Things you should never do- Lesson 3- Refuse to learn the lingo of the retail trade

One of the things I find fascinating is that off price retailers have a greater tendency to dismiss traditional retail concepts. If you have a retail operation, there is a term called "open to buy". You can google this term to find out more than you ever want to know, but in general, open to buy is your purchasing budget for a particular time frame. Calculating this is based on many factors, such as your cash flow, your projected sales, how much inventory you already have on hand, how much you have on order, and so on. Most off price sellers that I have come across completely ignore this concept in favor of hoarding (as I like to call it).

Let me give you an example: a jobber has a deal on high end merchandise that they get once every 4-6 months. Your typical off price seller looks at that and figures that they need to buy enough inventory to last them until the next deal comes in. So they buy 4-6 months of inventory at a time. Usually, people like this never turn the inventory over fast enough to make a good profit and by the time that next deal comes in, they are not sitting on as much cash as they had hoped.

Part of the problem is that many off price apparel sellers behave with a starvation mentality, they hoard as much inventory as they can because they don't know when the next deal is coming. It's a bad way to eat, and it's a bad way to run a business. It almost never works.

Let me say that again, it almost never works.

Purchasing must be based on your projected sales and inventory turn (you can google that too). It is unwise to buy more than you can sell within a reasonable amount of time, because you are tying up your cash and retail (I don't care what you sell) is a cash flow sensitive business.

If you're serious about off price selling, you really should pick up a good book on retail management, read a few websites, or take a class. I know far too many sellers struggling because they refuse to implement standard retail management concepts, that are time tested and exist for very good reasons.

Things you should never do- Lesson 2: Don't buy an entire lot if you're small

I know I've discussed this before because this consistently comes up. Should I buy an entire lot or a trailer at a lower price or go through a jobber?

A couple years ago a friend and I analyzed this issue. We had a very complex Excel spreadsheet that analyzed very different scenarios. For the data, we had a few spreadsheets of Macy's and Bloomingdale's manifested trailers. At this time my friend was considering opening an off-price store and selling some items on eBay and we needed to figure out if it was worth her while. At that time, you could buy an entire trailer from Federated at 10% of original retail and the jobbers were selling it at 14% (a 40% markup -- a lot of people say 4%, no it's 4 percentage points, but 40 percent).

Anyhow, we looked at every scenario and what would be a safe retail price for each item. We even figured in items that would have to sell at or below cost and items that would have to be liquidated.

When it came down to it, it was only slightly more profitable than buying from a jobber. Because when you buy from a jobber, the jobber absorbs the financial hit for the items that are slow or non selling. Now when I say it was slightly more profitable, that is right, but the question was-- is it worth the risk?

Yes you can make out like a bandit sometimes, but that involves a lot of risk. If you are small, you can't afford bad buys and if your first load is so-so, well, you've just put yourself in a really bad financial situation.

I have seen people also do this with smaller store loads, buy the entire thing when they could have just been selective at a higher price. Another thing that creeps up is incredibly expensive items that you can't sell above your cost. Getting a pair of True Religion jeans at 12% of retail is a steal. Getting a hideous $5,000 Dolce & Gabbana dress at 12% of retail makes you want to cry. Get enough of those pieces in your load and you've offset a lot of your profit with the loss.

When you're big and huge and can afford risk, go right ahead, but when you're small, it's the kiss of death.

Things you should never do- Lesson 1

In all my years of being in the clothing industry, in one facet or another, I have come across many companies (and people) that have made many mistakes. Seeing as how I see the same pattern of the same mistakes made repeatedly, I thought maybe I should start talking about it so that some of you can learn from it.

The ironic part (which I already know) is that many of you will read this and will still make the same mistakes because you will think there is something inherently different about your situation.

