business plan builders and things like that. Sure. But in addition to really sitting down and thinking about your business plan, what are some other key pieces that you really need in place before you're ready to actually engage, you know, a company to help with design or manufacturing? 

Bret Schnitker 02:51 

Finance, obviously, is the is maybe an obvious one. But what's not so obvious is how much finance you know, understanding that typical brands start to break even at year five, you know, there's an investment period, there's these positioning years that really lasts between years one and three, you start if you're doing everything, right, you're out there, and you and you've got this engagement with your, you know, target audience, that, you know, around years, four or five, you really start to turn that corner, and you know, you, you have a good chance to be profitable, after your five. There are exceptions to that. But there's no substitute for, for time when it comes to building an audience today. But you know, and building a brand, and I think understanding the finances that's going that are going to start you here and take you through to that end point, are really important. Understand, I can't, I can't emphasize that enough, with our experience with a lot of very talented people who have started brands who simply ran out of money, you know, and it's, and it's something that's important, you know, 

Emily Lane 04:03 

understanding those numbers, and, you know, the finances side of things that that is actually far more complicated than I think people really initially understand. You know, a lot of times, we've had people say, Okay, well, I'd like to just start with, you know, five items or two items, and, you know, ordered 20 of them, 100 of them, get them online, sell them and then we'll see how it goes. And then there it is, you know, and in all practicality, that's not the way to build a business. 

Bret Schnitker 04:36 

It can be it just may not ultimately work for that particular brand. You know, we have a lot of brands today that are focusing on the best of best t shirt, other items like that. I think we talked about that in the past. So, you know, you can run a singular item business and potentially, you can do really well. If you're building a brand specifically I think that, you know, understanding the assortment planning in a brand. Well, there are, there are core key pieces, usually 30 to 40% of your line would be core basics that don't have seasonality, generally, that don't have this forced markdown period that we can can help you bring consistent revenue in, if you really build those products, right, and you build a following, a lot of customers will come back over and over again for those basics. And so understanding that and having a good percentage in their limit your risk, and extends the period of time that you can carry that inventory. But then you have fashion basics and fashion pieces, fashion pieces generally, you know, they're more limited buys, they're things that provide excitement, that focus maybe the visionary elements of your brand and draw the consumer to you. Those things, especially as new brands, those things become challenging, because you know, you might have minimums that you need to purchase. And you might not have the audience to sustain it. And you realize that those might have a seasonality or, you know, you want to consistently refresh those fashion businesses, the markdowns and the liquidation of those items can be expensive years, one through five, even until you get the ability to flush through those items, you know, the key is, is that fashion items should really come in, and you should target them to always sell out after a period of time. And that, and that, again, depending on where you're at in that spectrum, can be easier or harder, and certainly more expensive. And then, you know, the middle ground, which can be a combination between some basics and kind of fashion where they have an elongated period of time, but generally have some sort of seasonality. They give you six months or so, depending on that season to be able to sell those but understanding how that mix is made up. year one, versus maybe your five is a critical thing to digest and understand. 

Emily Lane 07:10 

Okay, so you've talked about the assortment plan. But what about the supply chain behind it? 

Bret Schnitker 07:15 

Yeah, again, varies dramatically from year one, in most cases to your five, when volumes are lower, traditionally, our experiences bad. If possible, brands find close to home manufacturing that can produce smaller minimums that can react to items that are successfully and well received. And today that can be certainly challenging the us because we don't have a ton of manufacturing. And that manufacturing is expensive. But I have seen that as a consistent path for brands where they're, they're bringing in their audience, and they're attracting that audience. And that at one time, one point, they make the decision to go offshore, when they go offshore, that whole combination that we talked about certain styles that can last, you know, year after year core basics, or certain ones, they can be six months, or certain ones that are fashion that last, you know, perhaps a quarter last, you know that supply chain becomes more complicated, you have minimums to deal with. And you have lead times to deal with. You know, we live as I mentioned in previous things in a micro society, customers want things fast. But supply chains just as much as you would want them to, and especially as an emerging brand or a smaller brand. They just don't move as fast as you would really like them to you don't, you don't garner a heck of a lot of attention when you're placing really small quantities in overseas factories. So planning effectively and understanding the weeks of supply on some of these things. And knowing when to drop in those reorders to stay in business because frankly, garments in this case are the revenue maker and the profit maker. So when you run out of goods for extended periods of time you've run out of revenue, right? We've seen a lot of cases also where these brands don't understand that dynamic. Yeah. And they've been out of product for a number of months. Yeah, can really cripple a starting burden. 

Emily Lane 09:18 

Yeah, I think that that is a big misconception. You know, often in talking to startups, you know, they they think, Oh, well, that's a wonderful scenario to be in if I sell out, woohoo. But you know, understanding the time it takes to get back into product, I think is a real thing that needs to be a part of that strategy when you're putting your plan together and part of the business plan. 

Bret Schnitker 09:39 

Exactly. And then in the business plan, it helps you really start to think through all those challenges the outside and so many people as you know, you've been in those meetings. You know, I've gone from mentor to somebody to mentor because I really push them so much of the numbers and again, a lot of these people that start brands are visionaries and creators and They don't want to be bogged down by the numbers, right? 

Emily Lane 10:02 

Well, you know, thinking about the numbers, we've talked a little bit about the investment from a product standpoint, guys, but we all know to launch a company a brand, you need more than product, you need marketing infrastructure. Plug for. It's so important. 

