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Explore more posts
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Harry Riley
The moment everyone has been waiting for is here…. Well maybe not everyone, but I do look forward to the annual ThredUp resale report, which just got released 🤩 Some stats I founded particularly interesting related to the rapidly growing resale space: The headline stat: 🌍 The global secondhand fashion market will reach £280+ billion within 4 years, growing 3X faster than overall global fashion market 📈 Resale grew 15X faster than the broader retail clothing sector last year. 🤯 An incredible 2 in 5 fashion items bought in the last 12-months were secondhand. 💸 Consumers spent nearly half of their fashion budget on secondhand in the last 12-months. 📱 Online resale is driving growth, growing 23% last year and will account for half of all secondhand spend by next year. See the report here: https://lnkd.in/eqrYtYuY Tomorrow I’ll share some stats on the growth of branded resale. Try to contain your excitement and sit tight!
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2 Comments -
Carla Penn-Kahn
$25m in an all cash deal for $2m in earnings. Even Adore Beauty Group’s shareholders didn’t like this announcement with the stock trading down 5.85% on the back of the news. What I find interesting is Adore’s market cap is currently $83.15m and last year they made a loss of $600k. So why not pay $25m for $2m in profit? On the back of this deal Adore will finally be profitable in 12 months time and that’s before they flog the iKOU brand to their customer base and no doubt improve the e-commerce fixed cost base inside Ikou. But will this really happen? Shareholders seem to be as sceptical as I am with a share price drop like this. It also leads me to ask; have we not learnt anything since the collapse of BWX Limited…? My hope for Adore’s shareholders is the, still to be announced new CEO has M&A experience to make sure the Ikou brand continues to thrive under their stewardship. Equally the incoming CEO will need to make sure the modelled consolidation benefits come to fruition. I suspect Adore are hoping a successful M&A strategy may get them back to a floated share price of $6.75 one day… Could Adore 2.0 be the new Australian beauty brand consolidators? One thing is certain, Adore 1.0, as a brand reseller is an extremely challenging market. Adore are price takers and hence profitability is extremely challenging. This move by Adore allows them to start becoming a price marker, an opportunity to be profitable. What do you think of this deal?
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19 Comments -
Sean Lee
James and I are interviewing Rachel Peters (Clean Age) this Friday for our pod, BrandBusters. CleanAge has been laser-focused on serving Gen Z, and they bucked the traditional 2010s CPG launch by going RETAIL FIRST instead of DTC FIRST. They have an awesome brand aesthetic and make products with better ingredients (and sustainable packaging). What should we ask Rachel? #CPG #podcasts #brandbusters
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10 Comments -
Fan Bi
We are at peak zombie in DTC land. Revenues flat from 2021-2024. Liabilities up YoY with many brands overlevered. Valuations down from revenue multiples to EBIT multiples. Capital markets access shrunk 90% according to Crunchbase. No end in sight for any of these drivers. Seeing more founders outsource their whole marketing, operations, and finance to reduce opex by 50%+ and either wait it out or soft land it. Seeing more agencies get stood up to run full-service marketing, operations, and finance to meet this need eg. Nogin, Samsara, Neon Flux, Seconda.
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49 Comments -
John Foraker
Quick mid-year check in on the macro situation for health & wellness focused #emergingbrands. Key point IMO: this remains one of the best times (literally) ever to be selling premium better-for-you products in the US. Consumer incomes, Inflation moderation, & wealth-effect are all good (and improving) driving very strong demand. Higher end shoppers are continuing to power right now. Continued bifurcation between high & low HH’s is real and not great, showing value & showing up in the right channels has never been more important. Retailers everywhere looking for great innovation and brands that can deliver real growth. The energy that was evident at #expowest was real and continues. I've seen no real evidence of any significant movement away from healthier options across HH income levels or channels. Consumers do seek value (always), but they want the products to meet their health needs too. Brands delivering both $ and unit growth are in the drivers seat. There could be pockets or categories I cannot see where this is not the case, but I think the big picture holds. The #emergingbrand financing environment remains terrible, especially at friends & family, seed & A rounds before scale. I'd have thought that would be better as the year has gone on but I've seen or heard no evidence of that yet. Seen lots of great brands you'd expect to raise easily just getting squashed. Investors remain cautious, careful, and outside the big deals you hear about everyone chasing, it remains a financing nuclear winter. Hope this changes soon because the macro environment is one of the best ever and there are some potential big brands of the future out there just needing the capital to scale. Please share if you see anything different, love to hear perspectives across the brand and investor landscape.
