How to Start & Grow a Sustainable Fashion Brand with Shannon Lohr

Do you want to know what it takes to launch a sustainable fashion brand and how to do it in a more environmentally conscious and affordable way?

Whether you’re a fashion designer who wants to launch a label, an aspiring sustainable fashion entrepreneur, or just someone curious about this whole process, like me, you will get a lot out of this episode.

In this episode, I talked to Shannon Lohr, the founder of Factory45, an online sustainable fashion startup school that has been trusted by over 500 Fashion entrepreneurs since 2014.

Shannon has worked with aspiring designers from all over the globe to launch and grow their brands in a way that is better for people and the planet.

You are going to hear Shannon talk about all things slow fashion business. In this episode, hear about:

How Factory45 helps fashion entrepreneurs get started from scratch without VC funding or tens of thousands of dollars to invest
How to create an eco-friendly product that considers the context of functionality and durability
The unique challenges that small, slow fashion businesses face
What pre-selling and on-demand manufacturing are — and why does she recommend these models as more environmentally — and financially — sustainable approaches
How entrepreneurs can build an authentic audience before they’ve even produced their product
And her perspective on if it’s easier for small, nimble brands to be sustainable or big brands with lots of resources.

Tune in to this episode of the Conscious Style Podcast below, or on your favorite podcast app

Quick Links: Listen on Apple Podcasts, Spotify, Pandora, or Google Podcasts

Or, watch this interview on YouTube! (coming soon)

Read the rest of the transcript from this interview:

SHANNON

So I started out in the sustainable fashion space in 2010, which was a time when you didn’t even put the words “sustainable” and “fashion” together. It was kind of like an oxymoron and people really didn’t know what sustainable fashion was.

But I was starting a business with my then co-founder. We just really wanted to do something to not have to get real jobs. So we had just graduated college, we were kind of just figuring out what we wanted to do next.

But long story short, we started researching the fashion industry and what it would take to create our own brand. We went down to Nicaragua and we were researching organic cotton farms, and we were talking to eco-friendly supermodels in Brooklyn and farmers in Texas, and environmental professors in Missouri.

And what we realized was: wow, the fashion industry is a really dirty industry.

There’s a huge carbon footprint, there is a lot of environmental damage, there’s human rights issues, you know, the list goes on. And we decided if we were going to start a business we were going to do it in a way that was better for people and planet.

And so we ended up launching a fashion brand that had a supply chain within a 50 mile radius, which was really unheard of back then. All of our fabric and our manufacturing happened in North Carolina.

And we ended up launching the highest funded fashion project in Kickstarter history at the time. We were featured by the New York Times, we were tweeted by The Wall Street Journal, it was this amazing first experience.

It kind of, well, it definitely led me into what I do today, which is, at the time I realized, wow, this should be easier. It shouldn’t take a year and a half to launch a brand in a way that is sustainably and ethically made like it did for us. And that’s what brings me to what I do today, which is Factory45.

ELIZABETH

Yeah, it’s great to have that context and backstory of Factory45. So to date, you’ve helped over 500 fashion entrepreneurs launch their brand. And you clearly have a lot of experience with this.

So could you give us an overview of how you help aspiring entrepreneurs get started from scratch with their fashion business?

SHANNON

Yeah, I really set out to create the program that I would have wanted when I was first starting out in this industry. Like I said, it took us a year and a half to set up our supply chain and to launch and I wanted it to be easier to start a brand that was sustainably and ethically made from the start.

You know, so often we hear about the bigger brands that are scrambling and backpedaling to implement sustainability into their supply chains now. It’s a lot harder to do that after you’ve already set up a supply chain.

So how can we just start that way, so that it’s an inherent part of our business model?

And what I do through Factory45 is we start really from the idea stage. Entrepreneurs can come through the program with nothing on paper. And we go from getting those ideas down on paper, all the way to launching a pre-sales campaign — whether that is through Kickstarter, or e-commerce, or a virtual pop-up on Instagram.

