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How did Spanx become profitable despite China?!

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Alexandra91zk

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Jul 26, 2019
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Hi everyone, I hope you are all doing well.

So i have a question. I assume you all heard about Sara Blakely's notoriously famous fastlane business called SPANX.

She cut the feet out of a pantyhose and basically came out with the idea of leggings. Back then in the early 2000s, this was revolutionary and she became profitable in her first year. She is now a billionaire, despite having no business education whatsoever, and her business is still profitable today.

My question is this: How did she manage, then and NOW, to still become profitable when Chinese sellers on Amazon and Aliexpress can so easily copy her product ? Is it because the internet wasn't so big back then? Or because she chose to sell her products in retail stores ?

If somebody today has a brand new idea, if they release their product, what prevents Chinese manufacturers to steal the idea and sell it 10 times cheaper on Aliexpress or Amazon (especially if it's a generic idea and easy to replicate?)

What's the point of ever launching something new??? (please feel the desperation in my voice :somber:)


Thank you beforehand for your thoughts!
-A
 

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Jon L

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I recently listened to a Tony Robbins podcast episode where she was interviewed. Its worth listening to:


What I got out of it was that she intensely cared about her customers. She thought about them, thought like them, talked to them, understood them, listened to them, etc etc etc. Then, when she talked to them about her product, they immediately got what she was talking about. She also worked her butt off, doing anything and everything possible to promote her product. She cold called Neiman Marcus, got an appointment with a buyer, flew to meet her, invited her into the bathroom to see the difference between her product and the competition. She also worked the floor as a salesperson for her product, in dozens of stores across the country.
 

Bobby_italy

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Branding is powerful, think about the reasons you own an iphone instead of a no name phone like those xiamosiofsi or whatever they're called... they're more powerful and cost less yet still won't surpass the iphone in sales.

This is just an example you can think about it in 100 other examples, like LEVIS jeans, versace perfume, etc.
 

becks22

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She also has a masterclass that is AMAZING! She's very smart and worked hard. Her product is superior to other competitors in the market.
 
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Alexandra91zk

New Contributor
Jul 26, 2019
9
4
11
I recently listened to a Tony Robbins podcast episode where she was interviewed. Its worth listening to:


What I got out of it was that she intensely cared about her customers. She thought about them, thought like them, talked to them, understood them, listened to them, etc etc etc. Then, when she talked to them about her product, they immediately got what she was talking about. She also worked her butt off, doing anything and everything possible to promote her product. She cold called Neiman Marcus, got an appointment with a buyer, flew to meet her, invited her into the bathroom to see the difference between her product and the competition. She also worked the floor as a salesperson for her product, in dozens of stores across the country.
Thanks for your reply and for that link, I'll sure give it a listen!

I think what she did is remarkable. It's clear she worked her a** off and it paid off.

But still, I wonder if caring about your customers and bringing a personal touch to your product is enough in today's international market to succeed. Because if she came up with that idea today, wouldn't it be instantly copied and manufactured by the Chinese and then sold for 2$ ?

Sorry I know I repeat myself but I still don't understand how anyone can launch a product today and not being instantly swept by this Asian competition, unless they have a ONE OF A KIND product
 
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OP
A

Alexandra91zk

New Contributor
Jul 26, 2019
9
4
11
Branding is powerful, think about the reasons you own an iphone instead of a no name phone like those xiamosiofsi or whatever they're called... they're more powerful and cost less yet still won't surpass the iphone in sales.

This is just an example you can think about it in 100 other examples, like LEVIS jeans, versace perfume, etc.
Yes you are absolutely right. Her branding definitely bonds with women. Just visiting her website makes you want to buy stuff ahah.
 
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Alexandra91zk

New Contributor
Jul 26, 2019
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11
She also has a masterclass that is AMAZING! She's very smart and worked hard. Her product is superior to other competitors in the market.
Ohhhh yes I saw the ad for this! I definitely want to hear more for sure. That's motivational!
 

Bobby_italy

Contributor
Jan 19, 2016
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Gym shark is another similar business worth studying - the owner Ben has a bunch of great free content on YouTube.
underrated content, he really gives you the blueprint on a fitness apparel ecommerce...
 
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Jon L

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I think it depends on the product and how connected people feel to it. For me:

I buy Starbucks coffee. I like it. I like the ambience I experience when I'm in a Starbucks store. I also know what I'm going to get when I order a particular drink. I get the same quality every time I order. 7-11 might have the same quality, or it might not. I don't care to try it. Right now, I don't want to spend money on Starbucks. Instead of trying something cheaper, I just brew coffee at home.

