Shirts
For a change I thought I would write about a business that I have some involvement in. I am currently working on a project with a student in the US, who was interested in starting a business. He has no experience and chose the shirts business as something he would like to have a go at.
You can read about the project on my blog as we progress (click link to left of page) and also on Mike’s blog at www.mikesbusinessblog.blogspot.com/index.html and see the project from both sides. So far we have only just got to a point where we think we have a business model that works, but time will tell.
Shirts come in different quality levels, branded and unbranded and the price moves accordingly. You can buy a shirt on Ebay for about $10 and you can spend well over $100 on your favourite brand. The key here is not to play at the bottom end of the scale. One of our early learnings was that Ebay is not the place to sell this product line as it is flooded with cheap branded goods which I assume are copies, some research in Hong Kong tells me that much of this stock is direct from the factories in China and you will never be able to source it cheaper….even if you wanted to sell counterfeit shirts.
The key is to build an impression of quality, which is done primarily through your marketing. You cannot compete with large scale importers such as Walmart at the bottom end of the market, so don’t even try. Stress things like thread count, manufacturing processes and design to build a unique selling proposition, compare your prices to high end designer shirts, and tailor made prices, and deliver a quality product.
Marketing ideas that we have come up with so far include: -
Building a website
Direct Response
Advertising
There are not many channels here, primarily because we have elected to provide a genuine tailored product, based on self measurement. Have a look at Matt Newton’s site www.newtonclothiers.com which is doing something similar out of Australia. Notably Matt is using the same tailor that I mentioned in idea #016 in early January. www.ideas2earn.com/archive/idea_016_tailors.htm. Our reasons for doing this are primarily that it is easier to get a higher price point, thus ensuring good margins, shipping can be done direct to the customer by courier thus avoiding import procedures, and competition for non-tailored shirts is so fierce that we could not find a business model that would work for a small operation.
Building a website is pretty straightforward, because we want a shopping cart and a certain feel we are having someone build it for us. Also with my various projects and a full time job along with Mike’s studies we don’t have the time to sit and play with web design. Getting the site built is cheap at about $150 using another student, but the main cost and effort will go into marketing the site to ensure that it gets to the top of the search engine rankings, a spot that is currently held by www.bespokeshirtmakers.com who are working out of Hong Kong. Naturally we will also promote the website on and offline.
Direct response is my preferred model for this business, but requires more physical work than the website. Thomas Pink and Charles Tyrwhitt have both built successful businesses charging premium prices for semi-tailored shirts. The idea being that you take your own measurements and order from a list of standard styles but pay more than you would for a shirt from Brooks Brothers, but significantly less than you would from a tailors. The model can be started with leaflets dropped in your immediate neighbourhood, and then can be expanded using brochures, and mailing lists.
Advertising will initially be Yellow Pages and local city Newspapers to keep the cost down. Later we plan to run test ads in men’s style and health magazines, as well as other media where we think we can find affluent male readers.
Our approach is quite focussed, but as I mentioned at the start we have already been working on this for a little while, and found that Ebay, and normal retail was closed to us due to the nature of our competition. We will keep exploring and you can follow our progress in the blogs.
We have looked at suppliers in India and China, and whilst China is undoubtedly cheaper you will find a better quality of service and generally speaking wider use of English as a business medium in India.
Finding a list of suppliers is relatively easy using www.alibaba.com and similar portals. The next stage is to engage in some email conversations, ask a lot of questions, and order some samples. Our key learning was that shipping can be the killer for this product. Many suppliers will ship samples using couriers which add significantly to the price, or by sea which means that you need to order very large quantities to take up enough space even in a shared container.
If you decide at any point to ship in bulk make sure that you address things like quota issues with your suppliers. They are used to dealing with this, and you should ask them where to get information, how to get a share of the annual quota and for help with import procedures. If the supplier does not have this experience start looking for someone else.
Competition is not a barrier to entry; it simply helps to shape your business model. We cannot enter the market with bulk, cheap products so have to develop a higher end, niche product in order to retain margins.
From my perspective the idea of shirts was completely random, Mike chose the business and I am supporting him. Every idea documented on this site is workable in some form, which is what I set out to prove with this project.