Retailing and wholesaling – the basics

In Week 1 you were introduced to the concept of D2C (direct-to-consumer) and B2B (business-to-business), here we explain more detail about what is retailing verses wholesaling.

Retail

Retail is the process of selling products or services to consumers through multiple channels of distribution to earn a profit. As a fashion brand, this means you’re selling direct to your customer. In retail, the typical mark up is 50% more than the price it costs to make your product or deliver a service. However, it completely depends on your market and what price points your customer would expect to pay.

There are many different ways to retail your products, including:

• Online webshop
• Your own bricks-and-mortar store or studio
• Through Etsy, Ebay, Depop or another similar online platform (expect to pay a fee)
• Market stalls
• Pop-up shop
• Sample sale
• Catalogue
• Direct selling (parties in people’s homes or community spaces)

Wholesales

Wholesaling refers to the sale and distribution of goods to users other than end consumers – in the case of fashion this means to retail buyers within the industry. If you are a fashion brand this means you would be selling your products into department stores, boutiques and online shops. When you work with retailers who are looking to stock your products in their shop, you can expect their typical markup to be somewhere between 55-65%.

• Being stocked in a shop
• Private label (your products sold under someone else’s brand name)
• Drop shipping (a store sells your products but doesn’t pre-purchase or hold your stock)
• Affiliate sales (working with partners who earn a commission for helping sell your products)
• Working with a distributor (someone who sells your products on your behalf)

Optional Further Reading:

Drop Shipping Retail: The Pro’s & Con’s (EFF, 2015)
9 Strategies for Profitably Pricing Your Retail Products (Shopify UK)
Forget-me-not: modernising wholesale strategies for multi-channel growth (MYCustomer, 2014)