Satur: 6 tips for building a multimillion dollar fashion brand company with no money
The fashion industry — an onslaught of challenges
Running an online fashion brand company is no joke. It takes hard work, dedication, and resilience, requiring business owners in this industry to overcome an onslaught of challenges.
To give you an idea of how difficult it is — 82% of businesses fail because they have trouble managing cashflow, and with the fashion industry being a capital heavy industry, only about 47% of fashion companies manage to survive past their 4th year of operation.
And to make things worse, the margin rate for most of these surviving fashion brands fall somewhere between 4-20%, with only 9% making it over the million dollar mark.
Yet, the industry continues to grow year after year with global fashion being valued at $1.7 trillion as of 2023.
So how can an entrepreneur that owns an online fashion brand company accomplish growth in such a highly competitive market?
The birth of a fashion brand company
To shed some light, we interviewed the CEO of Satur, (Ho Chul Son) who shares about his experiences in the industry in South Korea — one of the leading nations for fashion ecommerce — and how he managed to beat these odds and turn his once failed fashion brand company, into a multimillion dollar fashion ecommerce that's taking the nation by storm.
Ho Chul Son was a mechanical engineering major before dropping out to pursue his passion for clothing. He initially stepped into the industry through a friend, who at the time asked him to help out with a store.
"I thought 'oh! that's easy' and started the business but I think 'failure' would be the keyword to describe it. And I did fail. And I had debt."
To make up for some of the debt he had, he knew a regular day time job wouldn't cut it, so he began designing and making products as a freelancer, and started up another business with the help of crowdfunding, and almost no cash on hand.
The 6 tips to grow a multimillion dollar brand
Through his failures, the CEO of Satur learned what he was missing from is first attempt at building a fashion brand company, and made the decision to apply everything he learned throughout his struggles to the next venture.
By applying 6 simple tips — that he now holds as a golden rule for himself and his business — the young entrepreneur was able to turn the lessons from his failures into a multimillion dollar fashion ecommerce business, averaging $1.5 million a month in revenue, and 13-14 million annually.
Let's dive right in!
1) Build a business before building a brand
Almost all new business owners go through the same process before launching their company.
They think of a problem, find a solution, then a name for the brand, the logo, the concept, the type of audience they want target, source the products, and then launch. And the same applies for fashion ecommerce owners.
But Ho Chul Son says that this could be restricting growth even before the business is even born.
"You have to start with the business part first. People that buy from me. My friends that buy from me. People that introduce others to buy from me... You have to start the business with people at the center of it, and build a following. After that, you can create a symbol or logo that people can recognize you with, and think about expanding the ‘brand’ at that stage. But it’s the opposite with most people starting their own fashion brand company — the symbol, style and brand personality are considered first, then the overall image of the outfit, then tone and manner. Usually in this order."
The problem with doing this?
Branding first can limit your potential audience, and limit the visibility on where your product fits into the market — a process we call, finding your product-market-fit (PMF).
'Doing business' by selling the product to, and interacting with as many potential customers as possible, will provide you with better insight and visibility on what type of fashion brand company should be building.
After figuring out what part of the market you have access to, you can always begin branding your company based on that audience later.
2) Communication over paid content — early stage growth strategy
It's not always a good idea to start pouring money into advertising at the beginning of a business. Especially since money tends to be scarce for many aspiring entrepreneurs looking to build a fashion brand company.
The CEO of Satur explains.
"If you consider whether there’s a higher probability of selling to a new customer or to someone that’s purchased your products before, there’s always a higher chance of selling to an existing customer. Then the first thing you should be doing is holding onto existing customers and communicating with them. But people tend to look at market expansion as merely increasing the number of new customers (through advertising) and in my opinion, it’s the wrong approach. It's much easier to focus on existing customers and convince them to buy one more product from me. It's significantly harder to bring someone new and convince them to buy something."
The thing that starting fashion ecommerce need most is information.
Businesses need feedback on their services, feedback on their products, information on customer needs, in order to improve the business and shape it in a way that fits with the expectations and needs of customers and the market.
And the best way to get this valuable information is to build a relationship with customers and directly ask them.
3) Organic marketing and growth metrics for fashion companies
For most companies, getting your brand noticed can be a real struggle. But for a fashion brand company, there are options that work specifically because of the visual characteristics of the industry.
"There are many cheap ways to create content internally and deliver it to existing customers. You can send out a push notification, send a newsletter, or upload new products on Instagram. And these are all existing customers, or potential customers that are watching us, and the cost of reaching them is low. Each week on Friday at 5pm, we send out a newsletter. Along with the newsletter, we also send out contents that were created that week, along with push notifications. Afterwards, we post images daily on Instagram, and on YouTube, we upload 16 videos monthly. And this ones a powerful strategy — we release a new product every 15 days. Just when you’re about to forget us after about 2 weeks, we release something new."