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26 Comments -
Ed Bartlett
I've been looking at investor decks a lot lately. It's fascinating, and definitely a worthwhile exercise when #fundraising. I just looked at one for another #apparelbrand, who are at a similar stage, and who just closed a bigger #preseed round than I am raising for KOSTÜME. What is most interesting is the traction and results page. Interesting in that, without mincing my words, #Kostüme absolutely trounces them in almost every area: Similar annual revenue but DOUBLE the AOV A fraction of the CAC (ours is practically zero) Half the return rate 50% more countries sold to The market we are in is 50% bigger 50% higher email open rate for mailing list 2026 revenue is 20% of what we are forecasting They also have a traditional retail model unlike our pre-order, so there's all the stock risk and logistics too. I don't know. To compare like this is arguably futile and self-defeating, and it's not something I make a habit of. But without looking outward how can you gauge your 'success?' I just don't get it. Maybe they got lucky. Maybe I've been unlucky. We just had 151 people from 21 countries signed up to the waitlist for our new bib shorts, of which 135 converted, all at full price. No stock risk, no waste, crazy margins, many also ordered other products (our customers buy on average 2.5 items each and that figure is growing as we grow) one guy in the US bought 4 pairs. All with no marketing budget, and while bootstrapped. I don't know. What am I missing? Someone tell me, please! #pitchdeck #eis #vc #venturecapital #angelinvestor #cyclingapparel #roadcycling #privateequity #startups #founderstories #ecommerce #dtc
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7 Comments -
Drew F.
In November 2023, Crunchbase famously declared that 'VCs no Longer Do DTC' - as financings in the category were down 97%. This has led to much conversation around the viability of VC x DTC, and has left many wondering where it all went wrong. Fear not, as I wrote 4,000 words outlining exactly what happened, and it starts by considering the following high profile failures: - Dollar Shave Club, divested by Unilever after a $1 billion acquisition. - Bonobos, sold $75 million after being acquired by Walmart for over $300 million. - Outdoor Voices, imploded after raising $70 million. - Smile Direct Club, from IPO to bankruptcy in just four years. These stories are part of a longer list of DTC brands that faced similar fates. So, how did it happen? The Rise: To understand the downfall, we need to look at the rise of venture capital. VC has grown exponentially—from $30 billion in 2006 to hundreds of billions by 2021. This influx of money meant there were far more funds than viable 'venture scale' investment opportunities. Investors looked for opportunity beyond SaaS The SaaS Illusion In the early days, DTC brands looked remarkably similar to SaaS. High gross margins, recurring revenue models, and heavy investment in technology infrastructure made them appealing to VCs. Oftentimes, DTC brands would have full teams of engineers building their websites and analytics. Ultimately, the products these technology teams were making would prove to be valuable vertical SaaS products (Shopify). Then, Dollar Shave Club was acquired for $1B. Proving that DTC could in fact produce venture returns at real scale. The Fall: VCs had seen DTC as a new frontier. The internet enabled a new wave of brands that could sell directly to consumers that could [apparently] generate massive returns. But as the market matured, cracks began to appear. Ironically, DTC brands that swore to cut out the middleman (retailers) and pass on margin to the customer created new, more powerful middlemen—social media platforms and online marketplaces that proved to be able to capture more margin than any retailer, x100. Additionally - bad accounting, Facebook arbitrage convergence, market saturation, increased competition, inflation, privacy changes, and shifts in consumer behavior post-COVID further eroded profits. The Conclusion: In the end, the DTC model couldn't sustain the weight of expectations. Don't get me wrong - many VCs made a killing on DTC. It is rumored that Kristen Green of Forerunner turned $250k in $35M by investing into Dollar Shave Club's first financing - a notable transaction that I theorize skewed investor underwriting models for the next 10 years. My prediction is that By 2028, it's likely that CPG-focused 'venture' capital will be a thing of the past, and traditional PE firms will prove to be the CPG capital provider of choice. For a deeper dive, read the full article here: https://lnkd.in/g5xnCwHM
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53 Comments -
Joanna Williams
