Are you in the clothing industry or are you willing to initiate your business in the same? Or is your relative working in the clothing industry? Today,we will discuss about the business model in the clothing sector Or if we want to start up in the clothing industry,how do we need to prepare and set up our business model We are going to start with a new segment of videos,where I will discuss about the business models in different industries and how to grow in such sectors. I will also discuss about the weakness and problems that can come up in such businesses. ,How much finance is required to be raised. And every other thing needed to grow your business Today,we’ll talk about the clothing industry,but for our next video,please do let me know in the comment section about what business sector I should talk on. Keeping in mind,that we don’t have massive funds,we need to remember,we can’t set up factories for production So,the first step is to outsource In order to decide what type of clothes do we need to outsource We need to understand how things work in our country Quality and price are two important factors we need to keep in mind,in our country. If you raise your prices,you should also level up your quality. This ensures the value of the product In case you raise your prices and don’t work on your quality,then there is a chance your brand might fail Try anything and everything to lower your prices and raise your quality This is the simple trick If you are able to achieve this,then you can easily become the king of any B2C business. So,we have to provide the best available product at the most affordable price.It is only sensible to enter this industry only if you can make things work this way. So,first start researching the market for suppliers of the inputs(in case of this coat i need around 7 pieces,so i need to find the supplier for each piece) and analyse their prices and find the cheapest. Allot work to them separately and ask them to make high quality material for you. And then give all this material to a person,who will assemble everything together This is known as Outsourcing If you have enough relations and can find suppliers willing to supply at low prices,only then it viable to enter this industry. The next step is Marketing which is my forte/speciality. In marketing,I emphasise a lot on Digital Market and now you’ll know why If you want to raise your brand name and value You have to advertise on T.V.,hoardings,etc. but In our country,the commercial way of advertising is to print pamphlets,and distribute them through newspaper Just because it is cheap irrespective of how productive it is or not But,if you are willing to pay Rs.1.20(approx.) per pamphlet,then you should prefer choosing social media(which is better for clothes advertisements) wherein you have to pay Rs.0.20/30 per person to advertise Moreover,the audience on Instagram and Facebook likes clothes and hence they are more likely to see and purchase it. Comparing the pamphlet advertisement to a Facebook ad,the conversion will be more going digital To become a good and known brand,it is important to do marketing,and if we don’t have enough money for the same,then digital marketing is the most viable option. The first step is to register on as many e-commerce stores(Amazon,Flipkart,etc.) as possible And ensure our product is available there Alongside we’ll create our website.Initally,we’ll create a branding type of website wherein we’ll list information about our company and all its whereabouts. And it should be a pretty exclusive and decent looking website,so that it puts an premium impression(like Louis Vuitton and Louis Phillipe) and not a inferior impression. Assuming he likes the ad or the product you displayed He’ll go and search your product,let say ,he searched on Amazon And before purchasing it,he did a little brand research While researching,he/she visits your website and if the user interface and website appears decent He’ll think of the brand as big and valuable,otherwise not. If we talk about all the big and premium stores,they spend a lot on their ambience To make it as good looking and decorative as possible In the online world,decoration means designing and decorating your own website So.we’ll create our website and work on branding in the initial stages And when our brand and product gets known among masses,then we’ll sell products on our website as well alongside on Amazon We will discuss how to do this,later in the video In Facebook,there is a feature called Retargeting Retargeting means targeting those people again who viewed our website once or interacted with our ads previously. This means only the people who are interested are targeted and showed our ads again After seeing the ad,assume maybe he liked the clothes After that he sees the website Lets say the product was a coat.Now,coat is an expensive item We don’t instantly make purchasing decisions here. We have to run behind the customer in such cases The more expensive a product becomes,the more difficult it becomes to sell. Let say,you went to a shop,and saw a appealing chew gum worth Rs.1 ,you will instantly buy it Because it looks good and you like chewing gums But if you went to a store,and saw a attractive dress worth Rs.20,000 Now,there will be only a small number of people who’ll instantly buy it Before purchasing,they’ll think of why they want the dress,how and when they’ll use the dress,how often they’ll use it And then they purchase it So we need to understand human psychology And so,we’ll retarget the customer and show him/her the ads again and again Now,let us talking about choosing our distributors In this modern era,I am against the idea of distributors Distributors were good in the era where your product was less visible to people Earlier,they used to allot distributors for Delhi,U.P,etc And assigned them to work and make customers in their own areas This helped in scaling different areas easily But in recent years,due to social media/digital marketing,it is very easy to reach to customers anywhere around the globe So,according to me,it is meaningless to give a margin to your distributors I can be wrong but I think it is irrelevant to give this margin when I am able to reach to the customers alone. If I have a high margin,then I can spend on distributors So,to work at low costs,according to me ,spending on distributors is not viable Now,what we have to do is,take our product to some specific market(for eg:Chandni Chowk) And display our stock in some of the popular stores In the initial stages,these retailers will keep your stock on rental basis And say,if your product sells,we’ll give the revenue to you Or give you your money after 20-30 days So,initially,you have to work like this. So,now you’ve invested and made your goods available in the market So,anyone visiting Chandi Chowk or its nearby places. We’ll trigger our ad to that person on Facebook If a person interested in shopping is in Chandni Chowk or around and uses Facebook,,he’ll see this ad Let us,there are two