5 Things to Consider for Your Ecommerce Fashion Startup

Posted by Bruce Welty on Thu, Jun 27. 2013 @ 14:06 PM

As a third-party fulfillment provider for luxury apparel brands, Quiet Logistics sits in the middle of the online fashion category and has seen many businesses succeed and fail.  Due to this unique positioning, we would like to offer some guidance for those of you who are planning to launch your first eCommerce fashion business.   

Lighthouse

1) Build a Brand Identity First

Fashion brands are built around an aesthetic ideal.  Your brand needs to be about more than clothes; it needs to represent and embody a lifestyle.  Your clothes need to make your customers feel a certain way when they put them on. 

With a clear (and unique) brand identity serving as your lodestar, you will be able to build a brand from the ground up.  Without it, your brand will be pulled in too many directions, quickly becoming a hodgepodge of nice pieces.  

For example, Bonobos has stayed true to its brand identity from Day One. The founders wanted to create a better fitting, better looking men's pant that were simple to buy and more stylish.  They built a brand around this identity, and in doing so have become the leading on-line apparel brand.   

2) Validate the Market

After developing a brand identity and making a small first batch of inventory tailored to your target market, it is time to validate the market by selling your products.  Many companies approach us at Quiet with a business plan before they have made a sale, saying “we want the best fulfillment experience for our customers and need a fulfillment partner in place before we start selling because we expect an immediate onslaught of orders.”  While order fulfillment is a key aspect of the eCommerce fashion customer experience, focusing on it first is putting the cart (order fulfillment) before the horse (attracting and wowing customers).  

In reality, sales are usually less explosive, more viral:  one buyer, two buyers, four, ten, fifty, etc.  Shipping orders for businesses in this early stage is not difficult, and successful companies generally do their order fulfillment in-house after launching (we have previously discussed why this is a good idea). Once the business really takes off and begins to scale, order fulfillment becomes harder to handle internally.  This is the point at which it makes sense to partner with a professional fulfillment partner like Quiet.

3) Get Pricing Right

Cheaper is not always better.  When an entrepreneur says “we plan to offer twice the quality of [insert brand name here] at half the price” we cringe.  Buyers cannot reconcile that something that costs half as much is twice as good.  Price IS one of the major arbiters of quality.  Second, quality measures may be somewhat arbitrary; there is no objective way to show that something is “twice as good” as something else.  We have learned to trust Louis Vuitton, Hermes and Patek Philippe et. al. as brands representing quality and their price points just reinforce that association.  

A price premium over the competition helps, even if it is not large. Establishing and justifying a premium often requires a certain je ne sais quoi brand positioning that says “my product has limited availability  through my own stores, web sites, and company-owned outlets.”  That is, brands want to own and manage the WHOLE customer experience.  This is the future, as even large retailers begin to follow the European model of putting branded shops in their own retail stores -- the so-called "Shop in Shop."  Retailers are facing more tough times as people window-shop in their stores but do not buy anything.  It is intuitive to think that buying something directly from the manufacturer or brand-owner will provide the same for less because there are fewer costs.  And that is generally the case, even for brands with a price premium.   

4) Recruit a Great Team

Selling clothing, accessories and luxury products is well understood. Selling on-line requires many new skills that are not necessarily resident inside a typical brand manufacturer or retailer.  Creating a team with both skill sets is paramount.  The on-line skills include an understanding of all the new social media tools, search engine optimization, shipment tracking technologies and web development.  Much of this can be outsourced, but it needs to be done perfectly.

Many customers will not give a brand that delivers a bad eCommerce experience a second chance.  If your systems cannot handle large volumes of traffic during the holiday rush and sales periods, you risk losing a large percentage of your annual revenue.  Fortunately, there are many success stories out there and it is helpful to have that experience resident in your own company.

Merchandising on the web is also very important and surprisingly difficult.  Getting good images and presentation of the clothing is a must and it is important to have knowledge of how to do this in-house. 

5) Partner Wisely

No company can do everything in-house.  Some tasks like order fulfillment, photography, parcel delivery, Call Center, web development and SEO can be outsourced.  Successful companies select partners that can help them excite their end customers and achieve their mission.  

For example, Gilt pioneered the flash sale model.  By initially purchasing products during a down-cycle and taking excess inventory off of manufacturers' hands, Gilt was able to get deep discounts on luxury fashion and pass the savings along to its customers.

Despite the discounted prices, the Gilt team never forgot that they were building a luxury brand themselves. As sales accelerated, they needed a fulfillment partner that could scale with them and fulfill orders quickly and accurately.  They also wanted a partner that could deliver beautifully packaged orders (Gilt was among the first to realize that quickly and accurately sending garments in branded boxes that appeared to be almost gift-wrapped improved the perceived value).

Conclusion

Small businesses create two-thirds of the jobs in America.  Being an entrepreneur is as rewarding as it is difficult. There has  never been a better time to build an eCommerce business, and we hope that these tips help you build something great.  

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Topics: Ecommerce trends, Third party Fulfillment