So with that, here it goes:

Lesson 1- Don't hoard merchandise
I see so many people do this because of the inherent difficult of being in the off-price business- what you see today may not be available tomorrow. Inevitably some people get freaked out and think they have to buy everything they can because there will be a scarcity of merchandise. The reality is there is usually always another deal somewhere. While one particular deal may sell out, there is never really a lack of something to buy.

What usually happens is that people finance their hoarding in one of two ways:

Terms from their supplier (where they give you 30 days to pay) or
Credit cards

Yes, I know it's often a good deal to buy merchandise on credit cards and rack up airline miles or other perks because you pay it off every month, but the people who pay their purchases off every month are hardly ever hoarders because hoarders buy more than they can handle.

What usually happens is people say "I'll buy it today, and I have a month before I have to pay my vendor or credit card bill and I will pay off enough of it with what I have sold.

But what actually happens is much of the time, they didn't sell enough to pay back everything they purchased and thus starts this cycle of accruing debt. Many people in this industry lack the discipline to keep their purchases limited to what they actually sell and base their purchases on what (optimistically) they think they can sell.

In business school (yes I have a degree in business) you learn about a concept called inventory turnover (or inventory turn). Please read this. Even though you don't need to be a financial wizard, understanding inventory turnover is crucial to understanding how much merchandise you should buy and avoiding overbuying.

Here's a quote from that site:

Every time we sell an amount of a product, product line, or other group of items equal to the average amount of money we have invested in those items, we have "turned" our inventory...

As you determine your inventory turnover goals, consider the average gross margin you receive on the sale of products. Most distributors who have 20% - 30% gross margins should strive to achieve an overall turnover rate of five to six turns per year. Distributors with lower margins require higher stock turnover. If your company enjoys high gross margins, you can afford to turn your inventory less often.

A turnover rate of six turns per year doesn’t mean that the stock of every item will turn six times. The stock of popular, fast moving items should turn more often (up to 12 times per year). Slow moving items may turn only once, or not at all.

Now the reason hoarding doesn't work is very rarely does a person buy enough fast-turning merchandise in a load to sell it to pay off the entire purchase. Even if you sell on eBay (and I don't care how much you beg to differ), it is still a challenge to turn enough of your inventory, at a high enough profit, to pay off the entire purchase you made.

Hoarding is usually the first step down a slippery slope leading right into debt. I know some hoarders who make impressive purchases of thousands or tens of thousands of dollars, but are no more profitable than those who purchase smaller amounts more frequently. Please read this page for an explanation of how that happens. Especially, once you consider large amounts of unsold inventory often makes sellers nervous which leads to discounting just to increase the cash flow. And once you've added discounting on top of hoarding, you've really reduced your profits.

The Clothingbroker-- Missing In Action

The most interesting email I ever received from a customer was from this guy in Singapore. He purchased the guide at what must have been a normal time in his time zone. He then proceeded to send three emails, approximately 1-2 hours apart asking why I had not processed the registration for the guide. So, when I responded I kindly told him that his purchase was at about 1AM in my time zone and his last email arrived at about 6 AM, when I was still asleep.

The Friday purchases are the worst because, I kind of tune out on Friday evening and come back to life on Monday mornings (and, of course, I am always playing catch up on Mondays). People purchase the guide on Fridays and on Mondays are ready to chargeback or complain to paypal or whatever.

I regularly have to remind people that:

A) I don't live in the computer
B) I do have a life and can't be on the computer all the time
C) I also have to make a living (hint: doing something other than selling this guide)
D) The guide never has been, and won't be, an immediate download. I still manually go through and process registrations.
E) Comcast high speed internet sucks (they are constantly down) but since that's all I have where I live, that's what I have to live with. As I am writing this, it takes about 4 minutes for just yahoo.com to load. I mean, how can a person live with that?

Naughty or Nice

So I get off the phone with this supplier and I am a little sad. Because I felt like he was a little curt, a little short, not very nice at all. So I'm sitting here thinking about this company and whether or not I want to do business with them. The person inside tells me to let it go, I don't need to do business with someone who isn't very nice. But the business person in me tells me that this is a competent, reliable company, I'm looking for a business relationship not a phone buddy.

