Crowdfunding has allowed startups in the fashion industry to bring their manufacturing near their home, instead of outsourcing it to factories in Asia. Labels use local manufacturers to create customized clothing.

Before the Label, Out of X, and I Am La Mode are just some of the startups that offer alternative clothing items to consumers. Startups are looking to crowdfunding to allow them to create unique and personalized clothing.

Crowdfunding in the fashion industry is similar to Indigogo and Kickstarter. Each item will have a campaign with minimum amount to make the cut. Once the item gets pass the set minimum number of backers, the item will go into production. The consumers will decide whether the item will be made or not.

Fashion designers startupsPhoto courtesy of Out of X, vist them!

Out of X is a company based in Tel Aviv. They want to change the way fashion companies do business by incorporating two funnels. The first one is between the designer and the consumer. The second one is between the business and the local manufacturers.

Shany Elkin, Out of X’s creative director, said that designers who submit designs can submit where they want it to be manufactured. It is recommended to go local because of logistical reasons. After pricing and submitting the designs, Out of X will contact a manufacturer.

They plan to launch a service that will rate manufacturers to allow designers to make a smart decision, as well as create competition among local companies that can lead to lower prices. Out of X’s will get a fee of 12 percent from the purchasing amount. It estimates that by 2016, its turnover will reach $10 million and the number of designers to increase to 5,000.

Most startups that have resorted to crowdfunding provide designers the ability to have a presence on various websites and pick local manufacturers. It is highly competitive industry and designers need to look for advantages to stay relevant.