2007
Where to Start? Online Store Front or Straight to Retail Brick and Mortar or Wholesale
Posted by: Fashion06 in Design, Promotion, Starting your own line |
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What does any business need to survive? Revenue. Simple answer right? Revenue is created through the sells of products or services. Where and how you decide to make your product or service available is ultimately up to you. The avenue you decide to offer to your consumer whether an online destination or straight to retail brick and mortar?or wholesaling?you must please your customers (Including your?B2B interactions)?on and offline.
This post was inspired by an email I received from a reader here?is a summary?below:
“In the planning stages of my work ahead in selling to store buyers and also my own marketing, I’m debating two sides of a coin: Do I host my own online store on my website or do I not?”
James made some great points in the email about the pros and cons of retailing yourself or wholesaling to a retail brick and mortar or starting online. They all have ups and downs. I think where you start really depends on the foundation of your business. If you have partners or it is a sole proprietorship or if?your business is going to be well financed or starting grassroots. Below I will list some of?the pros and cons of the three avenues that?we are discussing in this article.?
Online Store Front or Destination
Pros
- Receive a larger percentage of the markup of your garments. Pretty much you are cutting out the middle man and return could increase your profit
- Better control over the final price of your garments. With an online destination you control the price from production to the placing it on your site for retail. Giving you more room to negotiate and offer discounts to the final consumer.
- Better (Lower)?prices to your end customer, because you don’t have to sell at a higher price just to see some profit. With most retailers markup being a time or time and a half you can cut out the middle man and offer your products straight to the consumer at low prices giving them more bang for their buck.
- Offer your product to a worldwide audience, which can eventually increase product/brand awareness. With the vast reach of the internet these days you could live in South Carolina
and reach fans of your brand as far as Asia. - Get rid of production samples or season leftovers. You can sell off those samples from models?or seasonal garments that didn’t make the cut or just didn’t sell too well.
- Not relying on brick and mortar retail stores purchase orders. As you know some businesses have been built solely off of online store fronts. Johnny Cupcakes at one time received a majority of their business from their worldwide audience.
Cons
- No control over who you sell too. Some clothing companies want certain consumers wearing their product that is why they target specific stores with specific demographics.
- James mentioned this one in the email and I think this is a very important con. It may decrease your chances of building a strong relationship with a retailer or buyer. When you set up an online store you are now their competition and not only that it is direct because you only sell your brand and most likely at lower prices than what is offered at the store with easier access (From?home on the computer)
- He also mentioned the extra cost associated with setting up an online store front. He spoke on how it may cost thousands to setup an online store that would meet his expectations. From my experience it cost no more than a $100 dollars to setup an online store that I had for my first clothing company. Mostly because I took the time to learn a little html and coding?I already knew about graphic design so I pretty much handled the website on my own. You can use businesses like GoDaddy and Paypal, which make setting up an online shop easy and can be done in no time. The more you can do yourself the less money you will spend.
- Another distraction. It can make you lose focus of managing your store accounts because an online store can become a big responsibility once orders start flowing through on a daily basis. Not to mention you have to pack and?ship garments out. Handle returns answer customer emails, and complaints. If you are not web design savvy you will have hell trying to fix small problems on your website or gliches in the code.
- Shipping can get expensive especially if your delivering to?a retail store on the other side of the world. This can definitely happen considering your site is open to a worldwide audience.
Starting your own Brick and Mortar Retail Shop
Pros
- Get to know your customer firsthand. You can get feedback on which products are selling the best and more of what your customer wants out of your clothing brand. Direct interaction with your brands consumers.
- Full control over the distribution of your clothing brand. You decide where to open up your next location and what customers you want wearing your clothing brand.
- Full control over the final price at which your garments sell.
- More?revenue for your business. You handle the production and sell of your garment so you have full control over how much you profit per garment. Again no middle man.
- Easily house your inventory in your retail store. No point in looking for a warehouse when you have your own retail store.
- Keep your brand exclusive to your stores only or select stores in the footsteps of brands like A Bathing Ape.
- You don’t have to worry about packing and shipping orders out to customers. Returns and refunds can be handled in store by customers.
Cons
- High overhead. For an independent clothing company opening up a retail store can be costly.?Surely?it can?be done, but most try to be as professional as possible while overspending in the process. You don’t have friends and family for nothing get them in there and make it happen….grassroots style. Rent, light, internet connection, and merchant accounts (So you can accept credit cards)?are all cost that are associated with opening a retail store and me personally would rather avoid.
