When Angela Gahng launched her contemporary womenswear brand Almina Concept in August 2017, she focused on making high quality, must-have pieces at a reasonable price. Wanting to be a step beyond fast fashion companies like Zara and H&M, but more accessible than some of the contemporary high-end brands, she figured the only way that could happen was to be exclusively DTC.
“When I started, I really thought about the consumer directly [meant customers] should only shop on my website, ”said Gahng. “At first I thought I could just bring all of the audience to my site on my own, but as a new brand, it’s definitely difficult.”
About half a year ago, Gahng said she realized that strict adherence to DTC while trying to build a fan base and increase brand awareness didn’t result in much sales or rapid growth.
With direct-to-consumer brands struggling to set up their own businesses, often due to the skyrocketing cost of customer acquisition, many are turning to retail partners to leverage their reach. However, it can be difficult for small DTC businesses to navigate wholesale as retailers typically want a specific range of products or styles and many expect young businesses to scale up quickly. With drop shipping, a young brand can worry less about wholesale partners placing large seasonal orders for certain pieces of a collection and instead simply fulfill orders immediately.
For many of these reasons, Ghang said she didn’t want to go wholesale and found the next best thing: the drop shipping model. In May, W Concept – a marketplace for independent designers worldwide – reached out to Almina Concept after seeing the brand on Instagram. W Concept asked if the company might be interested in working with them, not so much through wholesale partnerships as through dropship orders.
With this model, the retailer, whether it is a Nordstrom or a REI, can avoid holding unsold inventory while expanding product choices for customers. Instead, the brands sold are used to hold inventory and ship the product when an order is fulfilled. So when someone buys a silk jacket or oversized blazer from Almina Concept through W Concept, Almina Concept fills out the order and ships it.
For the small brands participating in this model, there are many moving parts to consider, especially when it comes to predicting how many specific products to make, said Jim Barnes, CEO of enVista.
“It doesn’t matter what the product is – the first thing a company thinks of is the demand forecast. Do I have enough clothes and have I produced enough to meet these agreements? “Said Barnes. “In an indirect market like a Nordstrom, [a brand’s] The ranking is much higher when it is not sold out. “
Forecasts were something Gahng said were difficult to navigate at first.
“We were suddenly getting all these sales for a single product, so I had to call our factories quickly [in Seoul, Korea] Reorder products, ”she said. “We initially had small delays trying to get the product to customers, but not really big problems.”
So far, the Almina Concept model has helped expand its audience in the early days without relying too much on expensive customer acquisition channels like Facebook and Instagram, Ghang said. The company declined to share size or growth last year, but said that partnership resulted in a sharp increase in sales.
Almina Concept also works in the lobby, with which customers can discover new brands in a test model before buying, also via drop shipping. In February, Almina Concept will open a small space in the multi-brand retailer Re: store in San Francisco.
“In the beginning you are so small that you can only do so much and so many people that you can reach. They really need help from companies that have built their reputation and brand and have a much wider audience, ”she said.
As part of the contract with W Concept, the marketplace will do marketing to promote Almina Concept, including in email newsletters to customers and on the homepage when a sale of Almina Concept takes place. While W Concept receives a portion of all sales from the brand, Gahng declined to provide details.
Gahng estimates that W Concept has an audience of between 5 and 8 million customers and 91,100 followers on Instagram.