Fashion Business: Private Label
When I entered the fashion accessories design industry in 2010, no one I knew was talking about the current realities of working in the fashion accessories industry; the things you can only glean from work experience. My 'Fashion Business' blog posts aim to change that by identifying the information I wish I had learned in college and demystifying some of the industry mores.
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"Private Label" is a term used when a company has a brand license to develop handbags under a brand's name, but most customers at retail may still think the product is being designed by that brand in house. In the business world, this is a low risk position for the licensor that allows the licensor to collect a royalty from the licensee for using their brand name & credibility. All the product development, logistics, and inventory is handled by the licensee. However, this creates a challenging position for the design team involved because licensor's often want to be actively involved: approving designs, materials, enforcing brand standards, etc... Meanwhile designers, employed by the licensee, need to make sure they are hitting target price points to meet the company's bottom line.
Many private label companies start out as sales offices with vendor contacts. These can be sales teams or individuals which represent a vendor or private company and serve as a middleman for clients looking to launch their own product lines. They often provide mass market products at very low wholesale prices (but can also be found at the casual luxury level too). Bag constructions and materials are down and dirty; budgets are very tight. Sales offices, from what I can tell, make their money giving clients what they want. As a client, you meet and tell them what you need and at what price. If they have a showroom space, they may sit with the you and show you other items they had made in a similar shape/material/price point. The sales people might work directly with vendors and shoot them images of bags that look like what you want and ask them to make something similar for a target price. Samples come in, client approves them, and places an order. Voila! If you have brand equity, but don't know anything about developing product, licensing your name to a third party can be the way to go for you.
However, sampling can become expensive, especially, if you need a few rounds to get it right. Designers are often contracted to create sketch presentations CADs of potential designs, which can be sent to the client for approval before sampling, limiting sampling costs. Working with a designer can also help a client visualize what their bags might look like in different material and color combinations. Some clients need more help than others figuring out what it is they want their bag programs to look like, and a beautiful sketch presentations can help secure a salesman's bid.
Sales offices often grow to be the licensees described above and that is when design departments are born. They may grow to represent several labels in various product categories. This can be very good for the private label owner, but disastrous for designers if the business structures are not in place to safeguard the design team. In my experience, there is a terrible misunderstanding rampant among business minded folks that creatives are jack of all trades, so I often see designers photographing samples for a showroom catalogue and designing the catalogue layouts, for example. This is really a graphic designers job and a photographers job.
It is true that by nature, a designer is a kind of creative engineer, and often posses the skills to do many 'creative' functions. Yet, in the same way a CFO could, in theory, do the work of say, an accountant, they are not asked to because each persons has their own function to perform. This is similar for creatives. Each discipline has its own work and asking a designer to take on more, especially for long periods of time, can lead to burn out, because it is the same as asking them to take on several job functions at once. Of course young companies always have budget challenges in the early years, but I think it wise for a burgeoning private label accessories company to spend their money early on hiring a good photographer, graphic designer, and product designer.
