Building a Fashion Company on the Internet? Stop. Just stop.
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Re: Building a Fashion Company on the Internet? Stop. Just stop.
#2> My guess is that the “back-end” supply chain / software / inventory management problems are just not as sexy as the “front-end” consumer-facing problems, or maybe the consumer-facing problems are just more intuitive.
Absolutely! I wrote MRP systems for a pharma manufacturing in Florida and the kind of stuff I had to do on a daily basis far surpassed the complexity of your breathtakingly-beautiful but typical project-management webapp or customized T-shirt webstore. Let me be clear, complexity has absolutely nothing to do with the merit of one product vs. another. KhanAcademy code could be simple as 2nd grade math but nothing I ever write will ever be as beneficial to the world. However, complexity is expensive, takes time and dedication, and rarely pays off in the short-term.
There is a reason most supply chain software installations run in the millions to tens of millions. Here's an example of something I wrote while ago: A drag & drop scheduler in JS, kinda like Google Calendar that lets you schedule production jobs on different equipment, across different labor teams. When you change a single job on the schedule, it auto-calculates the entire requirement for the entire company. Moving one production job up (say shampoo for customer A) could end up in the company losing $500k because one of the ingredients that went into shampoo for A also goes into conditioner for customer B. This particular item has a lead time of 3m from China. And since order for B is significantly larger in amount, every single day of delay is money actually lost because you bought all the other raw materials for B on credit from the bank and now have to pay interest on it, while it just sits in the warehouse waiting for the raw material to be flown in from China.
Of course, this is something you want to avoid in the planning stage itself. And that's what the software does and warns the user within seconds of making any changes. One tiny bug in the code, say it doesn't correctly factor in the internal lead time from QC (this particular chemical needs to be sampled for microbiological contamination) and you just delay the project by a week. Putting up a pretty website is hard work but it is nothing compared to hiring 20 people to spend 3 months mapping out the multi-stage routings for 500 different SKUs. No tech-VC wants to invest in businesses that require a tremendous amount of operational labor. That's what banks are for.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#3Not really a well thought out article. Here's why -
1) Why should anyone care about solving the problems that the writer of this article wants to see solved?
2) She fixates on the 3-8% that affiliate sites make without considering a few things:
a) Sites make that regardless of where the user actually buys. So if someone comes to your site and decides to buy a jacket you make money whether they buy it from Retailer A or Retailer B.
b) It's usually 10% for fashion sites and once you are driving larger volume you can cut deals for 15%.
c) If you become the decision engine (something Google and Bing are trying to do with their Flight Search and other initiatives in various verticals), then you can easily take over the entire business.
If people are coming to you and you help them decide what to buy - then you can start selling them that stuff.
3) The costs and barrier to entry is much lower if you are trying to fix the discoverability problem.
4) The real problem, and the most important thing, is the role of fashion. What fashion really does. That can be tackled completely in the online world through a website.
5) Fashion is a market that is going to make a lot of startups a lot of money.
Things that signal status (such as special electronic brands and designer bags and Grey Goose vodka) are never going to go out of style.
Instead of listening to this writer's advice, any company going into fashion should look at how backward thinking most people in the industry are, how little they understand technology, and how they are unwilling to admit the core purpose of fashion.
The easiest entry is discoverability and influence and that's also the most powerful element of the fashion ecosystem.
If you become the discovery engine and the decision engine then it's game over for everyone else.
All those VCs funding fashion startups are not idiots.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#4Not really a well thought out article. Here's why - 1) Why should anyone care about solving the problems that the writer of this article wants to see solved? 2) She fixates on the 3-8% that affiliate sites make without considering a few things: a) Sites make that regardless of where the user actually buys. So if someone comes to your site and decides to buy a jacket you make money whether they buy it from Retailer A…
For criticizing her article for not being "well thought-out", you sure didn't write a well thought-out reply. I don't see how your reply actually disproves anything she said; you've basically just said, "no, she's wrong... because she is wrong."
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#5So, I'm going to toot my own horn here, because this article is extremely well timed.
(Note: her site is down now, thanks HN! :P)
This line of reasoning is exactly why we decided at Everlane to start manufacturing our own apparel. You just don't capture enough of the value if you exist as a pure discovery layer unless you (somehow) get everyone and their uncle visiting you, looking to purchase, i.e., Google.
The internet does afford you the opportunity to redefine how people shop, but sorry: you're probably going to have to really sell things.
If that sounds rad, come join us and send me an email at jesse@everlane.com
Edit: Just noticed the article is about a month old. So, well-timed, but not timely.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#6Not really a well thought out article. Here's why - 1) Why should anyone care about solving the problems that the writer of this article wants to see solved? 2) She fixates on the 3-8% that affiliate sites make without considering a few things: a) Sites make that regardless of where the user actually buys. So if someone comes to your site and decides to buy a jacket you make money whether they buy it from Retailer A…
Yes, fashion is a huge industry in the US, and you can make a ton of money in the market.
By just being a middleman, you're looking at margins in the 10% region. Enough to build a business, but not a game-changer.
If you target production and supply-chain problems, which are far harder, then you can build a business with margins north of 40%. Not only that, but because you've solved some seriously hard problems, you've driven the cost of competition up for the existing players, while adding yet another entry barrier for other startups.
That's the point of the article -- that today's fashion-focused startups are all going after small game, with nobody shooting for buffalo.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#7What companies is she even talking about?
Because the best fashion-related startups that I am aware of are super revenue and retail focused. I am talking about renttherunway, or this other startup that sells subscriptions to product trials etc.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#8"In fashion, trust me, that are MANY problems that need to be solved: a highly antiquated supply chain, non-standard, un-linked computer systems, non-standard sizing that varies even within the same line, inefficient pricing methods."
I don't see why internet fashion companies couldn't take a crack at solving / mitigating at least some of these. For example, there are some sites (like zafu.com - no affiliation) that help women find jeans that fit. They can't change the sizes on the jeans, but I'm not holding my breath for the fashion industry to make sizing any easier any time soon.
I also disagree with her claim that discoverability is not a problem. A lot of people are trying to solve it, but I don't consider it solved for myself (or other women I know). I find the choices in women's fashion to be overwhelming (to say the least), and I'm still looking for the more efficient ways to find clothes I like.
I agree with her overall point that the number of trendy affiliate fashion sites is getting tiresome, but that doesn't mean that they couldn't be developed in interesting ways. It may be true that affiliate sites need to sell a ton more in order to compete with "click-and-mortar" fashion companies, but I'd argue that affiliate sites can also be more innovative, flexible, and forward thinking. If you're not shipping or manufacturing, you can iterate more quickly.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#9What companies is she even talking about? Because the best fashion-related startups that I am aware of are super revenue and retail focused. I am talking about renttherunway, or this other startup that sells subscriptions to product trials etc.
She's talking about sites like Pinterest, Svpply, TheFancy, etc.
Re: Building a Fashion Company on the Internet? Stop. Just stop.
#10I agree with her ideas for the most part. You need tremendous scale to make something like ShopStyle profitable. But even if you sell stuff, it's hard to differentiate yourself from the crowd as well.. and if you do software for the back-end.. ugh.. maybe it's because I'm into consumer web, but I can't imagine how to market to those type of companies who have age-old processes that are incredibly hard to overthrow.