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Haven’t done a Dobizo Answers question on the front page of the blog in awhile, but I think this questions holds good merit. As a small fashion line owner your number one source of sales comes directly from your wholesale accounts or on a smaller scale of hand to hand transactions, and at such small volumes neither one makes for a profitable business, but it is definitely just part of the game in the beginning. Some newbie apparel designers don’t turn a profit from their business even after 5 years of operating. This is not just ‘how it is’, but depends on your setup, growth, timing, experience and the nature of your business.

Carl Wesley asks:

“On the level that I operate my business. The only way’s my company makes money is through Consignment/Wholesale from stores or from personal orders or online sales…

The question:

What are a few of the different way’s the big boys of the business earns income through out the year that would differ from a independent label?

For ex. If you went to the (Spring) Magic show and sold 3 million worth of gear. Would that be all you have to base your sales out on until next season’s gear?”

I think this is a great question and definitely something to think about when your small trying to be one of the big contenders.

Most larger fashion lines operate just like you and I, but on a larger scale therefore making them a more profitable enterprise then the small mom and pop shop or startup fashion line. The key to turning a profit with your wholesale venture is seasonal reorders and pushing for more volume.

Newbies to the industry focus more on just getting in the store and once their product is placed they leave it to fend for itself, which is not going to create a profitable venture. Once you get in the store that is when all the real work begins because you want the store to replenish your clothing stock during the season thus creating more sales per season and increasing your wholesale volume. Most younger companies think they can survive off of one-offs as in they sale to stores one time per season and expect their companies to stay afloat until the next season usually scrambling to find new accounts because their clothing sales at retail weren’t satisfactory with the store owners so they fail to reorder for the next season or replenish sold out stock.

Most small clothing companies have two deliveries per year Spring/Summer and Fall/Winter. While an moderately successful fashion line might have 7 to 8 major deliveries per year not including the replenishing hot sellers. That is the difference between small and large scale fashion lines.

Wholesale isn’t the only way they make money from their fashion ventures. Licensing the name once it becomes a hot commodity plays a lucrative role in building a fashion company. Once your clothing becomes a recognizable brand name they may or may not come knocking to attain a license for developing other products under your name. Licenses for footwear, sunglasses, accessories and other collaborations are more of the norm in the fashion business. Many large companies outsource footwear and other accessories to companies who specialize in that type of development. Major companies including Tommy Hilfiger once outsourced their footwear and just decided to bring footwear in-house for development effective January 1, 2009. Read More

I personally would focus on creating more volume and getting stores to replenish sold-out stock and increase my volume per order. Better product, quality, timing, marketing, delivery and letting the customer know where your product is for sale will put your company in a better position then finding many ways to sell. Find what works best for your company and perfect it, because volume might not be in your best interest if your company produces clothing in limited quantities or exclusive releases or one of a kind garments.

What different ways does your company go about selling product and increasing the chances of a retailer replenishing stock?

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