Tag: Clothing Business

5 Common Mistakes Why New Wholesale Clothing Businesses Fail

jefferson john babasa asked:

The wholesale clothing business has boomed since the time that fashion clothing lines have become the largest trend in the world. Left and right, the business minded side of the community is starting their own business of wholesale clothing sharing a single goal of gaining a lot of profits.

But apart from profits, another reason why a wholesale clothing business is very popular is because of its maintenance. Among of the many lines of businesses today, a wholesale clothing business is among of the easiest to maintain. Another reason is that clothing is always on demand, so wholesalers are sure to profit even if the competition is hard. Though this is true, then why is it that there are a lot of wholesalers that fails in their attempts to be successful.

A large percentage of wholesalers fail in their first year because of several mistakes that new wholesalers have overlooked and failed to notice. Here are some of those common mistakes that cause a wholesale clothing business to fail.

Mistake #1: Lack of Experience

Number one in our list is the lack of experience. Because of the small amount of capital used for starting a wholesale clothing business compared to other wholesale businesses, many entrepreneur wannabees can easily start a wholesale clothing business even without having any kind of experience in managing a business. This is one of the many mistakes that new wholesalers have easily overlooked.

We have to remember that a wholesale clothing business is still a business that needs to be maintained properly and systematically, and this can only be achieved with enough experience in handling a business.

Though a lot say that one can learn it from a book, it’s still much preferable to get a hands-on experience on handling a business. May it be from assisting a friend on their business, or may it be from working on a retail clothing store or on a wholesale clothing shop. Whatever experience it is, it can still provide assistance in handling a wholesale clothing business, especially when faced with potential risks that may render a business bankrupt or it may help a business to be successful.

Mistake #2: Poor Planning

Planning about the business is important, and many newcomers have failed to notice this importance. Though they do make plans about their business, lack of experience may leave out important aspects of planning which includes the type of business would it be.

Planning about the type of business beforehand is important. Would the business run as a partnership or would it run as a sole proprietorship? Not planning about this important aspect of business firsthand can induce huge problems in the future. One of them is shifting a business from a partnership to sole proprietorship which could take a lot of time and money.

Business permits are also important for planning out a business. Business running documents and other paperwork such as taxation documents and business permits should be properly arranged before starting the business itself. Making such arrangements firsthand can avoid bigger problems in the future.

Mistake #3: Poor Location

Though location is not of big importance when starting a wholesale clothing business, planning about it could still prove very beneficial, especially for the smaller wholesale clothing businesses.

There are many reasons as to why choosing the right location is important for a wholesale clothing business. One of those reasons are the cost for shipping and transport. Shipping cost is not a problem for those larger wholesaler that has been in the business of long time, but for the smaller business, this could prove to be a big problem.

Choosing a location that is near from the clients and from the manufacturer can cut the cost of shipping goods from suppliers to retailers. This could also help in maintaining credibility when it comes to the speed of delivery.

Mistake #4: Poor Communication with Clients

Another thing that new comers of the wholesale clothing business industry have failed to realize is the importance of communicating directly with clients. Clients such as retailers are the wholesaler’s source of income. It is with them that wholesalers can get to sell their goods to the public and introduce new clothing lines to the public.

Communicating with clients are the key element that strengthens the bond between wholesaler and retailer.Checking on the status of their business, talking about what’s in demand and what’s hot in the world of fashion, and taking inputs about the business can build their trust. This in turn will create more opportunities such as distributing new products in the public that other retailers wouldn’t take, better deals, and loyalty.

Letting them face a secretary or talk to answering machines are the reasons why many wholesalers loose their clients. So making sure that the clients are taken care of, provided by trust more than just business but of friendship, and caring can gain their trust and loyalty.

Mistake #5: Poor Operations

One of the reasons why many wholesale clothing businesses fail in their start-up phase is because of their business operations. Because of the lack of experience that some entrepreneurs have in managing a business, defining a customer base and locating reliable sources of product are sometimes left out until the time they realize the importance of planning this in the first place.

Wholesalers are charged with the responsibility of matching up the manufacturer and customer by obtaining quality products at a reasonable price and then selling them to the companies that need them. Doing this poorly could lead the business to failure in which many inexperienced wholesalers have already suffered.

