8 biggest mistakes fashion brands make.
This post isn’t about just listing the most common mistakes fashion brands makes, it’s about guiding you on how to not make these same mistakes and what you need to do to successfully launch your fashion business.
I have helped guide numerous fashion brands from idea to launch over the last 8+ years, I even launched my own fashion business in 2019, so trust me I know what it takes to successfully launch a fashion brand!
Are you ready to learn what mistakes not to make?
1. Not having a financial plan.
Without a financial plan, how would you know how much upfront investment you need before you make your first sale? How would you manage your cash flow without having a financial plan? How would you seek investment without a financial plan? What targets would you be working towards without a financial plan? The questions go on… What I would say is clear is that without a plan your operating blind.
Without cash running through your veins, how will you keep the heart of your business alive?
“If you’re starting without capital, really you are starting with a cash-run rate of weeks,” said Outlier’s Burmeister. “You have to be profitable from the get-go at some level, you can’t just keep pouring more money into it and not getting anything back.”
If numbers are not your strength and you find this task over-whelming simply start with a really straight forward list (in excel). List the cash coming in each on a separate line and the cash coming out on a separate line running vertically down your page. At the end of cash in and cash out total it, and see if the number is either positive or negative. This will start to help you plan either how to reduce the cash coming out and/or increase the cash coming in to help improve your final cash flow position. Creating a simplistic plan can help you see where you need to focus, reducing costs or making more money. This is a continual essential exercise you must be doing weekly but as a minimum monthly.
There is a great level of detail to financial planning like forecasting and seeking investment. I can guide you here, reach out for more info.
2. Not having a pricing strategy.
To run a successful fashion brand you need to be both competitive and profitable on pricing, and that comes from market and competitor research.
How would you know you are pricing your product competitively without research? Never assume when it comes to pricing, as pricing will either make or break the customer transacting as well as it can make or break your brand’s success if you don’t charge enough.
“I knew that if I was going to create a collection, it had to be at a certain price point, I knew that the fabric had to be at a certain price point, the manufacturing had to be at a certain price point,” he said. “Whatever I was producing, I would be able to sustain myself and live.”
(Source 6-Steps Student)
I see a lot of brands looking at the cost price and making up the RRP based on achieving their target margin (GP), this isn’t an accurate way of pricing as your creating a confusing message to your customer by not benchmarking by price in each category, as well as, pricing inconsistency across similar products.
Conduct a detailed competitor pricing analysis every season and/or for every new market you enter. The end goal to have a price matrix translating your home market price point into every currency you work in. This will remove interpretation and set rules for you to follow, ensuring your competitive, fair whilst still making a profit for your brand.
Within a competitor price analysis you need to review:
- What price your competitors charge per product categories. Find the entry and exit across your competitors and ensure yours within this range.
- What exchange rate are they using in new markets? How does this compare to the year average? Set yours for a yar.
- Are your competitors up or down pricing on your new market? Find the average then compare this against the cost of shipping into this market for example duty, freight, taxes, and choose what % you will up-price by?
3. No real marketing plan.
You may have started your brand as a hobby, and started posting content freely with no end target in mind. My advice is that this is not an effective way to run a business and you will burn through your time and cash quickly.
To effectively market your product you need to know who your target audience is (their demographic, interests), as well as, know what your target market/s is and what your business end goal is. All content needs to be created with these factors at the forefront of your mind.
You need to create an effect ROAS focused marketing plan. Decide what your goals are, fix a budget, and build a campaign and ad spend around these targets. Work to milestones and as a minimum twice a week review your performance and actively make changes.
Never lose sight of the why. Focus on achieving strong ROAS as well as achieving your end marketing goal.
Ensure you create a focused marketing plan per channel, don’t spread yourself to thin and always keep your end customer profile insight. Only advertise on the channels they use.
One final tip; if you are wanting to grow your organic traffic, the best ‘free’ method is to create a blog. This helps to improve your SEO as well as build your brands awareness. However, this can take up to a year to mature and see organic results.
4. Not creating a plan with targets and milestones.
Without defining your brand’s strategy, how can you keep sight of the end goal or even know what the end goal is?
Part of building a successful fashion brand is through research and planning. The end result of this is creating a business plan. A business plan is a step by step process where you make key decisions by the department that will define, shape and build your brand.
Find a business plan template online or contact us to receive our free business plan template, and work through each section documenting your decision.
- Executive Summary.
- Market Analysis.
- Product and Service.
- Logistics and Operations Plan.
- Marketing & Sales Plan.
- Financial Plan.
- Funding Request (if applicable)
Remember a business plan is a sales pitch, use the correct tone of voice to act as a professional as well as selling your business vision.