Whatever it is, the idea is that you’re pre-selling so that not only are you reducing your own financial risk, right, you’re not paying $20,000 of your own money that you may not even have to produce inventory of a product you don’t know will be able to sell.

So instead, we pre sell, customers finance our production run for us, and we are able to produce inventory that has already been sold, so that it’s not sitting in a warehouse or in our basement without having customers.

ELIZABETH

Yeah, definitely. And we will talk more about the pre-selling later in this conversation for sure, because I think that’s a really interesting approach.

But first, I wanted to talk about something else that you teach in your curriculum, which is material sourcing. So before you even start producing that product that you’re going to pre-sell, like teaching entrepreneurs how to source eco minded fabrics.

And there is a growing awareness that sustainability assessments require context in terms of how that material is sourced, where it’s sourced from, how much of it you’re sourcing, and you know what you’re using that material for, because some fabrics might be sustainable, but then what you’re using it for, it doesn’t last, and it’s not the most durable choice.

So what advice do you have for entrepreneurs, designers, and also consumers who are looking to purchase products on what makes a material eco-friendly within a certain context?

SHANNON

So I always say — and I tell my entrepreneurs — there is no such thing as perfectly sustainable.

Anytime you’re making something new, it has an impact; it has an environmental impact.

So our goal is to reduce that impact as much as we can without risking the product. So it’s what you said: it’s if we’re creating a product and using a sustainable fabric that isn’t going to hold up or isn’t going to last for that particular fabric, it’s not going to be durable ,or it’s not going to drape correctly or fit correctly, then we’re really doing ourselves — and our customer — a disservice by using that material.

So really the goal is to figure out: how can I do this? How can I do this in the most sustainable way possible without sacrificing fit, durability, drape, quality of the actual garment so that it gets worn over and over and over again and can hold up and doesn’t get thrown into the back of a closet.

I mean for consumers I think that the first place to start is looking for natural fibers. Anytime you can go into a store, look online at a product description and look at the product description, there should be a fabric, basically the fabric component of the fiber. So if you’re looking for natural fibers, like organic cotton, or Tencel, or hemp, or linen, those are all fabrics that are going to automatically be a better choice than synthetics like polyester, nylon, spandex, etc.

ELIZABETH

Yeah, definitely. And so in terms of sourcing and production, small businesses typically face more challenges than larger companies that have more of a budget and they can meet maybe these higher minimums set forth by the factories.

So could you speak to that, and what types of barriers small businesses might face in that sourcing process?

SHANNON

Yeah, I think that one of the things that I’m really conscious of in Factory45, all my entrepreneurs get a database of suppliers that work with lower minimums. So automatically, I sort of delete the suppliers that aren’t going to really work with small designers.

So that’s not something that really comes into my atmosphere anymore, which is nice, because I’ve developed those relationships, enough relationships to have those low minimum suppliers. But it’s obviously a challenge for people who, let’s say, aren’t in Factory45, or don’t have access to those resources.

I think there’s always a way to negotiate. I think that it is all about relationship building, and this is what I tell my entrepreneurs from the beginning. If you want to be successful in setting up a supply chain, fabric, manufacturing, packaging, it’s all about relationship building.

And you’ll never know what a supplier will be willing to do for you if you’ve taken that time to build up that relationship in a way that is respectful of their time. So that’s a whole other thing we could talk about. But I think that again, there’s always room for negotiation, and it’s about building the relationships.

ELIZABETH

And in terms of building the relationship, how do you suggest that people go about that, you know, how can you start building those relationships?

SHANNON

Yeah, so one of the things that all my entrepreneurs are provided in Factory45 is an email template of a few actually, different email templates to initiate that first contact, right?

So part of it is send the email, maybe don’t expect a response right away. But at least there’s going to be that name recognition in the supplier’s inbox when you do pick up the phone, and you follow up with a phone call. So that’s part of it is just send the email. If you get a response back, that’s great. But if you don’t, you have to follow up with it with a phone call.