- Salaries?or commissions for your employees. Unless you are going full-time into the retail venture than you will need somebody to operate the store while you are working at your everyday job.
- In the beginning you have less reach to an audience than if you were to sell to other stores worldwide or in neighboring cities. So you’re missing out on possible customers and revenue for your clothing business. It’s not like you can’t do both wholesale and your own store, but in the beginning that would be a hell of a reach nonetheless possible.
Selling wholesale to retailers
Pros
- Traditional way of starting a clothing company. Connect with customers faster through store distribution as compared to having your own single store.
- Less overhead. Many clothing companies are ran from homes and apartments with nothing more than a computer some design programs and a telephone.
- Build relationships with retailers that can benefit your clothing company in the long run.
- Have help on the promotional side by having your clothing company retail in an already established retail store like Up Against The Wall or Drjays or Macy’s. This will give your clothing company credibilty, because these retail stores don’t just accept any clothing line.
Cons
- You have to attend trade shows, which can be fun experiences but are rather costly. Cost can increase if you have to hire a sales rep or pay someone to attend shows that you are unable to make, because a other responsibilities…you didn’t think a clothing company stopped at designing and selling did you .
- Stores not pushing your product, because they are not giving your brand proper placement within the store. Retailers tend to allocate better real estate in stores to the more popular brands or ones who tend to have a better sell through.
- Chance of charge backs, because your shipping, packaging, or delivery didn’t meet the retailers expectations. This normally happens with larger retailers, because they are lazy and want you to do all the work!
After reading over all the above pros and cons give me your opinion on what is the best way to go in the beginning stages of your clothing company. If you feel like I left anything off than feel free to leave a comment with a pro or con I can add to the list.
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June 30th, 2007 at 8:37 am
One thing that I believe should have been metioned in selling through your own on line store, is the importance of getting good photography to showcase your products in the best way possible. Either learn the basics in taking pictures with your digital camara and then retouch in Photoshop, or even better hire a photographer. Of course this is something that is not needed if you just own a brick and mortar retail shop. So think of this as an additional expense for on line stores.
My experience. I have an on line store. I have a background in graphic design, so I saved some good money with the design, I just had to pay the programmers to make it work. I have to agree that setting up an online store can get expensive, it also took me about 6-9 months to finally put it in the air. You have to think of the Shopping Cart system (I found one I am really happy with with no monthly fees, and you own it for life), A gate way company for order processing, hiring a photographer to have professional and clean images that best show your products. I have not done any advertising my site yet and I’ve had it open for a few months. I am basically watching to see how people find me. Because I’ve been selling to a couple of boutiques locally (South Florida), I’ve not been doing too badly, I’ve also had more time to work on other design ideas.
The next thing I am doing, is experimenting with a small tradeshow. It is showing me how much it takes to get ready for one. Just pricing for wholesale is taking a lot of the time, and I find it very tidious to do. But I am excited about it, since I think it will help get more exposure for my brand, but mostly I want to see if wholeselling is the way to go or if the next thing I should do is to begin publicing my own website to get more profit.
June 30th, 2007 at 9:33 am
Candy-You should try adding a blog to your site…that will draw in traffic from post. You can post like once a day with news about your brand
June 30th, 2007 at 10:02 am
I really might look into this online store front,it sounds like something i could really get involved in.
July 1st, 2007 at 1:53 am
Thanks for posting on the topic, Fred, it’s certainly a big one.
There is a lot to be gained through having an online store, and I’ve decided that I will go ahead with that plan. I’ll be up front about it when talking to retail buyers, using a set of rules regarding release dates and pricing, and I’ll do my best not to step on their toes, but I won’t completely water down the viability or ability to compete of my own store just because a retailer wants to have an exclusive.
I don’t feel the need to squash my potential to fit within their defined parameters, because the market today is a very different demographic to even just three years ago, it doesn’t make sense to start up a business today built on yesterdays tradition.
I’ve got some exciting ways to add value to retailers and build relationships, in conjunction with my own online operation, and I hope I can successfully manage a strong network of distribution. I’ll see what kind of reception they get from retailers in the coming months and let you all know =)
July 2nd, 2007 at 1:02 pm
Great post on options in retailing a brand to consumers.
Some of the points I want to bring up include:
1) Make sure you do not sell your brand online at cheaper or more expensive prices than what the retail stores retail them for. A) if its cheaper, then no one is purchasing the product from their store and they won’t restock your item. B) if its more expensive online, the customer won’t purchase the product from you.
