Using an online wholesale marketplace can be a good way to grow your brand and show off everything you have to offer to a pool of buyers all in one place. However, if you plan to use a wholesale marketplace for your fashion brand, it’s important to understand the positives and the negatives of doing so in order to choose the right wholesale marketplace for your business.
THe positives of using a wholesale marketplace
The main benefit is that you can reach a wider buyer market through a wholesale marketplace than you can on your own reaching out to buyers one-by-one. This is convenient and saves time. And doesn’t require you to find the contact details for buyers, which can sometimes be challenging.
You also can avoid the expensive in-person tradeshows that brands often participate in as a means of reaching buyers. Instead, you’re showcasing to the buyers online.
THe negatives of using a wholesale marketplace
Your margins are even lower. It’s already tough to cut your profit margin when you sell wholesale. But now you’re losing money to both the retailer and the marketplace that connected you to that retailer.
You also need to keep in mind that as the wholesale marketplace grows and adds more and more brands to the website, you get lost as one of many. It’s not really a “set up my shop/profile and watch the orders pour in” situation.
How to Choose the Right Wholesale Marketplace for Your Fashion Brand
While there are advantages and disadvantages to using a wholesale marketplace, if you decide to try it out for your business, it’s important to make sure that you’re choosing the right one for your needs.
If you follow these steps, you can choose a wholesale marketplace that fits your unique needs.
1. Look for a marketplace whose target audience fits yours.
You may have a very niche market segment, depending on the type of designs you produce. An online wholesale marketplace may have a much larger overall target market.
When it comes to wholesale, what kind of stores are you targeting? Are they in the right geographical location for your brand? Are they luxury boutiques or mid-prices shops?
Just because we’re talking about B2B, doesn’t mean that you’re not still thinking about your target market.
2. Take a look at other brands represented on the marketplace.
Are those brands with which you want your brand associated? Do they offer the same high standards and quality that you present with your brand?
You want a wholesale marketplace that has products that are of the same overall quality as yours. You may also want brands that reflect some of the same values or that will fit well with yours.
3. Consider the payment terms offered by the marketplace.
Take a careful look at the terms and conditions offered by the online wholesale marketplace before you sign on the dotted line. There are several factors you may need to take into consideration.
- What will you pay to list your products?
- Is there a limit on the number of products you can list?
- What percentage of your profits will be taken by the marketplace?
- When will you receive payment for any items sold through the marketplace? How long will those payments take to process?
- What platform does the marketplace use for payments?
- Are there any hidden fees that could impact your profits?
- Are you able to communicate with interested buyers or will there be no way for you build those relationships?
Keep in mind that the wholesale marketplace is a part of your overall fashion business. You don’t want to lose money on your wholesale sales, nor do you want a platform that drains more of your profits than it provides.
4. Consider shipping and returns policies.
In addition to examining payment policies for the online wholesale marketplace, make sure you take a close look at shipping and returns policies.
Often, those policies will turn out to be more complex than you think.
- Do those policies fit with your own?
- Does the marketplace have fast shipping turnaround times?
- If items are returned, do you still lose the percentage paid to the marketplace?
Take a careful look at those policies as you choose the marketplace for your brand.
5. Make sure you understand how the platform works and that it is easy to use.
Can you easily manage your inventory through the platform? Keep track of sales and profits?
If the platform is complex, hard to understand, or difficult to work with, you may not want to make it part of your sales plan.
On the other hand, if you can easily understand how to effectively use the platform, it may be a good fit for your needs.
Popular Wholesale Marketplaces for Fashion Brands
There are a number of potential wholesale marketplaces that you might choose for your fashion brand. As you consider which one is right for you, take a look at these options.
- IndieMe, for handmade items
- FashionGo, for a number of fashion brands
- Joor, for luxury fashion
- Wholesale Clearance, for UK sellers
- Faire, for boutique brands, not specifically for fashion
- Abound, for independent brands, not specifically for fashion
- LA Showroom, for many types of fashion brands
Choosing an online wholesale marketplace for your brand is a very individual decision. It’s important to choose one that fits the unique characteristics of your brand and your unique needs.
The process of expanding into wholesale can be time-consuming, but it can also well worth the effort you’ll put in if your sales increase and awareness of your brand goes up. Working on expanding into wholesale? Get the only Tool Kit you need to grow a profitable wholesale business.