Why no one is helping you with your apparel business

I get a lot of emails, most of which I ignore. There’s one particular type of email that I get (nearly daily) that irritates me so much that I figure I’d write about it.

This is why no one is helping you:

I am starting an _____ store in ______. I wanted to know what type of brands you could supply me and how can you help?

I’m not helping you and I’m not even replying to help you. When I sold on ebay, there were sellers who would say something like this in thier ads:

If you don’t read what I write in my description, it’s not likely that you’ll read what I write when I answer the question you send me because you don’t respect my time.

When people send me an email, and they clearly don’t get that I don’t actually sell clothing, I don’t respond.

And I’m sure others don’t either. In fact, many of my industry colleagues echo this sentiment. The ones who don’t get what they do tend to be the biggest time wasters.

Now, here’s the other part where you’re wrong: Nobody credible is going to chase you for your business, even if you are well funded (or claim to be). The fact that you’re not reading and you don’t understand how to contact manufacturers is an indicator that you’re unlikely to succeed. Why bother? There’s not enough quality discount designer merchandise on the market. Good jobbers barely have enough merchandise to go around, they don’t really need to hand hold newbies. A scammer will chase you for your business relentlessly because it’s a one shot deal, they need a steady flow of newbies.

More Bloomingdales store stock from Jobber #19

Jober #19 (version 30 of the guide) has been selling merchandise from Bloomingdales and Macy’s for years. Every now and then, I get an update of what is available. They allow you to build your assortment by brand, to create a lot that is tailored to your needs. In most cases, you have to take every piece when you take a package (unless the lots are unusually large). Minimum orders need to be $1800-2000. Customers who have purchased the guide can download the guide under “my account”, selecting the “files” tab. You will need Adobe Acrobat Reader to view the file. I do not provide technical support for downloading and reading PDF files.

Reputable jobber offers fulfillment and eBay auction support

I received a referral to Jobber #38 (in the guide)from a very reputable jobber in the inudustry who would not send anyone my way who wasn’t the real deal. After speaking with the owner, I truly do believe he has as service the industry has been waiting for and he also has the cooperation of some of the best jobbers in the industry. On top of that the owner has retail experience dealing with brands and manufacturers directly, which always helps when in the off-price world. I allowed him to write his own write up (which I have never done before) so he could fully explain his services. Customers who have purchased the guide can download this jobber’s profile under “my account” in the “files” area.

Do the vendors in your guide sell/ship overseas?

Many do. Some vendors have a substantial export business, and some prefer that you have a US based freight forwarder that handles your exporting for you. You might do well to have a freight forwarder that can handle shipments all across the US, because this will make your buying easier.

International buyers have advantages that US and Canadian buyers don’t. Many popular brands and items cannot be sold in the US (or all of North America) because the manufacturer doesn’t want to diminish the demand for their product here. So jobbers can ONLY export these deals. Companies that come to mind are Abercrombie & Fitch (especially the logo merchandise), Citizens of Humanity, Frankie B Jeans, Tommy Bahama and others.

Additionally…To read the rest of this article, buy the guide.

Where can I buy Seven Jeans?

Well, here’s the scoop. Seven jeans are manufactured by a company called ***** (this is very important because lately, some people have been getting offers for Seven Jeans made in China, Hong Kong or Italy. If they are made overseas, they are fake). At one point in time, one of the jobbers in the guide got a shipment of thousands of pair of Seven Jeans. But then they were all very irregular, small holes and such and swooped up by one buyer.

Then later on, they got another shipment of Seven, some irregular some first quality. And then they had restrictions on where the jeans could be sold. Not on the internet, not in certain parts of the country, etc. Well, again, one buyer swooped them all up.

To read the rest of this article, buy the guide.

Low Margins, Breaking Even and Volume… It’s not what you think

Question:
Love your frank honesty.

We have a used children’s clothing site for the past two years. We are breaking even with low volume and average markup of only five dollars. We do ebay some to drive people to our site.

We want to take it to the next level which would be above our competition. We have about 1,300 items. Our best competition has about 3,000. To get to 5,000 I think we need your guide. We also would like to get more high end designer clothing.

But our brands are (blah blah blah). Does your guide give insight into locating the other children’s brands?

Thanks for your insights! Have a great day.

