Many industries have seen a rise of start-ups because of crowdfunding, but none have benefited as much as the fashion industry. Under the traditional format, a brand would need to find manufacturing in Asia in order to become profitable. With crowdfunding, local jobs can be created thanks to the need of lower minimum order amounts. This creates a boutique brand that can be trendy, unique, and even customized.
Why is this working so well for the fashion industry? The fact that it is scalable. New start-ups don’t need to have a massive following in order to be profitable. They can instead create a new crowdfunding campaign for each product and if it meets the funding goals, then it can become part of the product line. If it does not, then it doesn’t cost much to have tested the idea. This is powerful because the crowd decides on the fashion, not the manufacturer, and it provides people with a sense of empowerment.
Why Is This Changing the Fashion World?
There is no longer the need for dictation. People in the past have always been told what they should wear. You might say, “Hey. I can pick and choose from a number of different styles that are hanging on the rack. No one is telling me what to wear.” Except they are. Did you have any input into the garment you’re wearing right now? Or did you just select it off the rack?
This is how crowdfunding is changing the world of fashion. It’s allowing a group of consumers to have a higher level of input in what they want to own. No one will ever be able to replace a sewing machine and personal creativity, but fashion crowdfunding comes pretty close. As a secondary benefit, local jobs get created and people can feel like they’re supporting the local economy – two key value benefits that Asian manufacturing can’t supply to the rest of the world.
That doesn’t mean that fashion manufacturing in Asia is dead. It’s far from it. Mass production will probably always be outsourced to that continent. The difference is that the boutique brands like OutOfX or Before the Label can become instantly competitive thanks to crowdfunding and all it takes is a little creativity. If they need mass production, they’ll still go to Asia. If they don’t, then they can still make money at home.
Crowdsourcing and Crowdfunding? A Match Made in Heaven
OutOfX has taken the concept of crowdfunding to another level for the fashion industry by including crowdsourcing for their clothing designs as well. This means that people who support the company are designing fashion on their own so that it can be marketed through the brand. Crowdfunding helps to validate the idea. It’s working because OutOfX expects to have turnover levels reach $10 million by 2016. Revenue shares come from 12% of the purchasing price.
We can learn a lot from the world of fashion crowdfunding. It pays to be creative. There are great ideas that come from backers today. Instead of massive surplus amounts from bulk manufacturing, limited runs can give people the custom looks they really want. In the end, the question is about value. This is how the fashion industry has created its value. How will you create value?
Strong proponent of individual liberty and free speech. My goal is to present information that expands our awareness of crucial issues and exposes the manufactured illusion of freedom that we are sold in America. Question everything because nothing is what it seems.