Wholesale fashion distribution refers to the global market of

bulk Bulk can refer to: Industry * Bulk cargo * Bulk liquids * Bulk mail * Bulk material handling * Bulk pack, packaged bulk materials/products * Bulk purchasing * Baking * Bulk fermentation, the period after mixing when dough is left alone to fer ...

clothing sales, in which producers, wholesalers and sellers are involved in a commercial,

business-to-business Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a commercial transaction with another. This typically occurs when: * A business is sourcing materials for their production process for output (e.g., a ...

process. __TOC__

Procedure

Most

wholesalers Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

get their fashion stocks from the producers that commercialize the latest collections in bulk, at volume discounts. Others purchase overstocks and closeout merchandise from retailers or distributors. Their clients are the

reseller A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but can be done at a loss). One example can be found in the ...

s that purchase those

stocks Stocks are feet restraining devices that were used as a form of corporal punishment and public humiliation. The use of stocks is seen as early as Ancient Greece, where they are described as being in use in Solon's law code. The law describing ...

and sell it to the final consumers. Often, this process is financed through merchant factoring or vendor finance. In other cases, the merchant is assessed "counter rent" for a "store-within-a-store" concept, common in the cosmetics industry, but also not unheard of in clothing. In other cases, the vendor agrees to buy back unsold merchandise from the retailer — this is a common arrangement for higher-value seasonal clothing, like designer coats.

Wholesale businesses

Many intermediaries exist to assure product quality or to hold stocks until needed by retailers who often have limited storage and retail space; they also help smaller retailers avoid issues like customs bonding and the need to secure an import

license A license (or licence) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreeme ...

. The

distributor A distributor is an enclosed rotating switch used in spark-ignition internal combustion engines that have mechanically timed ignition. The distributor's main function is to route high voltage current from the ignition coil to the spark plug ...

sells large quantities of clothing stocks to a reseller, who tries to charge sufficient mark-ups to cover his costs and still make a

profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...

. Often the supply chain will include more than one intermediary, although retailers usually strive for the fewest middlemen and lowest prices. Since the emergence of the

Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, p ...

, many retailers have begun using it for just this purpose, and many new online-only wholesalers have emerged as a result.

Risks

Business always involves risk, especially in a market strongly controlled by powerful fashion houses and manufacturers at one end and fickle consumers at the other, where global supply chains and the seasonality of clothing often mean that clothing must be bought months or a year in advance and credit, transportation and warehousing arranged on tight deadlines. Producers are the ones that set up the apparel stocks starting prices and consumers are the ones that choose to buy or not a product sold at a certain price. Despite increasingly sophisticated tools like computer modelling for measuring and predicting consumer behavior and tweaking price and promotional activity, retailers can never be entirely certain of their

sell through Sell-through refers to the percentage of a product that is sold by a retailer after being shipped by its supplier, typically expressed as a percentage. Net sales essentially refers to the same thing, in absolute numbers. Sell-through is calculated ...

rate or the average price realized. Retailers hedge risk by seeking vendor financing or vendor buy-back arrangements as mentioned above, which distributes some of the risk of unsold merchandise back up the supply chain to the producer or wholesaler; they also open alternate channels such as

outlet store An outlet store, factory outlet or factory shop is a brick and mortar or online store in which manufacturers sell their stock directly to the public. Traditionally, a factory outlet was a store attached to a factory or warehouse, sometimes allowi ...

s to liquidate unsold merchandise while freeing up floor space for new arrivals. Some "

fast fashion Fast fashion is a term used to describe the clothing industry's business model of replicating recent catwalk trends and high-fashion designs, mass-producing them at a low cost, and bringing them to retail stores quickly, while demand is at it ...

" retailers, like Zara attempt to control their whole supply chain from design to production to the retail store, in order to practice just in time production, or something close to it; in cases of complete integration, there is no "wholesale fashion distribution," as the retailer is its own manufacturer and wholesaler.

Related concepts

A related concept is drop shipping, a commercial process used in direct-to-consumer marketing. A drop-shipper relies on a third party, like an online fashion

blog A blog (a Clipping (morphology), truncation of "weblog") is a discussion or informational website published on the World Wide Web consisting of discrete, often informal diary-style text entries (posts). Posts are typically displayed in Reverse ...

to generate consumer interest and initiate an electronic order that is sent to the drop shipper's warehouse for fulfillment. The profits are split between the drop shipper and the nominal seller at a pre-arranged rate, usually involving a commission structure. Because only the drop shipper has physical facilities, the notional online "retailer" faces much lower costs. This allows consumers to realize prices closer to the wholesale level, but it disadvantages retailers who lose control over many aspects of customer service, discounting, packaging etc.

References

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External links

The New York TimesOrotex Liquidation Wholesale Fashion Distribution
Freight transport