Episode 142: Good Business Is a Choice, featuring Selina, Benita, & Jennifer

Welcome to Clotheshorse, the podcast that just did their first IRL Clotheshorse-related event, appearing on a panel at Slow Fashion Fest here in Austin!

I’m your host, Amanda and this is episode 142. As you’re probably tired of hearing me say, I believe that small business is the future. And doing what I can as a member of the slow fashion community to elevate these small businesses, give them a moment on my platform to meet other members of the community, is very important to me! For November and December, I will be sharing audio essays from small businesses in our community in each episode. And I will be doing all I can to share and shine a spotlight on other small businesses I love on Instagram. If you want to participate in any of this, you’ll find all the essential info in the show notes and on instagram. I want to say that at this point, I have received about half a dozen audio essays and I still need more. The deadline is November 1. And in terms of IG lives, honestly so few people have signed up that I may not be able to pull it off. We’ll see!

To get us ready for two months of meeting small businesses and hearing their stories, today’s episode features two different conversations with small businesses that are trying to scale their business (meaning: grow it) without sacrificing their values. And that might sound like an easy problem to solve, but it’s actually a big huge riddle! That doesn’t mean it is impossible, but it does mean doing things in new, unprecedented ways. And diversifying how, what, and where you sell stuff/ideas/etc. Bad business is a choice. And so is good business. It’s just that we don’t see a lot of good business happening on a large scale, so doing things the ethical way is still pretty groundbreaking and disruptive in 2022.

First we’ll chat with Jennifer and Benita, two of the founders of Style Crush, an online secondhand/resale platform that is trying to do things in a better way: ensuring that the people who sell on their platform actually make some money. One of their big issues (and I share their frustration) with Poshmark, Depop, etc is that while the companies themselves are seeing massive revenue, the sellers make very little because these platforms take such a big cut. They are going to explain how and why they are working to do things differently.

In the second conversation, long time Clotheshorse friend and recurring guest, Selina Sanders, is back to tell us about what she has been doing to scale her namesake brand, how she keeps herself motivated and healthy, and to talk to us about her new Domestika class.

This episode is a little on the long side. But guess what? There will not be a new episode next week because I will be camping with my in-laws at the beach, so you have two whole weeks to get through this one. Maybe you can just split it in half?

Let’s get started with Jennifer and Benita. So you have all met Jennifer in the past, in episode 52…which to be fair, was a long time ago! And Style Crush has grown and evolved a lot since then. According to their website, “We believe profits from a marketplace should flow back to its community. By making StyleCrush a member-owned cooperative, we’re building that principle into the foundation of our organization

We’ll never have outside investors pressuring us to do things that are better for the bottom line than our users.⁠

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It may mean we have to grow a little slower than our VC backed competition, but we think that’s actually a benefit. Prioritizing growth over functionality is what created this mess to begin with. ⁠”

Obviously I love all of this, especially after all of the research I did into Etsy and eBay for the Etsy-sodes. The moral of that series: these platforms make it nearly impossible for their sellers to make a living, yet they sell their platforms as a way for…you guessed it…their sellers to make a living. And Poshmark definitely markets that idea to their sellers. Benita and Jennifer are going to tell us about how and why they want Style Crush to be a gamechanger in the resale community. Let’s go!

Coming Soon!

Thank you so much to Benita and Jennifer for spending some time with me! I hope by now you are obsessed with getting involved with Style Crush! You can sign up at stylecrush.co and give them a follow on instagram @joinstylecrush. I am so excited about what they are doing and I want this to be successful because it will be a game changer for the entire resale industry.

Okay…now let’s shift gears to my conversation with Selina!

In our conversation, Selina touches on something that I explained way back in the Etsy-sodes, the idea of “runway.”

Runway is a great startup business term, and if you’re a small business owner, you’re probably thinking about your runway even if you don’t know what that term means. Runway refers to how many months your business can keep operating before it’s out of money….basically, how long can you stay in business with your current sales and expenses without either going into debt or taking on more investment. When a big business (like a massive startup, think WeWork, Etsy, some of my past employers) is still in the runway mode, it means they aren’t making any actual profit when they deduct the cost of what they are selling and their overhead expenses from the money they are bringing in from sales. When you’re a small business, you’re kinda always in the runway mode, and that’s okay, as long a you re planning things the right way.. Any profit that you do make just adds a few more inches or feet to that runway (in reality days, weeks or months)…with the right balance, your runway begins to feel infinite because it’s constantly extending itself. That’s a profitable, healthy business! And if you aren’t making any profit, well, the runway just keeps getting shorter.

