Limited Edition: a winning business model for fledgling fashion brands

Looking for a way to convert new fans to your brand and make more money at the same time? A limited edition sales strategy could be just what you need! Limited editions can be very effective for clothing startups, but they have to be tackled in the right way. It takes months of planning, careful market research and hard work to get right.

This week, we’ll explain why even the smallest bootstrapped fashion brand should have a plan for selling limited editions online. We’ll show you what a drop strategy can do for your business and what the limitations are. We’ll also share some practical tips on how to get your own product drops up and running. 

Limited Edition As A Business Tool: The Product Drop

When we hear ‘limited edition’, most of us think of something that is precious, special and scarce. This perception of rarity is what underpins its success as a selling strategy. 

The phrase ‘limited edition’ has been around since Victorian times. While the phrase is still well-known today, the industry term you’re more likely to hear nowadays is ‘drop’, or ‘product drop’. Product drops are lightning-fast flash sales of one specific limited-edition product, usually conducted online and promoted over social media. The goal of a ‘drop’ is to create a perception of exclusivity and immediacy around a garment. In essence, you’re compelling fans to ‘buy it quick’ and ‘buy it now’. 

Product drops are getting more and more popular, especially for cult ‘collector’ brands. 

Tips For A Successful Fashion Drop

It’s by no means an easy task to run a profitable, sell-out limited edition campaign. You need to time your drop carefully, pick the right product and promote the whole campaign effectively. Here are our best-practice tips for successful product drops…

• Own your audience. Before launching your limited-edition range, you need at least a few pre-existing fans that you can talk to. Make sure that you have a strong following on social media and a proven list of email subscribers. You should be able to guess, with a high degree of confidence, whether your drop will sell out. The simplest way to work this out is to take your database list size and divide it by your normal conversion rate for a quick sales estimate. 
• Be ready to impress. If you’re going to launch a product drop, clear your schedule so that you can serve customers quickly. If your drop goes viral, you’ll need all hands on deck to pack and ship orders that day. And if you’ve booked a holiday, then delay your product drop! Make sure you can handle deliveries and get it done. 
• Only drop on-brand goods. Your limited edition products should embody the ‘soul’ of your brand. Nobody should hit your website, look at your limited edition and think ‘why would I want that?’ or ‘what has this product got to do with this brand?’. Be brave and different, by all means. Just make sure that your limited edition product ties in with the inherent ‘promise’ of your brand. 
• Build up to it. Set a date for your drop, then get people excited about it ahead of time. Use social media and email to give your fans a ‘teaser’ to the product drop ahead of time. Alert your fans the week before, the day before or even the hour before goods hit the digital shelves. When your drop goes live, you should know that buyers are already out there, ready to place orders.
• Use it as a subscription tool. How many  times have you looked at a website, seen the ‘sign up for our newsletter’ box and completely ignored it? Email marketing can deliver conversion rates as high as 10% in some retail markets … but most of your site visitors won’t subscribe to your email list unless they have a very strong reason to do so. If you can promise a fan of your brand that, when they subscribe, they’ll get early warning of upcoming product drops, then that’s a great reason to hand over an email address.  

Case Study: Supreme Clothing

One clothing brand that has built its entire business model around the limited edition concept is Supreme Clothing. This exclusive skater fashion business has a very limited number of retail stores in major cities like London and New York. They release mini-collections of stock, on a very limited run, and allow the stock to completely sell out. Once their stock sells out, they simply close the doors on the shop and walk away until the next product drop. 

Supreme has taken this business model online in recent years. Every Thursday at 11AM, a brand new mini-collection goes on sale on their website. They often sell out in a matter of hours. It’s worth following their Instagram profile, just to get a sense of how they run these drops so successfully:

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A post shared by Supreme (@supremenewyork)

Problems With Limited Editions

It’s not all good news. Limited Editions are a powerful selling tool, but there are problems that you need to be aware of up-front.

First off, limited-edition dropping is not a very efficient way to run your business. Most of us expect to design a garment and then sell as many copies of that garment as we can. The plan is always to keep selling until you’ve ‘used up’ your buyer demand for that item. With Limited Editions, however, you’re always going to be leaving a lot of untapped consumer demand on the table. 

Another common issue is how much money you make per-item, compared to what those items are eventually worth on the ‘open market’. It’s not uncommon for a well-known Limited Edition brand like Supreme Clothing to sell a garment at £100 and find it reselling online, hours later, for £600 or more. If the thought of ‘missing out’ on extra income like this turns your stomach, then maybe limited editions aren’t for you!

Second, a limited edition isn’t going to magically transform your brand into something it’s not. You’re selling to an established fan base: people who already like what you do and what your brand is about. You need to cater to this fan base, regardless of your own personal ambitions as a designer. For instance, you might have a reputation for delivering durable, good-value workwear for men. A limited-edition toolbox or baseball cap might work well for you here … just don’t expect to ship 100 limited-edition luxury ball gowns to the same audience. 

Third, limited editions only ‘look good’ when they sell out. Part of the implied contract you make with your fans with a product drop is that the garments you’re selling are truly rare. If you charge someone a premium for a limited-edition design and — months later — that customer sees the same item still listed on your site, they’re going to feel cheated. You have to be confident in your demand levels and you need to know that your drop really will sell out. 

In summary…

Overall, limited edition product drops are a great way to boost revenue and grow a business. Limited Edition is not a passing fad — it’s a legitimate sales technique that has been used for more than one hundred years. Very few marketing strategies can claim to have worked for more than a century. Fewer still can deliver an overnight bump in revenues. Our advice is to give it a go. Spend a few hours thinking about how you might launch your own limited edition drop. And let us know how you get on!

Thanks for reading!

Pete

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