Featured Listing: Luxury Clothing Brand

About the business

Tell us a little about yourself. What’s your background? How did you start the business?

I’m a 22 years old entrepreneur living in Italy.

In the past years, I spent most of my time building my future. I started selling products with dropshipping, because of low budget, and suddenly invested my profits in Flames (my very first brand) ordering clothes stock and selling it through Instagram stories. Every profit of the first year was invested in e-commerce knowledge from the top mentors and that allowed me to achieve better goals from my brand, making it more solid and stable day after day.

As an eCommerce business, where are your products made?

As a luxury brand, my products are mainly manufactured in Europe and Asia.

What can you tell us about your Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC)

Since this business mainly makes money on returning customers, it is clear that the CLV is very high. It’s a community-based business and people need to fill their closets regularly. I personally had customers spending 1500-2000$/month for 5 months. The CAC may vary depending on the period of the year, obviously always lower than the CLV.

How have you marketed the product and where are your customers originating from?

I marketed my product only through Facebook Ads, so there is a huge opportunity for the brand to grow by using also other advertising platforms or influencers. My customers are originating from Italy, so, again, there’s a huge opportunity for the brand to expand all over the world.

Is the asset on your listing owner-operated, how much time does it take to run the business, who else is needed on the team, and what is automated?

The asset is owner-operated and the business takes about 1 to 2 hours/day to run if you work completely alone and you like do to some manual work like me. You can bring to 0 the daily working time since all the work can be completely outsourced and automated.

What does someone need to do to continue operating the business in its current form?

Again, if you work alone like me, you need to study e-commerce and have the knowledge to run a business. Otherwise, you only have to outsource and manage from backstage.

Growing the business

Can you list a few opportunities for a potential new owner to continue growing the business?

A few suggestions for the new owner that will guarantee exponential revenue growth, that I didn’t implement:

Influencer marketing: I didn’t manage to implement this extremely valued marketing strategy, that could easily multiply the monthly revenue and build a bigger audience of returning customers that spend their money consistently over months;
Brand scaling: This feature is what allows brands to make millions in revenue, especially for evergreen products like luxury clothing. It requires budget (big stock to make sure you never run out of clothes and big advertising budget) and this is the main reason I didn’t scale, I preferred to secure my profits because I was already happy with them;
TikTok Ads and others: TikTok became the best advertising platform so far. It could generate totally organic traffic and sales only by posting videos daily and without spending a dollar on ads. Luxury clothes, as I told you a lot of times, are evergreen products that will always perform well and attract people’s attention, so posting videos on TikTok is a must. You could run paid ads on their platform as well as Google Ads and many others that I personally never used;
Outsource everything: I highly recommend doing so. It won’t drain your budget as I was thinking, but instead, it will give a huge boost to the quality of your brand and bring a lot more income to your pockets.
Sell in multiple countries: as I told you, I run my ads in one country only. Expanding the brand to multiple countries could easily multiply your revenue.

What has been the evolution of this asset since its launch?

This asset had an initial growth and then remained pretty stable all the time. This is not a one-product store, a dropshipping products store or stuff like that. It’s a brand selling internationally well-known brands: the interest is here ALL the time. It’s a money machine and nobody cares about competitors, if they like you, they buy. I’m guilty of not pushing this brand to huge numbers, this is the only reason why the growth wasn’t constant during the past 2 years and it’s so important for me that the new owner of this asset understands that, dashboards are important but don’t display everything.

How does this business make money? What are the current revenue streams?

The process is pretty simple – You buy a stock of clothes, take pictures, post on social media, and run advertising. Here’s how you make money on a clothing e-commerce store.
In my experience, I made up to $20k+/month in revenue without any type of scaling strategies and very low influencer marketing, selling in only one country.

What marketing channels are most profitable for the business?

Since it’s an evergreen products store, every channel is good. I recommend Facebook Ads, Google Ads and TikTok Ads.

How does the business currently acquire customers and what is your breakdown for marketing costs?

The business currently acquires customers through social media. My expenses for marketing are very low since, as I told you before, I wasn’t constant in managing this particular business. I spent an avg. of $297/month on FB Ads.

How big is your current team? How many people does it take to run this business?

I work alone on this business.

What’s the reason for selling your business on Flippa?

A solid brand requires constant dedication. I’m now selling Flames because I have multiple brands running and it’s better for me to concentrate only on some of them in order to run everything properly. This is also the main reason why my dedication to this brand wasn’t constant during the all-time run as shown in revenue dashboards.