Today marked the launch of an exciting and innovative new website called FashionStake.
A New York-based company has come up with the idea of allowing the consumer to purchase a ‘stake’ in a designers collections. In return they get various privileges, which any fashionista would love, such as pre-order discounts and runway show tickets.
The idea is a novel one; it gives us, the consumer, the chance to fund and shape a designer collection before it has even been produced. It allows you to become more hands on, or to have more online input, in the clothes you will eventually wear.
Firstly FashionStake allows you to provide feedback, so you can vote for individual pieces and also interact with the designers themselves in discussion boards.
Secondly you can become a buyer. This means you can pre-order from a collection and get a big discount, thought to be about 40%.
Thirdly you can become a funder. Pay $50 and you can purchase store credit, worth up to $125 return on a $50 stake, which you can use to shop till you drop once the collection goes live.
And lastly, for the die-hard fashion fans, you can pay $500 to be a VIP. You will get things like Fashion Week tickets, dinner with one of the designers and even a free item from the collection.
So, it’s great for designers who want to launch a career, it’s great for the owners of FashionStake who don’t have that much money to support all up and coming designers and it’s great for the consumer. It offers them the interactive aspect that you don’t get when buying clothes in most shops and there is also a social media feel to it that people want.
Is this the way forward for all new online businesses? If you lack the funding to do everything you want, then this seems like a good alternative because you get the money and also a fan base. It’s using the principle of crowdsourcing and crowdfunding.
We know this idea does work, to an extent anyway, look at Ebbsfleet United, the English football club.
In 2007 instead of allowing the club to be owned by millionaires, it was announced that it would be taken over by the website MyFootballClub.com.
27,000 members of the website paid £35 which provided the £700,000 takeover fund and they were all given an equal share in the club, although they do not make a profit.
Similar to FashionStake, the members vote on transfers, player selection, even the kits.
Initially ideas like this do very well, especially with all the press involved and people like to be a part of exciting new projects.
Ebbsfleet United is still owned by the members of MyFootballClub.com. However in March of this year, only 800 out of 4000 members have continued to pay membership fees. The initial idea clearly works but the future of the club may be rocky. Speculation suggests that the club had far too many debts in the first place for this to succeed.
What about FashionStake? Presumably it will do very well in the first year but whether it will stay the distance is anyone’s guess.
But if you are looking for an injection of funding, a chance to get your customers involved and drum up a little publicity, crowdfunding seems to be the wave to ride.