And then I think the key to successfully and effectively sourcing fabric is knowing exactly what you’re asking for. You have to have a specific ask for the supplier.

If you just go in there, and you say, I’m looking for 100% cotton in a blue color. Like that is just they have so many different weights, and colors and all the things that you have to be super, super specific.

So that’s really what I recommend starting with is the one sentence description, the fabric, the weight, the fiber, and the color. Like if you can link out to a specific HEX code or a Pantone code, that is ideal because it really sets the supplier up to be able to help you.

ELIZABETH

Yeah, that makes sense to know the lingo and the terminology. And…

SHANNON

So important.

ELIZABETH

…yeah, so you mentioned this earlier, but you know, once you’ve found your sources, a big part of your launch strategy is pre-selling.

And so for listeners who don’t know what that is, could you just explain, you know, what preselling is how that looks and why you recommend it for new fashion brands?

SHANNON

Sure.

Pre-selling is simply selling your product before you make it. That’s the most simple terms. Your customers pre order before you create the product.

And the reason that this is such a smart way to launch, and you can do this after you launch, you can do this for new collections, new products, new color ways, but specifically for launching is that you’re able to test the market, right? You’re able to test the market to make sure that you have customers for what you want to create.

Because until people are willing to open their wallets and say, Yes, I want to order. I want to buy what you’re selling, you don’t know.

You can send out as many surveys and talk to as many customers and do as many Instagram polls as you possibly can, but you really don’t know until it’s time for your potential customers to open their wallet.

And so this not only tests the market, but it also reduces your own financial risk, so that you’re not using all of your life savings or taking out a loan, or whatever it is to produce. You know, it can take $20,000 to just do one initial production run of a few hundred units.

So making sure that you are protecting yourself and again, making sure that you have customers to buy before you create anything.

ELIZABETH

Yeah, definitely. So of course, this pre-selling strategy requires building an audience so that the brand has people to sell to.

So what advice do you have for brand owners that want to build an audience from scratch?

SHANNON

Yeah, this is so so important. It’s arguably more important, if not as important as your product development and setting up your supply chain. Because you can have the most beautiful product in the world, but if you don’t have an audience of customers to buy it, then it’s, it’s just a hobby, it’s not a business.

So building that audience in advance, again, if you’re on a bootstrap budget — most brands, most of us don’t have thousands, if not millions of dollars in VC funding or celebrity endorsement — if you’re really doing this yourself from scratch, then you have to build up that audience organically. And it is never too soon to start doing that.

It’s one of the first things we do in Factory45, is we start building that audience, building our email list most importantly, building our social media following, content marketing, getting in front of existing audiences. There are so many different strategies.

Where I often get the pushback, well, how do I build an audience, I don’t even have a product to sell yet, I don’t even have samples to show, I don’t have anything to show for myself.

And it doesn’t matter. You can create that community in advance and take the audience through that journey with you of creating your brand and creating your product. And that’s what is compelling. That’s a compelling story that gets people on board and invested in your idea.

ELIZABETH

Yeah, absolutely. And that reminds me of another conversation I had with Natalia Gomez, who works in the marketing space, and we were talking about ethical marketing. And part of that was, it’s also about building community. It’s not just about selling and pushing sales all the time.

It’s building an authentic community and sharing your story, and I think that points to that really well.

So another mindful or very intentional approach to production is on-demand manufacturing. So can you tell us what that is, and is that different from pre-selling?

SHANNON

So I think of it is, it is pre selling in some way it is. I sort of separate them as your pre sale campaign is like a bulk launch. It’s pre-selling a bunch of inventory upfront. And then once you do that initial launch, you can shift to on demand manufacturing, or people call it made-to-order, and that would be more like one off.

So let’s say you do a production run of 500 units through your pre sales campaign, you create that 500 units, and then you continue selling one off through the made-to-order manufacturing model.

