Monday, July 4, 2016

This 31-year-old built a $180 million fashion empire in 5 years - here are his secrets to success

In 2011 Filip Tysander took $24,000 out of his own pocket to start a watch brand. Now he’s 31 and his 100% self-owned company Daniel Wellington is selling watches for $180 million annually, with a profit margin of more than 50 percent.
The preppy Swedish watches with a classic Nato band can be seen everywhere on Instagram, where Daniel Wellington has managed to gather 2.2 million followers. Success was almost instant for Filip Tysander who seems to have uncovered the perfect recipe for online sales in this day and age. Sales are soaring while the profit margin is kept high.

The Swedish business magazine Veckans Affärer recently digged deeper into the strategy behind Daniel Wellington.
Here are the four secrets to the success of the Swedish company:

1. Marketing.
Within Daniel Wellington, social media is viewed as part of the core business. They have systematically used influencer marketing to reach their customers. Instead of paying for ads they give away watches to influential Instagram stars, and in return these stars show the watches to their followers. Some of the bigger stars are paid in money.
According to Veckans Affärer, Daniel Wellington are not aiming for the largest Instagram stars. Several smaller names give the same effect as one big name, while being cheaper to pursue.
Furthermore, Daniel Wellington has an on-going Instagram campaign where users can upload their own photos of the watch, increasing the organic reach of Daniel Wellington. It also gives the company access to high-quality user-generated photos, and every day one photo is posted in the official Instagram feed.
 2. Timing.
When Daniel Wellington was founded in 2011 the world economy had started to recover from the financial crisis and the watch industry has had healthy growth numbers ever since.
3. Distribution.
The watches are manufactured in China, in the same city where many other brands manufacture their watches. The parts are cheap and easy to assemble. Even so, the number of returns from customers are below one percent, adding to the high profit margin.
4. The price.
It’s a matter of definition whether Daniel Wellington watches are cheap. If you compare them to their competitors they are cheap. If you compare them to the cost of manufacturing a watch in China they are expensive.
Even so, the comparatively low selling-price of a Daniel Wellington watch is often said to be a success factor in reaching the millennial generation, since this coveted consumer group is often strapped for cash.

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