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How to start an online fashion store, from a Kentucky couple whose side hustle became a $65 million brand with 1 million Instagram followers

Published by Business Insider on Thu, 10 Jun 2021

<p><img src="https://static4.businessinsider.com/image/60c218de6d855e00181574ab-2400/Chris Gerbig and Tori Gerbig.jpg" border="0" alt="Pink Lily founders Chris Gerbig and Tori Gerbig." data-mce-source="Courtesy of Pink Lily" data-mce-caption="Pink Lily founders Chris Gerbig and Tori Gerbig."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Tori Gerbig started selling clothes on eBay in 2011 as a side hustle to pay off student loans while she and her husband, Chris, worked their corporate jobs.</p><p>When their son arrived in the fall of 2013, Tori went on maternity leave and started a Facebook group to ramp up her selling. "We had people coming over shopping from the trunk of my car, in our house and our dining room," she told Insider.</p><p>On January 1, 2014, the couple rang in the new year with the launch of their e-commerce site, <a href="https://pinklily.com/">Pink Lily</a>, and set a goal to reach $50,000 in sales that year. They continued working their full-time jobs, and on nights and weekends they packed and shipped orders, bought inventory, handled customer service, and marketed their brand.</p><p><img style="float:right;" src="https://static4.businessinsider.com/image/60c1369b6d855e001815737a-650/Pink Lily Model Shot-1.jpg" border="0" alt="A styled look from women's apparel brand Pink Lily." data-mce-source="Courtesy of Pink Lily" data-mce-caption="A styled look from women's apparel brand Pink Lily."></p><p>Four months in, the couple surpassed their $50,000 goal. The company was already more successful than they had expected. Tori quit her job, and Chris followed a couple of months later. They moved their operations from their dining table to their first "warehouse," an old 1,200-square-foot hair salon. They outgrew the space within three months, recruited their sisters and Tori's mom, and hired their first non-family employee in August. By the year's end, they'd hit $4 million in sales.</p><p>"The sheer amount of work that goes into it was not expected," said Chris, who was also studying for his MBA when they launched the site. "It was just crazy. We were up at 2, 3 o'clock in the morning packing orders and doing homework."</p><p>As the Gerbigs grew their company for the first year and a half, they worked 40- to 60-hour weeks and holidays, reinvesting profits in the business. "We used all of it just to grow the business," Chris said. "And we were able to really grow that inventory collection in a very short period of time, which in turn increased sales, revenue, and customer retention."</p><p><img class="float_left" src="https://static3.businessinsider.com/image/60c1369db50ed500185e3f94-2400/Pink Lily Model Shot-6.jpg" border="0" alt="A styled look from women's apparel brand Pink Lily." data-mce-source="Courtesy of Pink Lily" data-mce-caption="A styled look from women's apparel brand Pink Lily."></p><p>Today their company, based in Bowling Green, Kentucky, employs 300 people, operates a retail store, and has 200,000 square feet of warehouse space, and the founders say they expect to exceed $100 million in sales this year. Last year, the brand made $65 million in revenue, nearly double the previous year's revenue, according to documentation viewed by Insider.</p><p><img src="https://static1.businessinsider.com/image/60c21b9f6d855e00181574ba-2400/ToriGerbig-Headshot.jpg" border="0" alt="Tori Gerbig Headshot" data-mce-source="Courtesy of Pink Lily" data-mce-caption="Pink Lily cofounder and CEO, Tori Gerbig."></p><h2>Wider variety, broader demographic</h2><p>Often the most effective way to nail down the right products for your customers is to sell what you would wear yourself. "The easiest way that we've built up the brand is because I am a customer of the brand," Tori said.</p><p>When she started Pink Lily at age 27, she wanted stylish clothes that were also affordable. "I didn't really love the stores in our local mall," she said. "I liked some local boutiques, but their prices were just a little bit too high."</p><p>As the brand grew, so did the age range of its demographic, which Tori said is 50% 25- to 34-year-olds and 40% 18- to 25-year-olds. Adding a variety of styles, from leggings and cocktail dresses to swimwear and mommy-and-me sets, provides more opportunities for customers to keep coming back instead of purchasing once or twice a year for special occasions.</p><p>"Competitors we have out in the market, they only focus on events and wedding-guest dresses," Tori said. "But then, especially during COVID times when things got canceled, you're limiting your customers."</p><p><img src="https://static2.businessinsider.com/image/60c219d36d855e00181574b3-2400/Pink Lily Team - 1M Instagram Followers.jpg" border="0" alt="Pink Lily team celebrates 1 million Instagram followers" data-mce-source="Courtesy of Pink Lily" data-mce-caption="Pink Lily team celebrates 1 million Instagram followers"></p><h2>Don't put all your eggs in one social-media basket</h2><p>When the Gerbigs started out, they said, they didn't have to pay for Facebook ads to get clicks. But today, algorithms that determine how often people will see a post or ad seem to change more frequently than fashion trends. Tori advised brands to spread their marketing strategies across as many platforms and channels as possible.