Are you ready to sell your fashion brand to department stores? If not selling to one might be fatal for your brand. Most fashion entrepreneurs dream of seeing a department dedicated to their brand in a major department store where customers are buying millions of dollars worth of styles making the entrepreneur rich. However, if you are not ready to work with them they can easily cost you so much money that your business might never survive. The following are questions your should ask yourself first”
Do you have product currently in stores or on websites that is selling extremely well? You must have product that you have a history of success with that you can recommend to department stores so that the stores have a good chance of performing well with your line. If you know that your embroidered t-shirts are hot then that is what you should sell the store.
Do you have all your logistics in place? If you don’t ship correctly and according to a stores vendor manual then you can get a chargeback (or many chargebacks) which can erode your profitability if not destroy it.
Are you willing to start small? A store buyer may be excited about your line and want to start with a big order. But that is not always a smart move. Most times you are better off starting with a test order to see how you perform before you expand. Then you can build on your successes and eliminate the kind of styles that do not sell for them. Also, sometimes it is better to have more product in less branches and make a bigger statement in the branches that have more traffic.
Do you have deep pockets? It is expensive to sell big stores. They may ask for money towards advertising and/or marketing. Or they may want mark-down money (this is money a department store asks for if your merchandise does not reach the margin plan for the buyers department) at the end of the season. They also might ask for extra time in paying their invoices so you are laying out a lot of money for production for months before you get paid.
Do you have salespeople who know how to build a business with department stores? You need to understand what it takes to build a business. It is not just taking an order and shipping it. You also need someone who knows how to negotiate, how to get selling reports, how to make sure there are no chargebacks and how to make sure the right product gets into the stores so that it sells well. There are many other details that an experienced salesperson will know how to cover.
Do you have enough margin in your product? Because it is expensive to sell a department store you have to make sure you have enough margin in place to that you are profitable with the account. If you lose money at the end of the day it can surely put you out of business.
Do you have good production? If you run late many stores will ask for a discount or even worse not take the order. You can be stuck with lots of inventory you have to sell at a loss. If the quality is subpar or the fit isn’t right they may return it. Or it could sell poorly and then the buyer needs markdown money.
Big orders can mean big problems and big losses. So make sure you can answer these questions in the affirmative before you sell to a department store so that big orders can mean big profits.