I remember once I had a meeting with this consultant. She made this comment (and I'm paraphrasing here because I don't remember exactly) that a crucial mistake people make is choosing to do business with people that they like, who are not always the best choice. And it really got me thinking today.

Let me just say that I have never known of a scammer who wasn't nice. And neither has anybody that I know who has been scammed. They are always friendly, cordial, always available to take your call, never too busy. I think this is part of the lure, why people trust them so much. Because, obviously, when you deal with so many curt or rude suppliers, you figure you're better off with those who are the nicest.

Often people contact me and they say, "Oh I called that company but they were so rude." And I say, "you know what, if you are going to be in this business, you need to get over that. Quickly." Companies that deal with consumers tend to be "nicer" than companies that deal with businesses. They may get to know you and all about your family and friends and your dog's heart surgery, maybe, but most are too busy for that kind of chit chat. So conversations are very short and to the point. There's not a whole lot of this and that and the other going on. What do you want and when do you need it thank you and goodbye.

And so I have had to learn to have a thick skin. Or just to not be affected by what may be perceived as unfriendliness. Keep this in mind as you contact suppliers looking for merchandise. Because if you write off every company that is, well a little off in the personal contact department, you will miss some gems. Oh, but there is a line to draw, there are boundaries, but you will figure those out.

Never Too Busy

A few days ago, a customer called. She was asking about her guide and had some general questions about the industry. She was really nice and apologetic and kept saying "I know you're probably too busy..." I had to reassure her that I was available to help.

I want to make something clear: I'm never too busy to help customers. I'm busy and I won't always be there to answer your emails right away, I have a hectic life. But I do help my customers as best I can.

Having said that I have to lay some ground rules:

I do limit my help to customers, i.e. people who have purchased the guide. Sometimes people can ask a question and if it's quick I'll answer. But I usually don't go into detail to help people who have not purchased the guide. It doesn't seem fair but the fact is people like to try to get over when they can. I've had people (mainly guys-- no disrespect but that's the truth) call and talk about how they are looking for $10,000 of merchandise, yet go on and on about the risk involved in paying the amount for the guide. Hey, the price for my guide is measly compared to ten grand. I don't charge people for providing information that they ask so I limit my assistance to those that have shown the courtesy (that's how I see it) of buying and reading the guide first.

I don't help people with bad attitudes at all. That's real. If I wanted to deal with impatient people, jerks, demanding, irritating, annoying and/or rude people, I'd go get a job. But I don't have one and haven't had one in years. So, that's the pleasure of being a small business owner- I don't have to take crap from people and believe me I don't.

I can't help people without a focus. Some people email like "I don't know what I want to do." And I'm like, I don't know what to tell you. I'm not THAT kind of person. I don't have the capacity to be able to assist people who are unsure about what they want to do.

It's better to have a concise email. If you go on and on with fifteen questions in one email, I'm not going to know where in the heck to begin. You can always get and answer and then ask another, but asking too many just overwhelms me.

I won't answer questions I feel can be easily answered with a quick google search. Stuff like when is XYZ trade show. Now if you want to ask me if I have been or how it was, that's different.

Anyhoo, that's about it for now.

A New Year, a New Outlook... or not

It has been such an incredibly long time since I updated this blog. A lot has changed, there have been a lot of issues with the website. I apologize to any buyers that fell victim to my slowness, my email problems, server problems or a host of other problems that kept me from being at peak performance.

I've learned a lot from you all over the past years. When you register at the website, I can get to see what brands people want. I can gauge how interest shifts from one group of brands to another. I see a lot of you still have those dreams of only selling the highest of high end merchandise. Some things change, some things stay the same.