American brands are struggling to join the $11.1 TRILLION social commerce market by 2030 Because of top down, silo’d, long leadtime, analog processes And prioritizing one off campaigns vs UGC at scale Our 28% decline in apparel imports LY should be the final notice Tech supported creator-to-manufacturer brands is what we need to compete The market is transforming into community-driven experiences, where social connections fuel participation But American brands will struggle to participate b/c they don’t control the entire value chain It all starts with a tech stack that discovers, tracks, & automates an alert when a trend, product, or conversation starts to gain traction in those communities To react in real time because the market moves fast If you are a second late, the algorithm will no longer serve Plus supply chains based on lowest cost highest volume sourcing can’t participate, it’s the antithesis of the mass model The current industry tools just don’t cut it any longer… Trendalytics forecasted a 28% increase to LY for “polka dot dress” yesterday An increase in search? UGC? On what platform? For which communities? Price? Fabric? Color? Style? Aesthetic? Polka dot dress is in fact down 3% on Google search YOY Although last month for 72 hours it had a 1000% increase b/c of the viral Princess Polly dress #iykyk It sold out immediately btw But that's in the past... the zeitgeist has moved on UGC videos are down 89% for polka dot dresses w/just 7 created this month I would deeply interrogate the data you pay enterprise $$$ for... In the arms race to ai – we need better data that solves problems, automates the work along the value chain, & accelerates technology’s integration into every single sector The adoption of AI should prove more momentous than the introduction of the internet & potentially create 10s of trillion dollars of value according to Arkinvest AI will democratize content creation to Hollywood level quality w/new tools like Odyssey FOR INDIVIDUALS If we didn’t organize around individuals creating a single TikTok per day How will we manage when those same people scale themselves & create hundreds? Arkinvest also said the annualized equity return associated w/disruptive innovation could exceed 40% during the next seven years, increasing its market capitalization from ~$19 trillion today to roughly $220 trillion by 2030.... Yet western fashion is experiencing historic losses Giants are crumbling.... From FARFETCH to EXPRESS's bankruptcies to lululemon as the worst performing stock on the S&P 500 + Nike losing $28B overnight in market share The time for incremental change has passed To regain competitiveness, American brands must embrace a holistic approach that integrates real-time trend detection anywhere online w/transparency, agile supply chains, & direct connections with engaged communities #thegreatfashionreset #creatortomanufacturer #communitycommerce #contentistheproduct #tiktokisthestore
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24 Comments -
Lydia Hartley
Thredup’s annual resale report came out last week. And it said... 74% of retail executives who don’t currently offer resale are either considering or planning on getting into resale in the future 💯 That's my kind of stat. But what's really interesting is the reasons why they AREN'T doing it right now. The following two came out on top: 🤔They think resale is too complex. 🥲They don't know where to start. If you are a fashion business owner, and this applies to you - let's chat. Trust me, incorporating resale into your business isn't nearly as complicated as you think. Drop me a DM! #resale #secondhandfashion #retailstrategy
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5 Comments -
Eoin Comerford
Emerging apparel brands should really study the Abercrombie & Fitch Co. turnaround story. There are many great lessons, but the initial key was a maniacal focus on the fit of their women’s denim program. Here are some of the key mistakes that I see emerging apparel brands make around fit. 1. Not understanding that fit is fundamental When consumers find apparel that just FITS – that makes them look and feel good – it is a defining brand moment. It drives purchase rates in physical stores and repeat rates online. Style, performance, sustainability, etc. are meaningless to the consumer without proper fit. 2. The founder is the fit model “I can’t find anything that fits me” is the genesis of many apparel brands. The issue is that what fits you may not fit many, and you are not a static model – the stresses of a start-up can cause big swings in weight. 3. Focusing on a single fit model There is no such thing as “the perfect fit model”. The best fit is the one that looks best on the widest spectrum of your target customer. When we developed women’s outerwear at Moosejaw, we fit samples on four women of different shapes and heights who all wore a small. The result was numerous small tweaks for the best overall fit. 4. Not researching “industry” fit Vanity sizing is the norm, even in measured sizes like waists and inseams. You need to understand those norms for your target category and then make very deliberate decisions if you want to go against those norms. 5. Not investing in sufficient QC for fit Few things will kill repeat purchase rate faster than different fits from items of the same stated size. Set key measurement tolerances with your factory partners and then rigorously sample test shipments, going to 100% testing when issues are indicated. Reject product that does not meet the agreed tolerances to show the factory that you are on top of fit. 6. Not communicating fit to the consumer Define your fit philosophy -- athletic, relaxed, etc. – and then communicate it to your target customer. Call-out fit in product descriptions and include a prominently displayed size chart with easy-to-follow instructions. This helps drive online conversion and avoid costly returns. 