I buy Adidas shoes. At Costco, they're $25. I could find a knockoff brand somewhere else that would be $10, and it might be the same quality, or it might not. Its not worth $15 to me to experiment with it.

I buy socks from Costco. They're more expensive than the ones at Walmart, but I like the feel of them better. Even if the exact same ones were at Walmart for a few dollars less, I wouldn't bother because I've been burned before by the cheap stuff at Walmart, and its not worth my time to try it out.

I'm not a woman and so I have no idea why cutting out the foot matters, but from what women are saying about it, its pretty innovative. Spanx has innovated similarly on a couple hundred other products by now. I could easily see it being worth the extra money to try their other products - if I'm happy with one product of theirs I'll probably be happy with one of the others.

However - I ALWAYS buy the store brand of over the counter drugs. They're half price and because I know they're regulated, they do the same thing as the name brand. Why pay double for something I know to be THE SAME EXACT THING?
 
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Alexandra91zk

New Contributor
Jul 26, 2019
9
4
11
I think it depends on the product and how connected people feel to it. For me:

I buy Starbucks coffee. I like it. I like the ambience I experience when I'm in a Starbucks store. I also know what I'm going to get when I order a particular drink. I get the same quality every time I order. 7-11 might have the same quality, or it might not. I don't care to try it. Right now, I don't want to spend money on Starbucks. Instead of trying something cheaper, I just brew coffee at home.

I buy Adidas shoes. At Costco, they're $25. I could find a knockoff brand somewhere else that would be $10, and it might be the same quality, or it might not. Its not worth $15 to me to experiment with it.

I buy socks from Costco. They're more expensive than the ones at Walmart, but I like the feel of them better. Even if the exact same ones were at Walmart for a few dollars less, I wouldn't bother because I've been burned before by the cheap stuff at Walmart, and its not worth my time to try it out.

I'm not a woman and so I have no idea why cutting out the foot matters, but from what women are saying about it, its pretty innovative. Spanx has innovated similarly on a couple hundred other products by now. I could easily see it being worth the extra money to try their other products - if I'm happy with one product of theirs I'll probably be happy with one of the others.
Great insight, thank you!

Yes it's true, user experience matters a lot. I also think it was a smart move to sell the products in stores and through retailers first. Her website only launched in 2017! Before that, it was mostly sold through stores and thanks to word to mouth. I think this has definitely played in her favour.

However - I ALWAYS buy the store brand of over the counter drugs. They're half price and because I know they're regulated, they do the same thing as the name brand. Why pay double for something I know to be THE SAME EXACT THING?
Yes and I guess that's what I meant in my original question. How does one determine what is worth buying on Aliexpress and what's worth buying from the original innovator?

Here is a STRIKING example, this:

31483

This is a makeup sponge. It is used to put foundation on and apply makeup perfectly. It has literally a perfect finish on the skin.

The brand beautyblender launched this.

Today, their sponge is manufactured indifferently all around the world. Even their name is being generically used for any makeup sponge. Every possible brand, even Sephora, has now their own beauty blender sponges.

So, how does beautyblender makes profit? It's clear when you look at their online website that they had to diversify, but it's another example that shows that being innovative doesn't necessarily mean you'll get success. Sometimes your idea will be stolen and there is nothing you can do about it. That kinda sucks to innovate and no longer get any credit for it...
 

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foodiepersecond

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I recently listened to a Tony Robbins podcast episode where she was interviewed. It's worth listening to:

The How I Built This podcast was also good. Who knew that she studied in the Barnes and Nobles that I lived across from and frequented! She was simply a go-getter. She would move her endcaps and stand it right in front of the cash register without any approval and tell cashiers that corporate sad it was ok. I think she built a strong brand and quality product. Spanx is definitely superior to just simply cutting the feet of hosiery. Same with Oreos. Every store can have its own brand and I would still pay premium dollar for name-brand Oreos. I think many women also appreciate her as a role model and want to support other women.
 

Sebastya

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The How I Built This podcast was also good. Who knew that she studied in the Barnes and Nobles that I lived across from and frequented! She was simply a go-getter. She would move her endcaps and stand it right in front of the cash register without any approval and tell cashiers that corporate sad it was ok. I think she built a strong brand and quality product. Spanx is definitely superior to just simply cutting the feet of hosiery. Same with Oreos. Every store can have its own brand and I would still pay premium dollar for name-brand Oreos. I think many women also appreciate her as a role model and want to support other women.
My favorite podcast. And yeah, she is a fantastic role model for all entrepreneurs.
 