The off-price market has changed a lot as well. I don't see as many people being able to compete selling department store merchandise as they used to. A lot of you have told me that the money is not in store stock like it used to be. A lot of you moved off ebay and got into some (more lucrative) ventures.

A lot of you have taken my advice and developed relationships with your vendors, and the effort has paid off. Many of you developed the courage to create your own deals with small stores and designers, and that's wonderful. It has always been a joy seeing your businesses prosper and flourish.

With that said, I bid you adieu until the new year. Have a prosperous 2005 until I start blogging again.

Dealing With a Bad Buy

It happens to everyone, even the most skilled and experienced buyer gets a bad deal every now and then. And most people foolishly believe that bad deals always come from bad sellers... Not so. Many times a perfectly good seller has a bad deal.

But how can this be? Because most of the terminology used to describe off price apparel is subjective: good, beautiful, quality, slight damage, these all depend on the frame of reference of the people involved in the buy. And they are not always the same.

So you're going along, selling stuff, buying stuff, life is good, business is good, the birds are singing at your window in the morning. You place a reorder with the same supplier and BAM! What happened?

The sizes are all off, there is damage, the quality is not the same, something is wrong. This happens more than you care to believe. This merchandise is something you cannot move to your normal customers in your normal venue.

So what to do?

Think outside of the box.

Well, let me rewind that for a minute. Don't try and buy yourself out of a bad buy, don't try and buy something else to compensate for the loss.

Promise me this: Try to sell what you have before you buy anything else.

What MOST people do when they get a bad buy is try and make another buy, a better buy, to offset the money they lost on the bad buy. Meanwhile, they never move that merchandise and it sits around forever. Pretty soon, hose bad buys accumulate and the seller has a load of stock to move-- only now, it's much older.

Whenever you get a bad buy, always try to sell it before moving on.

This is important. You have many different opportunities to sell if you think outside of the box. However, don't sell it to another buyer via the internet, because most likely, the merchandise will seem misrepresented to them. You can have a small trunk sale, a sample sale, find a mid to lower end consignment store, find another seller that deals in that type of merchandise, find a store that deals in that type of merchandise. There are tons of ways to get rid of it. But get rid of it before moving on.

Hey, who in the heck are you?

I read an interesting thread on a message board about my site that prompted me to post this information. Many people say that I give no information about who I am.

And I'm not really about to. I actually enjoy my privacy so I'm going to tell my story, but at the end, you may feel like you don't know much more about me now than you did before.

I started selling apparel years ago. I have always had a love for fashion and was extremely excited to be able to participate in the industry to some degree. As I became more and more familiar with suppliers, I saw the inefficiencies in the market because there was this huge growth in internet and eBay sellers and most jobbers (at that time) didn't really know how to deal with them.

Around the same time I hooked up with a woman, I'll call her "C" because I don't know if she wants her name all over the place or not. Anyhow, C was selling off price clothing, mostly unbranded (or unknown brands) and she had a sizable little business selling to mom and pop stores in the Midwest. C is a very brilliant businesswoman (and I like to think I am too) and she is full of ideas. So I told her, let's do what you do, but with branded and designer apparel instead of unbranded.

So we started working with other stores, eBay sellers, brokers, people doing all kinds of stuff. And it was through those experiences that we came to know people like you and understand your concerns.

It was a lot of hard work and we didn't really make as much commission as we thought we would. And it was a little difficult to keep up our commission arrangements with the companies we were working with because the customer always wants the lowest price. So C said, well I kind of got into this but this isn't really what I want to do and so I'm going to take a step back, liquidate all I have and go pursue my dream (in a nutshell). And I wrote this guide.

Yep, that's how it came about.

And about the time I wrote the guide I made a conscious decision to stop selling off price apparel. There were other reasons it was no longer attractive to me, but I felt it would be a conflict of interest to sell on both ends. Because, well, I would have to withhold information from you in order to profit from it and that wouldn't really be fair.