7. Not communicating fit CHANGES to the consumer Defining your fit can be an iterative process, but making changes can alienate existing customers. Make sure to clearly communicate what’s changing and why. 8. Not considering multiple fits Multiple fits may seem crazy to a founder struggling to hit minimums but may make sense depending on the product. Thicket Adventure, a plus-sized hiking pant start-up, quickly realized that no single fit would work for their target customer. So instead of one size in four colors, they launched with two sizes (Booty and Belly) in two colors. Don't feel bad if fit is a challenge for your brand. It amazes me how many established brands really struggle here. So what’s your favorite fitting brand? #OutdoorIndustry
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4 Comments -
Joanna Williams
Nike, the most successful sports brand in the world had the largest one-day drop in history, w/shares plunging 20% yesterday As UBS's Jay Sole wrote: “Fundamental trends at Nike are much worse than we realize...its lifestyle business needs a major reset” It’s b/c they’re not building communities You can't when 96% of your creator partnerships are short term They have 100's of millions of followers, but just 509 shares/month If you can't get people to spread your word, the algorithm will stop serving - you can't cut thru the noise of 202k years of content watched daily Plus creating 15 TikToks a month just isn’t sufficient when everyone is their own production studio and will soon scale themselves with ai They need more content that is personalized to each person And break them into communities of shared interests to engage w/them on the topics they care about b/c this is what powers everything online, including sales As Microsoft AI CEO said recently the economics of information are about to radically change The advent of AI + the democratization of content creation tools mean that every individual is now their own production studio Brands must keep pace, producing not just more content... but more personalized, relevant content that resonates with each segment of their audience When production becomes virtually costless, brands must position themselves as curators & facilitators of information flow within their communities This new paradigm requires a fundamental rethinking of marketing strategies And new data tools - not ones that track vanity metrics It's not about pushing products; it's about creating ecosystems where consumers can connect, share, and co-create with each other It can't be managed in a mass way, your consumers are not a monolith I'm tracking a super-user fashion community right now - they're ALL talking about a Fashion Nova "Darla Lace 2 Piece Set" right this second It happens to be about a product But yesterday it was about navigating emotional struggles in their personal &professional relationships... see screenshot below The narrative is primarily found on Instagram and has a saturation level of 100% Tapping into real time conversations is crucial to truly stay in tune w/their desires + interests It demands a deep understanding of community, constant engagement across multiple platforms, & the ability to navigate cultural nuances The future belongs to those who can master the art of fostering genuine connections, leveraging AI + other emerging technologies to create personalized experiences at scale, & positioning themselves as integral parts of their consumers' lives + identities Whoever has the real time data & empathy can help Nike thrive in this era they are the greatest sports brand in the world - they just need to find, segment, & empower the 100's of communities who adore them Since Tomorrow #thegreatfashionreset #creatoreconomy #communitycommerce #contentistheproduct #tiktokisthestore
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82 Comments -
Nick Adcock
Colin True i’d argue it is VERY smart product marketing by OluKai . They know their customer and know what their customers are into. While the surf sandal brands were fighting over logo driven $15 flip flops in the surf channel, OluKai were carving out their own niche of $80-$120 leather sandals in Nordstrom & menswear stores. They took a risk in a crowded market and it paid BIG dividends - they own that premium sandal market/channel now as well as expanding successfully into “closed toe” shoes and sports footwear (Golf). So why not Pickleball? Tipping that same older sandal buyer (their customer) is fuelling the pickleball growth so why not have a crack by making a shoe for them? I have zero affiliation with OluKai but commend them on having the guts to take the path that others choose not to. Focus group of one but I wouldn’t be writing this move off. Time will tell. Note : I actually think the design is pretty on point with the current clean design trends in footwear.