So people can come to your ecommerce site, your Shopify site, where ever it is order it and then there’s a lead time maybe of two to four weeks because it is made to order and then the factory is just making it as the orders come in.

ELIZABETH

Yeah, that makes sense. So why do you think that this is a more sustainable approach, you know, environmentally speaking, but also financially speaking?

SHANNON

Yeah. Well, you know, you think about the amount of waste that the fashion industry creates. And of course, the bulk of that waste has nothing to do with the small brands or the independent fashion brands. It’s fast fashion. That is what is the most problematic area.

But I’ve seen you know, brands that are more established adopting this pre selling or on-demand manufacturing strategy. And I think the whole idea is let’s not produce clothing that we don’t know will sell, that will end up sitting in a warehouse or will end up slashed through and put into garbage bags and discarded into a landfill.

So I think that’s the environmental side of it, which is pretty straightforward. And then obviously, the financial side of it is just cash flow can be an issue for small brands first starting out.

And so if you don’t have the $10,000 upfront to invest in more inventory, then you can at least adopt a made-to-order model so that you don’t need that bulk cash up front that you can really just, you know, take it as it comes in and produce it, you know, to go out directly to the customer who just purchased it.

ELIZABETH

Mhm, absolutely. And have you experienced that being a challenge for brands?

I feel like consumers have become so used to 2-day shipping, free shipping, really fast deliveries, you know, convenience, things at our doorstep for the next day.

Is the made-to-order model difficult to get customers on board with and commit to that? You know, what have you experienced with that and helping brands launch?

SHANNON

I think that it depends on who your customer is, if you’re trying to go after the Walmart, Amazon Prime shopper, and that’s the only place they ever shop, then yeah, that’s probably not going to be a successful customer brand relationship.

But if your customers are made up of people who are already invested in the slow fashion movement, like they only buy sustainable fashion, or they only buy thrifted fashion, or they have this kind of ethos around them that they care about their purchasing power, then I think they’re willing to wait.

And I see that, you know, all the time with my brands that are launching pre-sales campaigns, they have these very dedicated followings, you know, these communities, who will say, yeah, I’ll wait a few months to get that product, because I believe in the mission, I really want the product, and you know, I’m here to support a different type of consumer behavior and shopping behavior.

ELIZABETH

Yeah, definitely. That makes a lot of sense. Finding the right audience, and probably also educating people on why made-to-order is a sustainable approach in a lot of cases.

SHANNON

Yeah, I think about like one of the brands that launched through Factory45, Vesta. Anyone who’s listening can look, look it up. It’s started by Kendall and she’s actually one of our alumni mentors, and she does made-to-order only and she, it works for her, it works for her customer. So that’s just like, one model to look at as an example.

ELIZABETH

Yeah, definitely. So for a conscious fashion label, there’s always a lot to balance when trying to operate in a way that’s ecologically sustainable, socially responsible, and financially sustainable.

And we talked about one area where actually those things can be aligned like the made-to-order pre-selling, but of course, there’s also areas that they’re not so aligned. And sometimes you have to maybe sacrifice some financial benefit to do things in a more environmentally responsible way.

So what have you seen with that? Like, have you seen some areas that brands sort of have to make those decisions about, you know, financial sustainability versus environmental sustainability?

SHANNON

Yeah, I think one great example is what we just saw this weekend with Black Friday and Cyber Monday. That’s like, the key question there, right, is, as a sustainable, you know, conscious brand, do I partake in this kind of mass frenzy of buy, buy, buy; more, more, more; deals, deals, sales, sales, all the things.

And I think that for the most part, from what I’ve seen, you know, the sustainable fashion brands, they have to opt in. Like they can’t afford to opt out because it is such a financial sacrifice, you know. The consumer is primed to buy on that weekend, right? Those really four days and we’ve seen extended sales.