MoreValue

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Thanks for your reply and for that link, I'll sure give it a listen!

I think what she did is remarkable. It's clear she worked her a** off and it paid off.

But still, I wonder if caring about your customers and bringing a personal touch to your product is enough in today's international market to succeed. Because if she came up with that idea today, wouldn't it be instantly copied and manufactured by the Chinese and then sold for 2$ ?

Sorry I know I repeat myself but I still don't understand how anyone can launch a product today and not being instantly swept by this Asian competition, unless they have a ONE OF A KIND product
Breakdown the value skew. You are looking at her products one dimensionally. You are focusing solely on concrete value. That is the function of its product. Most people do this because it is the easiest to see. Other concrete values can include its construction and quality of materials.

The reason she is still alive in this market, like what most others. Branding. Which falls under abstract value. It is the “feel” someone gets when they hold your product. These feels can created through concrete measures such as typography, packaging, etc. People that are logical suffer from grasping this concept and undermine the power of branding. Branding is a subconscious level.

Branding is powerful, think about the reasons you own an iphone instead of a no name phone like those xiamosiofsi or whatever they're called... they're more powerful and cost less yet still won't surpass the iphone in sales.

This is just an example you can think about it in 100 other examples, like LEVIS jeans, versace perfume, etc.
This

Gym shark is another similar business worth studying - the owner Ben has a bunch of great free content on YouTube.
I wouldn’t exactly call them small anymore. It is different than Spanx though. I looked at her website and it is somewhat of a personal brand she uses herself as an influencer. She only works as an influencer because she represents ideal customer archetype Or the person that her demographics desire to be.

Ben used other influencers to promote the brand, this makes your brand look a lot bigger.

edit: misread your similar as small, lol
 
Last edited:

MoreValue

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Forgot to mention that China tends to hold a negative perception of poor/low value. Even though that’s not exactly true. Good and bad things come from all countries.

The cringy thing brands do which I personally hate. “Designed in San Francisco” “Designed in New York”. They trying to hide that made in China label so hard. Or some just repping the fact that they are just located in New York. Even changing their domain handle.

Leveraging the brand equity of the cities. For being hip, cool, innovative, Etc.
 

alexkuzmov

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Great insight, thank you!

Yes it's true, user experience matters a lot. I also think it was a smart move to sell the products in stores and through retailers first. Her website only launched in 2017! Before that, it was mostly sold through stores and thanks to word to mouth. I think this has definitely played in her favour.



Yes and I guess that's what I meant in my original question. How does one determine what is worth buying on Aliexpress and what's worth buying from the original innovator?

Here is a STRIKING example, this:

View attachment 31483

This is a makeup sponge. It is used to put foundation on and apply makeup perfectly. It has literally a perfect finish on the skin.

The brand beautyblender launched this.

Today, their sponge is manufactured indifferently all around the world. Even their name is being generically used for any makeup sponge. Every possible brand, even Sephora, has now their own beauty blender sponges.

So, how does beautyblender makes profit? It's clear when you look at their online website that they had to diversify, but it's another example that shows that being innovative doesn't necessarily mean you'll get success. Sometimes your idea will be stolen and there is nothing you can do about it. That kinda sucks to innovate and no longer get any credit for it...
If you havent, you should read MJs books.

Success is temporary.
To avoid being destroyed by competition you must innovate, then innovate some more.
Constantly adjusting to the dynamic market conditions.
You cant make a product, make some money and then sit on your a$$ from then on.
You have to keep moving.
That and branding is what makes these businesses profitable even though their products can be copied by the asian market.
 

Kevin88660

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Hi everyone, I hope you are all doing well.

So i have a question. I assume you all heard about Sara Blakely's notoriously famous fastlane business called SPANX.

She cut the feet out of a pantyhose and basically came out with the idea of leggings. Back then in the early 2000s, this was revolutionary and she became profitable in her first year. She is now a billionaire, despite having no business education whatsoever, and her business is still profitable today.

My question is this: How did she manage, then and NOW, to still become profitable when Chinese sellers on Amazon and Aliexpress can so easily copy her product ? Is it because the internet wasn't so big back then? Or because she chose to sell her products in retail stores ?

If somebody today has a brand new idea, if they release their product, what prevents Chinese manufacturers to steal the idea and sell it 10 times cheaper on Aliexpress or Amazon (especially if it's a generic idea and easy to replicate?)