Answer:

As you know, I am candid, so if you don’t like what I have to say, just shrug it off. If you have 1300 items and cannot be profitable with that, then the problem is not your volume, it is your business model. What I am about to tell you is very important.

When a business model is “broken” the solution is not to throw more volume or money at it, the solution is to fix the business model FIRST.

And yours is lacking for so many reasons. You have done a good job with the layout of your site, but you could work on the look and feel and layout to make it LOOK more high end. And by having a more high end LOOK, you could raise your prices a bit (because your biggest problem IS your markup– not the # of items you have). Right now, your site looks like an eBay seller’s site and you are going to attract people who pay eBay prices. The rest of the world is not as price sensitive as eBay and in fact, most eBay buyers are not as price sensitive OFF eBay as they are ON eBay. But your website is very eBay-ish. Throwing higher end merchandise on that site won’t do much, because the site does not have the image yet to carry it off.

Trust me on that I know of other eBay sellers who have made the transition to a website and they do it well when they do it right.

Secondly, your problem is the PayPal shopping cart. It is costing you sales because your general run of the mill internet shopper does not use PayPal. When you are only targeting the eBay crowd, you can get away with that. When you are going for the general internet buyer, you cannot. YOU MUST have your own merchant account. You can get great rates from Costco, Sam’s Club (both offer merchant services to members), ECHO Inc, or emerchantsgroup.com. Those are the only places I will ever recommend because I know people will get good rates and be treated properly, no hidden strings or such.

I have read anecdotal evidence from people who went form PayPal only to a real merchant account and had a doubling, tripling or more with their sales.

Now, are you so sure that you need more volume to make more money?

Last, your site is not very search engine friendly and as such, because if this, you are probably not getting nearly as much search engine traffic as you could. When I see your site I see potential but there are the glaring problems of:

The look and feel is not going to work for you if you are going to try and go high end
The pay pal only thing is killing you
The site is not search engine friendly and you are not getting as much traffic as you can
A price point of X.99 is very much a discount/bargain shopping price point mentality. If you want to go higher end, you are going to need better price points. Like, for instance, you carry clothing from (insert store name here). Notice that their regular prices are $X.00 and they only mark it to $X.99 when it is **ON SALE**. But DON’T change your prices before changing your site. I mean, the price fits the site, I’m just saying if you want to go higher end, this is how to go about it.

Anyhow, these are my beginning thoughts. I would say FIX THAT before you think about getting more stock because you need to work some things out. You don’t throw more money at a problem, you fix the problem first. And with 1300 items, I don’t see that you need more merchandise to be more profitable.

Nothing But Net: calculating profits and margins

Here’s one thing I come across a lot with my customers that are eBay sellers: On one hand, the price of designer merchandise is rising. On the other hand, the amount of money they can get for it on eBay is falling. And they are constantly searching for less and less expensive merchandise or untapped niches.

The problem is that most jobbers serve retail stores as well. And the retail stores do not have the same nature of competition as eBay sellers, so they are perfectly fine with the prices the jobber is charging.

So what happens is that there is no incentive for a jobber to find cheaper merchandise or lower their profits to service the eBay seller. As a result the eBay seller is in a crunch.

Some of you, I feel really sorry for you, in a year, or two or three, you are either going to have to wrap up your business and get a job, suffer financially as prices fall or find something else to do. Some of you are smarter and will evolve because you see it coming and are planning an exit strategy.

Now the number one problem many eBay sellers have that’s keeping them “in their box” is that they are looking at how much they are SELLING and not how much they are MAKING.

So, let me explain. Some of you high volume sellers are paying $2,000-$3,000 a month in eBay fees. You won’t look for other avenues to sell in because you feel that the $3,000 is a necessary expense. eBay is a venue, but eBay is also advertising. If many of you looked at what percentage of your sales you were spending on advertising (i.e. eBay) you would not be there.

Anyhow, most other people don’t evaluate other avenues of selling because they don’t want to give up the income eBay provides. So I pose the question:

How much of a decline in sales can you tolerate and be just as well off. Someone who pays eBay $3,000 a month in fees will normally say that they can tolerate a $3,000 reduction in sales and be just the same.

WRONG.

If you have to sell $10,000 in merchandise in one month, just to pay the $3,000 eBay fees, then you can tolerate a $10,000 reduction in sales and be just the same.

