15 ways to increase the profitability of your fashion brand this year

If you keep up with the news, you might think that the curtains are coming down on both fashion brands and the retailers who stock them. The constant barrage of articles about closing retail stores or bankrupt brands, and dare I say it, the consequences of Brexit and the pandemic, are stimulating a high level of negativity.


However, there are success stories, as well as growing businesses in the fashion industry that are working hard to build on their success. The industry is still alive and well, but it is changing. Change is difficult because it disproportionately affects the most established businesses, but it is not always bad for everyone.
One of the many challenges of running a fashion brand of any size is maintaining an overall view of the business while being forced to prioritise pressing responsibilities. It is a disadvantage of working in a fast-paced industry. Entrepreneurs are frequently drawn into whatever the day-to-day pressures are, but every now and then you need to take a step back, look at your business, and start a project that will help you grow or increase profitability.


The initial reaction may be to put pressure on growing the sales volumes, but while this is important, it is not always necessary to increase revenue to significantly increase profits. The typical fashion business has numerous opportunities to increase its gross or net margin. I have outlined some ideas to consider helping you see this. Any branded fashion company can probably take at least one action item from this list to kickstart a project or add a new string to their bow.


I hope it contributes to you and your team’s progress this year. And, of course, if you require additional information, advice, or assistance, you know where to come.

1: Communicate – Return to your existing audience and offer them what they truly desire.

How well do you communicate with your current customers or consumers? Do you only contact your retailers when they need to buy or pay? Do your customers only get notified when the sale begins? Consider who you are dealing with and what might be of interest to them. Any increase in communication frequency should be of interest to them, not to you.


So, if you genuinely want to be valued and top of mind, your messages or phone calls should aim to improve their lives and businesses. Instead of selling in these messages, make sure you are actually being helpful.

Extra Tip: Take communication to a more emotional level.

For a few moments, step away from your brand and consider who is on the other side. What could you find and show them that would be of interest to them? Nothing beats a brand that cares enough to offer advice or include their customers in their way of life.


Are you a swimwear manufacturer? Make a brief series on sun exposure and aftercare.


Do you have an outdoor brand? Create a genuine customer review for a lesser-known hiking destination.


Do you have a cycling brand? Participate by conducting a survey of your customers’ favourite cycling routes and publishing the results in a series of articles.


You can always include an advertisement for the new top at the bottom, but the goal here is to generate interest and a sense of belonging. Participate, write, and share. Of course, you can ensure that all your images feature your product so that the destination or topic is always associated with the lifestyle of your brand.

2: Re-source selected products

Identify good products in your company that are not as successful as they could be due to a relatively high price, or a low margin compared to what the market appears to bear. Those products should be closely examined to determine whether they could benefit from resourcing or redevelopment in order to become more successful and profitable.

3: Develop a new sub-brand

When it comes to your brand identity and collection structures, it is also useful to take a step back and look at the big picture. In many cases, the brand structure makes sense to the people within your company. Does it, on the other hand, make perfect sense to your customers and consumers? Is there anything your brand could realistically add or develop to put you in a better position to attract more new customers in the coming year or so?


Consider going up with a sub-brand in addition to going down in price. For example, you could do something that is a collaboration or limited edition, or even benefits a specific goal or charity that would appeal to your target audience. The goal here is to gain new customers without alienating or cannibalising your existing ones, so consider this strategy carefully.

4: Make your showroom and sales teams digital

It is only natural for buyers to expect convenience and a brand experience throughout their purchasing cycles and beyond. An order pad and a sample may appear to be sufficient, but they will not leave an impression that will keep you at the top of mind when it comes time for re-orders or replenishment.


You can approach the subject in stages. Begin by introducing a B2B ordering system that provides a complete overview of your brand and range, allowing the buyer to conveniently see, place, and top up their orders when it is convenient for them. One way to expand on this is to digitise your showroom or trade show purchasing experience.


Our B2B wholesale partner Colect exemplifies how a salesperson can truly engage the buyer in the process. Screens show key looks before transitioning to selection screens where the buyer can see what their options look like. It is an excellent way to persuade the buyer to bring in complete outfits, key looks, and complementary items.


Having your range, offers, and brand marketing teams ready to engage with your buyers all year is an excellent way to boost your annual wholesale sales.