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22 Comments -
Abhijeet Agarwal
I've noticed a recurring trend in the fashion industry: a shift towards business models focused on thrifting, pre-owned, or recycled goods, and it’s bigger than we think. Year over year, the U.S. secondhand market grew 11% in 2023, seven times faster than the broader U.S. clothing market. Major online marketplaces are recognising the huge potential of pre-owned fashion. eBay recently removed all selling fees for used clothing items, making reselling more accessible. They also hosted a live shopping event where comedian Katherine Ryan sold pieces from her personal wardrobe with proceeds going to charity. Brands are also exploring more sustainable options. Urban Outfitters launched a clothing rental subscription service. Everlane introduced an in-store drop-off program for used clothing credits. Even brands like Patagonia, Levi's and Nike now offer national buyback programs, offering store credit in exchange for pre-owned clothes. TikTok Shop UK has launched a preowned luxury fashion category where shoppers can browse through big brands added to the platform. Is this shift towards pre-owned fashion a viable business vertical for brands, or are they primarily adopting it to cultivate an image of promoting conscious consumerism, which may ultimately lead to consumers trusting the brand more? Picture - Statista #ecommerce #thrifting #retail #fashion #ecommerceusa
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Carley Lake
Another crazy stat from the ThredUp 2024 Resale Report that I can't stop thinking about... Social media is the # 1 preferred place by consumers to shop secondhand online. Not traditional resale apps or managed marketplaces. And 500+ million are using buy/sell/trade communities on Reddit, Facebook, and even Instagram to take part in shopping secondhand on social. People want trust, curation, connection, and to exchange clothing with their communities/people they trust. Secondhand 1.0 got us here, and I couldn't be more grateful (especially as a lover of secondhand and a person living on this planet!). But we need Secondhand 2.0 —community-first, ultra-curated, and fun, to hit the $350B market projections. A place to discover, connect around, and find the brands/things you love—with people who love what you love too. Join us in 2.0 land on Lucky Sweater. 🙂 https://lnkd.in/eVisFGqS #secondhand
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5 Comments -
Sarah Shapiro
I have suggestions to help fashion ecommerce: The demand for functional fashion is on the rise, and pockets are leading the charge. The Wall Street Journal's article, "Women’s Clothes Finally Have Pockets. What Took So Long," highlights the evolution of women's garments, now featuring pockets that offer both utility and style. This shift reflects broader societal changes, promoting equality and recognizing women's active roles in public and professional spheres. As an avid supporter of pockets, I appreciate how they can be designed to either stand out with a cargo style or blend seamlessly into the garment's design. For e-commerce retailers, this trend presents a significant opportunity to enhance the online shopping experience. Here are some actionable insights: 1. Add a "Pockets" Filter: Introduce a filter option specifically for pockets, allowing customers to easily find clothing items that meet their functional needs would improve navigation and discoverability. 2. Detailed Product Descriptions: Clearly indicate the presence and type of pockets in product descriptions. Don't rely solely on images; specify the functionality and design of the pockets. Added benefit of improving SEO. 3. Highlight Functional Fashion: In your marketing and product listings, emphasize the practical benefits of pockets, supporting the growing trend towards functional equality in fashion. By integrating these features, retailers can cater to the increasing demand for practical and stylish clothing, ensuring a better shopping experience for their customers. If you make these updates please let me know any data insights.
