The wholesale clothing business is a lucrative one. Amidst the COVID-19 pandemic, the wholesale clothing business is experiencing a major change. This year, the industry is anticipating the following trends: eCommerce continues to grow; clothes become genderless; increase in sales of comfortable clothing; online shopping evolves. Are you also planning on entering this lucrative industry? If you are, read on. This post will teach you everything about the wholesale clothing business and how you can increase the chances of success in this highly competitive industry.
Table of Contents
What is a wholesale clothing business?
A wholesales clothing business sells bulk clothing to retailers, who then resell the product to customers or end-users. Since wholesale clothing manufacturers buy in bulk, they can sell their products at a much lower cost. Retailers benefit from reselling at a higher price.
Some wholesalers produce clothing in-house, while others serve as a liaison between manufacturers and retailers.
How to start a wholesale clothing business?
Understand the Industry
Before you dive into wholesales clothing distribution, you need to first understand the clothing industry. There are many opportunities in the clothing industry, but also some potential challenges you might need to consider. Staying on top of rapid developments in this sector necessitates alertness and agility.
Many social and pop culture trends influence the clothing industry. A specific clothing item or accessory may become a hot commodity overnight. Social media and influencer culture have a major impact on this. If any post or video goes viral in social media, the demand for an item of clothing featured in the post can skyrocket.
These fads come and go as quickly as they appear. This generates a condition of “high risk/high reward.” Knowing which patterns to follow – and how much inventory to buy – can be difficult to determine, since predicting demand can be difficult.
Understanding clothing trends and the market is an essential before stepping into the industry.
Choose a niche
There are many different types and styles of garments out there, but you cannot sell them all. Decide what type of garment your wholesale clothing business will sell.
Other than considering what garment you choose, you may need to decide the target audience you want to serve. For example, if you’ve decided to sell formal shirts, identify what sort of retailers you’ll sell them to. Will you sell to a luxury store instead of a discount store? Will you sell to retailers catered towards the Asian market or European market?
You need to brand yourself and niche down even more to align with a specific target audience. This will relate to the style of clothing or how it is manufactured.
Have a clear idea and direction to help you create a business plan to market and sell your garments.
Create a business plan
Creating a plan for wholesale clothing business gives the direction for you to navigate through the startup process. With the niche you decided, craft out the overall business plan as below:
Build your own identity
Lay out the details of your company, such as what you’ll see and to whom you’ll sell it. Determine the issues that your product solves. Create a client avatar that represents your ideal client (ICA). Determine how you’ll reach out to your target audience.
What is an ideal client avatar (ICA)?
A customer avatar is described as “a detailed profile of your ideal customer”. It makes no assumptions or divides people into classes. The avatar focuses on a single individual and describes him/her in detail. It goes far further than a standard marketing persona, giving marketers a lot more targeting options.
*Retrieved from: What Is An Ideal Customer Avatar? by Henry DeVries (2019)
Budget and financial planning
List out all the expenses you need to get started and how much you will need every month or quarterly to sustain operations. How much money will you need to achieve your expected break-even?
Carefully plan your budgeting and spend it on what is necessary. Compare these expenses to how much money you have available. Did you have sufficient funds to get started or did you need to get more investors to invest or apply for a business loan?
A well-budgeted plan will help you define the business challenges and issues you need to face.
Build a team
A team with some executives to head operations, sales, marketing, supplying, distribution, etc. is necessary for starting a business that will be sustainable for years to come.
Each department will handle different kinds of business activities in terms of operation, marketing, sales and financial management. Hire workers for jobs like order fulfillment, inventory management and customer service.
Work together with your team to brainstorm ideas to penetrate the market and sustain it. Figure out what roles you need to fill and start hiring talent in the market. A reliable team will power a business to success.
Document internal processes
Record daily activities, employee onboarding, lead generation, marketing campaigns, order fulfilment and other processes that make the business happen. Processes that are consistent and tailored to better represent the company and consumers are critical.
The aim is to provide concrete guidelines for someone to step in and manage your company when you are not available to do so or if you employ a CEO and delegate operational duties to him/her.
Also, documenting internal processes helps to figure out areas of improvement to ensure business sustainability and standstill in the market. Learn the mistakes from the last campaign and improve or enhance in next campaigns.
Having a process documented helps to both maintain the consistency in operations and to help identify and tweak to make improvements.
Secure licenses and permits
When starting and operating a new business, you are required to understand the legal action and formalities in your area. Different places have different legal action and formalities you must follow if you want to start a business in those places.
Generally, your business must be registered as an entity, whether that be a corporation or an LLC. It helps to protect yourself as an individual, since it keeps both the finances and legal implications as a separate entity.
Look into local guidelines and restrictions to see what you need to do when you start in another location. It keeps your business protected and makes things easier at tax time. Seek help from a local tax professional and business lawyer for further advice and consultation.