I know some people look at this site and say, well if he (most people assume I am a man, I don't know why, most men don't have an attitude like I do) knows so much, he would make tons of money from it and not sell it.

I guess so. That's one way of looking at it.

C and I are still great friends and we talk from time to time, she's a brilliant person to discuss various business ventures with.

I look at what a lot of you go through (in the off price industry). I am happy when you find success, I feel it when you have serious problems, I love knowing about what is going on, helping some of you, planting seeds, giving ideas. I have really helped some people completely turn their businesses around. But, all in all, I have no interest in selling off price anymore.

The Value of Information

From time to time I get emails from people who, for whatever reason, are skeptical of buying the guide. That doesn't bother me because I expect that. What does bother me is when people ask for free information in order to "be convinced."

I get a lot of comments. They come from all kinds of people. People just starting out, people coming up, people who claim to be successful. But there is one common thread:

$30 is a lot to pay for information.

Really?

I have books that I paid $50 to $100 for. I have consultants that I pay anywhere from $85 to $150 an hour (or more). The average cost of a trade directory is well over $100. I know because I just bought one for $150. It gives me industry contacts (in a different but related industry). It's the consumer oriented information that is free or cheap, but not the business information.

Anyhow, the point I am trying to make is that I have to pay if I want to know. I, personally, am beyond the point of wanting basic "how do I" business information. Sure there are plenty of organizations that dispense free business advice, but much of that is general, basic, business 101 information. When you get to the point of needing very specific information, you find that it comes at a cost of some sort.

The person who thinks $30 is too much to pay for information is the person who doesn't know the value of information and I don't respect that. I have colleagues that feel I should charge more. I really don't because I try to balance that with the hordes of stay at home mothers looking for supplemental income, people who actually don't have the money to spend.

But you guys, and you mostly end up being men, who spend all this money and make all this money but think $30 is too much for a guide just kill me. I don't respect you. I don't respect you because you don't respect me. I most of you are playing games because you just want to see what you can get.

Anyhow, there is a lesson to be learned here. As you progress in business and become more knowledgeable, the information you seek will be more specialized. Because it is more specialized, it will cost a lot more to get it. Think about that. A public school primary education is free, but a college education (for most people) costs a lot of money. Specialized information. General legal information can often be found free, but specialized information costs more. You see how it goes.

Doing it for the fun of it. Or not.

Question

---

This is so cool! I have spent the last couple hours perusing your web site and I am blown away. I read about myself and my ideas 10 times over in your articles. I am a stay at home mother that spends all her time looking through the consignment stores and the department stores, I also idealized e-bay signs in my eyes to think that if I could find other ways to find designer merchandise that is quicker and new, I could sell on e-bay.

Here's the deal. I mostly love consigning and stuff because I'm really good at it and it's fun. I'm not looking to get rich or even make a living doing this stuff. I would just like to do what I wind up spending my time doing anyway, and be able to make some money doing it too, (if only that it gives me a good excuse to spend my time doing it). I planned on selectively buying the merchandise myself at a reduce price because I'm a great shopper. I know that takes a lot more time but I do it anyway and this way I won't be buying everything for me and gifts, etc.

I think it would be great fun to be able to supplement my family's income this way. It would certainly make all the tons and tons of hours I spend shopping worthwhile, huh?

Answer

---

eBay is a great place to start. If you're new, there is probably no better place to get your "on the job training" than eBay. Most of my commentary is directed towards people who think they will make a killing on eBay OR people who have been selling there long after they should have either moved on or diversified.

If this is what you want to do, do it. But don't think that just because you HAVE some time, you should USE it doing things like this. The mistake SAHMs make is putting too much time into their selling, with respect to their earnings because they NEED something to do. It gets tired and they get burned out.

This business is a business, you really can't do it for fun and expect it to stay that way. If you're not close to your supplier and using one that lets you pick and choose items in person (only a few do), then you have to "buy blind." NO ONE that buys blind likes every thing they get.

