In the luxury fashion business, make no bones about it: funding is the engine that keeps the vehicle of the business running. More to the point, without funding, it is nearly impossible to launch brand. Many times funding is required to ignite the engine to flourish in business. If you ask the folks who own the brands, they will surely agree that funding is one of the biggest challenges they face in today’s marketplace.
And when it comes to creativity, it is much easier to execute ideas when you have funds readily available. Sadly, the reverse can cripple an entire business and into the grit of the infamous chapter eleven.In order to earn money a business is required to spend money.It is like the proverbial sowing and reaping; you cannot harvest where you have not sown. Unarguably, it took a lot of funding for luxury lifestyle and fashion brands such as Ralph Lauren and Calvin Klein to rise to the levels they have attained. High returns in revenue are usually the result of an investment of time, energy, and most importantly, funding.Luxury brands were not ready for the onset of Covid-19 stop the manufacturing. No one was ready, But on the bright-side, the beautiful thing about e-commerce, lifestyle, and fashion brands is that they are largely the creative rave of the moment. Consumers for the most part, enjoy the convenience and ease shopping online and having their orders delivered to the doorstep. While fashion and lifestyle brands are listening to consumers—changing the norm with respect to style, the level of acceptance and growth in the sector is magical.
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According to Statista, in 2019 alone, e-commerce sales accounted for 14.1 percent of all retail sales worldwide. This number is expected to increase to 22 percent by 2023. In terms of sales, global e-com sales reached a whopping 3.5 trillion U.S. dollars in 2019.
In truth, online stores are taking over market share inciting brick-&-motar retail brands to invest more in the online market for their products and services. For guys like this, the online market provides them with the opportunity to reach many more people, expand into other territories without any restrictions, and ultimately achieve greater sales revenue. And that is something all brands wish to achieve after 2020.
On the other hand, folks aiming begin a business as an entrepreneur, they are surely discovering that lifestyle and fashion are profitable e-commerce niches to operate in today’s volatile marketplace. Subsequently, this has led to the massive influx of countless e-commerce sites. In addition, there has been a rapid rise in the number of lifestyle brands for the fashion industry.
I have been conducting research at New York’s Fashion Institute of Technology (where I teach from time to time) and have come to this simple conclusion after having run several statistical tests with the statistics department. The hard cold reality is that a brand needs to raise funds for the survival of the brand. Grassroots business can only last so long.
Here are three (3) ways you can do that.
- Take advantage of financing options
The reason you need to raise money for your brand is to finance production/inventory acquisition, operations, marketing, and management. These key focus areas drive the rest of the business, including the miscellaneous slices. When faced with the challenge of limited funds, brand owners and executives are left with the tedious task of allocating available resources to focus areas.
An alternative way of getting the funds you need to finance your lifestyle or fashion e-commerce brand would be to take advantage of financing options that cater to specific focus areas. Although startup funding is traditionally dominated by venture capital firms, the business world is seeing some kind of a paradigm shift in recent years. One example of this is the growth-focused investment firm DRVE, which is helping online businesses scale online with smart capital and expertise. In fact, a know of a few fashion entrepreneurs who have gone this route and are pleased with it.Instead of simply providing money in exchange for ownership, DRVE offers e-commerce businesses in industries like fashion, lifestyle, and beauty to foot their paid marketing budget and also let their online advertising specialists handle the entire paid marketing strategy. By doing this, DRVE enables business owners to eliminate the risk of losing precious funds in an unsuccessfully executed advertising strategy, while also allowing them to maintain their shares in their own company.
DRVE’s three-step process, source: drve.com
Through DRVE’s growth-focused investment programs – Velocity and FastForward – the company offers two highly effective financing options. In FastForward, brands obtain access to funding and support from a team of specialists who advise and help optimize the online sales process, while Velocity participants receive advertising budgets of up to $50,000 per day in addition to full management of service for their paid advertising strategy.