2) Marketing, Marketing, Marketing. You HAVE to come up with creative, somewhat expensive marketing tactics that are not the norm (i.e. magazines, newspapers, etc). Fred is right, you will probably get just as many people coming to your store through links/posts on various blogs as you would if you placed a small ad in a magazine. Other advertising gems (thanks to Fred’s previous input on this subject) are giveaways (MySpace, for example) while advertising your product on their space. Marketing is one of those expenses that goes hand in hand with the cost of samples. You can’t not do it. Nor can you expect to do it for a few penny’s.
3) If you build it, they will come…is unrealistic thought process for a website. Get the word out. There are actually a few websites where you can “brag” about your product or someone else can “brag” about it for you…thisnext.com, stumbleupon.com are two examples (this is not an endorsement or advertisement of these website, just providing some info).
4) Create your own wikipedia page and make sure you keep it up to date with new info.
5) Fred is right put a blog on your website and start talking about the ups and downs of the creation of your brand. People learn from others experiences.
Anyway, I digress, just wanted to add my 2 cents. I liked this post because it is something to consider when you are ready to start selling. While our clothing line is nowhere near where I would like it to be (chalk that up to busy lives and trying to keep the lights on), I have done my fair share of reading (both on and off line) and found a ton of info that I have kept in my mental file drawer.
July 3rd, 2007 at 5:57 am
Great tips. I’ll look into all of them. Thanks for sharing!
September 19th, 2007 at 11:59 am
THANK GOD! I FOUND YOUR SITE VERY, VERY, HELPFUL
THANKYOU!
KAMCLOTHING.COM
January 4th, 2008 at 1:43 pm
Again, I love this post. The best tips that I’ve ever come across. Please keep me on the mailing list when a new tips is posted. You’ve inspired me to start an online clothing business after making a research throughout on wholesale and retail. Online business is the current trend on business growth in the modern era.
Thank You once again.
Regards,
Stefanie
January 7th, 2008 at 4:07 pm
Thank you.. dobizo has helped a LOT! our brand is very new but we’ve been progressing v well in just a year.. we are online and we have a retail (mostly college students coming)… and we’re looking into wholesale-ing overseas this year…
feel free to commend on our site and let us know what’s working and what’s not…our link is http://www.osixnine.com
thanks
Sarah
January 13th, 2008 at 12:27 am
WOW…Thanks for the great article!
Jackie
February 1st, 2008 at 8:21 pm
Im confused, how do i go about buying legit urban clothing,wholesale will the clothes be real or fake? or tradeshows how do i get into a trage show for new fashion im all about having legit clothing lines.will either or help tradeshows or wholesale and if wholesale will my clothes be in style in up to date.
February 1st, 2008 at 8:23 pm
hello
February 7th, 2008 at 7:29 pm
i am new here but from what i have surmized here is how it looks correct me if i am worng. however, in summery from what i have read if you want to start your own clothing line 1. you cannot go to the mall to have them sell your items because most store are corporate owned they only sell their own items . 2. if you go to the web you need lots of money to carry your brand but then, you are a competitor to the mall stores so expecting to get your items into stores i pretty well not possible. So unless you have 20,000.00 to 150,000.00 to start your own line it will not be possible. 3. Doing selling “on consignment” is not smart because it puts all the risks with the new clothing designer whom are stranded by unscrupulous stores whom won’t pay when they get their merchandise.
so, what are the “other” possibilities left?
February 25th, 2008 at 12:00 pm
Yeah I believe the online site is the way to go as far as a startup clothing company. With the proliferation of sites like myspace and all traffic that is streamlined your way can be redirected to your webpage with a simple link. The internet has took advertising and marketing global to those of us who otherwise wouldnt have the oppurtunity to compete on a global level. Like someone previously stated sites like godaddy and othere makes it easy to setup a webpage, create links, hosting etc. The key to creating and managing a successful webpage is the pictures of your products. Bad pics can make or break your business thats what online based consumer soley rely on in decided whether to purchase you products or not. Low overhead, cost effectiveness, price control you have more control over every aspect of your product from presentation to price. With retail stores in my opinon its very risky for a startup because these stores are not really willing to give prime space to new startups, this goes to the established, “money making” brands.
March 27th, 2008 at 10:26 am
Hi
Just wondering if you’ve had any experience using a sales agency? and if you could give any feeback on that? what sort of arrangements have to be made, costs etc… And is it a better way of getting your brand out there?
