Expected to become a $95.14 billion dollar industry by 2025, the sneaker industry has boomed quite fast over the past decade.
Also, with the growing popularity of sneaker culture, the fact cannot be denied that athletic footwear was indeed the largest revenue generator in the shoe industry in 2019. Statistical reports show that the athletic footwear had a 95% increase in revenue compared to textile, leather, and other shoes in 2019.
The fact that it’s putting huge money in sellers and resellers pockets, many brands are adapting to the new trend and several emerging sellers are getting into the game.
Indicative of huge potential in the shoe industry, sneakers are the hot-selling products around the world. Therefore, many retailers are picking up the new trend.
Realistically speaking, whether you plan to sell locally or internationally, starting a shoe company can initially cost you a fortune.
If you wish to start your shoe company, you must walk through this article with a bunch of considerations to reflect upon before beginning:
How to Start a Shoe Store or Company?
Now that you have your perfect business idea, there’s a lot more to consider before final execution. It’s actually a lot more than registering with the state and buying a couple of insurances.
Step 1: Develop a Solid Plan for Your Business:
A great plan is based on great analysis. With planning, you can chart out and visualize the nitty-gritty of your new business venture. Here’s what you should consider:
- Costs of Opening a New Shoe Store:
The costs of new shoe stores are hefty. As much as the profits are when the business is in full bloom. The initial franchising fees can be roughly up to $15,000. The marketing and branding costs would be $5,000 before your brand comes into existence. Your initial inventory can cost you about $60,000.
All in all, a simple shoe store’s costs can turn out to be with all the professional fees, licensing, and utility bills involved.
Of course, The cost also different for different country so you can do some research in your country first. Now also more and more peoples choose to build their online brands of sneakers and shoes too.
- Costs of Running a Shoe Store:
The upfront rent and utility bills each month would be around $2,500. Also, you’d need to pay about $10 to $15 per hour to your employees. Alongside the day-to-day costs, there can be IT costs, marketing costs, and much more to establish and sustain your business during the initial set up.
- Identify Your Target Customers:
The assets of your shoe store are return customers with the love for athletic and sports shoes. Because shoes, especially sneakers, are one-time investments; therefore, each impression counts.
Also, figure out who are most repeat customers: punk rockers? Business executives? Young athletes? High school kids? It will help you design better and set reasonable prices for the buyers.
To retain customers, its best to offer several discounts without losing sight of your basic manufacturing costs.
- The Average Profit Margin for a Single Pair of Sneakers:
Sneakers are costly investments because the manufacturing process is quite expensive. Therefore, with booming sneaker industry growth, you can earn quite a heavy profit margin in exchange for exceptional quality.
- Identify Your Selling Market:
Before you open your sneaker company, you should consider your target market—whether it’s local, national or international.
Also, consider where the shoes will be manufactured. Because high quality athletic shoes are manufactured in Asia, while high-quality leather shoes are manufactured in Europe.
- The Name of Your Sneaker Brand:
Based on target audience, your brand’s name should be catchy and relatable. After registering your company and getting the license, check out the names available online for your online and offline business. Keep the name simple and easy to remember for the customers.
For developing a solid business plan, these 6 considerations should be interlinked to determine how much investment it would take for your startup.
Step 2: Create Exclusive Designs to Brand Your Company:
If you want your sneakers to sell, you would have to take a chance with unique designs for sneakers. Communicate with wholesale shoe manufacturers to send you samples for initial review of your desired products. Share the design with people around you and on social media for reviews.
You can hire a designer to help you come up with catchy and trending designs and styles for your sneakers. However, it can cost you up to $5,000 dollars or even more.
However, amidst the designing loop, don’t forget the fact that customers value comfort as much as the uniqueness of designs.
Step 3: Figure Out Who Will Be the Ideal Wholesale Shoe Manufacturers:
Depending upon your market research, you can choose the ideal wholesale shoe manufacturers for your shoe company. After Comparing the MOQ, quality delivered, and production costs, you can figure what fits well for your small, medium, or large scale business.
Generally, China shoe manufacturers are ruling the world. Even Nike and Adidas have outsourced the production to shoe factories in China where labor is cheap. Thus, you can also look up to Chinese wholesale manufacturers for wholesale production at best and affordable prices.
We, Marcusius, are China’s wholesale shoe manufacturers. Check out our product range and contact us to help you set up your new shoe company.
Step 4: Calculate the Production Cost for First Batch of Shoes:
The billion dollar sneaker industry has no cheap production costs either. In simpler words, a basic sneaker pair can cost around $30, and considering the wholesale minimum order quantity, which is, generally 200, it would be $6000 for one shoe style.
Considering the fact that you would order shoes by container having around 6000 pairs, you can imagine the cost for your initial set up. Not to forget the shipping costs, the initial investment is going to be huge.
Another neglected aspect by new entrepreneurs is the production costs incurred by extra styling of shoes. For example, a fancy sneaker with molded parts or embossed lettering can be even more costly per each pair.
Step 5: Find Out How to Market Your Sneaker Company and Earn Profit:
Investing huge bucks in manufacturing shoes, renting a place, and setting up the whole business without any customers is not a fair deal. You need to have planned a path to brand and market your business before the final purchase. Some companies take up pre-production orders from customers before the final manufacturing process to get the ball rolling.
Also, research the popular brands and find out how they market their shoes. What designs are the hot sellers? How can you make it available at affordable rates? Figure out which designs are selling more than others? All these considerations will help you make better decisions about future shoe stocks.
Once the setup starts functioning, you should opt for online shoe store for availability at national or international level. Plus, having great customer service can help you gain returning customers and huge profits. Therefore, prioritise the customer service. If possible, make the shipping affordable to attract more customers.
Step 6: Evaluate the Risks Involved:
Starting a shoe company all alone is not a wise choice. Rather it’s a team effort with stakeholder involved at every step. Because shoe business involves production at bulk quantity. In other words, you cannot display a shoe design in one or two size choices in your shop. Rather you’d need to invest in 12 shoe sizes for a single shoe design. Quite a daunting risk!
Therefore, planning out the business costs and income is crucial initially. You need to know from where the costs would be managed until your brand turns into a recognized ‘name’ in the national or international market.
To sum it up, there is no business without risk. But, considering the booming sneaker industry, the risky business has billions of dollars to drop into your pocket.