How to Grow a Fashion Business By Increasing Wholesale Accounts

Transcript:

How to grow a fashion business by increasing wholesale accounts. Hi guys. I’m Syama Meagher, CEO of Scaling Retail. And today we’re going to talk about how to grow a fashion business by expanding into wholesale accounts. Now, guys, wholesale can be a really great channel if you’re looking to rapidly increase your profits and increase your revenue. Why is that? Well, as you can imagine, there are a lot of different retailers globally that are willing and able to carry your products and sell them to your target consumer. In addition to a really strong direct to consumer channel, having great fashion retail wholesale accounts can really help to build profits into your bottom line, help you gain large amounts of distribution and visibility into different markets, how to identify where it is you want to be, thinking over your options, how to build relationships, be persistent, and lastly, the best times, the most profitable times to be reaching out to buyers. So let’s unpack these fashion business consulting strategies a little bit further.

Identify where you want to be. So it’s important, guys, as you start to look into your various distribution points, that you don’t just come at this from a “I want to be everywhere” standpoint. In fact, you need to be very clear and concise about the types of retail doors that you do want to be selling in. Please make sure to make an exhaustive list. Take a look at not just e-commerce platforms that you find through searching online but also take a look at platforms like Yelp and even TripAdvisor when you’re looking for brick-and-mortar stores certainly here in the US but also globally. When you start to think about where these little stores are advertising or where these stores have a brand presence, also start to take a look at platforms like Instagram. But it’s very important to take a step back and not just consider a business not to be worthwhile of your retail account simply because their e-commerce site isn’t good. In fact, so many more businesses, retail businesses are launching on mobile-first platforms. A lot of the stores in the Middle East we’re working with don’t have great e-commerce platforms, but guess what, their mobile business is very strong and they have a very strong flagship presence in their local cities and markets. So, be exhaustive about the lists that you make and do be concise about making sure that the retailers on that list do have products and other kinds of independent fashion brands that they sell that are similar to yours, whether that is price point, whether that is the type of product that they’re selling, or even having brand adjacencies in terms of lifestyle brands. The list that you start to pitch on and focus on, you need to make sure there’s a real one-to-one fit so you don’t end up sending out emails for no reason and then you save yourself the hardship of getting emails from people that are like, “Hey, you’re pitching to the wrong store. We don’t even carry products or brands like yours.”

Now, as we tell our fashion business consulting clients, there are a couple of different ways to get wholesale accounts. So think about how to grow a fashion business from the perspective of your independent fashion brands’ unique needs. Certainly, there’s the bootstrap version where you’re creating lists and you’re doing the cold pitching and you’re developing those relationships over time, but there are also some shortcuts. And let’s talk about what those are. The showroom’s a great shortcut to getting in front of the doors you want. Working with different sales reps, again, another great way to getting in front of the doors you want. Hiring an inside sales person to be working for you internally, another great way of getting in front of wholesale accounts. It is very important that you outweigh what are the different pros and cons of working with each of these different people mostly because showrooms can be quite expensive and they’ll also be opening you up to bigger retail accounts. You’ve got to make sure that you not only have the operations and infrastructure to deliver on those orders but that you have some selling history. A really great showroom isn’t going to take you on unless you have some kind of proof that your product has demand in the market.

Now, when you take a look at let’s say a sales rep, an outside sales rep, a lot of these guys tend to be territorial, meaning you’re going to have an East Coast sales rep, a European sales rep, a West Coast sales rep, a Canadian sales rep. These guys tend to be really on the ground doing house calls to a lot of the independent fashion brands that they are working with and visiting up with these different retailers. Now, what’s great about a sales rep is they’re usually a little bit less than a showroom and they usually make up a little bit more of their profits when it comes to the percentage of commission that they have. Great thing about them, they tend to be more on the ground. Now, hiring a sales person internally, I think is an amazing strategy. Eventually, you will want to have internal sales, why, because you want to keep those commissions internally. You want to be able to grow your sales staff and you want to make sure that you can keep everything centralized into one location.