Simple Thoughts Before Opening a Wholesale Clothing Business

jefferson john babasa asked:

The wholesale clothing business is believed to be one of the growing trends in business today. A large number of businessmen and women are now redirecting their attention to focus on starting wholesale businesses of their own. But why is it that people would want to be wholesalers if they could be retailers or dealers? What is the difference between a wholesaler and a retailer?

Though both are the same in terms of selling, there is a huge difference between a wholesaler and a retailer. As a wholesaler, you’ll be targeting the retailers or dealers and wholesalers; whereas a retailer, you’ll be focusing on the buying crowd or the consumers as targets. This is a great advantage because if you choose to act as a supplier for these retailers and dealers, you’ll be serving as a bridge to get the goods from manufacturer to retailers and won’t be needed to take on the role of selling it to the consumers. But as I’ve said, there are wholesalers that deal with both retailers and consumers, and there are some who deal with wholesalers. So it’s up to you to decide what type of wholesaler you would want to be.

Another great advantage of being a wholesaler is the amount of profit you can bring in. Unlike retailers, wholesalers sell their goods on bundle which means more profit. Retailers, on the other hand, sell their goods separately from consumer to consumer. Wholesalers may also benefit from having stable connections of retailers, from which are very popular with consumers and other retailers and dealers alike, whereas retailers depend mainly on the success of their location to bring in customers.

These are some of the possible reasons why businessmen and women would rather focus on starting a wholesale clothing business rather than a retail business. If you’re thinking of venturing to a wholesale clothing business, here are some factors you need to consider before you make some plans on opening your wholesale business.

What kind of Wholesaler would you be?

As I’ve said earlier, wholesaling involves a lot of process. The common process is manufacturer, to wholesaler (which is you), and then to the retailers and dealers. But there are wholesalers who sell to the consumers and then there are some who sell to other wholesalers. It’s your decision whether you want to sell to the public or wholesalers.

Who are your clients?

After choosing the type of wholesaler you’ll want to be, your clients would be your next priority. Your clients are your source of profit. It’s your duty to distribute the goods to your clients, and then it’s up them to distribute your stocks to the consumers. One way of keeping clients is to keep a long list of what you have at the moment, and also, a separate list of those you have failed to have. Keeping a list of clients you failed to gain is as important as keeping your own list of clients. If the time comes when you would be needing another set of clients, you could talk and ask them to be your client again. You might be surprised when you finally have them this time.

When you are new in this kind of business line, it is wise that you should first target clients that are near to you. It saves time and money on shipping (if you don’t have your own delivery system). It is also important that you talk to your dealers in person rather than have your secretary or voicemail talk to them. This is important so as to build the necessary relationship between your business and theirs.

But before entering an agreement with your client, make sure that all legal documents that permit them in selling your stocks are arranged properly. This is to ensure security on your business.

Where would you store your stock?

Keeping an emergency stock is very important. It is important that you keep a stock of all of your products in case item shortage or emergency orders from your clients come by. Lack of stock is one major cause for a lot of wholesale businesses to fail. This is because of “Reliability”.

Reliability is what your clients would want with wholesalers. Unable to provide them their stocks on time could cause them to switch to other wholesalers that can provide with the services they want. So keep in mind to find a place to store your stock. Make it as close to your clients as much as possible, keep it updated as much as possible, and keep some of your in-demand stocks for emergency purposes.

Could you provide them some advantages?

Providing an advantage perhaps is the most important aspect that clients are looking for in a supplier, and one of those advantages is providing credits. By offering favorable terms of payment and perhaps a higher credit limit than that of your competitors, you could attract potential dealers to your business.

It is normal that some clients cannot pay  upon delivery of their stocks so wholesalers typically put up credits to provide their clients the advantage of getting their stocks today, and pay for it tomorrow. Being able to provide them an advantage where others could not is a huge plus over your competition.

But keep a close watch of what you’re trying to provide them. Give them benefits that do not jeopardize your own business. Keep this in mind and you’ll run a successful wholesaling business.

These things are some of the important things that you should think about before opening your wholesale clothing shop. I didn’t include the location for your business because location rarely is considered in this line of business. The best location to think about is where your clients are close by. However, keep a good distance away from foot traffics.

Let me give you another tip: If you are new to this kind of business, or in any kind of business, it is advisable that you seek some advice from someone who has an experience handling a wholesale clothing business.

You can learn a lot from other’s experiences in handling a business. You can learn how to maintain your business properly, or learn how to manage your profit, or better yet, learn from their mistakes so if you every encounter them, you’ll know what to do and how to react on it.