Being discovered and selling: e-commerce incubators

Shamelessly cribbing from Cathy Horyn (snipped obviously):

In the late 1990s, Cecilia Pagkalinawan had a business advising fashion labels about selling their stuff online. There were actually some people who knew what she was talking about, although there wasn’t really a market… She learned a lot about the inside of the luxury-goods business at a time when those dyed-in-the-wool brands were coming to grips with digital technology. She also began to wonder about emerging talent and if an e-commerce model could be built around those people, one that took advantage of social media…In January, Ms. Pagkalinawan […] decided it was time to start Styletrek.com, a site for emerging fashion talent from around the globe. Styletrek will start officially on Sept. 7, when 50 designers will have clothing and accessories for sale. Candidates must be in business at least three seasons and submit to a review process. Styletrek will handle the orders and shipping, as well as help with social media.

Of all the e-commerce incubation models, Styletrek looks promising. No it won’t help someone at first launch but having a stringent review and entry process gives the site more credibility. With more credibility, they can get funding to make the project viable. That proceeds from designer sales would be sufficient to pay for itself is three to five years off. The site hasn’t officially launched so there’s no word on commissions and fees.

<soapbox>No grousing. First go round is a cattle call, your goal is to be substantive enough that they’ll consider reviewing you. The program criteria can be immensely educational</soapbox>

I like that non-designers can submit their choices. I have several designers in mind that I plan to submit.

A similar site is Catwalk Genius where designers can raise seed money from visitors for their first collections and or they can sell goods directly. Commissions range between 15-33% which isn’t bad if the site delivers sales, your costs are contained and you have priced well. The commission is higher than Etsy but it’s not as crowded, it’s easier to find goods and is more upscale.

However, caveats are considerable and found with a careful reading of the FAQ. Other than that their math is fuzzier than a newborn bunny (see “How much will I earn from sales of my new collection?”), their prototypical example is an over-sell, implying designers stand to earn much more than they do in real life. This will make you laugh out loud, their example lists a designer selling £50,000 worth of goods of which the costs are £10,000. Ha! 400% profit? Where do I sign up for that? Most designers would consider themselves wildly successful if they got 20% profit (sales: £50,000 less costs of £40,000 leaving £10,000 profit).

Has anybody tried Catwalk Genius? If you used it to sell finished goods, it could be a way to become acclimated to selling in the UK if you’re interested in distribution there. The export market is only going to increase.

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13 comments

  1. Jill Homiak says:

    Based on the questions of the application, I wonder how “emerging” these designers are? I understand they can’t just take any & everyone though. I’ll be curious to see how makes it on the site.

  2. Carla Dawn says:

    I have ??? about Catwalk Genius myself, the first thing that struck me was HOW fuzzy/insane the math is & if any of the founders had experience in a producing fashion business, & like you, I would want to hear from someone who has tried it. It was like you say- LOL funny- but not in a good way! More a bit scammy- Granted it’s been a while since I checked this site, it launched quite a while ago.

    As a designer who saw the potential for sales at the high end in 1996, I have been continually astounded regarding the “dyed in the wool” brands that have taken so long to figure it out!
    Honestly, in a way you can’t help but wonder a little in this case as well.

    But at the same time, with the time frame – planning & set up implied, backing required. The big push in the Times, & the beautifully laid-out site, (tho here the fear is PR will trump substance) StyleTrek (Love the StarTrek Reference!) will hopefully shift the paradigm.

  3. Aimee says:

    Here is another emerging site for new designers: http://www.bellaga.com I have personally worked with this site and the creators are both very knowledgeable and ready and willing to promote new designers. We used the site to sell old inventory and actually have done really well. We’ve helped them from a designer standpoint to improve their site and it’s very user friendly.

  4. Harper says:

    For Formalwear and Bridal Designers, just an fyi that Recycled Bride is about to launch PRO Pages. I’m going to use it as my Sample Sale Rack in cyberspace and see what happens! They’re linked to all the major Wedding sites and prices on the site run the gamut up to basic Bridal retail, so we’re optimistic.

  5. Hello all,

    I’m one of the co-founders of Catwalk Genius and while I won’t make any bold claims about my mathematical skills, I just wanted to clarify something about the returns calculation.

    The £50k to which we refer is retail value, not wholesale. After all, our concept is based on the gains a designer can stand to make by cutting out the retailer and selling direct.

    This example was based on selling wholesale at 100% markup of production costs, then the retailer adding a typical 2.7-2.8 multiple.

    Granted, we took this as a basic starting point so it could be debated – and certainly it seems we need to improve the way it’s communicated! Helen.

  6. Xing says:

    Thanks for posting this Kathleen. Being a fairly new label, I know it’s challenging to compete in e-commerce independently and these kinds of shopping sites may be a good alternative. It seems that many of these online stores featuring emerging designers with the exception of Etsy charge around a 15-30% commission, such as Smashing Darling. While we sell to retail stores, we would love to thrive in online sales for obvious reasons such as higher profits and more control in the selling process.

    I’d be curious to know if you’ve heard any success stories from any other e-commerce DE’s who are e-commerce based who haven’t gone though the traditional route of selling wholesale to stores?

  7. Jill says:

    That’s a good question, Xing. I wonder if anyone has successfully sold with ModCloth. I know they just received a lot of funding to expand its online offerings.

  8. Kathleen says:

    Xing: I know tons of DEs who sell their own stuff online successfully, a few haven’t gone wholesale -among them several clients who have become fabulously successful. It’s really the only way to go, problem is, operationally, you really have to have it together. The ones I’m thinking of specifically have all read my book, joined my forum (have been hanging around here for years) and also hired me to assess and analyze their products and operations. The product type has to be a match for the venue also.

    What I don’t know is whether those who start with these ecommerce solution sites until they get their sea legs, go on to build a following. I think it is not as many as the given individuals would have hoped. Long story why…

  9. Jill says:

    Kathleen, I’d assume these folks do their production overseas and/or have the financial resources in order to produce units before they have the official “orders”. Is that right?

  10. Jill,

    Nope.

    See http://fashion-incubator.com/archive/fit_couture_lean_manufacturing_implementation/ for an example of what she’s talking about. Mike Cerny has written posts himself, and Kathleen has written posts about Fit Couture where she explains how they make most of their items exactly when they are ordered and ship them immediately. (Despite claims of my bear-trap mind, in my brief search I couldn’t find that post. I will try again later, maybe on the weekend.)

  11. Kathleen says:

    Jill, Mike and Amy are excellent models of what I teach -produce to order. It’s seamless to the customer. Customer orders and FC says they’ll get a shipping notice within 24 hours. Unbeknown to the customer, the product doesn’t exist. They cut, sew and ship within 24 hours from Houston TX. I’ve written about this model often, in the book even, I have always said you get orders before you make anything. Most people can’t do it because, well, they aren’t looking to cut and sew themselves. They’d rather someone else do it. Ultimately, people who can make their own stuff will be more successful than those who don’t. It’s also why I’ve written myriad “why you should start your own factory” posts. Btw, neither could sew when they started the company but they’re motivated self starters. They worked out of their house for quite awhile doing everything themselves. Now they have two stitchers and a 6,000 sq ft shop. I can’t tell you what their gross is but it’s probably far in excess of what many imagine. In my experience tho, it is rather typical of people who run their own operations. Just wish I could convince more people to do it.

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