5: Distribution and Sales in New Markets

When a brand expands into new markets, it is uncommon for them to have the same infrastructure and support as they do in their core or home markets. Too often, the words “we are now in Italy” simply mean that a few Italian retailers purchased a few dozen pieces each at a trade show. Within Italy, the brand is still relatively unknown, and the additional sales would have been more profitable if they had occurred in the home market.


However, if a market has expressed an interest in your product, pay close attention to it.


Finding a partner, distributor, agent, or sales team that honestly believes, desires, and is driven to help you build the brand to its full potential in that market can be a life-changing experience. The key is to put yourself in a position where you can treat that market with the same care and attention you would give your home market, which often means relying on a local partner to act as your eyes and ears.

6: Include something in your product that encourages repeat purchases on your website

What is in the bag, attached to the product, or discovered in the box when a paying consumer walks out the door with your products at one of your stockists or when they receive their parcel from your warehouse that genuinely enhances the customer experience?


What do you find in the pocket of a winter coat if you buy one? A coupon to be redeemed online for a free polar fleece scarf? Would you register to receive your free mini shoe care set if you bought shoes? Is your graphic T-shirt linked to a competition to win festival tickets?


It does not have to be costly, and it can be a non-monetary product, like a 6-month subscription to a lifestyle magazine (that you negotiated for free because their marketing manager would like exposure for their publication).

Extra Tip: Improve the Experience

Retailers love it when a brand does something to help increase foot traffic. A competition in which one or more customers from across the country can win something related to your brand’s lifestyle will also make the retailer look good. This is also an opportunity to negotiate better placement in the window, on the shop floor, or by the counter, and you will find that even the sales staff will remember your joint promotion for a while.


The advantage is enormous. Customers redeem their entry by registering with you directly. For example, you could give away a fantastic prize that appeals to your target lifestyle group, but you could also give ‘losing’ entries a discount voucher to your store or to selected non-sale items from your brand in that specific retail store.


This would encourage people to not only engage/register when they buy, but also to return and redeem their voucher (which you can remind them of as often as you like). Consider this if you need to do specific product development for this (for example, the free item that comes with a paid item if you use a voucher).


To get the free item, the retailer would have to stock the paid item, so you can allocate the marketing expense to the cost of the product while still making a profit on the total in most cases.

7: Boost online sales

Selling directly to the consumer is usually more profitable than selling through retailers and distributors. That does not mean we do not need retailers. They have a distinct level of footfall that cannot be overlooked.


The same is true for distributors; they oversee a region where you would not otherwise make money. The distribution income is profit, and profit is good. Starting a new phase of online sales increases your profit even more because of the lower overheads associated with online fulfilment versus physical direct retail.


So, how can you increase your direct online sales? The principles are like increasing sales in any store; the methods differ.


Attracting attention through spearhead products. What one item could you develop, advertise, or promote that has the right price, message, widespread appeal, and is most likely to generate a click from your potential customer? Could you channel that into a recruitment campaign?


Repeat sales and database building. The people most likely to buy your products are those who have previously purchased and were satisfied with the experience. So, do not forget about your current customers while you are looking for new ones. Take care of them, keep them interested, and give them what they want.


Multiple purchase incentives. If someone is already willing to buy something, could you entice them to buy something else? What is that worth to you? You could increase basket value and net profit by passing the benefit on to customers in some way. You do not have to spend money on advertising for the second product, so you might as well use it to increase in-basket sales.


Gift wrap / shipping / gift with purchase. Would people buy from you more frequently if they knew you gift wrapped for free? What if a gift was included with purchases of a certain amount? What if you could get free shipping if you bought two or more items? Experiment with different approaches to see what works best for your customers. You will soon notice that they will buy from you rather than someone else because of the benefits you provide. So even though free gift-wrapping is common in many European countries, you will find that the many Europeans living in the UK cannot believe they have to go out and buy all the bits to wrap their purchases. Customer service is priceless.


Translation for new markets. Does your website only exist in English? Which market would you approach if you could approach another one? Why? Once you have made your decision, make a concerted effort to provide the same experience in that language and (most importantly) begin approaching that market as if it were your home market.


Pay an influencer to share an offer. Sharing offers is common on many social media platforms. Because of the considerable number of ‘influencers,’ there is a lot of competition, and you can negotiate pretty low prices with mid-level influencers, which can typically get you a lot more targeted views than the same budget on a search engine or social media adverts.


