For Designers It’s better to be ‘sold-out’ than ‘on-sale’
It’s better to be “sold out” than “on sale”
After all the promises by retailers and brands to buy less, manage their inventories better and reduce waste - its disheartening to see the packed sales racks in the stores! These discounts can devastate small brands by eating their margin and tying up their funds.
Heading into another wholesale selling season, it’s important to try and reduce the risk of discounted and unsold inventory. Here are a few tactics to help decide what orders to accept, what to negotiate and how much to make sure the product sells well in the store.
Start small. Only take orders you can produce and deliver on time. Large orders require more production financing and create more risk of shipping and delivery problems. Its better to keep the stores wanting more than to risk over exposure and bad sell-through.
Know your minimums. On the flip side, if an order is too small to meet your production minimums, it may not be worth the high sample cost to produce it. Sometimes a special item is worth making because it draws attention to the rest, and if you have a strong online business you may be able to make up your production numbers on your own website. However, if you need to drop a style once your orders are in, let the buyers know right away and see if they will replace it with something else in your line.
Know your production schedule. If you can’t be sure of on time delivery, you should not take the order. Be up front with the buyer if you need more lead time than they want. Only promise what you can truly achieve.
Expect partnership. Only offer exclusives or special requests to a store that is genuinely supporting you with strong marketing, good placement and good payment terms. Be clear on the definition of ‘exclusive’ and say ‘no’ if it doesn’t make sense for your business.
Offer Limited Edition. Test new styles or capsule collections in small quanities. If the response is good, you can increase the next production run and use that opportunity to incorporate customer feedback. Creating limited edition product throughout the year keeps buyers happy and customers engaged so you can lead them back to your core product. Often designers only have enough fabric to create a limited quality of an item and can offer these to buyers as exclusives.
Consider Pre-order. Offering pre-order and/or hosting a trunk show for certain items can balance the risk for both parties. Many designers offer a selection of new or special product by pre-order even as they create inventory for the rest of the order.
Negotiate all the terms. Make sure you understand all the payment, shipping, delivery and sell through terms and consider the pros and cons to arrangements such as dropship and consignment. Every business is different and you should only agree to what works for yours.
Discuss the discount policy. Ask for exclusions from discounts on key items and core product. Negotiate a sale break date that is later in the season to give more time for the goods to sell at full price. You can ask for unsold goods to be returned to you, if you believe you can sell them elsewhere.
Support your sell-through. It’s your job to help sell the product once it lands in the store. Confirm delivery and check on the placement and appearance of the merchandise. Offer to meet with the sales people to explain the product and share your story. Find opportunities to meet customers in the store and definitely spread the word on your social media, website, email and other communication channels.
Stay in touch. Keep up to date with how your product is selling at the store. If it is selling well you can offer reorders, different sizing and any other inventory you have. If its not selling you can schedule an in-store event, create an incentive for the sales people or offer to swap out specific items for items that do sell well.