Lots of times I get questions about distributors, wholesalers and stuff along those lines. I figure it’s a good idea for me to set aside the time to really clarify who is who in the apparel industry.
For lack of a better word for this, this is what I’m going to call it. This is the company behind the brand. The people that are creating the styles, designing the items. They usually manufacture themselves or outsource manufacturing and handle the distribution of product to their retail stores (or outsource that too).
For the most part, everyone uses contract manufacturers. Some companies (few) own their own manufacturing facilities, but most outsource the production of their merchandise. Many times you will find a company that’s producing designer merchandise for more than a few companies. Sometimes those brands will have striking similarities.
Sometimes a company gets a license to produce merchandise under a brand name. In many cases, they are designing the merchandise themselves and just producing it under another brand. This happens a lot when a company ventures outside their normal product line.
For example, domestics (sheets, comforters and stuff like that). Ralph Lauren, Donna Karen and all those brands with bed and bath lines usually license that out to a company that specializes in producing bed & bath items. Sometimes the factory making the high priced Ralph Lauren Home is the same one making the low priced store brands.
The reason I am taking the time to point out the manufacturer and explain things is because, lots of questions arise about where a jobber might get their merchandise.
Very few designer apparel companies have distributors here in the US. Very few. And for the most part, many are foreign companies that need a US distributor to handle their retail accounts.
A jobber is basically someone that buyer off price merchandise and re-sells it.
Now, let me give you a brief explanation of how stuff gets to the off price market.
There are many people that could have merchandise to sell:
1- The designer/design company. They may have produced more than they needed to meet demand, they may have cancelled orders or slow moving styles. They may have damaged or irregular items that slipped through production. Rare is the company that is completely sold out at the end of the selling season.
2- The manufacturer. Sometimes the manufacturer gets stuck with excess production, cancelled orders or something along those lines. many times a manufacturer will overproduce by 5 or 10% just to make sure they can meet the quota after damages and irregulars are accounted for. In the case of large production runs, that 5 or 10% can be a lot of items.
3- The retailer. Buyers aren’t perfect, nearly every retailer ends up with some quantity of stock they can’t move before they need to pull it from their shelves.
4- The showroom. Most companies either have their own showrooms or have independent sales reps that maintain multi-line showrooms. Though this is usually not a large source of merchandise, it is a source.
5- Another jobber. Sometimes a jobber buys something and does not have the appropriate clientele to move it to and sells it to another jobber.
There are others, but these five cover most of the stuff that’s out on the market.
Now some of you want to know how a store or a jobber gets merchandise because you want to get closer to the source. Your big off price chains like Loehmann’s, Filene’s Basement and such sometimes buy from a jobber, but they have the buying power to go directly to the company and negotiate with them. Your larger jobbers, for the most part, do not have a middleman involved in their transaction. So to get better pricing than them, you would need to buy directly from the designer or manufacturer or retailer or whatever.
The problem is that most of you don’t have enough money to make a deal like that and even if you did, probably could not deal with the downsides of doing so. What you don’t realize is that when a buy has damages, that jobber is sorting those out and selling those separately. When part of the buy sucks, they are dealing with that. You have to realize that these buys are not always pristine and perfect and sometimes the markup you pay to a jobber compensates for the undesirable stuff that you do not have to deal with.
Retailers (which most of you are) are picky. If you were going directly to a company (for example, let’s use Diesel Jeans as an example), you wouldn’t be able to say that you don’t want those 260 pieces of that style because it was hideous, or you don’t want all size 26 because your customers are larger than that, you don’t get that. You take it or you don’t.
Most jobbers aren’t marking up tremendously. So the little more that you pay sometimes compensates for that.
And if you think the jobber IS getting a steal of a deal and marking it up like there’s no tomorrow, well then, that’s the benefit they get for having resources (whether it’s money, knowledge or something else) that you don’t:)