Crowdfunding fueling growth of leather goods maker Satchel & Page
Nov 24, 2014
Austin Business Journal
Austin's Satchel & Page leather goods brands has struck upon a way to use the Kickstarter crowdfunding site to crowd test its new product offerings and figure out its best opportunities for
The three-year-old startup, which will reach $500,000 in revenue this year, has raised more than $80,000 on its still-active Kickstarter campaign for a new line of custom leather jackets.
The donations to the campaign are in effect pre-orders for the Turkish-made jackets, allowing the company to produce only what it has enough demand for instead of tying up scarce capital to
produce excess stock it would then have to use its marketing budget to find customers for
Daniel Ralsky, founder of the three-person company, said the company's first Kickstarter product launch last year helped validate his initial line of leather duffel bags when it raised
$228,000 on a goal of $15,000
"It was that campaign that we did for the bags that made it legit and served as validation," said Ralsky, who holds an MBA from the University of Texas but left the world of corporate
consulting to start a consumer goods business. "We've found that crowdfunding is the best way to offer a great value because we only produce what the customers tell us they want"
Satchel & Page currently makes 75 percent of its sales online and the rest through 20 retail accounts for its bags and other smaller goods. Ralsky said he will be hiring a sales team in
2015 to open new retail accounts throughout the U.S., though the jackets will likely remain a special order item made available in batches twice a year
Looking further down the road, he said he'd like to grow out of the appointment-only showroom the company occupies on South First Street to open a flagship retail store, though that move is
likely three years away
Ralsky said new products in store include more bag selections, belts, shoes and other goods to turn the company into a leather lifestyle brand