March 28th, 2008 at 6:05 pm
Hi I found the comments very interesting. I am currently working on opening an online boutique and I want to feature designers and fashions that are not carried by the department stores rather stylish wardrobe solutions for the multi-tasking working woman. My target market is 35+. I found there is a large variation in cost to developing an e-commerce site - and the challenge is determining what is right to ensure that the website is appealing to my market yet cost effective.
I want to brand the boutique by offering unique designs that are not luxe rather appeal to the average American who is stylish and fashion conscious. I like this site and would like to learn more about how to contact designers looking for exposure through an online boutique; and how to drive traffic to the website without spending national brand money? any suggestions?
April 3rd, 2008 at 6:25 pm
I’m just finishing up with redoing my website and setting up an online store. I am extremely happy to have discovered Yahoo’s website builder and their online ecommerce store builder. Their support 24/7 is superb, and once you get to know the programs, they are easy to work with. Together with a free html editor found online to help out alittle, the cost has been mostly my time. And I’m getting an online store that allows me to put in the options I want. If you want to see the quality of Yahoo, feel free to visit my site http://www.mastectomydesigns.com. I’m presently looking forward to finishing up and then doing some payperclick ads to drive traffic to my site, as well as getting a blog going and targeting some directories, etc.
April 3rd, 2008 at 7:47 pm
Im trying to create my own line ,such as t-shirts but wear to begin, such as materials prints how would I began this with grapics what shell I need such as machines printer for graphics what?
April 11th, 2008 at 4:44 am
I must say to Fashion06 that this posting was awsome. I beleive that there are stages to how you want to intriduce your brand. But you first have to do some homework….You have to budget every step of the way which prttey much determines the level at which to begin. There are cost that you can’t avoid. Like the product of the product your making. If it is a designer label with unique designs than you will have to look at…,fabrics, manufacturing-pattern making, sewing cost, packaging all with a manufacturer can cost out for you and they may be in position to offer distribution items which are ready made blanks…and some labels such as allstar apparel, anvil sell tear away T-shirts that can be used for re-labeling. Customised goods will cost your mor to produce especially with a small budget and no large orders to fill. Economies of scale kick in for large oders which lower your production and manufacturing cost. Federated stores such as Macy’s is a good outlet and you can service the smaller retailer. Strategy is important each avenue wheather on-line, retail or wholesale has it strengths and weaknesses. We are technology drivin and it is no longer a novelty to have a website for your goods it is like not having a phone…thats if you really want to run a competitive and profitable business. If you do graphics and feel you are happy doing T-shirts with your cool designs that cool. But know where your direction have a vision for your line. T-shirts can get costly. Screen printing set up cost can be high. Screens can cost up t0 $8 per color in yor logo plus fim cost of $5 and screen printer print by the dozens some 12 others 36 and more. Set up cost are one time fees but if you are doing many designs and the designs are not gonna sell right away. This can be a costly route. So pick a few designs that you are confident with a start there. Starting up online you may want to handle the shipping your self untill you can no longer manage things like ordering processing, customers service, stock levels, accounting and storage. There are fullfiment companies that handle these internet business operations. You will have to research and do cost comparisons. Some charge monthy for storage by the pallet for $15-$30 and will take a percentage of sales.
Well there are so many aspects to look at so think of were you want to go pay attention to budget and lay your building blocks.
April 13th, 2008 at 6:56 am
I’ve been reading all the comment above and it’s really help me a lots and it’s very interesting. I have a small buget to open online store and I don’t know how, what should I do? and if you can help me step by step what to do to open store online with small buget…If I leave in Asia
April 18th, 2008 at 4:23 am
For the online stores, I was glad to see someone post about having quality images (which is what I’m working on right now. I was also unaware that trade shows can be as costly as they are… I know, however that they are a necessary evil to achieving the goal of retail placement. Any advice on using a fulfillment company as your online store grows?
April 22nd, 2008 at 7:20 am
thanks for this article!!!
April 28th, 2008 at 3:23 am
What up everyone,
hi, i’m DnB, and I plan to start my own clothing line! Been doing a lot of reading/research and I just gotta say, this site rocks. Thanks for all the comments. I need all the help/advice I can get. So if anyone wants to network, please email me at gpsangs@aol.com.
thanks n peace out!
May 8th, 2008 at 11:01 am
Interesting article… thanks! I am in the very early stages of starting my own line. I have the vision/ideas although I’m having a tough time locating a reputable manufacturer to partner with. I’m located in Chicago… any suggestions?