You know whereas I think it was really like five years ago when I saw more conscious labels opt out and not partake, and kind of message why they were not going to participate in Black Friday and Cyber Monday. I think I’ve seen that messaging sort of phase out. And so I think that’s one example of just, you know, not having the luxury of sacrificing the financial benefit. Even though the environmental or just like the messaging, the psychology, all of it, isn’t aligned with what sustainable fashion is about.

ELIZABETH

Yeah, definitely. That’s interesting you noted that about that messaging sort of fading away, because I noticed, I thought I noticed something similar. And I wasn’t sure if it was just, you know, in my head or something.

But I think there is a way to do it consciously. Like I really liked how some brands, you could choose if you wanted to donate or get a discount, or you could get a discount, plus, they would donate.

One brand even said they were going to like double the wages to workers that day or something along those lines, and so I like to see the kind of unique twists on it, at least.

SHANNON

Yeah, me too. Me too. I think there’s like you said, there’s definitely ways to get creative to not sacrifice your values, but then also not sacrifice, you know, the financial reward of just, again, consumers being primed to buy.

ELIZABETH

Yeah, so I think that you pointed to this a little bit before, but I would be curious more of your thoughts on this. Do you think it’s easier for newer, smaller brands to be sustainable — since they’re more nimble they’re creating from scratch — or do you think it’s easier for the bigger brands — who have a lot of, you know, staff, they have a lot of money to invest. Do you see going either way?

SHANNON

I mean, I think it’s always easier to start from scratch, but you look at the resources, as you’ve said, of these bigger brands, like they don’t really don’t have an excuse.

If the smaller brands can start this way with a limited reach, limited marketing dollars, limited staff, then surely, the bigger brands can do it faster than saying, oh, we’re gonna do this by 2030.

Like, all of that is just I’m just so over the fast fashion, you know, message of like, oh, yeah, we’ll get to that eventually, like it should be a priority right now. So, yes, easier to start from scratch. But should be easy with the resources, and the trillions of dollars that the bigger brands have.

ELIZABETH

Yeah, totally, totally. I get very frustrated about that as well, especially when they have these goals of like, 2050, 2060… and it’s like, I mean, we’re gonna be underwater at that point, like, so.

Yeah. I personally trust smaller brands as being more sustainable than bigger brands. But yeah, I think that definitely, the big brands could do more if they chose to, but they often have their interests in the wrong direction.

So going back to your Factory45 launching strategy and courses. What advice do you have for somebody who wants to start a brand, but is worried that there’s too many brands in the market already.

You know they don’t want to add more product to the market, because there’s so much being produced already. Maybe they have concerns about the sustainability, or they’re just maybe feeling a little bit of imposter syndrome, almost about like not thinking that their brand will stand out enough.

SHANNON

Yeah, I think this is a question that comes up a lot. My answer, you know, the whole idea that we have too much stuff like that there’s just like too much stuff produced because of small, independent fashion startups. It’s just not true.

Like, we have too much stuff because of fast fashion. Because of companies like Amazon, and Walmart, and because people are addicted to shopping.

So it’s kind of like the government telling everyone that, you know, if we want to curb climate change, then we need to take shorter showers, right? When in fact we know that the vast majority of climate impact comes from major corporations, fossil fuels, animal agriculture, deforestation, all the things.

So I just, I just think to say we don’t need yet another small fashion brand is placing the blame in the wrong direction.

Because really, you know, what’s the alternative?

If we don’t have small, independent, purpose-driven, conscious fashion brands out in the landscape, marketing, sharing the message of why it’s important, then there will be no other option than to buy from these same corporations who are doing most of the environmental damage from the fashion sector.

So, yeah, this is a question that comes up a lot and I get pretty passionate about because I just, I just think the blame is being placed in the wrong in the wrong place.

And in terms of like, too many brands are doing what I want to do, I mean, that’s something we really, really focus on from the beginning and Factory45 is you have to have a unique selling position.