Set up your physical location
Next, decide on a physical location for your business. It depends on whether you are manufacturing your clothing yourself or you just need a factory or a warehouse to store inventory and fulfill orders.
As a clothing wholesaler, you have the option to manufacture clothing in your own factory or just grab it from another manufacturer. Options will cost differently as you may need a bit of capital to get started if you plan to operate your own manufacturing factory. Well, it will have a high return on this investment if everything goes right.
You will need to consider whether you will rent or buy. Renting gives you the flexibility to start small and move into something bigger as your business grows. However, you do not own the factory if you rent it.
Deciding a physical location for your business not only considers what business model you want to go for but also depends on your capital to rent or own the factory or store.
Determine your prices
Setting prices is not an easy task, because you can’t set the price too high or too low based on your own perception. You may need to find out the competitive middle ground.
Here are the questions you should define when determining your prices:
- Identify the cost per unit you’re manufacturing or sourcing from the third-party manufacturer
- Compare among your competitors’ prices and demand for the product
- Find out how much retailers are willing and able to pay for
Basic formula for wholesale price calculation:
Average cost of goods manufactured + profit margin = wholesale price
Remember, prices are always negotiable when we talk about wholesaling. Add extra padding in the pricing if you want some room to lower down on prices without compromising your profit margin.
Create an online storefront
To sell products online, you need to have an online storefront or e-commerce website first. You can create a storefront on a B2B e-commerce marketplace, such as Alibaba.com, or build your own e-commerce site.
Upload all your products in an e-commerce marketplace or own e-commerce site with attractive and clear product descriptions. It is important to describe your product’s features in detail so that buyers will better understand your products.
Always get your customers to rate your products and services in the online storefront. It increases the potential customer confidence toward your products and also one of the best marketing strategies.If you have no idea where to find a trustable B2B marketplace to expand your business overseas, I would suggest you look for our Alibaba GGS Plans. For more details, visit our Alibaba page or talk to our sales consultants at [email protected]
Organise your product listings
Product listings are important on the online storefront. It helps to speak to your customers online about your products without any physical interaction.
Having a clear product image, title and description become a key success when a potential client first reaches out to you. Let’s talk about how to organise your products in a more presentable way.
How to curate your product listings to be more attractive and presentable
- Use high-quality photos that capture your product from different angles
- Take a video of the garment to show the overall customer experience
- Choose keywords that your audience searches for
- Use the keywords in your product titles and descriptions
- Describe your product in more attractive ways and tell your customers “how your product will solve their issues”
Creative product listing will keep the buyer at the forefront.
Start selling your products
It’s time to start selling once you’ve finished setting up your storefront and product listings. You’ll either have to close deals via direct conversations with clients or fulfill orders from submitted forms, depending on how your storefront is set up.
Invest some time to hone your sales skills. Learn how to build a good relationship and optimise your sales pipeline. You may need sales pipeline software to manage all the deals and leads from your sales team. Always brainstorming with the team to improve sales skills, marketing strategic planning and customer support skills.
A trained AI chatbot is necessary to integrate on your online storefront to help you support your customers when your team is not available. Learn how to do online selling thru live chat.
It would be difficult to make enough profits to keep the company afloat without the right salesforce and help.
Always keep in touch with your client after a sale. It is important to set up a solid foundation and eventually grow your wholesales clothing business.
Schedule a call to follow up with the buyer 1-2 weeks later after they’ve received the order. Ensure everything ran smoothly and was delivered as expected. Get their feedback to improve the overall customer journey experience. It can be done with an online survey over the follow up email or a phone call, if necessary.
Build good relationships with those buyers and get their help to refer their friends if they are satisfied with your products and services. Update them when your new product launches.
How to use Alibaba.com to sell wholesale clothing online
B2B e-commerce marketplace helps expose your brand to new buyers and enter new markets. Alibaba is the Largest B2B International Marketplace with the highest traffic in the world to reach out to millions of potential customers over 190+ countries other than Malaysia.
With Exabytes Alibaba GGS, selling clothing to retailers is simple and easy. You will have a minisite to list all your products. Manage customer relationships directly through our site or from our mobile app. We also have automated translation and currency conversion software, allowing us to conduct international business.
Why should you choose Exabytes as a provider for Alibaba.com B2B Marketplace platform?
- Setup a professional Minisite for you
- Professional photography service
- Professional product posting and write-ups
- Provide exclusive onboard training
- Dedicated local technical support
- Consultancy & quarterly account review
The Exabytes Digital team handles everything from A to Z for your business from setting up your minisite to improving your sales target with a tailored marketing strategic plan. With us, you can enjoy total peace of mind while focusing on your core business.
Get Up to RM25,000 Grant to kickstart your export business with the world’s best B2B Marketplace platform and digital marketing services. Slots are limited. First-Come, First-Served.