Can I start a shoe company?

Can I start a shoe company?

How a factory makes shoesSo you ask yourself. “How to Start Your Own Shoe Brand?”   What does it take to really start a shoe company?  When we say “start a shoe company” we really mean a company that designs, markets, sources and imports shoes,  Not a factory that really makes shoes.  We think of Nike and Adidas as shoe companies but they don’t actually own the shoe making 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 do import many shoe components from overseas.

Okay, what do you really need to get started with your shoe company?

Compelling Original Shoe Designs:

You will need something special unique and original to catch peoples attention.  Billions of shoes are made, why will people want yours?
Do you have designs or do you need to hire a designer?  You will 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.  Without great designs your new shoe company is going nowhere.
Now Stand back, do these designs say “This what my new shoe company is about?”

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 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 are the shoes going and where are will the shoes come from?   Depending on the style of shoe or maybe 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 is your target customers?

Figure out who is your end-user 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 do you have a totally new idea!

Does your shoe brand have a name?

Based on your target customer it’s time select a name for your shoe company.   You will need to set up your shoe company.   Contact your city hall to get a “DBA”  Doing Business As. Register your shoe company, get a vendor’s license and a Tax ID.  Don’t forget to check you names on the web.  If you can’t get a good website Domain that is close to you 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. Many companies own several brands.

Research and More Research of the footwear market:

Visit you 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 feature 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 “Me Too” brand!

Finding a footwear sourcing agent or Shoe Factory may just be the hardest part!  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 looking for new customers.  The Website is 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% when you place your orders, and 50% when the orders ship. Not to mention the tooling and development costs.

How much will you need to get started of the for the first production order of shoes?

Do you need to hire a designer? $2,000 to $5,000 depending on the Scope of your Project. $4000 for travel to Asia or Europe. This amount can easily be more.  Maybe 2 trips?  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 item and you should order shoes by the container. 6000 pairs! And we have not even talked about 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 needs lots of help! It’s a full time job.

How much does the shoe development and pre-production phase cost?

The answer is, it depends on the style of shoe you want to make. Leather wing tips 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 times 12 sizes. Big bucks!  Before start a shoe company you need to think about where the money will come from?

I’ll tell you,  shoe factories need volume to make money.  Small orders just can’t cover the time and expense of development. For example, the development process for a 500 pair order is the same as a  25,000 pair order. Order minimums are based on the material minimums. We say MOQ for short. Minimum Order Quantity.   For a material like suede leather the MOQ may be 1000 Sq feet.  This is enough leather to make about 500 pairs.

Also, for each new shoe the worker needs to be trained on how to make it.  500 pairs is one day of work for a stitching line.   For a basic sneaker, a smoothly running line can make 1500 to 2000 pairs a day.  That 500 pair order will be done before lunch.   A big factory will 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 don’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. 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. So if a basic shoe is $15 the sample would be $30, shipping could be another $50.

How To Start Your Own Shoe Company PDFYour next steps:

Check Out our New Book:  How to Start Your Own Shoe Company
Read these articles:  Can I start a shoe company  and Finding a Shoe Sourcing Agent. 
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