For startups in the fashion industry, usually their first port of call would be to purchase wholesale clothing from a local wholesaler. However, there are some profound implications to this that are not widely explored.
Working in the industry, we’ve acquired some insider knowledge to the wholesale clothing industry. Please note this mainly applies to Australian markets where we are from.
Here are some pointers we’ve learnt over the years:
1) Designs are spread out through retailers meaning your competitors could have the same design as yourself. This means your products will not have any points of difference and given the low barriers of entry in the fashion industry, it easy to lose a sale or compete on really low margins.
2) Usually, you’d be pushing the wholesalers brand rather than your own as all the products are branded already. Many startups are toiling away building brand equity for someone else.
3) Trends pick up a lot quicker with wholesale. If you had a design selling well; competitors will join the market quickly saturating demand.
Manufacturing is seen as a option to explore further down the track but given these challenges, it could be a valid investment strategy to begin your business manufacturing your own label!