When Kate Spade got their first huge contract from a department store, there was a big problem: they needed ship a lot of product and wouldn’t get paid for 30-60 days.
As founders who hadn’t taken a salary in years, running the company out of their apartment, this was no easy feat for Kate and Andy. The manufacturer demanded tens of thousands upfront, but the department store wouldn’t pay for over a month. It’s never easy to find that much capital when you’re a small player in a big market.
That was the mid 90’s. This is 2017, and you don’t have to have that problem anymore. Some people still choose this model, maybe out of ignorance or maybe because it’s the route they desire. But at least now you have a choice. You can start on etsy. You can build your own website and sell online forever. You can launch a kickstarter. You can 3-D print your goods on demand.
You don’t have to upfront huge shipments to a department store because there are more ways to reach customers than ever before. The internet has given the entrepreneur power to choose her channel.