One of the first decisions you have to make when launching an apparel company is where you are going to sell your products. Do you see yourself distributing your wares through your own independent retail boutique, providing customers with a high-end, hands-on, knowledgeable customer service experience? Maybe you are thinking bigger, and want to get seen by as many eyeballs as possible on the racks at Wal-Mart or even Macy’s? Or perhaps you want to be an entirely e-commerce operation, selling your products only online so as to keep costs at a minimum and the greatest amount of control?
As you might have guessed by this point, there is no right or wrong answer. There’s also no single answer. And frequently, there is no final answer.
The “right” answer for you is going to depend largely on your brand, your products, and your goals. You’ll have to make an assessment as to what your company is (or can be) set up to do, what sales strategy aligns with your brand’s identity and your ideal customers, and what balance of benefits and drawbacks (which, to be sure, all methods have) you are willing and able to cope with.
And you won’t just have to make this assessment once. You’ll have to do it every single day.
Okay, maybe not EVERY day, but frequently. Anytime you are taking a look at your long-term and short-term goals, anytime you are looking at how to grow, anytime you are concerned about your bottom line – where and how you are selling your products is going to be a big part of the equation.
E-commerce, or selling online, is probably the easiest and fastest way to get started selling apparel online. Which isn’t to say that it is “easy,” just that it has the lowest barrier to entry. Whether or not you are selling exclusively online, e-commerce will more than likely (though not necessarily) represent some portion of your business.
Having an e-commerce component is popular for a number of reasons. First, relatively speaking, it is cheap. Compared to the cost of opening up your own brick-and-mortar store, the cost of building an e-commerce site is pocket change. Selling wholesale to big box stores also requires a significant upfront investment which you may not be able to pull off when just starting out. Plus, services like Squarespace and Shopify make it easy to set up a beautiful and powerful online store quickly.
But having success through an online-only store isn’t as simple a few mouse-clicks and then watching the dump-trucks of money roll in. If it were, then everyone would be doing. Actually, everyone is doing it, and that’s part of the reason why success is so difficult.
If a customer finds your t-shirt on display at Target, or your handbags on display at Saks Fifth Avenue, they will only be directly comparing your product against a handful of other products of a similar type in the store. You’re only facing off with a limited number of competitors, and it’s pretty easy for your customers to make their own comparisons based on seeing and touching the products in person. It’s a different story online, where you’re competing with other apparel brands – both large and small. And that means instead of a handful of similar products to be compared against, you are more likely to be facing off with dozens, if not hundreds, of similarly situation products. And while customers have definitely shown they are willing to make purchases without having ever seen a product in person, the inability to give them a tactile experience is certainly not a positive.
Plus, on the internet, you aren’t just competing against other products, you are actually competing for attention with the entire rest of the internet. The internet is a really distracting place. So while you’re trying to get focus on your awesome apparel, your customers are constantly being distracted by Facebook and e-mail and the directions they were supposed to be looking up to that place they are going tonight which is why they took their phone of their pocket in the first place.
It’s not impossible to break through the noise online, especially with a great marketing strategy. Plus there are some other amazing advantages to selling online, such as the ability to offer a much larger product catalog while keeping less physical inventory on-hand.
Brick & Mortar
There are several different ways to get your apparel brand into a brick-and-mortar store for customers to be able to see, touch and purchase. Maybe the most straightforward is to open your very own shop.
Opening your own store requires a significant investment, and will likely mean incurring a lot of expenses. Not only will you have to pay rent and keep the store decorated and furnished, you’ll also have to hire employees to work in the store, invest in physical inventory control systems, invest in a point-of-sale system, and so on. Whereas introducing a new product or deciding how to showcase your products online might be accomplished with an afternoon in Photoshop, performing the same task in a brick-and-mortar store would likely require much more time and money.
Another way to sell your apparel in a physical space is to work with independent retailers or boutiques. Working to develop relationships with small store owners can be incredibly rewarding and mutually beneficial, and can potentially last for a long time. Having your brand in a boutique can increase the perceived value of your products if the store is viewed by customers as cool, trendy, or “high-end.” It can also lead to bigger orders than you’d be likely to get from selling just to individual customers.
The flip-side of that, though, is that you need to be prepared to produce those high-quantity orders, and likely do so while fronting the up-front manufacturing costs. Boutiques will also frequently work on tight shipping deadlines without much if any flexibility. You also have to be aware of what the boutique’s cash flow is like and work out a payment schedule that you are both comfortable with.
Another potential option when working with boutiques is to sell to them on consignment. With consignment, the boutique doesn’t place a large order, but instead will take your products and sell them, giving you a cut of whatever sells. This can be a lower cost way to get your products in front of buyers, but will also result in lower volume of sales and lower profits.
For many businesses, getting their products into a big box retailer is the ultimate goal. Traditionally, this category includes wholesale clubs like Costco, and department stores such as Target or Sears. However, selling through a mass e-tailer such as Amazon or Overstock can also have a lot of similarities to selling through big box retailers.
Selling wholesale through big box retailers can be a tremendous boon to a business. Order sizes can be quite large, which can mean a lot of money coming in at once, and the built-in audience and visibility of having your products in a big box store is hard to beat. However, your manufacturing process needs to be rock solid so as to be able to handle the large orders. And often, big box stores will expect a volume discount, so expect your profit margins to be lower – and sometimes significantly lower. You also may be required to invest in an Electronic Data Interchange (EDI) system in order to work with the big box retailer, or face other costs and charges involved in the shipping process.
Another downside can be the inherent change to the way your apparel brand will be viewed depending on which store you are working with. If you’ve worked hard to cultivate a certain image for your brand as trendy, it might work against this brand image to then have your products end up in Wal-Mart, where the tendency of shoppers is to focus more on low prices. Any boutiques you are working with will also probably not be thrilled about selling the same products that are available in a big box store, as a certain degree of exclusivity is part of their business model.
Mixing & Matching
The reality is that there is no single correct answer for any individual brand on what the best way to sell their products is, and especially with selling apparel, you may need or want to be able to shift strategies as you grow. Most companies will have some kind of online presence, whether it is a full-fledged e-commerce store or just an online catalog, to go along with their other retail strategies. And just because you are successful at one strategy, doesn’t mean you shouldn’t explore others.
A great example of this is Warby Parker. In a time when there is a perception that online shopping is killing retail stores, Warby Parker has been able to take their business in the opposite direction. They started as an online-only business and have grown to have brick-and-mortar stores that are quite successful in their own right. Companies like L.L.Bean have gone from brick-and-mortar retail staples to doing huge amounts of business online. American Apparel, their recent struggles notwithstanding, started out with an amazing wholesale business and then expanded to having their own retail stores which had a great run.
Which is all just to say, there is no single solution or even combination of solutions that makes sense for every apparel company. It will all depend on your brand, your capabilities, and your goals. If you missed the first blog, check it out on our website. Look for our next blog in the series and if your company needs advice on where to sell your brand, chat with us today!