Fashion Startups: The Pros and Cons

I wanted to start a clothing line earlier this year. Specifically, a women‘s contemporary line. I know people who have worked in fashion for over the last ten years and lost¬†everything when they tried to launch their own lines. I would still do it if I knew a pattern maker who was quite innovative. My last business partner wanted to go in a different direction. However, the risk of losing everything is huge.

Looking to build a fashion startup like I was?

Here are the pros and cons:

Pros.

  • You just need to focus on branding and client engagement.
  • Profit margins are huge.
  • Brand loyalty is huge.

Cons.

  • Styles go out quick.
  • You work on a Net 30 to Net 90.
  • Some clients don’t pay.
  • Inventory dies quickly.
  • Location matters too much.
  • If your brand is unknown, you can burn and churn through cash.
  • The failure rate is extremely high, even if you start with $1mm. The chances of losing everything, even with 10+ years of experience, are nearly guaranteed.
  • There are not that many entry points in the market to succeed.
  • The market is over saturated.
  • Your old inventory is worthless.
  • If you can’t get through three seasons, you’re out of business.
  • You won’t make any money for your first three seasons.
  • You will be debt in your first three seasons.
  • You can be profitable one day, and bankrupt the next.
  • There is no sense of security.

Originally posted on Quora.

Leonard Kim is Managing Partner at InfluenceTree. At InfluenceTree, Leonard and his team teach you how to build your (personal or business) brand, get featured in publications and growth hack your social media following.

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