What's the point of ever launching something new??? (please feel the desperation in my voice :somber:)


Thank you beforehand for your thoughts!
-A
I remember watching Shark Tank and heard Daymond talking about how he has to always find the cheapest manufacturer in Asia because the apparel market is so price sensitive.

You cannot steal a brand. And it is common place to have Western brands that are actually made in Asia (most of the cases are). The amazing thing is how she manage to survive to have it made in U.S.
 

SeanODG

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If I had to summarize the messages in this thread:
  • Branding matters
  • Caring about your customers matters
  • Working your butt off matters
If you achieve all three, you can win on a product that isn't the standard "you need to be 100X better than your competition" belief.

If you truly have a product that is 100X better (and I think there are very few of those products, the iPhone being an example), then maybe you can get away without those three things above
 

Kevin88660

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If I had to summarize the messages in this thread:
  • Branding matters
  • Caring about your customers matters
  • Working your butt off matters
If you achieve all three, you can win on a product that isn't the standard "you need to be 100X better than your competition" belief.

If you truly have a product that is 100X better (and I think there are very few of those products, the iPhone being an example), then maybe you can get away without those three things above
Apple has to use Chinese contractors for production. It is the made in U.S. success that is amazing...
 

Determined2012

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Thanks for your reply and for that link, I'll sure give it a listen!

I think what she did is remarkable. It's clear she worked her a** off and it paid off.

But still, I wonder if caring about your customers and bringing a personal touch to your product is enough in today's international market to succeed. Because if she came up with that idea today, wouldn't it be instantly copied and manufactured by the Chinese and then sold for 2$ ?

Sorry I know I repeat myself but I still don't understand how anyone can launch a product today and not being instantly swept by this Asian competition, unless they have a ONE OF A KIND product
Kim Kardashian is copying her idea present day- it is called SKIMS...Kim is succeeding with it too, she sells out with in seconds of announcing a restock.

Social Media changed the game.

Its the reason why any new brand can succeed even though there is already a market/industry leader.

I think this is a good thing- SM gives more people the opportunity to win!
 

sparechange

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It's already been mentioned probably but branding is super important in the business world.

Right now there is nothing stopping anyone at all from knocking off Nike, Lulu lemon, Apple or any big name brand.

You could easily source the materials to make a Nike shoe or clothing items, but I'd bet the average person would completely fail at actually building a big company like the ones stated above.

There is a million things that pop up, how do I sell them? What's my pricing? What do you mean I have to market these? How do I do that!? I could go on and on.

If you really would like to understand why it's not as easy to import from an online wholesaler & retail them, I've got a fun challenge for you!

Order a few units and try to sell them. It's alot harder than you think!
 

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Ing

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ea-st.com similar
 

MoreValue

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I remember watching Shark Tank and heard Daymond talking about how he has to always find the cheapest manufacturer in Asia because the apparel market is so price sensitive.

You cannot steal a brand. And it is common place to have Western brands that are actually made in Asia (most of the cases are). The amazing thing is how she manage to survive to have it made in U.S.
Apple has to use Chinese contractors for production. It is the made in U.S. success that is amazing...
Not sure why you think it is hard to survive for made in US. Surprisingly, it doesn’t cost that much to manufacture in US (in terms of cost of materials). I make my own products in US. Robotics, automation, and software will dominate manufacturing. At that point, location or cheap labor won’t matter. The business able to manufacture at lowest cost is one with the most automation and least human capital. Higher upstart front cost though.
 

Roli

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Hi everyone, I hope you are all doing well.

So i have a question. I assume you all heard about Sara Blakely's notoriously famous fastlane business called SPANX.

She cut the feet out of a pantyhose and basically came out with the idea of leggings. Back then in the early 2000s, this was revolutionary and she became profitable in her first year. She is now a billionaire, despite having no business education whatsoever, and her business is still profitable today.

My question is this: How did she manage, then and NOW, to still become profitable when Chinese sellers on Amazon and Aliexpress can so easily copy her product ? Is it because the internet wasn't so big back then? Or because she chose to sell her products in retail stores ?

If somebody today has a brand new idea, if they release their product, what prevents Chinese manufacturers to steal the idea and sell it 10 times cheaper on Aliexpress or Amazon (especially if it's a generic idea and easy to replicate?)

What's the point of ever launching something new??? (please feel the desperation in my voice :somber:)


Thank you beforehand for your thoughts!
-A
Don't let fear of being copied stop you. Your product will only be copied if it's successful, and by that time you'll be the number one brand, and you won't care about the copycats.
 

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