Can I start a shoe company?
So, you ask yourself, “Can I start a shoe company?” Your next question should be “How do I start a shoe company?” What does it take to start a shoe brand? When we say, “start a shoe company,” we really mean a company that designs, markets, sources, and imports shoes. Not a factory that just makes shoes.
We think of Nike and Adidas as shoe companies but they don’t actually own the shoemaking equipment. Of the major athletic shoe companies, only New Balance owns its own shoe factories. In the case of New Balance, they also import some shoes from China and they import many shoe components from overseas.
Okay, what do you really need to get started with your shoe company?
How to create your own shoe design?
You will need something special, unique, and original to catch peoples attention. Billions of shoes get made, what makes yours better than the rest?
Do you have designs or do you need to hire a designer to make one? You will also need clean shoe renderings that communicate your ideas to the factory, don’t be afraid to hire this out.
The shoe world has many designers for hire that can really bring your ideas to life, but without great designs, your new shoe company won’t go anywhere. Once you find a quality designer and plan out some great shoes, make sure to stand back and think about your brand. Does this shoe fit your brand and accomplish what you sought after when starting the design?
Sales and distribution plan for your new shoe brand:
Making shoes is not the hardest part, finding customers for your shoes is! You need to have this figured out BEFORE you place a purchase order with the factory. The big shoe brands actually have orders in their hands for shoes before they produce the new models.
What is your intended selling market for your shoes?
Before you start a shoe company you need to know where the shoes are going and where the shoes will come from. Figuring this out may depend on the style of shoe or your marketing plan. Asia or Europe? Athletic shoes are almost always made in Asia. Leather shoes can be made in Asia, but high-end leather or “brown” shoes are made in Europe.
Who are your target customers?
Figure out who the end-users are for your shoes. Business executives? Punk rockers with tattoos? High school kids? Knowing your customer will let you set the price, look, and materials for your new shoe. What kind of shoe do you want to make? Casual, performance, fashion, or maybe something completely new!
Does your shoe brand have a name?
Based on your target customer it’s time to select a name for your shoe company. You will need to set up your shoe company by contacting your city hall to register your “DBA” or Doing Business As, which states the name of your company. Register your shoe company, get a vendors license, and a tax ID number. Don’t forget to check if your names are available on the web. If you can’t get a good website domain name that is close to your new shoes company’s name your customer may have a hard time finding you on the web! Remember, the shoe company name does not have to be the brand name. Many companies own several brands.
Research and more research on the footwear market:
Visit your target retailers and search online for the types of shoes your future competitors are selling and the prices they charge. Study the designs, logos, materials, and any features these shoes have. Ask yourself , “what will make my shoe brand unique?”
If you can’t answer this question, STOP. There are thousands of shoe companies, the world does not need another copycat brand!
Finding a footwear sourcing agent or shoe factory may be difficult. Search the web or ask me! There are many firms that can help you get started. Visit the major shoe trade shows. There is always an area set up with factories that are looking for new customers. The website http://www.alibaba.com/ can be a gold mine for finding factories.
Do you have any starting capital for your new footwear company?
Depending on what kind of shoes you plan to make, you are going to need a good bit of money to start. For the new brand getting started, you should expect to pay a minimum of 50% of the shoe price when you place your orders and 50% when the orders ship. Not to mention the tooling and development costs.
How much money will you need to get started on the first production order of shoes?
Do you need to hire a designer? This can cost $2,000 to $5,000 USD depending on the Scope of your Project. $4000 at least for travel to Asia or Europe also needs to be factored in, and that’s only one trip! A basic shoe can cost nearly $20.00 per pair (shipping and import duty included). Minimum Order Quantity (MOQ) per one model/colorway is around 500 pairs. $20.00 x 500 = $10,000 for just one style/color, and should you order shoes by the container, it’s most efficient to fill one container at 6,000 pairs! This is without even thinking about the prices for lasts and tooling.
You can see it adds up fast! So, yes, you can start your own shoe brand, but don’t expect to do it by yourself. You are going to need lots of help! It’s a full-time job.
How much does the shoe development and pre-production phase cost?
The answer depends on the style of shoe you want to make. Leather wingtips with a leather bottom require very little tooling. A fancy high tech basketball shoe with molded parts may be $10,000 per each size of outsole, midsole, welding, and emboss tooling. Then multiply that number by 12 sizes. Big bucks! Before you start a shoe company you need to think about where the money will come from.
Keep in mind that shoe factories need volume to make money. Small orders just can’t cover the time and expense of development. The development process for a 500 pair order is the same as for a 25,000 pair order.
Order minimums are based on the material minimums. Minimum order quantity (MOQ) for a material like suede leather may be 1000 sq feet. This is enough leather to make about 500 pairs.
How many pairs of shoes are made each day?
For each new shoe, many workers need to be trained on how to make it. A 500 pair order is finished within a day of work for a stitching line. For a basic sneaker, a smoothly running line can make 1500 to 2000 pairs a day. Those 500 pairs you spent a long time designing and ordering will be made before lunch. A big factory will agree to make small orders for an important customer. I’ve worked for companies that produce 5 million pairs a year, so if we asked the factory to make a small order they would do it as a service, but generally, they seek to avoid small orders.
Now, some factories will make small orders. They have smaller operations but will charge more. Materials will have to be bought from the local market and tooling will have to be “open” molds – you won’t have a great selection.
How much do shoe development samples cost?
For a shoe factory, every new customer has a chance to be the next Nike or the next flop. The factory sales manager has the task to figure out which you will be. Is your company new, or an existing company that already sells shoes or clothing? An established shoe brand will have no trouble getting samples made for free. The pattern development could be free, but tooling will always be billed. A sample tool could cost $1500 for a rubber sole to $5000 for a rubber and EVA midsole. A newcomer may need to buy samples. Again, each factory has a different policy. You could expect to pay 200% of the real FOB price plus all shipping charges for a sample. So if a basic shoe is $15 the sample would be $30, shipping could be another $50.