But, GASP, OH, CHOKE, no one wants to suffer a $10,000 decline in sales.
The problem is most of you are looking at how much you are SELLING and not how much you are MAKING.

Let me give you one lesson I had to learn early on and thank god I learned it when I did.

Don’t get addicted to the revenue and get a big ego based on how much you sell. Take a good look at what’s left over after paying for inventory and selling related expenses (payment processing fees, auction fees, auction software fees, etc.). Take a good look at what that final number is and ask yourself two questions:

Based on this final number is what I am doing worth my time?

Is there a way to make that same amount of money with less work (because eBay is VERY labor intensive for many of you).

Let me give you an example. A somewhat distant relative of mine is a personal shopper. She specializes in getting people deals on merchandise. She meets with a client, sizes them up and hits the stores. Because she mostly gets discount merchandise, she charges a markup on her merchandise in lieu of charging by the hour of her time.

So, one day she is telling me about this client. She spends three days shopping for the woman. And she says, it was great, I made $3300. And I said, okay, but how much did the merchandise cost? $3,000. And so I said, well you only made $300. Now, I’m not going to make a judgment about whether $300 for three days of work is good or bad because it all depends on where you live. In some areas, $300 is half your mortgage, in others, it isn’t even your car payment.

But what I said to her is:

Is what you do worth it for the money you NET and could you find a way of making that same $300 without having to drive all over town all day for three days (even though you like it)?

These are two important questions all of you have to ask yourself.

Why? Because some of you spend all day shopping at consignment stores, outlet stores and thrift stores for deals. I know you, you email me, you’re stay at home mothers who say that the thing you want most is more time with your kids, yet you select a method of sourcing your inventory that requires you to drive and shop all the time. Not to mention the time spent getting stuff listed. Is what you do worth it for the money you net and can you find a way of making the same money with less work?

Now to bring this back to eBay. The reason this is relevant is because some of you need to look at what you are selling and how you sell it. Some of you have one item that you’re going to sell for $10. I don’t care if you bought it for a dollar and made a million percent profit, is it worth the time involved in listing for what you are making for that item? I get a lot of people who want to sell children’s clothing. Man, they are perfectly happy photographing one onesie at a time and making $5 profit on that item. And then there are many who won’t touch certain brands of children’s clothing with a ten foot pole because they *know* that they don’t want to list a bunch of low dollar stuff. Low dollar stuff is only really worthwhile when you have a lot of it and you only invest the time into writing one auction ad to sell multiple items.

So the lesson here is take a look at how much you NET, not how much you sell and ask yourself those two extremely important questions.

Question from a customer– job lots, job outs, what is this stuff?

Question :
I am reading your guide and need a few definitions –
What is a Job Lot and what is a Job Out.
What is the difference between a Jobber and a Liquidator (if any) and a Distributor.

Thanks
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Answer:

I probably use the terms job lot and job out interchangeably. Possibly. I don’t always remember what I was thinking when I said something.

As far as the other question, that’s easier for me to answer. A jobber is someone that sells off price apparel. Jobber is also used in other industries as well, like fabric, but I’m not sure if it’s used outside of the apparel industry. A jobber is someone who buys overstock, overruns, excess production, possibly irregulars, whatever, and sells it for much less than regular wholesale. Like fabric jobbers buy the leftover fabric after production has taken place and sell it at a discount. Same deal with apparel jobbers, though fabric jobbers generally sell to the public whereas apparel jobbers do not.

A liquidator is someone who buys distressed inventory and sells it for a profit. Typically a liquidator will buy and sell anything as long as there is profit to be made. Some liquidate clothes, shoes, electronics, housewares, furniture, groceries, you name it. There is not much technical difference in what they do, just that a jobber sticks to one thing whereas a liquidator will tend to sell anything because they specialize in helping companies get cash for their inventory.

A distributor is someone specific in the food chain. No one in my guide is a distributor. Here’s an example: there is a brand of lingerie made in Europe called Lise Charmel. Very expensive stuff. Well Lise Charmel does not have a US subsidiary or office or presence. So in order to sell in the US, they normally need to have someone here to handle retail accounts because teeny tiny retailers don’t want to import that stuff and have to call Italy all the time. So Lise Charmel contracts with a company called Miltex Group (if I remember correctly, I could be wrong) that is a distributor that represents several different lingerie lines. That distributor buys in enormous quantity, imports handles all customs and duties and services small retail accounts. Some distributors stock the merchandise, some do not and serve as a go-between, but they all typically handle the importing.