Bret Schnitker 10:25 

I agree, especially today. I mean, you know, when we're moving so much of our business and interact with our consumer online, and there's so much noise online, there is this science behind marketing today. And there is this goal. And again, that takes investment in dollars. And, you know, one of the key things that startups don't really anticipate I was one years ago, is the investment of time. I mean, you can spend 23, out of 24 hours a day, trying to manage the business, because you don't have the funds to really manage, you know, have different people manage different aspects of that business, you feel like you're doing it all yourself. And sometimes things have to, you know, some get pushed on the backburner and, you know, some get moved up front based upon priority. But today, I think it's very important within that business plan to paint a very good understanding of the role that marketing does play in your success, you know, 

Emily Lane 11:26 

talking about online, the consumer behavior has really evolved. It continues, and it's something that we have talked about a few times, but, you know, we've really moved into a consumer driven economy versus, you know, these big powerhouse retailers and organizations really, really running with the trends and setting the pace for things. So what are some of those as a new brand? Or what are some of the key challenges that you face, going into this more consumer driven market, 

Bret Schnitker 12:00 

The ability to communicate and draw your consumer. You know, I think, this ability to have a point of view, you know, we've talked about in the past, a lot of people that develop brands come from a design perspective, many of them, and, and they have this vision for this brand. And I think it's important today that you're sure that that consumer, or enough consumers, you know, follow that vision that you have. And so, you know, one of the biggest challenges when you're strapped for cash is how do you get out and test market this vision? How do you test market the consumer, before you make big financial decisions, and some of the people that you know, that we've mentored, you know, it's been a lot of personal, on a plane, into communities, pre COVID was pop up shops, right? Throwing, quote, you know, "get togethers, or parties", or whatever to, you know, interact with the consumer and hear what they're feeling about some of the prototypes, or some of the initial products that you're bringing in, and being very, very sensitive to, to letting them know that they do have a voice. And if there's something particular that they're not super thrilled with, or something that needs to evolve, taking that as an opportunity. I think big companies, like Apple understand that that's always an opportunity, you know, Apple Iphone, one through what are we twelve? Every year, we want a new one. So right, yeah, you know, the new and improved model is something that that these these brands can always utilize as attention getters, or bringing your consumer into that communication. We've listened to our consumer, you know, and we've evolved the product come try this. And I think those things in the past were never really done. And today, it's a critical part of, of I think the brand. 

Emily Lane 13:59 

I agree. I like how much that is this combination of we hear you. Yeah. And it's good marketing. And so it's kind of a win win on all sides of things, almost like 

Bret Schnitker 14:09 

the new position as a chief communications officer where people are communicating with, you know, where someone in the organization at some point as you evolve, is constantly charged communicating with the audience. And today, we got built in things, the one to five star ratings, which immediately can make or break you, right? And they're going to tell you right away, whether they like your brand, or they don't. And so really thinking through those steps two are really important. You hear very quickly today. 

Emily Lane 14:37 

Yeah, absolutely. Do you see any other shifts in the industry happening that would impact somebody who has their dream set on starting their own brands? 

Bret Schnitker 14:50 

I think understanding today as so many people are migrating online to make their online purchasing decisions. The vast assortment of choices that exist online today because of what we talked about with this kind of boutique brand economy where, where there's this kind of ability for so many people to have all their voice, and you're now vying for a percentage of that navigating those waters, I think are really something that, to me is a new, a newer and more unique challenge today than it's ever been. And sometimes we've discussed in the past, do you kind of with reverse psychology know that, you know, direct to mail pieces of all that dried up, and today, you're seeing with some brands that decision to curate a really beautiful catalog that goes to a home or it goes to a target audience, where they might have time to page through a really nice catalog with great images and show your product. Certainly, they go online to buy it, but it's a space where there's not that much noise now, yeah, so really thinking strategically about how to reach out and communicate with your audience, 

Emily Lane 16:01 

Creative thinking is really important. So before we wrap up, are there any other kind of key bits of advice you would want to share? 

Bret Schnitker 16:14 

I think today, it's really important to align yourself with experience when you're going out and starting a brand. And understand that in many cases, a an expense for launching a brand can be when you're talking about inventory, and even limited employees and, you know, periods of time, you know, you're investing as much as you would on a house, sometimes as much as a big house. So, you know, a lot of people, if you put it in that context, they're going to make plans differently. And they're going to, really, vet this opportunity that exists out there that they think for them. And they should really vet that with, you know, some skilled individuals, they can ask tons of questions that can really vet that opportunity and make sure that they're just not, you know, so many times we've seen people that have just thrown a lot of money away and not survive. And the ideas frankly, have been good. Yeah, because they just, they don't take the time to really think about the size of investment that occurs when you're building a brand. And there is no substitute for time, when we are building brand equity. It doesn't happen overnight. You know, brand equity comes with consistent integrity and trust in that brand. And it takes a while to build your followers and your club, you know, that want to be part of that. And that and that time can be expensive. 

Emily Lane 17:44 

What is your thought on? Local national global approach? 

Bret Schnitker 17:49 

Interesting. I think that today, we are in a globally driven economy. And it would be a mistake to not consider decisions. When you're launching a brand to think globally. China by 2025 will be the largest consumer of luxury goods. I think in the world. You have in China, you have you know, I think 1.4 billion people in India you have 1.3 6 billion people, that's, that's a big percentage of the people on this planet. And when you distill down the middle class and the consumer class within those nations, that's a pretty powerful group there. They will far suppress far surpass the US in terms of consumerism in the next few years. So I think thinking globally is really important. 

Emily Lane 18:42 

Well, thank you Bret, once again for sharing your valuable insight that came from what how many years now in the industry? 30 some? Well, if you have any questions on this topic, please feel free to reach out you can find us at clothing culture or at stars Design Group on Instagram. You can also find us on our website at www.starsdesigngroup.com Make sure to subscribe so you can stay apprised of upcoming episodes of clothing culture. 

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