- Bearbottom, a men's clothing brand, has costs 15% to 20% higher than they were before 2020.
- Its CEO and founder told Insider how the small business found ways to be leaner across the company.
- Most of its cost saving has been through open communication with vendors and partners.
This as-told-to essay is based on a conversation with Robert Felder, the 28-year-old CEO and founder of the men's clothing brand Bearbottom, about how he's dealt with inflation over the past few years. Insider has verified the business' growth with documentation. The following has been edited for length and clarity.
Like most business owners, I started noticing our costs ticking up in 2020 when the pandemic led to limited shipping capacity and skyrocketing prices. Since then, we've seen significant price increases in nearly every aspect of the business: fabric, shipping, warehouse materials, and advertising.
At the peak of price hikes, we saw cost increases of close to 40% compared with 2020 for our best-selling product. Since then, we have seen some prices normalize a bit, but our costs are sitting closer to 15% to 20% higher than before.
Yet we've done everything in our power to avoid passing this increase on to our customers, even going so far as to make a pledge to customers at the start of this year to not raise our prices in 2023. I think it means a lot to our customers, and as other brands increase prices, I think it gives us an opportunity to pick up more of the market — we saw our total sales increase by 149% last year.
The cost increases have been challenging for us to absorb, but we have put energy into finding ways to be leaner across almost every aspect of our business, without ever sacrificing the product quality or customer experience.
We've collaborated with the vendors we work with to create efficiencies
Many of our cost-saving efficiencies have been found through open communication with our vendors and partners.
For example, we approached our shipping partners at FedEx and the post office to share our shipping parameters (standard package sizes, ideal delivery times, etc.) and asked what we could do on our end to make things easier for them and maybe lower the cost. They suggested things such as consolidating packages and getting items to them earlier. We also worked with our manufacturers in Bengaluru, India, to adjust our packaging sizes so that we could use 97% of each container shipped to the US, which drove down the cost per item.
Our partners are open to these conversations because we're not just approaching them asking to pay less money. We're working with them to save both of us money. Our director of sourcing has been in the industry for decades and has been able to help our factories implement best practices that save us money and expand their businesses.
Doing this successfully has involved a deep understanding of all aspects of the business so we can spot opportunities for efficiencies and have real relationships with our vendors so they are open to working together to find solutions.
We spend where it's worth it and save where we can
Swallowing these increased costs wasn't just about telling my team that there was no budget for anything. In fact, there are some things we're spending a lot more on this year to strengthen what's worked well.
I challenged our marketing team this year to cut marketing costs by 15%, while still working toward our goal of increasing revenue by about 50%. To my point above, that has involved working closely with our reps at Meta, Google, and TikTok to come up with new methods of targeting that help us lower our customer-acquisition costs.
It's also involved investing more in creating great content, which we've found is key for our growth. Besides creating a lot of content in-house, our team has been focused on sourcing user-generated content, developing relationships with customers who want to help the brand, and converting what they've created into posts that help us gain customers or highlight product features. This content is more authentic and more affordable.
All in all, our team has been energized by this challenge to create a comprehensive strategy that keeps total costs down while effectively reaching our customers.
We keep the long game in mind
There's never a dull moment in business, and you're always going to be facing some kind of problem. Trusting that we're in this for the long term helps me see the bigger picture through challenges like these.
I truly believe that, eventually, the market will correct itself and a lot of these costs will come back down. In the meantime, we're going to control the controllable, stick to the principles we were founded on, and do what we need to stay profitable while delivering the best product and experience for our customers.
In the short term, that may just help us get a bigger piece of a smaller pie — but I think it's what will build a truly lasting brand.