And to be fair here…your runway–even as an older, more established business–can really reveal the values and priorities of your business. Like if your runway is massively long, you could keep going as-is for years and years…it probably means a few things: either you’re marking up your product a ton (and it’s possibly low quality or kinda scammy) AND/OR you aren’t paying people enough or hiring enough people. Your staff is underpaid and doing the jobs of several people. Or it’s just you doing all the work…and it’s time for you to get yourself some help! Because you’re going to burn yourself out.

If your business has been around for a long time and your runway is always *this close* to running out…well, you’re probably spending TOO MUCH money, either on inventory that isn’t selling, on marketing that’s not bringing a lot of repeat customers, or on staffing–your team is too big…a rarity in 2022, but definitely a common issue in early startup culture.

Nasty Gal ultimately ran out of runway and filed for bankruptcy due to several of these issues:

The company was spending wayyyyyy too much on customer acquisition. Spending more than $100 to acquire each new customer, but that customer only shopped the site once, spent about $50, and then never came back again. Now how that applies to you as a small business: you might be spending too much money on IG ads, giving away too much swag, too many giveaways on IG, or giving a lot of stuff to influencers.

Carrying too much inventory and never cleaning it out, revisiting the inventory strategy. When I started working there some of my categories had enough inventory in stock, that it would take more than a year to sell out of it, even if we never added anything new. I always tell clients “the product you sell is money that had a curse put on it that turned it into stuff. Your goal is to turn that stuff back into money to feed your business.” You can’t hold on to stuff for a long time, unless your plan is to do the long game of waiting for it to become vintage. Take markdowns and move on!

Spending too much money on things that weren’t making an impact on the business from a revenue perspective, but were definitely shortening that runway: a big fancy office in DTLA filled with very expensive furniture, a huge store in Santa Monica that wasn’t really doing well, massive sample and travel budgets for design…that kind of thing.

As a small business owner, your runway is not only financial, but also physical, mental, and emotional. I can honestly say that there have been times where I have just thrown my hands in the air and said, “I have no more ideas or words to give to Clotheshorse right now.” And that usually means I need some rest and time off, maybe to actually do something fun for a change!

Part of being a small business owner is maintaining the emotional runway, just as much the financial runway. Getting rest, taking breaks, realizing that you can’t do everything yourself, and working paid help into your financial plan. Ultimately extending this runway allows your business to grow, be efficient, gain loyal customers, and keep you inspired/motivated!

If you’re feeling that the emotional/creative runway is just a little short for you, it’s time to start giving yourself a break NOW before your business feels the negative impact of a broken owner/maker/seller/human!

Well, without further ado, let’s jump into my conversation with Selina!

Coming Soon!

About a year ago, I made the mistake of reading a conversation about Clotheshorse on Reddit, and it’s something I will never do again. One of the complaints about this podcast (other than it being super depressing) was that I left the nice things people said about the show in their voice messages, rather than cutting them. And so for the past year, I’ve been cutting that stuff out…for some reason that even I don’t understand, especially as I explain this out loud. But I left in that last part in my conversation with Selina because you know what? It means a lot to me that she has seen the evolution, because she and I have been on this journey since the beginning, growing alongside one another. Extending Clotheshorse beyond just clothes, just fast fashion, all of that has been part of a larger mission to show everyone who listens that we can as individuals make an impact, that a lot of our consumption habits stem from not feeling as though we can be ourselves, and that so many industries exploit that insecurity as much as they exploit humans and the planet. Each time one of us has that AHA moment of really feeling and knowing that who we are is just perfect…fast fashion loses another devoted customer. Each time we proudly show our true inner selves to others, we start someone else on their own journey to achieving that for themselves. And that is how we disrupt the status quo of buying shit to make ourselves feel better, cooler, prettier, wealthier, smarter…whatever it is we are trying to do when we shop. Changing is work, and progress isn’t linear…but wow, to look back and see how you’ve grown and how much better you feel…that’s better than the best article of clothing I’ve ever owned!

It was so great to catch up with Selina, who you can find on instagram as @selina_sanders. The linktree in her profile includes both the link to her online store and the link to her Domestika class. As she suggested, you should use THAT link to sign up for class because she gets paid a bigger share.

I am so excited to see Selina at West Coast Craft in San Francisco, November 19 & 20. I hope I will see some of you there, too!

Okay, well that’s all for this episode everyone! I am going to go finish my laundry and do all kinds of boring housework in preparation for my in-laws arrival this week.

Thanks for listening to this episode of Clotheshorse.