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8 Comments -
Chris Reilly
My 𝗨𝗹𝘁𝗶𝗺𝗮𝘁𝗲 𝗚𝘂𝗶𝗱𝗲 𝘁𝗼 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 👇 ~~~ 🏷️ 50% off Sale going on now until 5/21! Use code "springcleaning" before the price goes up this summer: https://bit.ly/46xfrp5 ~~~ Table of Contents (107 pages with font you can actually read): • Simplify Your Formatting • How I Layout Most Models • Build 3 Statements with These 4 Things • How I Build FP&A Models • How I Build LBO Models • How I Build Rollup (add-on) Models • How To Find Outliers in Your Data • My 7 Most Used Excel Shortcuts • Modeling Tips I Wish I Knew When I First Started I hope you can apply some of it to the model you're working on!
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12 Comments -
Dan Major
Whatever channel you sell on, you have to pay for the awareness and eyeballs. Retail pay the landlord rent Wholesale sell at wholesale margin DTC requires sharing margin with Meta/Google/Amazon Brands can move to omni channel, but only profitably if they have their unit economics set up to thrive in that space. DTC traditionally spend more on product cost for higher quality, but this needs fixing before entering wholesale/retail as the lower gross margins will wipe out DTC net profits. The other often seen issue is the expertise for successful execution in a different channel. Most DTC leadership teams are set up with DTC channel experts, so are missing significant and expensive experience in other channels. There’s often significant margin shrinking OPEX costs to backfill to get the brand ready to take on another channel E.g. If hitting wholesale aggressively, a Sales Director who will drive the growth in accounts is expensive. Saying all that, if a DTC brand can get all the channel specific expertise in place and the supply chain set up, then from an enterprise value perspective, they can fetch a higher exit multiple due to having de-risked the revenue streams and opened up more scale for a potential investor.
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Wilson Griffin
Fully integrated resale channels drive more value. It's a fact. This might be our best case study yet on the benefits of a fully integrated (same URL, same shopping cart, same checkout) resale experience. Coyuchi has been running a resale subsite for years with other partners, but we rebuilt and fully integrated their site with this relaunch. And sure enough, more than half of buyers are purchasing used and new in the same cart. Previously, each of those customers would have had to visit two sites, build two carts, and complete two orders. How many would have done that? How much money would have been left on the table?! The answer is becoming more and more clear...a lot!
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4 Comments -
Josh Payne
As a VC investing in DTC in 2024 - there's one thing that I always look for when investing: A very high percentage of organic revenue. In other words, you have to be able to consistently manufacture customer demand without paid ads. Throwing some ads up on Meta for a new brand just won't work long-term. There's no moat. There has to be a reason that you are the best person in the world to create your product. So, how are the best founders doing it? 1. Building in public on TikTok to create virality (Haley Pavone 1m+ followers for Pashion Footwear: https://lnkd.in/e8HKWUvH) 2.Creating an exclusive community w/ premium offering (Raad Michael Mobrem with Intro) 3. Driving insane repeat rates w/ "habit-forming" products (James Beshara with Magic Mind) Leveraging a paid-first strategy, you'll never reach first-order profitably. Which will drive you to take out short-term Clearco/Shopify/Wayflyer loans or constantly get distracted trying to raise capital to keep your business afloat. Both will blow up your company eventually. Instead: 1) Negotiate harder w/ suppliers to keep unit economics low. 2) Reduce costs w/ contract team members where possible. 3) Unlock organic growth outside of traditional paid media (social / influencer / partnerships). 3) Launch a product you are uniquely suited to sell, don't be a commodity. What am I missing here? Let me know in the comments.
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18 Comments -
Kevin Harmon
So, you are watching a very common business cycle play out here. For 15+ years, Nordstrom has liquidated product via Nordstrom Rack and by liquidating to partners who scatter their product all over the place - even MY company used to buy Nordstrom liquidations. Their largest liquidation client (via a broker) was/is? ThreadUp, who would buy in truckload quantities. Sooner or later, the brand slowly realizes that instead of liquidating product, they should resell it themselves. I learned that the VERY hard way a decade ago when my company helped Target and Best Buy realize that yes, there sure was a market for customer returned dvd/cd/video game product and so why sell returns to me when they can just start their own used program? I was SO good at showing them how to do it that I lost BOTH of them as liquidation partners in the same year, which was the main catalyst for my old company Inflatable Madness to go belly-up. Let's see what this move does to the secondary Nordstrom buyers, but...it might sting a bit.
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