In this turbulent time with many industries feeling the financial impact resulting from the COVID-19 pandemic, there may be no better time to pursue wholesale strategies as a small fashion brand. Adopting wholesale strategies can position you to attract new customers by increasing your brand awareness and diversifying your distribution channels. As a result, you can expand into new regions by leveraging trade shows and other brands to gain customers and increase sales of product. 

While much of what you choose to adopt will be influenced by your brand identity, product and market audience, there are strategies that can be universally adopted. Strategies you pursue can include identifying your market, adopting an ecommerce wholesale marketplace, reducing costs, attending trade shows to increase visibility with new audiences, and even creating a wholesale portal on your website.

Identify Your Market Audience To Guide Your Efforts:

First things first, knowing your market audience will help determine your course of action. This is particularly true for eco-friendly, sustainable and ethically sourced brands. Take AMALFII for example, founded in 2017 as a contemporary women’s wear brand based in Los Angeles, California, they were created through the inspiration of the founder’s own personal style as a minimalist. 

The brand attempts to “find the balance of being fashionable, yet sustainable, in a world filled with fast fashion”. As a result, AMALFII sources organic textiles from ethical manufacturers and are designed in a way that are both ready to wear yet able to be worn multiple ways. Even the color tones used can be worn year-round. Furthermore, the brand prides itself on upcycling material, thus reducing what’s sent to a landfill. 

These values guide who the brand seeks to attract. For example, through AMALFII’s brand profile on Faire, they are categorized as a company that’s “eco-friendly”, “handmade”, “organic”, “women owned”, “small batch”, “made in USA” and “not on Amazon”. This allows retailers shopping for those categories of wholesale products to find AMALFII’s brand more easily, based on the values they stand by.

Adopt A Wholesale Marketplace As A Virtual Storefront For Retailers:

Small fashion brands can increase their odds of attracting boutique retailers by joining an online wholesale marketplace. Using a wholesale marketplace allows small businesses to showcase their product online, transforming the physical marketplace into a virtual bazaar. Here’s how this works. Members gain access and the ability to create an online store with the apparel in their inventory. While some wholesale memberships are fee based, they all have one thing in common. They allow brands to sell product in bulk quantity at a reduced cost to buyers, thus making them more attractive. Retailers can buy inventory for their storefront with an ability to increase their profit margins as a result of buying product at a lower rate. 

The ability to retain some of their margins is a benefit to buyers. However, it gets even better. Some wholesale clubs like FashionGo.net do some of the vetting for you by requiring all members to verify wether they are a seller or buyer. Others like Faire, operate differently but have other member benefits. For example, brands benefit from product spotlights, opportunities to feature their new arrivals, and even taking advantage of Faire’s ability to offer “Net 60” and free returns on opening sells for buyers. In many cases that allows retailers to sell their inventory before they have to pay their bill. All of this will help you reduce marketing spend, increase sales, while maintaining attractiveness to potential wholesale customers.

Restructure Your Wholesale And Retail Price To Reduce Costs:

By seeking a wholesale marketplace, a massive benefit to retailers is more competitive pricing. While wholesale and retail price ranges differ from company to company, many aim for a 50 percent markdown for buyers. But that won’t always be the case. 

For example, AMALFII sells their 5 Layer Carbon filter (for their face mask) at $13.00 USD for a five-pack (essentially $2.60 USD per filter) on their Direct-to-Consumer (DTC) website. In contrast, that same product sells for $1.70 USD per filter on their wholesale marketplace. The difference of course is that they’re being sold in packs of 100 wholesale. But the reduced price in bulk is the benefit for a buyer. If those same 100 masks were purchased through AMALFII’s DTC website, a customer would pay at least $260.00 USD for the same product as opposed to $170.00. 

Another great example is the pricing strategy of AMALFII’s “Miss Monaco” Wrap Dress. The wholesale price is $100.00 USD per unit, where as the retail price is $140.00 USD. Their wholesale price is focused on providing more value to their retail customers but as a sustainable brand with high production costs, the per unit difference isnt much. Just be sure that as you navigate this process you also strategize your wholesale pricing to ensure buyers can benefit from at least a 30 to 50 percent profit margin. 

When working with a small business or boutique retail store, you may even share your Suggested Retail Price (SRP) to ensure they don’t undercut you or other retail partners. In AMALFII’s case, while they sell their “Miss Monaco” Wrap Dress for $140.00 USD on their DTC website, their SRP to buyers through the wholesale marketplace is $200.00 USD (a 50 percent markup).

Depending on the brand, you may want to position your wholesale price to be slightly lower (in the case of a big retailer like Nordstrom) or slightly higher (in the case of an international market) than your DTC brand after the retail markup is applied. If you have physical retail partners, work to ensure you don’t cut into their margins as well.

Attend Trade Shows To Build Brand Awareness With Less Risk:

Trade shows offer an opportunity to break into new markets on the regional or national stage. Trade shows come with many benefits. This makes them one of the most widely used avenues for companies using wholesale channels to find retail partners. Just like any industry, trade shows exist for many niche products and markets, so be sure to do your homework. For eco-friendly and sustainable brands, it’ll be important to be associated with similarly positioned brands. You may even wish to use a trade show directory. 

Once you’ve found a trade show, think about attending it first as a participant. With most trade shows going digital and allowing some level of consumer access online, you can see how your brand would be presented alongside competitors. While exhibiting in some trade shows can be costly, they can also have the benefit of increased brand awareness and exposure. In the case of AMALFII, they recently recieved a mention in Women’s Wear Daily (WWD) after exhibiting at WWD MAGIC in Las Vegas 

While they benefited from an in-person trade show prior to the COVID-19 pandemic, trade shows, despite some claiming otherwise, are not going extinct anytime soon. They provide a much-needed business-focused environment that allows buyers to sample product before they purchase, typically in a non-pressured online environment.

Create An Online Portal On Your DTC Website That Has Wholesale Capability: 

It’s also not uncommon for small businesses to create a wholesale mechanism through their own website. Sure, they can always maintain their DTC capability, but can do so while also attracting retailers interested in bulk purchasing. AMALFII created a wholesale inquiry portal on their website. You may opt to do this as well. But, like a wholesale marketplace, ensure the information you collect allows you to screen for serious customers. 

For example, you might choose to collect the company name, tax ID number, website, email, phone number and social media information. In addition to that, you’ll want to ensure that your website can collect payment information in a way that’s friendly, allows for quick response while also communicating payment terms as a “Net Price”.

The final takeaway is this, adopting these strategies can yield real benefits for small brands. For the most part, you can even do so without spending exorbitant consultancy or sales agency fees that are prohibitive to smaller sustainable and ethical fashion brands. Alternatively, a small-business friendly agency like Ombre Digital can help as well.Testing a few of these tactics may even allow you to diversify your revenue streams and improve survivability during this uncertain time.