First published in Ragtrader Magazine.
The wholesale market is changing and for those who understand it, it can still be a highly lucrative option for many labels providing you understand the customer your targeting and the challenging needs for the independent retailer. It has become a price pointed market in retail even for vertical operators. However it’s important not to confuse it with being cheap. It’s simply about offering a great product, with a strong point of difference, which knows and understands its customer and gives great value for money in the eye of the consumer.
Doing your research properly is something that many labels miss when approaching wholesale. Getting out there and speaking to retailers and agents and really listening to what is missing in the market, in particular the less favorable feedback you may get, can strengthen your range, as it’s incredible how much this can change from season to season. A lot of labels miss how important this is and grossly underestimate the importance of really listening to feedback from retail buyers and agents, forgetting that retailers and agents are essentially making a living from their product and therefore are the best partners to listen to.
Seasons & The States
Winter seasons have become difficult for retailers. Essentially, in the last two winters, we have seen much shorter sell through periods, which has left retailers carrying over too much stock in a lot of instances which in turn has affected the indent buy for the next season. Interestingly, our agency tends to write about 30 to 40% more for winter due to the higher price points of coats and knitwear. While the sales figures can be higher in winter, we find it does tend to have fewer stockists than summer, with summer offering a much broader client base, particularly in NSW where we have such a coastal market. S.A & VIC are much colder, and have longer winters while QLD & WA have elements where it gets cold, but like NSW they tend to have longer summers and a coastal audience. Fast to market ranges work well for the younger audience, with high trends and fashion fluctuations. The mainstream market claims they want the same such intervals, yet they still stick for the most part, to the twice yearly, traditional indent seasonal buy, because this is where their main big brand volume labels are still operating on. In terms of timing for trans-seasonal merchandise, we are finding that it tends to work well in ranges, which also back up with some in season stock of best sellers. This tends to pick up the buyer who has been caught short indenting from the previous season, or the stock only buyer. For a product with proven sell through on indent these extra stock injections can prove highly lucrative but they are usually more effective for ranges that have retail price points mainly under $99.00RRP.
The Contemporary Market & Price Points
Independent retailers don’t have the luxury of the same high margins as the vertical operators do. Price points are a factor for the quick turnover sales and the contemporary price points tend to work well in wholesaling. The luxury segment is very limited in wholesale in Australia, and extremely specialized, best left to strong brand names or overseas luxury brands and even then there are limited retail accounts for this. While higher price points technically mean you need to sell less, it can inhibit unit numbers in production and can limit stockists unless it’s a proven or established brand. Buyers are tending to buy more fashion pieces,and fewer basics in most ranges due to the fact for the most part the customer will seek out basics in chain stores. With exception if it’s a company founded on basics in which basics are the core of their business.
Price points under $99.RRP yield a much broader audience in terms of retailer buyers and the buyers are more willing to try a new brand. Ranged price points under $300RRP tend to work but obviously those at closer to $300 need to have a strong value for money component through good fabric and strong fashion pieces that relate to the customer segment they are targeting. It’s also important to realize that it’s not about just the price, but the perceived value of the product. Consumers will pay more for knitwear and coats and of course if it’s something they truly love like leather, fur, luxe or beautiful textured fabrics, but they do need to love it, and it must have a strong point of difference from the chain stores.
Payments & The importance of Sell Through
For the most part the fashion industry has extended credit, which in recent times has been a double-edged sword for the industry. Without offering credit many retailers simply wont buy. Now with retail sales soft in recent times we are seeing more retailers treating manufacturers like a bank, with part payments and slow payments on the rise. While manufacturers tend to focus on the sales results and units at wholesale, interestingly, many manufacturers underestimate how important sales are at retail. If a product doesn’t perform at retail very well they can be put last on the list from the smaller retailer to pay. Major’s accounts such as department stores and large business obviously are except from this and are usually excellent payers. Having seen debtor reports from various labels we have noticed a difference between those with the strong sell through and those with the patchy sell through. Producing a brand that gets strong sales at retail is within everyone’s interest to ensure timely payment for everyone.Sampling – Maximize samples not necessarily styles
One of the hardest things for designers & manufacturers is coming up with too many styles and then facing the prospect of not meeting the minimums in production, particularly off shore. Ranges can quite often be too big, which can be overwhelming for the buyers and also in the opposite case too small, not allowing the buyer to have some process of elimination. At the very least a good size minimum range would be 15 styles and 3 colour way options minimum in each style. One of the mistakes many manufacturers make is not sampling in all colour ways and by doing this it can increase sales and units significantly on styles. It’s quite often hard for buyers to envisage what a garment will look like in swatches and we find when a buyer likes a particular style they will pull it out and tend to buy most colour ways in that style, leaving them room to make a small selection of styles but buying enough to make it a decent sized order. This is why sampling in each colour is important. Fit samples are important, some buyers try on samples and quite simply the buyer likes to ensure what they see is exactly what they get.
Marketing to Build a Brand
Building a brand is something which the vertical operators, high end and younger markets do exceptionally well. However there are way too many wholesale labels, which resist spending the money on decent photo shoots and look books, social media, PR and advertising. Appointing agents to sell to retailers is one thing, but it’s not enough in this highly competitive retail environment. Retailers need to have customers coming into their shop and asking for your label. They are inundated with agents offering them good labels, so building a strong brand is paramount. Agents also need to have great clean good quality commercial images to be able to lure retailers in each season.
The first thing a retailer asks to see when being approached with a new label is images, and if the images are not first class and polished, it can actually turn a buyer off your label. Sadly too many fashion labels in wholesale are only using Facebook and ignoring all the other social media such as Instagram and Pinterest. Advertising in mainstream press is highly effective as well, and you can increase unit numbers on styles advertised if you advise retailers what is going into advertising before each sell period as you will find many retailers will buy the styles being advertised. By building a strong brand, which sells well for retailers in many cases, this will also increase your stockist list and therefore your sales.
Finding the Right Agent
Quite often I see emerging designers approaching fashion agents for representation before they are ready. Firstly the more experienced agents will for the most part be reluctant to take on an emerging designer or label, unless they have prior strong experience in the fashion industry. Secondly you need to ensure you have the ability to produce the orders should your label take off. Establishing a label from nothing is hard work and it takes time, instant success is rare and while sales figures can be good over time it does take time. Many labels don’t understand what agents are looking for when taking on a label. Firstly it is important your label fits their current client base. It is also important you see an agent as an important partner of your business, not as just a ‘sales rep’. Agents only make money on what they sell so when they give constructive feedback it’s important to listen and act, as they do want your product to be successful. Be realistic about sales, usually it takes 3 seasons for to see if a label is going to be successful. Sell through is everything, bad sell through equal’s non-repeat sales and in essence it’s simply death for labels. Good sell through spreads fast amongst the trade and new retailers come looking for your label.
About the author
Phoebes Garland is a Features Writer for Exposed Online & co-owns Garland & Garland Fashion & with Robert Garland, a leading fashion agency based in Sydney. Phoebes also owns Fashion Initiative, an online fashion destination covering business of fashion, luxury and events. Described as a” Power Agent” by Ragtrader Magazine. Between the two of them, Phoebes & Robert Garland have over 50 years sales experience in fashion, publishing and advertising. Phoebes is on the Advisory Board for Fashion Design Studio (Sydney Tafe) in 2014 and is an industry mentor to designers with industry body Australian Fashion Chamber amongst many others.
Garland & Garland Fashion is a respected leading boutique fashion agency based in Sydney and they are regularly sought for comment from various media and the fashion industry on business fashion topics, fashion and issue.
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