With a big company, like Gucci they have Gucci of America that handles the US distribution.

Now these distributors ONLY sell to normal retailers and do not sell to off price retailers, BUT a jobber (or a really big chain like Loehmann’s) can come in and cut a deal with them and buy their excess stock and many do just that.

Now normally fashion companies based in the US don’t have distributors, because they are here to distribute their own stuff, but they will have sales reps and those reps will service the retail accounts. But the company itself usually processes and ships all orders and holds all the merchandise, the rep is just a sales person.

So, that’s one term I am finicky about because too many people ask me for a distributor of XYZ. If you wanted to buy a designer American brand like Juicy Couture or Seven Jeans or Tommy, and you are a regular retailer, you deal directly with the company or their rep, they have no distributor for their merchandise. There is no middleman company that “wholesales” a bunch of designer apparel lines. If you’re not a regular retailer and are looking for off price, then you are looking for a jobber.

In other industries, like computers or electronics, distributors are very common, even with US based companies because it allows the retailer one-stop shopping for being able to get a variety of brands from a single source and not have to deal with multiple minimums. But apparel is not like that because designer companies like to be in control of where their stuff goes and some don’t want too many stores in the same area carrying their merchandise.

Hope that clears things up for you

Why Won’t A Vendor Answer My Emails/ Return My Phone Calls?

First, many are extremely busy and just not able to follow up efficiently. Secondly, many of you have the wrong approach. What you have to understand sometimes is what it’s like being on the other end of that email. You may get dozens or hundreds a day. It takes time to answer them. You will answer the ones that you can understand and then the ones that are sensible. Some others, you may not have the time or the will to get around to.

So people say hire someone to answer your emails. Yeah, if there was sufficient reason to believe that it would be worthwhile.

The problem with a jobber is that very few prospects turn into customers. That means out of 50-100 of you that call or email, maybe 1-2 will actually buy. So paying someone to deal with the first level response is almost always dependent on how much you think it will benefit you financially to do so. If someone can’t even write a decently written email, how likely are they to become a customer? Not likely at all.

I email companies all the time. And with the exception of those that only read their email when they make their biweekly trip to the public library to use the computer, I always get replies. Why? Because I compose an email knowing in my head that it’s a one way conversation. So, your emails should include your name, your company name, contact information, what you are looking for.

I’ve had some emails forwarded to me by vendors. Here’s an example of one:

“I want Seven Jeans how much are they and when can you ship them?”

For the first contact with a company, many are going to hit delete.

More appropriate:

“My name is Lucy Blue. I own a retail store in Atlanta Georgia. I currently have a need for Seven Jeans. Please let me know if your company has access to this merchandise, the pricing and the approximate turnaround time from order to shipping. Please also send the name of the appropriate person to speak to so that I can follow up via telephone.

Thank you,

Lucy Blue
Company Name
Company Address
Phone Number

That, my people, is one of the ways to compose an email. It is more professional and gives people the sense that you know how to work with a company in that capacity. But also, you are contacting a business and potentially establishing a relationship with them and it’s important to convey that you know how to communicate effectively and be professional.

Now if you still don’t get a response, then try again. People do get backlogged and can’t always reply to every email, some do fall through the cracks.

Now here’s the thing you have to look out for. Scammers are notoriously good at keeping up contact. You can email or call them anytime of the day or night and they are always there to respond. I have one customer that said “company xyz was unbelievably good to deal with, they always responded to my emails, called back immediately, sent me all kinds of documentation and pro forma invoices, gave me their Dun & Bradstreet number and everything else to instill a sense of confidence. And they ripped me off for so much money it wasn’t even funny.” You can’t always judge a company by how they respond to your correspondence. A scammer, who won’t deliver anything or will deliver counterfeit merchandise, will make a lot more profit from your order than a legitimate jobber, so they have more incentive to work with you.

Defining who’s who

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.

Designer/Design Company
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).

Manufacturer
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.

Distributor
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.

Jobber
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:)