Concentrate on the right customers. If you are advertising, posting, or sharing, you should be extremely selective about who you spend your money or time on. It is easy to assume that everyone between x and y should like your product because you do. Every product, however, has a limited audience, and you are better off focusing your efforts on the sweet spot rather than taking a broad scattergun approach. You should see an increase in conversions and, most likely, a higher spend per purchase.


Write, film, share, and collaborate. A brand must add something. That simple principle is something you should never forget. You are just selling products if you do not add anything more than a pretty label. That is something that any maker can do. However, no one else can be your brand. So, communicate in a way that is appropriate for your target audience. Associate your brand with others who are important to your target audience. Not necessarily well-known celebrities: that would be predictable and even boring. Your brand can have an opinion, beliefs, preferences and can even be a fan of something or someone. Think about the attitude that your brand brings, make sure that everyone in your team understands that persona and use it, consistently, in everything that you create.


Member-only sales on key items – reward your repeat customers. Do things that only your loyal customers will know about. Give them a name that sounds elevated and special (Something like VIP Gold, Royal Circle or Ambassadors). Make it relevant and ensure the benefit is genuine, and they will spread the word and assist you in growing.

8: Create your own marketing channels

What does your target audience care about? What is your lifestyle association? Can you create a channel (blog, vlog, magazine, app) that delves deeper into the topics while remaining completely consistent with your brand?


This would also attract people who are likely to become your customers in the future, and a larger audience can encourage retailers to invest more in your brand, not least because you will have an audience to send to them for launches and other events.

9: Lead with products for specific audiences

What one product could you create that will increase your sales volume? It is time to consider what most of your customers would buy from you if you had it in the right version and price. This does not imply taking a huge risk; rather, the opposite.


You are looking for a reasonably safe bet that you can execute flawlessly at a reasonable price. This single product can be used to entice customers to return to your or your stockists’ stores, preferably because they will replenish it when it runs out.


Not sure what product that is? Ask your retailers (or their store staff) what they would like from you if they could have it.

sales and showroom collaborations fashion brands

10: Sales infrastructure collaborations

Carefully chosen collaborations across joint showrooms, trade shows, and landing pages with other brands can expand your audience, encourage cross-pollination, and increase your exposure and opportunities.


This is a strategically important and significant point. It will take some motivation, meetings, and discussions, but the results will be well worth the effort overall. Which other companies serve the same market segment (though not necessarily in the same retailers) as your brand? Would combining forces on some levels benefit you all?


For example, if one of you has a showroom that could be shared by three or four brands, the cost for each brand would be reduced instantly. As each brand invites customers, the other brands also gain exposure.


The same is true for trade shows. Taking a stand as a group, rather than as an individual brand, gives you more negotiating power, more exposure, and real savings. A larger stand with sections, for example, can use the same bar, transportation, and installation company.


The same principle applies as different brands attract different buyers, but each of these is exposed to all brands to some extent. This provides the participating brands more chances to sell at a modest cost.

11: Your warranty + product registrations = database growth

If you are confident in your products, why not provide a reasonable period of free warranty? Yes, some setup is required, but it provides several significant benefits.


When it comes to trust, you win on the shop floor as a brand that offers a warranty over other brands (a key factor in long term consumer brand confidence). Customers choose to register with you in order to activate their free warranty, giving you the ability to entice them back to the retailer when new product lines arrive. You might even be able to invite them to a future special preview evening with a drink in-store.


A voucher or gift can be used to encourage warranty registration. The resulting entry into your consumer database is valuable because it would have cost you a significant amount of advertising money or effort to find a motivated and spending consumer who has already demonstrated a willingness to buy your products.


Reward them for trying your brand or returning. Make the promise to care for them a reality.


What can you do to be more convenient for them than other brands? Having another 100 or 1000 real consumers in your database is valuable, especially when new product launches and events must be successful, or when you are attempting to gain the trust of potential stockists in areas where you already have a customer base on record.

12: Purposeful retargeting

You may be familiar with the concept of retargeting. Many people use the principle of repeated visibility of your brand and product to a consumer who has recently visited your site. It makes sense, given that 96% of consumers who visit a website for the first time do not buy.


The key is to do retargeting (or remarketing) in a thoughtful, personalised, and helpful manner, rather than simply repeating one generic ad to everyone. A helpful product highlight in one case, a sale banner in another, and a quite different approach if the customer has already purchased the product from your site.


In that case, rather than repeatedly displaying the item they now own, you should complement what the customer already purchased.

