Wholesale vs. Retail Clothing Vendors: Which Business Model Is Better?
There’s an ongoing online debate over which business model works better – wholesale or retail clothing vendors? To all resellers, these two terms are definitely familiar and used by most of them. However, there’s an important difference between these two and it’s largely connected to consumers. In short, we’ll explain what each model means and then let you decide which one’s better.
Retail Clothing Vendors
To many, retail is more profitable than wholesale because you’re able to dictate prices by selling clothes per piece. On the other hand, wholesale retailers for boutiques sell stock lots and clothes in large quantities, thus giving buyers and boutiques adequate discounts.
Another important thing to mention is that retail clothing vendors know everything about the whereabouts of their products, and get to know their customers much better. Using customer praise and criticism, they know how to react in given situations and quickly fix anything wrong.
Knowing what customers want is what’s best about this business model. In the retail business, you can encourage customers face-to-face, to put in a good word about your shop and to increase brand awareness. In other words, knowing your customers will help increase sales and overall marketing. However, this is as bad as much as it’s good – why?
Because it requires a lot of time and energy to meet your clients face-to-face every day, talk about prices and inventory, and take mental notes about everything they say, to improve things as early as the next morning. Sounds hard, right? That’s because it is. You’ll have multiple roles and even if you hire people to distribute tasks, they’ll still answer you. That’s time-consuming and a real energy drainer. Still, it pays off.
Wholesale Clothing Vendors
The job of wholesale clothing vendors is a lot easier than one of the retailers. These clothing vendors for boutiques sell in bulk, often via many locations and markets. There’s no need for direct communication with customers since this task is now entirely on whoever buys your wholesale products.
Another positive thing is the costs. Wholesalers cut expenses on marketing and stores, with just renting (or buying out) warehouses for the inventory. All they need is active social media pages and a physical address. The rest is up to wholesalers to decide – what to buy, when, in what quantities, etc.
Are there any real cons concerning this business model? Of course, there are, as with every other business. For example, it’s not as “adventurous” as retail since you mostly deal with getting products shipped in time and do research on new customers.
As for stocking and stock lots, wholesalers need more finances to organize shipments, or materials to manufacture. Generally, it’s about getting things done in large portions, both buying and selling. The bad thing is, there is a small time frame before this and the next shipment, so you’ll need to find buyers quickly. If you already got loyal customers, it shouldn’t be a problem at all.
Overall, this type of business model is excellent if you know how to buy big and sell short. Sounds familiar, right? There has to be a balance between these two because you don’t want to sell everything and have an empty warehouse while waiting for another shipment. That’s basically the difference between retail vs wholesale, but there’s another option.
Can you combine both business models?
Well, you could but it’s much more complicated to sell both to customers and wholesale buyers, i.e. retailers. First, come the prices. You’ll need to come to an agreement with them about pricing and details. After all, they’ll be both your customers and competitors you provide with products.
In the end, it is probably the most lucrative idea to turn into a successful company, but it has its risks and the stake is big. Either way, choosing between retail vs wholesale business models will get you independent and successful, as long as you put much effort into it.
BrandsGateway as a wholesale clothing vendor sells branded apparel and accessories using the tested business model, allowing our users to sell every product we have, for profits. In return, consumers will keep on buying cheap branded clothing.
We offer drop shipping packages as well as stock lots at large discount prices, ready to ship worldwide within days. So, if you’re interested in any of our clothing stocks and luxury clothing brands, contact our live chat support, or register on our site and check the prices to see the difference between wholesale and retail.