Let’s explore how to grow a fashion business by expanding into wholesale accounts. Wholesale can be a really powerful channel if you’re looking to rapidly increase your profits and revenue. That’s because there are a lot of different retailers around the globe that are willing to carry your products and sell them to your target consumer.
In addition to a really strong direct-to-consumer (DTC) channel, having fashion wholesale accounts can help to build profits into your bottom line, give you wider distribution and visibility in different markets, help you identify where it is you want to be, make your options more clear and build relationships throughout the industry.
When you start looking at distribution points, it’s important you don’t approach it from an “I want to be everywhere” standpoint. You need to be very clear and concise about where you want to sell and the types of retailers you want to be associated with. Make an exhaustive list. Don’t stop at e-commerce sites. Look at platforms like Yelp and even TripAdvisor as well to find brick-and-mortar stores, at home and abroad. As you think about where these small stores are advertising or where they have a brand presence, look at social media platforms like Instagram. With more and more retailers moving to mobile platforms, it’s important to consider all your options and not disregard retailers just because they don’t have a certain presence.
Many stores in the Middle East we work with don’t have great e-commerce platforms, but their mobile business is very strong and they’ve built a strong flagship presence in their local markets. That’s why it’s important to be exhaustive with your list and make sure the retailers you’re considering have products and other kinds of independent fashion brands similar to yours, regardless of price point. You should identify an overlap between the retailers and what you sell so your pitch will be well received.
There are a couple of different ways to get wholesale accounts. Think about how to grow a fashion business from the perspective of your independent fashion brands’ unique needs. 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 some shortcuts…
1. Work with a Showroom.
The showroom is a great shortcut to getting in front of the doors you want. Working with different sales reps is another method. You could also hire an inside salesperson to connect you with retail accounts. Carefully weigh the pros and cons of each option. Showrooms, for example, can be quite expensive, but they’ll open you up to bigger retail accounts. You’ve got to make sure you have not only the operations and infrastructure to deliver on these orders, but that you have some selling history. A great showroom isn’t going to take you on unless you have proof your product has demand in the market.
2. Take on the Services of a Sales Rep.
Outside sales reps 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.… They tend to be really on the ground doing house calls to a lot of the independent fashion brands they are working with and visiting with retailers. One advantage of using a sales rep is they usually cost less than a showroom and make up more of their profits when it comes to the percentages of commission they earn.
3. Build an In-House Sales Team.
Hiring a salesperson internally is an amazing strategy. In fact, you should plan on having an internal sales rep at some point so you can keep the commission in-house. It also keeps all of your business activity centralized. Building an inside sales team gives you more control and visibility over the different sales activities and strategies that are being implemented. Sometimes communication can be difficult when you have to go with an outside company because of all the other independent fashion brands they’re dealing with. Having someone in-house ensures you’ll always have their time.
Take a Long-Term Approach to Wholesale.
Being patient and persistent is very important because wholesale buyers will be looking to watch your brand over a period of time before deciding to invest. This doesn’t mean they think negatively of you or your brand. It simply means the timing isn’t right for them, or they may want to see if you grow more first. Make sure you’re looking at this as a long-term process.
Many strategies adopted in this business are long-term plans. It’s important to have a really strong direct-to-consumer strategy as you’re growing and waiting for your wholesale accounts to grow and build up more speed. However, if you’re persistent, you’ve done your market analysis and you know your positioning, you will find yourself in the doors of Net-a-Porter, MATCHESFASHION.COM, Shopbop, or whatever stores you’re targeting. It’s about having persistence, being considerate that buyers are people… and waiting. Do not be afraid to keep pushing with each new collection.
It takes persistence to bridge these relationships. Brands that already have some distribution and scale are mostly going to be pitching during regular in-season markets, like Spring/Summer sales periods starting in July or August, and Fall/Winter sales periods happening around February. If you’re a small brand, you’ll want to pitch and develop relationships during off-seasons. These are great opportunities to get feedback and let your brand be seen and known without the pressure of an open-to-buy (OTB).
When you’re forging relationships with these wholesale businesses, you’ll 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.” 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?” They’ll be more open to giving constructive feedback.
Follow these strategies to begin to understand the importance of growing your revenue through wholesale accounts and wholesale businesses. These wholesalers should be seen as part of your revenue and part of your journey. This isn’t one of those platforms where they’re taking advantage of you on their terms. It’s a real collaborative landscape these days. Your relationship with buyers can be what you want.
If you want to find out some more information on the subject, check out our blog post on how to grow a fashion business by doubling your sales via wholesale strategies. Also be sure to 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 what markdown dollars are, RTVs, etc., you won’t want to miss this cheat sheet. It will tell you everything you need to know about how to make it through some of these conversations and even how to read some of these contracts. Get this helpful extra, then create a fashion business consulting folder for quick and easy access.
When you’re ready to take some strategic changes to launch or grow your budding business, please shoot us an email at firstname.lastname@example.org. Our fashion business consulting services are here for you.