</p><p>Pinterest has been an incredible source of Pink Lily's growth<a href="https://www.pinterest.com/shopthepinklily/_shop/">the brand's account</a> gets more than 10 million monthly views, according to its profile page. Plus, she said, the brand has 1 million people signed up for text alerts and 2 million email subscribers. More recently, Pink Lily has benefitted from viral moments on <a href="https://www.tiktok.com/@shoppinklily'lang=en">TikTok</a> with styling tips and influencer content.</p><p>Pink Lily dabbled in working with marketing agencies but found more success through its in-house marketing team, now 10 people. "We're very specific with the people that we bring on to the team," Chris said. Some employees didn't have decades of marketing experience but have high energy and understand the brand, he said.</p><h2>Buying out a style makes it a Pink Lily exclusive</h2><p>In May 2021, Pink Lily averaged 11,000 products sold on its site a day, which Insider confirmed through documentation. Tori said the brand carried 800 to 1,000 styles a month and was consistently adding new ones. About 70% of the inventory comes from manufacturers that produce exclusive designs for the brand, and 30% is premade and purchased wholesale.</p><p>When she or her team of seven buyers finds a premade style they think will do well, they'll buy up all the vendor's inventory. This way, the style can be purchased only on Pink Lily, even though it wasn't made exclusively for the brand.</p><p><img src="https://static6.businessinsider.com/image/60c21ac26d855e00181574b6-2400/Pink Lily Warehouse.jpg" border="0" alt="Inside Pink Lily's 160,000-square-foot warehouse." style="font-size: 15px;" data-mce-source="Courtesy of Pink Lily" data-mce-caption="Inside Pink Lily's 160,000-square-foot warehouse."></p><h2>Tori surveys her customers to know what they want</h2><p>Pink Lily uses Facebook and Instagram's livestream capabilities to survey customers in real time and give sneak peeks at new inventory. Sometimes Tori goes live while visiting a vendor to ask viewers what they think about the styles as she goes through them.</p><p>"We don't show them every style, because there's no way to show them a thousand different styles every single month," she said, "but we feel out what the trends are going to be ahead of time." Tried-and-true styles like animal prints can skip the survey and go straight to the yes pile. "We pretty much know that anything we carry in animal print they're going to love," she added.</p><p>Tori said she'd noticed a slight age difference between Facebook users, who lean older, and Instagram users, who lean younger. This can be an advantage to further understand how to cater styles to those age groups.</p><h2>A 620-member ambassador program is the brand's secret sauce</h2><p><img class="float_left" src="https://static5.businessinsider.com/image/60c136a26d855e001815737d-2400/Pink Lily Model Shot-5.jpg" border="0" alt="A styled look from women's apparel brand Pink Lily." data-mce-source="Courtesy of Pink Lily" data-mce-caption="A styled look from women's apparel brand Pink Lily."></p><p>Pink Lily has more than 1 million followers on <a href="https://www.instagram.com/pinklily/">Instagram</a>. Part of its large fan base is thanks to a powerful ambassador program giving&nbsp; commissions to women who promote the brand on social media. Ambassadors earn 10% commission on every sale made through their personal link. The program has 620 members and has generated $7.4 million in sales in the past year, according to a company representative.</p><p>Though thousands of people apply to be a Pink Lily ambassador, the program is selective. The team vets every applicant, looking for positive, supportive women with trusted followings and who typically already wear the brand. Engagement rate is more important than follower count, because that's the most effective way to tell whether someone has meaningful interactions with their audience that would translate to sales. Tori said ambassadors could earn up to $40,000 in commissions a month.</p><p><img src="https://static3.businessinsider.com/image/60c21a8c6d855e00181574b5-2400/Pink Lily Retail Store.jpg" border="0" alt="Exterior of the Pink Lily retail store." data-mce-source="Courtesy of Pink Lily" data-mce-caption="The exterior of the Pink Lily retail store."></p><h2>A brick-and-mortar shop is nice to have but not necessary</h2><p>In 2017, the Gerbigs opened their store in Bowling Green. Though it's been a good add-on to the business for brand awareness and last-minute shoppers, e-commerce traffic far outpaces in-store traffic, they said.</p><p>E-commerce "has grown so fast and just changed so rapidly over the last few years, but in-store shopping has not," Tori said, adding that they didn't plan to expand retail operations because their time and energy is better spent on e-commerce, especially as more people turned to online shopping during the pandemic.</p><p>"When an online website is receiving literally millions of hits a month of happy customers," Chris added, "there's no way that a retail store in a small Kentucky town is going to be able to compete with that."</p><p><a href="https://www.businessinsider.com/how-to-start-online-fashion-brand-make-millions-2021-6#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/movie-theaters-ruining-masking-curtains-projector-bulb-brightness-2018-7">Hate going to the theater' Here's how theaters are ruining the movie-going experience</a></p>
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