wholesale-retail-how-to-choose

How To Decide Between Wholesaling And Retailing

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When creating a fashion business, there are many important considerations to ponder over. What business model should I choose? What payment systems will I use? Where can I source my raw materials and equipment from? How will I market my products? What team of employees do I need to help with production and running the business? While all of these are extremely important, choose a specific line of sale is also vital – Wholesale or Retail? Which to go for? Which will be more beneficial for your business? How do you decide between the two?

 

While there is no definitive answer, there are many things you can consider and ask yourself to make the choice clearer. Choosing wholesale or retail is one of the many tips that successful fashion brands know and understand. First, you must understand the difference between the two:

 


Wholesaling

 

Wholesaling concerns selling to retailers. You do not sell directly to the end customer. You will sell to a business who will then sell your product in their store to consumers. This method of sale provides extra stability as you will generally receive bulk and repeat orders. You do not have to worry about selling individual items as your customer will do this in their store.

Wholesaling will generally mean lower profit margins but a greater volume of sales. For example, if your garment had a retail price of $75, this would not be your selling price – Your customer (the retailer) would sell it at $75 – You would sell it to them for maybe $37-$40 to allow room for their expenses and profit margin. In retail, you might sell 5 garments at $75, whereas with wholesale you might sell 20 garments at $37.

 


Retailing

 

Retail concerns selling directly to the end customer. There is no middleman. You will operate a store or work trade shows to sell your product to the final customer. This method of sale is less reliable – There will be no bulk orders, and repeat custom will be harder to come by. Retail sales will, however, offer greater profit margins but in return a smaller volume. You will sell at the full retail price, but will also have increased overhead costs for your marketing, and sales operation.

 

How to decide?! (Or choose both!)

 

So you now understand the difference between wholesale and retail criticisms of your designs in a constructive way? If so, you may be suited to the more honest retail sales. Alternatively, do you prefer to work to deadlines and have clear goals and targets? If so, the structured world of wholesale might be advisable.

 

 

As Wholesale and Retail are vastly different methods of business, you should really think about your personality and your aims for the future. When you have carefully considered all of these factors, choose the business method that you feel represents your ideals and targets the best.

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