brands:Rupa and Rupali And for example, the name of our brand is Rupali This is just an example and we should not give our brands names like these So,we started advertising our brand Rupali to people Now,somewhere in his mind,he knows about the brand and its name,Rupali He knows that Rupali is not a very famous brand but atleast he has heard of it somewhere He doesn’t remember whether he saw this brand’s advertisement on Facebook but atleast he knows that he has heard it somewhere And then if he goes to purchase some cloth,and sees the brand Rupali,he is more likely to purchase it because he has heard of it more often than the other brands So,the chances of conversion increases The motive of the marketer is to position his brand in the mind of the target customers and increase the chances of conversion. Here,you have to ask for a small favour from the retailer’s side,to share the contacts and database of all their high potential clients Now,this is what happens.If let say someone is shopping for a saree or any wedding related item For now,I am assuming he is willing to buy high valued clothes Anyone shopping for wedding clothes or items,prefers researching first Now,we know that they have a wedding and we also have their database. Now,we’ll advertise and market our product to them vigorously So much that our brand name gets inserted in their heads so that they will only purchase our products Even if they search about the brand on Google,they’ll find our website and get convinced after seeing it,that our brand is trustworthy and deals in a certain line of clothes,is in the market for a certain no. of years or Or if we are a new brand then they’ll see that we work on making high quality products And show some of our product portfolio Our website should leave a good brand impression on the viewers And we also have to show our retailers that,our brand is new in the market and can compete with the top existing brands in the market By comparing it to the top brands,etc. and tell them how to pitch their products to the customers so that they can be easily convinced. After inserting this thought in their mind,when they see our website,it’ll become more evident to them that our product is good. And even the prices are low and quality is good,so why wont they buy your product? Our costs include premises charges,that is,a small shop anywhere at a low cost with sufficient space for me or an employee to sit. Three employees max including you will be sufficient enough and the other person should be a good sales employee So,lets take Rs.15,000 for rent and 30,000 for the sales employee max(saying that sales employee is very experienced) So,in order to sell your stock to the retailer,salesmenship is essential and here digital marketing is of no use. So,we should hire a salesman who is able to deal with the retailer easily. Or maybe he can deal with him in cash other than rental basis A digital marketing agency who runs your ads, and handle your social media marketing,would take around 30,000 And let us hypothetically take Rs.15,000 for other expenses and 5lakhs,maximum, for the material we purchased. I am taking the max amounts so that even if the conversions aren’t that great,we won’t suffer a loss The overall cost is an estimated 5.9lakhs Now,we have to keep our selling price,40% above our landing cost(all costs included) If the landing cost of our product is 100,then we have to set our selling price at Rs.140 You can set your MRP higher(even at Rs.160),that is upto you. So,basically we’ll sell it at Rs.140 and we’ll give a margin of 20% to our retailers and the other 20%,we’ll keep it with ourselves as profit. So,we’ll earn a estimate profit of 20% of 5.9lakhs,which is 1.18lakhs So,1.18lakhs will be our profit from this consignment Now,as soon as we get 1.18lakhs profit,we have to reinvest that profit in our business And continue to grow our business We have to boostrap.I made a video about boostraping,do check it out We can take minor costs out of it but it is important to reinvest this profit in the business If you spend around 7-8lakhs on digital marketing,then the reach will be 5X,that is,35lakhs people And those 35lakhs people are the targeted customers,if you want to display your ad in Sarojini Nagar,then you can display it in Sarojini Nagar If you want to display the ad only to the female group,then you can display it only to the females. This is the power of digital marketing In this series,I’ll mainly focus on how to grow and strengthen our business,although according to me,doing business has become relatively easier now I used to listen to the age old saying ‘Money does not grow on trees’ but actually Money does grow on trees if you work with the right knowledge and method. Here,I only talked about the retail sale we made,but let say,we also made good revenue from Amazon So,we’ll earn revenue from both offline and online. If I am doing social media marketing,then there are more chances it’ll be sold online but if it is a high end product,then it’ll be sold more through retail If I am selling a saree worth Rs.40,000/50,000,then it’ll be more likely sold offline through branding But if I want to sell it online,then the value of product should be low If I am selling T-Shirts worth around Rs.500 and jeans worth around Rs.700-800,then I can target e-commerce platforms like Amazon In social media marketing,I created a hype about the brand and informed people about how good the product is. Then after knowing about our brand,they will then check our product on Amazon and see the reviews,and ultimately purchase our product. I will post a detailed series on Amazon in the upcoming weeks(will take around 2-3weeks) I will post continuous videos of that series I will start shooting soon and will shoot all the videos once and then start posting it continously. Once we get enough sales from Amazon and Flipkart,we have to make our websites as a e-commerce platform as well When we send our products through delivery from Amazon,we can insert a Rs.500 discount voucher,which can only be redeemed if you make a purchase through our website Now after purchasing our product,we gained his trust and now we have tied him to our website through the discount voucher as well By using Amazon,we tied him with our website and now we are selling our products through our website If we initally display products on our website,it is difficult to gain the trust of customers as no one is willing to spend his money on a untrusted platform On Amazon,they won’t hesitate and purchase it.So,I am asking you to display and sell your products on Amazon first I thought this would be a 5-6 minutes video,but it became a bit long Hope you liked the video.Please like,comment,share and subscribe.Do share this video with anyone working or starting up in the cloth industry Do comment and tell me what next industry I should talk about This was a small experiment from my side that whether I could make this series work or not I’ll try to make around 10 videos in this series Thank you and Bye!