Crowdfunding is changing the world of fashion as it allows start-ups to collect small contributions from a large group of people in exchange for products, gratitude or equity.
The fashion industry is so competitive for budding designers who want to break into the industry making it almost impossible for start-ups to gain financial aid which is why Crowdfunding was created. This new initiative has given fashion designers the once in a lifetime opportunity to showcase their master designs and receive funding.
Entrepreneurs use their networks of family, friends and acquaintances to spread the word about their fashion ventures, as well as using websites like Kickstarter and Indiegogo, which are platforms that allow start-ups to reach very large audiences of donors.
One of the advantages of using crowdfunding platforms is that it allows freelance designers to gain a huge customer base even if they do not have any connections in the industry. This has had a huge impact especially on the creation of various t-shirt designs.
Crowdfunding gives companies the ability to cut their costs
Crowdfunding has changed the fashion industry in a number of significant ways. As well as the emergence of funding given to independent designers, crowdfunding platforms also offer established companies the opportunity to gather feedback from consumers through a voting or liking system. Based on the results, companies can choose to only produce their most popular selling designs.
Buyers are the decision makers
Crowdfunding has also given more flexibility in the fashion industry whereby the power shifts to the buyers and no longer is the responsibility of the designers. A number of designs will be submitted onto crowdfunding websites and interested investors can back the project. If the funding goal is reached, these backers will receive samples of these designs. Therefore, potential buyers have the freedom to choose what they want instead of going to a shop and pick up a generic piece.
Many high street fashion retailers currently choose around 10 styles, and try to estimate the demand for products based on wholesale orders or the past seasons sales performance and then produce thousands of pieces abroad in countries like China and India. These mass-produced pieces are presented to consumers at inflated prices to account for probable markdowns as time and excess supply devalue them.
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