Crowdfunding for Fashion Entrepreneurs
We all know that crowdfunding is a great way to fund a business. Yes, you need to put energy and resources into fulfilling the incentives that you promise supporters, but this is usually still a better deal than having to pay the standard costs of funding:debt or a loss of equity. In order to secure coveted crowd-sourced financing however, you have to first attract a crowd! Which is exactly what fashion-focused crowdfunding sites are helping designers do.
Unlike “general” platforms, fashion-based crowdfunding sites like Before the Label, Luevo, and BetaBrand serve only the fashion industry. This allows them to offer unique services to designers, but more importantly, they help solve the problem of “excessive noise” in the crowdfunding space. By creating a space just for fashion, they ensure that the audience is uniquely primed to support fashion brands. Also, their model is unique in that it is centered around the concept of “pretail.” Companies essentially pre-sell goods to backers, and deliver these items if the campaign is successful. This arrangement gives funders their fix of fashion, and fashion brands their fix of funding—a win, win!
Here we ask Before the Label COO Uzma Kaleem a few questions about using a fashion-focused crowdfunding platform.
How many items has Before the Label funded? Any favorite success stories?
UK: So far over 300 items have been funded. Our favorite story is about a handbag designer, Marylai. She makes women’s handbags but was receiving requests from customers to create a unisex bag. She didn’t want to produce a run without knowing that people would actually purchase it, so she prototyped a canvas and leather bag, and used Before the Label to gauge interest. She ended up having a successful campaign and got some great marketing buzz from a whole new audience.
How difficult is it to be accepted onto a platform like yours? What are your requirements and what is the application process like?
UK: Every designer who submits a campaign is evaluated on several fronts, including: (1) whether they have production capabilities; (2) understanding if they can meet production deadlines; and (3) if they understand the concept behind the model. Currently, we have personal conversations with every designer that goes up on our site. We do not try to make it difficult to be accepted but we do ensure that backers will have a seamless experience when supporting a campaign and receiving items in return.
What specific benefits, in addition to receiving money, do designers receive when they launch their lines on Before the Label?
UK: One of the benefits is no-waste production. You only produce what you sell! Designers will also have sales data from a third party (us) to present to boutiques and buyers and say, “Look, there is a demand for my product.” We offer the opportunity to be validated by a large community.
You say that there is an eco-friendly aspect to crowdfunding sites. Can you explain that?
UK: Our site helps prevent overproduction of items that end up on sales racks and storage rooms and tax the environment, both by unnecessary production and waste. By only producing items that already have a demand, designers can build efficient companies based on goods backed while also producing a minimal eco-toll.