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On day two of Glossy’s E-Commerce Summit, Glossy senior reporter Danny Parisi spoke with Ricardo Larroudé, CEO and co-founder of the 4-year-old luxury shoe and accessories brand Larroudé, about how he’s growing a DTC business without outside investment.
Since launching, the company — which boasts affordable price points, vertically integrated production and marketing, and an on-site marketplace — has focused on slow, intentional growth.
At the Summit, Larroudé broke down the company’s unique processes and strategies. His comments from the discussion, below, have been lightly edited for clarity
Building a business without outside investments
“Just like a lemonade stand, it’s about unit economics. People make a business plan and it’s just a list of things to spend on and, hopefully, it will have value. There’s no: ‘I need to deliver a product, what’s the most efficient way to do that?’ Instead of spending money with the first guy who comes along and offers to do postering around the city, I ask around and see what it costs to get it done and then do it ourselves. Same with factories. The factories would tell us they charge this amount, and I’d ask how much it costs and then say, ‘Let’s just do it ourselves.’ Just do the math, ultimately. You have to understand how the product you’re selling is made.”
Attaching your name to your brand
“It brings a lot of credibility to put your name on the door [of your business]. The downside is that it’s harder to walk away from it. I put down my driver’s license and it says Larroudé. I can’t get away from it. My son is wearing a Larroudé shirt. It’s my name. Your suppliers believe more in you when it’s your name on it. That said, brands shouldn’t be built around people but around products.”
Wholesale vs. DTC
“We grew faster on wholesale before we were able to tell our story through digital marketing. Now, we’re growing much faster DTC than wholesale. I think it has to do with the supply chain and how quickly we can replenish your stores. We’re everywhere all the time, and don’t have to wait for people to go to the mall or any place else [to purchase our products].”
Cost to acquire customers
“With DTC, I have to have a profit on the first sale. It’s offensive to say you have to acquire a customer. You should make your money back on the first sale. At the price point we run, we are able to move quicker. We do the creative in-house, as well. We have a studio in Brazil. We do hundreds of ads, and we look at them all the time to see what works. We have five women in Brazil working in our studio and we make new things all the time. When I hear how much it is to produce a single image in New York, … I mean, we just have our team in Brazil doing it at no cost.”
