Managing distribution as your on-line fashion boutique grows.

Space for a growing business is always an issue.

One of the main Routes to Market for many of the Start Up Loan businesses we work with is selling their products on-line, either via their own e-commerce website or on other marketplaces.

These on-line boutiques are often run from home, to keep overheads to a minimum, and technology has made it possible to be a global brand from your bedroom. However, as a  business becomes successful and orders increase, it may well become impractical to manage the distribution from home as additional space and staff may be required to accommodate stock and order processing.

This can be a critical point for the business as it may be doing well, but taking on premises and staff is another ball game. The extra financial commitment can easily turn a company making a small profit in to one making a loss.

courtesy of www.saderose.com

Luckily there are ways to manage this growth spurt without taking on large overheads. There are now an increasing number of order fulfilment houses that are set up to take in your stock from the manufacturer and distribute to your customers on your behalf. Traditionally these distribution warehouses only wanted to work with high volumes of stock and deliver to business premises. They were used mainly by large brands delivering to  retailers, but the experiential growth of on-line sales has led to many offering a menu of services to smaller web based retailers including pick and pack distribution, re-processing and customer service.

Obviously there are fees attached to these services, which will need to be included in to your cost prices, but this can be a cost effective way of managing growth. There are many fulfilment warehouses to choose from including Intermail and Amazon offer this service for goods not even sold on their site.

As ever, you’ll need to do your research to check out the comparative costs between companies offering these services. You should find out who else they work for, if they have minimum quantities, where they can distribute to (national and international?), what level of service they can offer you ect. You'll need to manage the relationship carefully and brief them on how to respond to customers and how your goods should be packed as it is important they maintain your standards and reflect your brand in a positive way. Mystery shopping can be a good tool to monitor their effectiveness and check if they are following your brief.

If your brand continues to grow there will come a point where the critical mass could mean it is better to take on premises and staff to bring the distribution back in-house, but by that time hopefully the business will be in a stronger position to take that next step.

If you want to find out more, our practical Routes to Market workshop will inspire you and further information on access to funding and free mentoring is on our Start Up Loan page.

If you'd like to share your experiences with fulfilment houses and have any recommendations for our community,  we'd love to hear from you.

By Alison Lewy

Project 104 - our second mentoring session

Project 104's designer Sarah Reader and I  had our second mentoring session on a lovely sunny  March day. I was so excited to find out what Sarah had been up to since our last session and was blown away by how much she had managed to achieve in the four weeks.

From not having any formal plan in place, using the Fashion Angel Business Plan Guide, she has now started to put together her  business plan and strategy for going forward with the business, and we have started to develop her USP and key messages that will be used to reflect her brand across all communications.

Project 104 jackets are now on sale on the Etsy.com website and she is investigating other online retail opportunities, as well as the development of her own website which is now underway.

An opportunity has risen for Sarah to participate in a pop up shop in May – this is a great way for her to promote her brand and generate income. Sarah attended our ‘Setting up an Accessory Business’ workshop and as we are moving into Spring/Summer season, has wisely decided to design a Project 104  limited edition accessory range.

It’s tight, but we worked out a manageable schedule so she can make up  enough stock to sell at the pop up shop and then online.

Accessories serve as a good way of allowing consumers to buy in to your brand at an entry price point level, even if they can’t afford to buy from a main collection.

It’s been a tiring month, juggling all the work entailed with starting a new brand, especially when you are also working part time and on a tight budget, but Sarah has done tremendously well and we are all very impressed with her progress so far.

As ever, we  finished the  session with some clear actions and target completion dates before our next session at the end of April.

Author Alison Lewy Follow @FashionAngel1

Project 104 - Business Mentoring Session

Today was  the first mentoring session with our mentoring competition winner Sarah Reader founder of Project 104,  which was sponsored by Etsy.

Sarah wear Project 104 jacket 

photo Jay Mclaughlin

We had a really productive session, first discussing the current status of her business and outlining what the goals Sarah wants to achieve over the six month programme.  We defined  the key areas that are a priority  to focus on in preparation for the brand’s launch to market.

There are always so many things that need attention when starting up a fashion business,  but it is important to be realistic with what can be achieved with limited time and resources. It is far better to take things slowly and make sure you have everything in place, rather than rushing, making costly mistakes and putting yourself under pressure.

As with many designer, Sarah has so many ideas and plans for the brand  but has yet to formalise her strategy into a business plan  Many people think you only need a business plan if you are trying to raise money, and whilst this is certainly true, your business  needs one anyway as it is becomes your roadmap and guide, allowing you to keep on track with your goals and objectives.

Sarah in Project 104 

photo Elliot Rose

I  have given Sarah our Fashion Angel guide to writing a business plan – writing a plan isn’t  as onerous as it sounds and can be broken down into small chunks. It’s not something you can put together quickly – it usually takes a few weeks while you refine your business model and conduct the necessary research.Working on the plan makes you think about the direction of the business and the many aspects to running a successful business.

The plan will evolve as new opportunities and challenges arise. Sarah is at the perfect stage of her business journey start working on her plan and working with the Fashion Angel team will give her the tools and confidence to do this.

Aside from this we discussed how important it is for a brand to have a clear USP which will be the cornerstone for all brand development activity and be reflected in all sales/press and marketing channels. Over the next few sessions we will be defining the USP, looking at  production options, costings and profit models and researching routes to market.

We rounded off today’s session with some clear actions and target completion dates and will review  progress at our next meeting at the end of March.

I am really looking forward to working with Sarah over the next few months and watching her label develop and launch to market!!

By Alison Lewy
Follow @FashionAngel1