Why Most Wallets Are Boring
In the fashion industry, there is a practice called, “licensing”. Licensing allows fashion labels to sell their brand to manufacturing companies (who could be manufacturing anything from sunglasses to waffle-irons) in order to receive a percentage of the manufacturers sales.
So, the manufacturer can make a run-of-the-mill design and, because they are paying royalties to the label, put the licensed fashion label’s brand on their product to boost sales.
This is a common practice that began in 1948 with Christian Dior licensing hosiery and really gained momentum through the 1980’s where you could find “Pierre Cardin” hair-dryers, alarm clocks, and frying pans as a result of Pierre Cardin having over 800 licensees.
This business arrangement allows the fashion label to leverage their brand to multiply their revenue earnings at the cost of potentially diluting their brand.
Unfortunately, the fashion labels usually have little control over the quality of the goods being produced.
This is both good and bad for the consumer: it allows the consumer to buy brand name goods at prices that aren’t ‘haute couture’ but the quality of the product is only as high as is economic to produce for high margin.
Given this business arrangement, why would a manufacturer want to spend more money on higher quality materials and on better craftsmanship when they have the power of a licensed label behind them to drive sales?
Additionally, why would a design label spend time and money trying to be innovative and creative when this licensing model brings them massive revenue for very little effort?
This model for fashion licensing is not sustainable and explores only one way of licensing: the manufacturer relies on already established designers and their labels to produce sales.
What if we reversed the roles? What if undiscovered designers worked with a manufacturer who has a brand that stands for innovation and quality? Could this new combination of designer/manufacturer create a superior product and still offer it at a good price?
Welcome to the way we do business.