Launching a fashion business of any type takes commitment and creativity, but the footwear industry has its own unique challenges. Drawing on decades of experience in the footwear and handbag industries, Len Pesko of Modern Pulse Consulting Group shared his insights at the August edition of SOURCING at MAGIC Las Vegas. 

While footwear sales in the United States totaled a whopping $118 billion at retail last year, the industry is currently in a sales slump as compared to years past.¹ According to Pesko, the industry needs new ideas, so the time is right for people with fresh concepts. It is said that it takes 250 steps from developing a concept to delivering a shoe to the consumer, but there are a lot of other things beyond design and construction that lead to success.  

First and Foremost: Have Your Finances in Order 

While some brands have been built on a shoestring budget, realistically, Pesko says that from his experience, it takes around half a million dollars just to get started. And that doesn’t even include what’s required for sample development or paying for your first order. “It’s been my experience that plenty of people who have created a great shoe either give up too soon—most folks don’t make a profit until the third year in business—or they don’t have the finances required. You must be obsessed with success—ready to roll up your sleeves and do the hard work. Nobody is going to throw orders at you, and you’ll be competing with 3,500 different brands of shoes sold in the United States right from the start.”

Other requirements include:

• Understanding sales and marketing (key to this market are PR and social media, celebrity placement, and working with influencers)

• Having a clear focus on who the customer is 

• Having a fully developed story 

• Creating a “pro forma” (a financial statement that projects expenses and revenues) to show to potential investors 

Travel is also essential, says Pesko: “While phone calls and teleconferences are both cost- and time-efficient, nothing beats a face-to-face meeting to build a business relationship.”

Build a Solid Base of Operations

Pesko also points out that it’s critical to have a solid support team behind the product, too. How are goods being transported to America or wherever they are being sold? Have you allowed enough time for transit? Sending goods on a cargo ship may be cheaper than flying them, but it can add significant time.  Once goods have arrived in the country, do you have a good relationship with a warehouse for storage and shipping or dropshipping if you’re selling DTC? Finally, Pesko notes that it’s absolutely necessary to have a solid IT department that can provide reliable reports and help keep track of all the moving parts.
  

Seek Out the Best Sourcing

“What kind of footwear do you want to do?” asks Pesko. “Zero in on what you want to do and create that as part of your plan, brand, and image. Find the manufacturers that match that image and know the questions you need to ask.” 

Those include: 

• Who else does the company make shoes for?

• What kind of footwear can they make? 

• What are their minimums - both for production and for lasts and samples?

• What is their typical production schedule? 

• What are their payment terms and costs? 

Another thing Pesko recommends that first-timers consider when sourcing is to work with a trade commission when producing footwear in foreign countries. (Check out our Country Guide Library to learn more about manufacturing in other Countries) Trade commissions can help determine the right region and factories to match your brand’s needs and image. 

As Pesko demonstrated, the footwear industry has some unique challenges, yet it also shares some essential good sourcing practices with others. Learn more about best sourcing practices at the SOURCING at MAGIC website, and be sure to register and attend our next thought-provoking event February 10-12, 2025 in Las Vegas.

¹ U.S.A. Department of Commerce International Trade Administration, https://www.trade.gov/