13: Implement technology to improve efficiency, transparency, and visibility

Extra profit can sometimes be found in unexpected places. Could your sales team or customer service support, for example, handle orders much more intelligently if they had advanced software and apps?


This may result in a better balance within the order placed and, as a result, a better sell through, as well as a reduction in the hours spent on processing orders by both the salesperson and the back office.


Reduced cost = more profit.


On the other hand, how efficiently do you manage your fashion product development and production? Remember that time is money, and if you want to achieve long-term profitability and make swifter decisions, you should eliminate repetitive tasks and remove any lack of visibility.


For example, how much time do you and your team spend on administrative tasks like spreadsheet maintenance, information searching, creating reports or overviews, assembling information for purchase orders, emailing suppliers to clarify or negotiate, arranging testing and product approvals…?


A typical fashion company is a complex beast, due to the multiplication of tasks times the high number of products. A Cloud based fashion PLM (Product Lifecycle Management) system integrates all product development, approvals, supplier management, pricing, and production processes into a single connected system.


A Cloud based fashion PLM (Product Lifecycle Management) system integrates all product development, approvals, supplier management, pricing, and production processes into a single connected system. That means that a sizeable portion of the time spent on the very manual administration, communication, approval, and follow-up tasks can be reallocated.


This change typically results in a design, development, and production team that can concentrate on creating the best product, informed decision-making (rather than firefighting), and situations that actually require their attention rather than basic administration. As the business evolves, this dramatically increases capacity and usually leads to much better decision-making.


A good system displays the tasks that must be completed and will alert you if something does not meet the expected timelines or approvals. Managing by exception becomes the norm, and both the business and the product benefit, while costly mistakes or unnecessary expenditures on samples of items that do not meet targets are avoided early on.


WFX is our recommended fashion-specific PLM system. It is Cloud based, globally accessible, simple to implement, affordable for most brands, and has a track record of producing excellent results. There are free online system demonstrations as well as some nice videos demonstrating the positive results for brands that have already implemented their processes into the platform.

14: Licensing

If properly implemented, licencing principles are genuinely interesting. You created a brand that has market value and appeal to a specific type of consumer.
What else could that consumer buy from the brand without jeopardising the brand’s core values?


Also, which consumers outside of your core markets would benefit from increased access to your brand if you found a licensee there?


Because of the high profit percentage and modest maintenance costs associated with licencing, even achieving 1 or 2 new deals per year in new categories or receptive countries can help your company’s profits grow in markets and segments you would never have been able to get the most out of yourself.

15: Incorporate long-term thinking into your business

When it comes to sustainability and ethical trading practises, the fashion industry does not have the best reputation. If it is not enough that doing the right thing makes sense, you should consider that word has spread, and actions are expected now.


Many new regulations and consumer reactions will be implemented over the next years, ensuring that fashion companies dramatically reduce their pollution footprint and provide real traceability. The relationship between plastic and polyester is no longer a mystery. Cotton’s extreme water consumption has also started to register with the general public.


Consider what you can do with your packaging, material choices, and transportation methods to reduce your impact or do things in a more responsible way.


The more impactful your actions are, the more you will reduce the impact on your business profits once the regulations take effect. It makes good business sense and makes you, your customers, and your accountant happy.

Extra Tip: Motivate your teams

People are just as valuable as your brand. Consider what you can do to increase your employees’ motivation and loyalty without forcing them to do things they dislike.


Employees who are happy and motivated care about the company in a unique way. You will notice that they are much better at spotting opportunities to save money, care better for customers and sell more. You should see a response if you implement genuine reward systems, such as increasing commissions for a specific period or product line or having a team benefit if certain goals are met.


Just like with your customers, you must ensure that the message or incentive is appropriate for your target audience. What will elicit a response from your audience? A week off for the team with the highest average profit percentage?

To summarise

Why not use this year to add one or more new strings to your bow, which will help you grow and protect your future profits? There are always things you can do to advance your brand, team, and structure.


Choose one or two ideas from the list that will help you get started, enlist the help of others, and set realistic but ambitious or exciting goals for each. Brands are important, but so is retail. Just because we are in a changing environment does not mean we cannot succeed.


With hindsight, we can all say what Blockbuster should have done when the movie-on-demand market changed. That now applies to us, and we cannot do it in retrospect.


We must stay ahead of the competition. The opportunities for the more progressive in the market are still greater than most people realise.


Be the brand that keeps moving forward and stays relevant to a very appreciated group of customers.