For most, launching any new business does not work out in the owner’s favor. Over 20% of new businesses shutter within the first two years, and 65% shut down within their first ten years. It’s even scarier for a saturated market like apparel, where new clothing brands often struggle to stay afloat. The reasons why new clothing brands fail, however, are usually very straightforward–and avoidable, with enough preparation.
If you look up how or why new clothing brands fail, often their downfall comes from their founder’s lack of experience. Not knowing what manufacturers to contact, how to distribute products, how to design tech packs, or how to check for quality–these problems inevitably affect the efficiency of any apparel brand business.
You can ask for assistance to cover some parts of this. If you have design and branding skills but aren’t sure about manufacturing or production, you can go to a merchandising business like Shirtual to find the right business models for you.
Why New Clothing Brands Fail
However, you still need to know the potential pitfalls of any new apparel business–and how to avoid them. These are just a few reasons why new clothing brands fail:
Not researching their market
The apparel market is heavily saturated with new and old trends, big and small names, and everything in between.
Many new apparel brands launch to fulfill a market demand but find themselves quickly being outcompeted by more established names, or out-innovated by newer ones. Worse yet, some new apparel brands launch just on the tail of a market demand that’s already running out.
How to succeed
Before launching your apparel brand, find a niche as specific as possible for your future target market. While most business owners have a general idea of what kind of products they sell, the successful ones hyperfocus on the market that works the most for them.
Wasting or not having enough capital
Having enough finances to run everything is key to any good business. Oftentimes, new clothing brand owners fail to account for all the costs of business–manufacturing, shipping, quality checking, and others–leading to ballooned costs that end up burying the business whole.
How to succeed
Keep your costs low when starting. Look for trustworthy manufacturers with relatively low sample and MOQ costs, or try researching other sales methods like print-on-demand. You can also contact more experienced professionals like our experts at Shirtual to know how to keep your spending lean.
Not knowing the industry
Founders often start with a basis in design and concept, but have little to no clue how to navigate the industry. What are some trustworthy manufacturers to work with? What’s the difference between screen and DTG printing? What are good fabrics to use for apparel? These are essential questions to answer when first starting an apparel business. The reason why new clothing brands fail is often because they don’t know these details.
How to succeed
There are a lot of fundamentals to learn when starting a new business, but a good start is figuring out how to work with a manufacturer. Research a little on tech pack templates, printing methods, and other important details needed in production, and then discuss how you can print your products more efficiently with your manufacturers and business partners.
Manufacturing is just the more jargon-heavy part of the business, however. For more information on the other important parts of a business, check out our guide on things you need to start a clothing brand.
Lack of marketing buzz
You can’t sell to people if people don’t know you. Newer clothing brands often need to hype up their new releases on a regular basis to drum up hype for their next drop. However, between juggling manufacturing, quality checks, and distribution, it’s easy to forget about posting schedules and marketing campaigns.
Of course, this leads to no buzz about new products, mounting inventory, and inevitably, wasted resources that run into a dead end for the business.
How to succeed
Having a consistent schedule is important. If you can delegate the task of social media marketing to a trustworthy worker, this can be a solution to a consistently hyped marketing campaign.
However, if it’s just you, you can also work with a merchandising company like Shirtual to take care of your manufacturing and distribution needs. Focus on your branding and marketing first–that’s often the core of any successful business.
Lack of quality control
Let’s say a clothing business has started taking off. Their initial business plan is solid, their marketing is great and they have tons of customers looking for their products. However, when those customers receive those products, they find that it’s…not quite up to par.
Maybe it’s a few faulty stitches, a lack of durability, or a general cheap-feeling material that leaves a bad taste in the customer’s mouth. While the business may be fine at first, the slow and steady hit toward its reputation inevitably leads to its end. This is one of the reasons why new clothing brands fail.
How to succeed
Scaling up inevitably leads to cutting some costs to increase operations efficiency. However, these cut costs should never hurt the appearance and quality of the final product. Always take time to double-check your materials before shipping them out, or bringing in others who will. If you receive any complaints about products, be sure to quickly respond and provide the necessary compensation.
Expanding too fast
Somewhat linked to the last reason, a common result of fast growth means new and unstable forms of expansion. This might mean buying things in larger bulks or investing in larger projects without any specific way to recoup possible losses. Many clothing brands believe that since they succeeded previously, they need to use their profits to quickly advance and take advantage of their great position.
However, expansion is a lot like building a new business from scratch–starting quickly can often leave more losses than starting small. For example, a new clothing business may invest resources into going from an Asian market to an American market. Without the knowledge of American trends and attire traditions, this can easily backfire, leading to wasted resources.
How to succeed
Always test the waters before continuing with expansions. There will be awkward growing pains for every business scaling up–for example, if you’re accustomed to small orders, you might struggle with maintaining quality for larger orders. If you’re accustomed to the humor and sensibilities of a Southeast Asian market, you may offend the Western market through cultural differences.
We’ve talked about a couple of ways you can prepare to expand your business internationally, but it all ultimately comes down to A/B testing and the constant running of data.
The same can be said for most areas of any clothing business. Ultimately, the reason why new clothing businesses fail can often be attributed to a) a lack of experience and b) a lack of knowledge. Don’t be shy to start small and grow along the way–you never know where it’ll take you.
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