The CEO of Satur also pays very close attention to specific metrics as a measure of brand growth, and sees it as an even more important metric than sales.
"There's one thing provides the most visibility, the number of times customers tag our official account. We always aim to have more than 99 mentions. Looking at the metric is the most clear-cut and shows ho much my brand is growing, and how much our customers have us in mind."
Whatever social media platform you use, by paying attention to the activities and mentions on these platforms, you'll be able to gauge the influence your brand has on customers and figure out if more needs to be done, or if you're on the right track.
4) If you must do paid ads, do it right — making or breaking a fashion brand company
Of course, there are situations where content marketing alone may not be quick enough for some people. And if you have the budget for it, paid marketing might make sense to boost traffic and sales for your store.
But many fashion brand owners find that paid marketing can become a double edged sword.
As we mentioned above, fashion is a capital heavy industry, and if you're not careful about how you manage your operational budget, you could find yourself in a lot of trouble early on into your business.
"If a store is in the early stages of branding, it means the customer base hasn't been formed yet. So, should you invest in advertising at that stage? It’ll burn through your budget fast. There's no need to overthink it — for example, Instagram has promotional features. With a daily budget of $3 about the price of a cup of coffee, you can achieve enough."
For Satur — even after growing into a multimillion dollar fashion brand company — they still consciously keep things lean by making sure that they minimize the amount of times that ads are shown to existing customers, and target their paid advertising only on new customers.
"It would be enough to simply upload onto your Instagram feed, and spend maybe $300 for advertising that post for about 6 days. You can be sure that your existing customers have seen enough of the post at this point. For new customers, I think we use about $5000. We did try to increase the budget to about $12,000 but we failed. We turned off some of our ads because most of our budget was being spent on already existing customers. I didn’t want ads to be shown more than 4 times to them."
5) Avoid hiring marketing agencies too early — Give them something to talk about
You may be thinking at this point, "well that sounds great and all, but wouldn't it be easier to hire a marketing agency to take care of advertising my fashion brand company?"
The important thing to remember is that a marketing agency's role is to 'spread the word' on your company to as many people as possible, and convince them to buy your products.
The problem is, if they don't know what that 'word' is, you could end up burning through your budget with very little results.
"The topic you want to spread is something you have to come up with, but if you have the mindset that 'the marketing agency will take care of it,' then you’re already starting off on the wrong foot. If I don't even create the source for my own story and instead rely on someone else to advertise for me — it’s going to end up being a huge waste of money."
Instead, Satur's CEO recommends thinking about what customers can relate to and using social media to test out content.
By doing so, you'll not only reduce the risk of burning through cash too quickly, but also get a better understanding of what sticks and what doesn't.
"When people are looking through Instagram stories, they're exposed to more than 300 products a day, and to get someone to click your product out of all of those posts, they need to think “Oh, I can relate to this content” in less than a second. And this message needs to get across to people."
6) Let Channel Talk manage customer experience and customer data
Satur's CEO states that by bringing all of these tips together along with a solid customer experience platform, like Channel Talk, can go a long way to launching a fashion brand company to success. He chooses Channel Talk for 3 main reasons:
1) Channel Talk stands out from its competitors due to how quickly you can resolve customer inquiries.
"The most powerful aspect of Channel Talk is its customer service (CS) resolution speed. For distribution companies, customers have no choice but to leave messages on forums or tickets. But when I think about whether this process is consumer-friendly or company-friendly, it's definitely more company-friendly. In e-commerce, Channel Talk is the fastest option available, which naturally leads to higher customer satisfaction."
2) It's also extremely user-friendly, making it easy for its end-users to reach out and contact staff, and for businesses to build genuine relationships with their customers.
"It's funny, but if you look closely at our Channel Talkdata, you'll often find our customers look for our employees. They call out our employees by name and some even send birthday gift cards through Channel Talk to staff on their birthday."
3) The platform also allows you to segment audiences based on potential customers, single-purchase customers, repeat customers and fans, and let’s you approach each segment in a planned and strategic way.
"The most fundamental aspect of building fans is viewing customers from a segmented perspective. Some are potential customers, some are one-time buyers, some are regulars, and some are true fans. It is crucial to develop separate strategies and operations for these four segments of customers."
The takeaway for those looking to build a successful fashion brand company
Building a fashion business isn't as easy as one might assume.
As the CEO of Satur has pointed out, there are a lot of things you need to consider in order to keep your fashion brand business on track.
But the key take away from all of these tips is that there's still a lot more that you could and should be doing, to ensure that your business stays on the right track towards becoming a multimillion dollar fashion brand company.
Even for those that aren't running a fashion brand company, the advice that the CEO of Satur shares in this article can be applied to numerous industries and different businesses that are facing similar challenges in early stage growth.