Having an inside sales team can be really wonderful for the sheer fact that you’re able to have real control and visibility on a day-to-day basis over what the different sales activities and strategies that are being implemented. Sometimes communication can get a little bit more misconstrued when you have to go with an outside company simply because of all the other independent fashion brands that they’re dealing with where their time and attention is being spent and then lastly just time differences. So having someone in-house really makes sure that you’re on the same page. Now, relationships and having some skin in the game and being patient and persistent is so very, very important mostly because a lot of times, the wholesale buyers will be looking to watch your brand over a period of time before they invest into making a purchase. Now, this doesn’t mean that they think that your product is crappy or that they don’t think that you’re a great brand or they don’t even like you. It really might mean at that time this is not a good business investment for them. It might mean at the time, they want to wait and see if your next collections take on a totally different focus or if you stay consistent.

They might want to see if you grow in some retail doors, again, showing some proof of concept, showing that other people are willing to take a risk in your brand and product. So, make sure that you’re looking at this as a long tail game. In fact, many strategies in this business are and we’re sure to make this clear to the would-be startup founders that seek out our fashion business consulting services. Certainly, it’s important to have at the same time a really strong direct to consumer strategy as you’re growing and waiting for these wholesale accounts to grow and to take and build up some more speed. But eventually, I promise you, you wait it out long enough, you’re persistent, you’ve done your market analysis, you know your positioning and you too will find yourself in the doors of Net-a-Porter, Matches, Shopbop, etc., or whatever stores it is that you are looking to get focused in. Some brands up there are looking to get sold at Macy’s or Nordstrom. And if you’re wondering how you get sold at Macy’s or how you get sold at Nordstrom or how you get sold to retailers like MATCHESFASHION or Barneys, it’s not just through being a one-hit wonder. It is through having persistence, being really considerate that these buyers are people, and waiting out a little bit longer. Do not be afraid to keep pushing each new collection.

Now lastly, guys, don’t think about how to grow a fashion business’ wholesale revenue without focusing on persistence. You have to be persistent as you bridge those relationships. Now, for brands that already have some distribution and they already have scale and they’re being sold in these different department stores and retailers on a much larger scale, they’re going to be mostly pitching during regular in-season markets. So we’re talking about looking at spring/summer sales periods starting in July, August, Fall/Winter sales periods happening around February. However, if you are a small brand, if you are a small fashion startup, you will want to be able to pitch and develop relationships during off-season moments. This is a great opportunity to get feedback. This is a great opportunity to let your brand be seen and known without having a lot of pressure of an open-to-buy. So when you are forging those relationships with these wholesale businesses, you want to say, “Hey, I really want to have a relationship with you. I’m really interested in being sold here. I’d love to get your feedback.” And guess what, since they’re not in market, they’re not going to be looking at your product through the lens of “Am I going to pay for this now. Is this a hard sell?” And more like, “Hey, let me give this person some feedback because working with us is important to them.”

All right, guys, I hope you found this useful and you start to see the importance of growing your revenue through wholesale accounts and wholesale businesses. I think it’s very important to think about these wholesalers as part of a piece of your revenue and part of a piece of your journey. Your relationship with them can be what you want. These days, I really love to see new independent fashion brands that are launching that say, “Hey, working with wholesale is really a partnership.” This isn’t one of those platforms where they’re taking advantage of you anymore where it’s simply based on their terms. It’s a real collaborative landscape these days. And I hope you too will find that your business and revenue can grow from that. Now, if you want to find out some more information, please make sure you check out our blog post on how to grow a fashion business by doubling your sales via wholesale strategies. And make sure that you check out our download and make sure you check out our download on buyer terminology. This is super important. If you’ve ever wondered what something like a chargeback is, if you’ve ever wondered something of what markdown dollars are, of things like RTVs, etc., you’re going to really want to take a look at this cheat sheet. It’ll tell you everything you need to know about how to make it through some of these conversations and even read some of these contracts. Get this helpful extra, then create a fashion business consulting folder for quick and easy access.

All right, guys, thanks for watching. Please make sure you leave a comment below. Hit subscribe and head on over to Instagram at Scaling Retail. When you’re ready to take some strategic changes to launch or grow your budding business, please shoot us an email at hello@scalingretail.com. Our fashion business consulting services are here for you. Thanks. Bye.

Thanks for the support! Here’s a free download to support you as you scale up your wholesale business: “The Buyer Terminology Cheat Sheet”.

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