Data point - Brooks Brothers does $750MM in revenue[1]
[1]- http://www.insideview.com/directory/brooks-brothers-inc
I don't know typical Wall St. income, but the friends I have there are around $300k. You can cite Google and Apple employees too as spending $50+ on clothing. That's all the elite.
Median household income is $51k in the US. That's 1/3-1/6 of a single salary at Google (and most have working spouses as well). It's perhaps 1/6 of Wall St. That translates into many times that difference in disposable income.
I appreciate the appeal of making products for people similar to yourself, but if you think that makes for a good business plan, compare you $750MM in revenue to TJ Max with $18B in revenue, Gap at $13B, Ross at $10B, etc. If you look at relative prices, that's probably about 100x as many items of clothing sold.
We get what you're saying about virality. We wanted to make shirts of a quality that we were proud of and after getting many samples we decided that we could make very high-quality shirts for $69. We hope that we'll be able to bring the price down with time.
FYI - the salesman in me has to say that if you have any doubts, you can try us risk-free because of our very generous return policy. We're happy to accept a return or remake your shirt for any reason (not just fit).
Unless you get fat.
Shit, my ex-wife would pay $150-$200 for what I'd consider to be a basic blouse without even flinching.
I'd suggest trying any of the wealth calculator apps, and figuring out which percentile you're in. And please post here once you've done that. Or, go here:
http://en.wikipedia.org/wiki/Household_income_in_the_United_...
Median household income in the US is $51,000. That's household income, not individual income. That's what a family of four gets. Take away taxes, and you're at 37k. Assume $1000 mortgage, and you're at $25k. Car insurance, gas, etc. brings you down to perhaps $20k. Four cell phones? $19k. Internet, property tax, utilities, etc? $17k. Food? $14k. Health care? Putting kids through school? Retirement savings? Once you add in all the bare necessities, you won't find many people spending $70 on shirts, let alone $150-$200.
To run with your numbers. A $200 basic blouse, times 40 items of clothing purchased per year by your ex, is $8000. Family of 4 brings that up to $32000. Perhaps $24000, if you consider kids clothing costs less, or perhaps more, if you consider it wears out quickly, so you buy a lot of it.
Typically, the biggest expenditures are housing, health care, car, food, and similar. Clothing is waaay down on the list.
I'd also challenge your assertion that the majority of the HN audience is elite, as that's a bit of projection, but that's not a fight I'm prepared to get pulled into right now.
I've spent my entire life at just about every notch on the wealth spectrum short of having seven figures in the bank (and I came from stretching $10 for a family of three over two weeks), and I would consider myself upper middle class at this very moment, yet one constant for me has been the price for an average article of clothing even if the purchaser had to save up for it.
> I'll be honest, I wasn't even aware dress shirts were sold at Walmart.
Someone might buy 1-3 nice shirts and take good care of them and they'd last a long time, provided they didn't buy a shirt with a trendy design that will be useless next year.
> Shit, my ex-wife would pay $150-$200 for what I'd consider to be a basic blouse without even flinching.
That's a different persona than the sort of person who buys 1-3 nice shirts and takes care of them.
There's everything from $13 ones at Walmart to $70 - $90 ones at J. Crew and Brooks Brothers (MTailor price point) to $300 Armani shirts (and above).
Having spent a lot of time in in-person custom shirt shops, our $69 shirts are comparable in quality to shirts you would buy there for $125 and above.
And obviously we'd go even lower if we could.
If you cannot go lower, I'd consider a partnership with an existing brand. You'll have to have an insane marketing budget to compete with existing clothing brands without viral.
If you can partner with Brooks Brothers (established in 1818, and part of American preppy folklore), J. Crew, Men's Warehouse, or similar, you'll have an easy time breaking in, although a much harder time getting most of the profit share.
Word-of-mouth can work well, but you've got to understand your customers, the networks, and the levers you can tweak to change rate-of-growth. I was suggesting price/quality/margin as one of those levers -- you want to be appealing to as many customers within your customers' networks -- but there may be others if that one is unappealing.
Compare the market caps of Walmart, J. Crew (which was recently purchased), Brooks Brothers (from a sane P/E ratio), Armani. Heck, try a TJ Max or similar (to avoid companies with major non-clothing businesses -- which, coincidentally, J. Crew does have).
As a business decision, the $69 price-point seems a bit high. That sets it at elite, rather than mass-market. The problem with elite is outside of SFO and NYC, you'll get a lot less viral word-of-mouth growth. In most of the world, elites do talk to each other, but they talk to non-elites a lot more, and when they do talk to elites, the topic is usually not clothing.
To give a concrete example: I am C-level. As such, I could afford it, but most people I know would not be able to. The only people I could mention it to would be VP-level or C-level, most of whom are colleagues rather than friends. This would limit word-of-mouth from someone like me to perhaps 2-3 people tops, rather than 20-30 (so in practice, 0 rather than 2-3, since it would come up in conversation for perhaps 10% of the people I know). At $69, I also won't buy it on a whim. At a price point competitive with Eddie Bauer, or even Men's Warehouse, I would, just to see how well it worked. If it worked well, I'd switch to it. If I did buy it, at $69, I also expect quality. I wouldn't buy a second one until I see how long the first one lasts. That means repeat business won't come until you probably run out of runway.
Custom-tailored pants, in India or Africa, cost $10 for the fabric and $3 for the labor (and are fantastic). Even with a generous mark-up, you ought to be able to have a slow but inexpensive process that competes with middle class mass-market goods (not Walmart and Target, but certainly EB and Men's Warehouse).