by Jordana featured in Forbes

"Before Jordana Schrager graduated from the University of Michigan in 2016, she had used her playful Instagram account to generate buzz for the sneakers she decorated with her colorful hand drawn designs -- and had even sold a few pairs to pop stars like Miley Cyrus, Selena Gomez, Ariana Grande and Pink. But since then though she’s struggled to turn buzz into big revenue. That's why she wants to turn a custom-order business that started as a hobby, into a mass-manufactured brand.

“By Jordana” custom-shoes booked just $30,000 in revenue last year, but the 23-year-old hopes it will make a bigger splash this year with the launch of her first ready-to-wear collection. So far she's booked about $60,000 in revenue for 2017, according to estimates. Her goal is to grow the line -- a limited run of 1500 pairs of shoes -- into a major fashion label sold through big retailers. Along the way, however, she wants to maintain control over production and distribution.

“I really wanted to take it slow in the beginning to make sure we maintained quality and not lose the artistic aspect,” she said. She’s also decided to continue operating her custom-design business. Keeping it up and running has landed ‘By Jordana’ partnerships with major brands like Nordstrom, Adidas, SoulCycle, among others. Schrager says she uses these collaborations as marketing tools for her mass-produced collection.

“I want to grow through events and personalized retail experiences that ties both my custom and mass-market businesses together and showcases my artistic talent,” she says.

Blank canvases

Schrager became a fashion entrepreneur when she was grounded one night during high school for staying out past curfew. "I was bored and saw a pair of shoes in my room and doodled on them,” she said. She sported the Sharpie-scribbled kicks around her high school and town, and then started receiving orders from across her home city of Boca Raton, FL. “That’s when I started to sell them for a small price,” says Schrager. “Over time, I made a website and social media account, then a wait list of customers began.”

Orders began to trickle in from across the country. She’d work one-on-one with her customers on picking icons, favorite emojis, themes and colors to create one-of-a-kind designs. Schrager would purchase white-canvas sneakers from retailers for $50 a pair. After personalizing each shoe, she’d sell the redecorated kicks (picture peace signs, pizza slices and happy faces splashed onto neon patterns) for $280 to $380 a pair and keep most of the markup as profit.

But a single order could take a full day to complete, resulting in a wait list of two months. Some customers would pay an extra $100 to expedite the process but Schrager realized the backlog would impact customer service. “I needed time to do designs so I would lose customers because they didn’t want to wait,” she said. “There were so many sneaker orders, I couldn’t handle them.”

When Schrager got to the University of Michigan in 2013, she enrolled in entrepreneurship courses, using her real-life business for class-projects and case studies. The assignments taught her how to write a business plan and the importance of reducing the costs of production; she started buying her blank sneakers wholesale from Vans for $25 instead of $50 from retailers. She also entered her sneaker business in campus-wide startup competitions that won her a couple thousand dollars in grants.

Meanwhile, social media helped her reel in major partnerships. Her first big break came during her junior year in college in 2015, when Taco Bell’s marketing team contacted her. They’d spotted her Instagram feed and ordered two pairs of taco-themed sneakers, $280 each, for a social-media giveaway, a campaign that would fuel her following by a few thousand (she currently has about 17,000 followers).

Besides fast-food lovers, she gained a celebrity following that year through a partnership with Barclays Center in Brooklyn, NY. “One of the assistants in events services heard of my company and my custom sneakers and mentioned the idea to her manager,” says Schrager. While still an undergraduate, the arena asked her to create personalized gifts for scheduled performers like Selena Gomez, Miley Cyrus, Ariana Grande, Nick Cannon and Pink. She’d also send complimentary pairs to fashion and fitness bloggers like Danielle Bernstein of WeWoreWhat. Tagging and reposting images of influencers sporting her polychromatic shoes would always lead to a jump in followers, inquiries and orders.

But no matter how many celebrities would “heart” her emoticon-inspired designs, she knew that sticking to a custom-order model would limit her capacity for growth. “I was trying to figure out ways to get to a bigger audience and lower the cost of business because it was expensive to create custom shoes,” she said. “I just didn’t know the best way to go about it.”

Scaling up ‘by Jordana’ meant scaling back on her social life as she worked on custom designs between classes and at night. After graduating in May 2016, Schrager set her sights on launching a ready-to-wear collection. She entered the Zell Founders’ Fund, a competition started by University of Michigan alumnus Sam Zell to help promising recent graduates jumpstart their businesses.

“Applying was a long process...I had to present income and cash flow statements while mapping out my budget for the next five years,” said Schrager. “Before, I was just looking at my business in terms of right now.” By October, the Founders’ Fund awarded Schrager a $100,000 investment but it came with stipulations: winners received the capital in $50,000 installments, based on whether they hit sales milestones.

She spent most of the first $50,000 on hiring a manufacturer. Instead of drawing on a pair of Vans, she wanted to design and produce her own label of slip-on sneakers. But picking the right factory was tricky. One manufacturer, for instance, wanted to just license her artwork and handle distribution. While teaming with this manufacturer would’ve delivered the larger quantities needed to fulfill department store orders, she’d have to relinquish control over decisions like fit, materials and from which retailers they’d sell.

“It sounded like a great idea but after doing more research I wasn’t ready,” she said. “I wanted to be in charge at each step so I decided to start with a smaller, limited edition of 1500 units.” Schrager selected a Chinese manufacturer that handles production, delivery and warehouse operations in New York, but allowed her to manage distribution. Her first collection of mass-market sneakers launched in December and is sold online and at about 15 boutiques small stores across the country for about $110.

She’s eager to receive the second $50,000 installment from The Zell Founders’ Fund, but the fund’s managers require her to sell more than 60% of her mass-produced line before she can receive the rest of the prize. Schrager says she’s more than halfway there. “I want to hit my sales goal for my Peace & Love collection and I expect to by end of year but it’s not my only focus,” she says. “I have to grow the brand and business in other ways.”

From social media marketing, to experiential retail marketing

Because a factory order of just 1500 units is not enough to land a deal with a department store, she says she’s striding down different paths to get into big retailers. “Growing my mass-manufactured line is my main focus, but my custom-design is helping me create relationships with big brands,” says Schrager.

Like her first corporate deal with Taco Bell, Nordstrom’s events team discovered Schrager through Instagram in 2016. But instead of a social campaign, the company invited her to host in-store appearances where she’d sketch designs for shoppers during special events like Valentine’s Day. Soon after, Bloomingdale’s asked her to also host custom-design events at their Manhattan flagship once a month, where she offers customers free artwork on any shoe purchase. The retail companies pay her hourly for her custom services.

“The custom-events are crazy busy,” she says. “It’s all hands-on and takes time to create personalized designs, but it helps us connect [to customers] and inform shoppers what the mass-retail brand is all about.”

Marketing through specialty retailers is also on her radar. After e-mailing spin-studio chain SoulCycle about her previous retail events, they welcomed her to host a series of 17 pop-up shops in June, where she created designs on the fitness brand’s sweatshirts, hats and other apparel using a heat press printing machine.

Schrager says creating a retail experience with SoulCycle paid her hourly, earning her $8,000 that month.

“We came up with this concept where they created a customizable design service for their riders or anyone who walked into their store. They supplied the garments, I supplied the artwork.”

Twitter: @TanyaKlich

 

To read the full article, click the link below below:

https://www.forbes.com/sites/tanyaklich/2017/07/14/how-jordana-schrager-went-from-scribbling-on-custom-kicks-to-launching-a-sneaker-startup/#33ea15c185dd

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