And so the two that I teach that I think are most effective for small fashion brands are number one: solving a problem for your customer, and number two: appealing to a market niche.

So if you can take one of those two things — ideally, both — but want at least one of them as a unique selling position and really hone in on it get really specific, then I think you’ll find like, there aren’t a lot of brands out there that are like you doing what you want to do and offering the solution to the problem, or the specific, serving the specific niche market that you want to serve.

ELIZABETH

Mhm yeah, what you said about placing the blame in the wrong direction. I totally agree with that.

Like, I would definitely say there isn’t room for another fast fashion brand, because existing ones need to go away.

SHANNON

Right.

ELIZABETH

Like we need to reduce them. But yeah, I think that in terms of slow fashion, and sustainably minded fashion, I do feel like there’s still a lot of room with that.

Because one thing that I do hear from people is like that the styles aren’t varied enough across sustainable brands. A lot of them are a specific style, and it’s not their style. So I think that definitely, there’s more room for sure to meet all the different styles and needs of people.

Can you tell listeners how they can get started working with you if they are a designer or you know, they want to launch their own fashion brand? Like what does that look like working with Factory45?

SHANNON

Yeah, so you can really start to explore the opportunity, right now, if you want to,you can just go to factory45.co. There is a button in the top right corner that says book a call and you can get on a call with Hannah, who’s our Director of Enrollment, and she’ll talk through the process with you and really determine if we’re the right fit for each other.

But you know, I think that it’s never too soon to start. I always say start before you’re ready. Even if you’re not sure of your idea, even if you’re still narrowing down the garments of your first collection, whatever it is.

Start before you’re ready, because it always takes longer than you want it to or you think it’s going to. And so, you know, if you wait for tomorrow, then you’re going to wish you started yesterday.

ELIZABETH

Yeah, I like that. I feel like that could apply to a lot of things. If you wait until tomorrow, you’ll wish you started yesterday. I love that.

So Shannon, thank you so much for joining us for this conversation and sharing all of your insights and tips with us.

So my final question for you that I ask all guests that come onto the show is what does a better future for fashion look like to you?

SHANNON

Well, I won’t go more into on-demand manufacturing and pre-selling. I feel like we got there with that. So I think that is definitely a business model that I would love to see for the future.

But just from the consumer side, I think if we can get to a place of buying less, but buying better — that has become such a cliche in a sustainable fashion, like we hear that again and again — but it’s so true.

Like just buy less we do not need the amount of stuff we have. And if you can really just start to be conscious of buying quality pieces that are going to last in your closet for years to come, get creative with styling different garments differently or whatever you need to do to feel fulfilled in your fashion creativity. I think there is a way to do it.

We only wear about I think it’s like a quarter of our closet anyway. So if we can start to fill that closet with quality, well-made, durable garments that are trendless and seasonless, then I think that is a better future for the fashion industry.

ELIZABETH

And that’s a wrap for this episode with Shannon. If you learned something or had an aha moment from this conversation, let us know by sharing your takeaways on Instagram and tagging @consciousstyle and @factory45co.

And if you enjoyed this episode, make sure to hit subscribe so that you do not miss any future episodes like this one.

Finally, if you have a moment, leaving a rating and review on Apple Podcasts can go a huge way in helping this podcast reach new audiences, and also help me continue to get more amazing guests on the show. Thank you to everybody who has already left a rating or review. It seriously means so, so much.

All right. Thanks for tuning in today and I will see you again here, same time, same place next week!

About Shannon:

Shannon Lohr is the founder of Factory45, the online business school trusted by over 500 fashion entrepreneurs since 2014.

Over the years she’s worked with aspiring designers, all over the globe, to launch or grow their brands in a way that’s better for people and planet. Shannon got her start in 2010 when she co-founded {r}evolution apparel, a sustainable clothing brand for female travelers and minimalists that was featured by The New York Times, The Wall Street Journal and Forbes.com.