Direct-to-consumer (DTC) is the phrase of the day as brands launch or shift their business models to sell directly to consumers. Benefits include enjoying complete control over their brands’ messages, collecting data and improving profit margins along the way. However, it’s important to remember the unique advantages of working with good retail partners – including increased marketing opportunities and brand awareness, an increase in revenue and a boost to your brand’s reputation.
You may have launched as an e-commerce brand but that doesn’t mean you’ll only sell through your website forever. Here’s what to consider as you transition your business from e-commerce to wholesale.
1. New Production Cycles
Shifting to wholesale means you’ll have to start operating on different production cycles. You launch your products online at the beginning of the season, but present seasonal collections 3-6 months prior to the delivery date. That represents a major shift to your business that you’ll need to be prepared to address.
2. New Pricing Strategies
Your pricing will have to change to adapt to your new wholesale sales model. And- don’t be surprised to see your profit margins change as you build in a wholesale price to your final retail price.
For example, let’s say a DTC brand’s cost is $20 per item with an online retail price of $50. Under a new wholesale model, cost remains the same ($20 per item), however, the wholesale price may be $40-$50 with a final retail price falling somewhere between $80-$100. While this is just an approximation, it paints a clear picture of why and how a shift in the business model results in new prices for customers.
3. Smooth, Sophisticated Operations
Your operations will probably need an upgrade. While shipping out of your home is acceptable if you’ve just recently launched your business, you will need some serious processes in place to meet wholesale demands. Take all of the steps into consideration, including barcoding, ticketing, poly-bagging and shipping.
4. Diverse Offerings
As you join the wholesale ranks, you’ll need to diversify your product assortment for success. If you offer the same products for wholesale as you do online, you’re not incentivizing customers to continue supporting your DTC operations. Keep them coming back for more with captivating styles that are exclusive to your site. In the same vein, make sure your wholesale products reflect the desires of your new customer base.
Tip: Consider offering capsule collections between seasonal drops or DTC-exclusive monthly product releases.
5. Expanded Reach
Look at your wholesale business as an extension of your brand marketing. Get ready to do a lot more event marketing- this time in-store and with your new retail partners. Events like pop-up shops and collaborations will be necessary to increase awareness of your brand.
6. Bandwidth Demands
As you branch out into an entirely new way of doing business, your daily responsibilities will change. You’ll need to stay in touch with retailers on a monthly basis, ensuring you know what’s selling and how your merchandise performs. This type of communication is non-negotiable. Without it, your wholesale accounts may not want to place reorders, turning your successes into one-hit wonders.
Be proactive. Prepare to increase your bandwidth accordingly.
7. Wholesale Access Online
Add a new password-secure section to your website, granting usernames and passwords to wholesale clients and potential wholesale clients only. This is where they’ll go to see lifestyle lookbook images and line-lists for all of your designs.
Also, be sure to add a stockist/retailers contact section to your website (with public access and in a visible location). If a potential sales partner visits your website and can’t immediately find this information, they could assume you’re a DTC-only brand.
Ready to expand into the wholesale business? Contact us for personalized guidance and expert professionals to help you execute – every step of the way. Email email@example.com to schedule your consultation session today.