Furthermore, a business plan can be an internal document used when you onboard new staff, it is a concise document covering your brand’s strategy, visions and goals, as well as, a document used to gain financial investment.
"Never lose sight of the why. Focus on achieving strong ROAS through the marketing plan, as well as, achieving your end business goal."
5. Not launching on time.
Never optimistically plan your fashion brands timings. Always add a time-buffer on all critical dates.
It is common knowledge that somewhere along with the product critical path that there will be a delay, either with production, labels or shipment, always expect a delay.
If your product launch is late you will instantly lose money. You will lose money on your marketing campaign, lose time in which to sell the product, therefore resulting in a poor sell-thru, you may lose money by having to promote the stock as it is delivered past its peak selling date.
Finally, never run the risk of disappointing your customers that may be eagerly awaiting your product launch. Be a reliable brand with a great reputation, and even surprise them with an early delivery, never a late one!
Build a critical path (CP) around your launch plan. Know the date that you want to launch on and work backwards from this date fixing key milestones and triggers that need to happen to achieve an on-time launch. Use commonsense to factor in buffers, for example, are there any key holidays coming up like CNY or Christmas? Factor in employee leave, as well as, a factor in the assumptions that there will be some production delays.
Use a project management tool like Trello to manage this through and remember it is your responsibility to ensure your brand launches on time, so never lose sight of your CP.
6. Not knowing who your target customer is.
Running a successful fashion brand starts with research and planning before spending a cent on development.
If you dont know who your target customer is how will you create the right product to solve their problems? How will you build an effective service based on their needs? How will you price your product correctly based on their income? Aside from product development you also need to know who your customer is to build a successful targeted marketing campaign, as well as use their profiles to inform the correct tone of voice on all comms you produce.
Before launching a fashion brand you need to first establish your niche and then your target market, before deep diving into who your target audience is. Once you have those answers conduct a step by step research to find out who your audience is, creating consumer personas to drive future work.
- What are their demographics?
- What are their interests?
- What are their pain points? How will you be resolving these?
Using your research create 2-4 consumer personas and name them for example John. Giving them life will help you to always focus on your end target audience.
After launch, once you’ve completed season 1, use your sales data to review and analyse if this is still your target audience and if not update your research, therefore updating your product focuses along with your marketing criteria.
7. Vet any 3rd parties to ensure you 100% trust them.
Entrepreneurship is a challenging journey, so don’t do it alone. Recognise that you need help from others, and to ensure you find the right person to help run them through a vetting process.
By asking key questions, this allows you to benchmark one response vs another to make a fair decision. Also, you can ensure they they are the right personality match for your brand. I highly recommend that you seek customer reviews/feedback about any 3rd party pre-engaging with them.
As a startup, it is essential you hit the ground running and have a solid team that sees your vision. Invest your time in finding the right employee/contractors and build a solid trusting relationship from day 1, investing your time upfront will pay off. This applies to all areas of your business both manufacturing, marketing etc. Always remember win-win!
“Reuel’s strong ties with, for example, fabric suppliers allowed him to put a hold on purchasing fabrics while he waited to see what his pre-orders would require. Like my first boss in New York told me … be nice to everyone,” said Reuel. “You never know who you’re going to need when you’re going to need them.”
8. Not setting up your business accurately from day 1.
By simply over-looking or cutting corners when setting up your business can cost you more time and money in the future.
If you want to build a professional business you need to ensure you look and operate like on. That can mean simply gaining a business email, setting up a business landline number, removing personal references and replacing it with your fashion brand. This is alongside ensuring you cover the legalities in operating a fashion business.
We teach business operation set-up as part of 6-steps to launch a fashion brand course.
Research or ask me what you need to ‘tick-off’ in which to set up a fashion business. Ensure you achieve these tasks or have them as WIP before launching your fashion brand.
Here are the key points you need to cover:
- Register your business name and trademark, covering your logo.
- Set up a business bank account.
- Register for VAT/GST if applicable.
- Find an accountant.
- Set up a business email account.
- Set up a landline phone number as part of your customer service tools.
“That means not cutting corners, like forgetting to register the business name and trademark, or not worrying about taxes. These oversights will become larger problems later on. And in order to have the tenacity required to survive, especially in as challenging industry like fashion, founders need to operate under the assumption that they will be successful.”
Register today and learn how not to make these mistakes by taking our 6-step to launch a fashion brand online course. Learn from the experts, with over 10+ years of experience in fashion eCommerce, they have learnt all the mistakes so that you dont have to. These are 6 proven steps, tried and tested with numerous fashion brands across UK/EU and AUS, and we are so confident in this 6-step course that we are offering a 365 days money-back guarantee.
Go check it out today and learn how to launch your fashion business!