Sometimes people in your position are better off sticking with clearance racks and outlet stores because they are accustomed to a certain level of selectivity AND have unrealistic expectations of the off-price market that make them difficult to deal with as customers.

When I was brokering, I remember one lady that got mad about an order and sent it back (nearly all jobbers do not allow returns). She was mad because the styles were all past season. And I was a little shocked, did she really think she was going to get current season merchandise for a fraction of the retail price? I mean retail stores didn't even mark it down yet. Sometimes you do get current season merchandise in the off price market, but it is not such a regular occurrence that you should expect it.

That experience was bizarre because I had taken for granted that people understood that off price was off price for a reason. No store would job out current merchandise that is sitting on their racks. If they need to sell it, they will actually hold it until the season is done. No manufacturer wants to shoot themselves in the foot by selling current season merchandise to jobbers. So if they do, it's with EXTREME restrictions on where it is sold, or sometimes they make the company hold it until the season is over.

Anyhow, people who are used to buying from stores (and have the ability to return damaged items for a refund) are often difficult to convert to off price buying (with most jobbers a level of minor damage is part of the business and if you are nitpicky about little things, they won't work with you again). And are often THE most frustrated off price buyers. The price you pay in the store covers the benefits you receive (returns, exchanges, extreme selectivity). The minute you want to come to off-price and get it cheaper, you have to give up those benefits.

Now, the reason I am writing this is because now that you understand how the business works, you can understand how people end up buying things that they do not like. And if you don't like it, you won't want to sell it. If you're handpicking in a retail store, you don't buy stuff you don't like and don't want to sell. So, what this means is that you will end up losing *some money* here and there. It happens to everybody, even the best. Maybe you didn't see the damage on this piece, or this one was horribly ugly or something like that. Maybe you got a little too excited in a warehouse and picked up some things you should have left there. There are tons of reasons why, but EVERYONE ENDS UP WITH SOME AMOUNT OF MERCHANDISE THAT THEY CANNOT SELL.

Now, once you end up losing *some money* here and there, you BETTER be doing this as a business or it gets old quick. Most SAHMs end up buying a bad deal early on. Even if they buy from the best jobber with the best intentions the merchandise may not be what they expected (you're used to shopping in a store, after all). Your husband is not going to think your "cute little hobby" is so cute if you blew $300 or $500 on merchandise that you couldn't move. I can't tell you how many emails I have gotten from SAHMs that were doing it for fun, asked the hubby for $300-500 dollars, blew it on merchandise that can't move, he got mad, dissed the hobby, now she needs to find a way to actually make money (not have fun) to recoup the losses and prove to her husband that she isn't crazy.

See where I'm going with this? If you like to do it for fun, stay in the store. If you want to do it for profit, do off price and think like a business.

Lessons Learned in 2003, part 3

I learned that sometimes you need to know when to let go
People get married to their ideas. They try something and they hang on to it long after they should have moved on. This is a hard one because there is a fine line between perseverance and hanging on to something.

The nature of business is funny. People often try their hand at a few thing before they find THE thing that works for them. Things go wrong when people try something that doesn't work and don't try something else.

How do you know when you need to let go? I don't know. Most people know because it is a gut feeling. Sometimes being open minded enough to accept change is all you need to catalyze your thinking to making things work, making things click.

Some people ask how long will it take them to become profitable. I don't have a crystal ball. Some ideas and business models are just so great that they start to work immediately. Some are so bad that they will never really amount to much, no matter what. Most are in the middle.

People have all kinds of ideas they are into. And their businesses are floundering to varying degrees. Some just need fresh ideas and a little new energy to get back into the swing of things and some just really didn't have a good business model in the first place.

You have to know the limitations of what you are doing
And this is part of the above. If you are planning to sell knitted hats to people with large heads, know that the market for that is limited, it's not the same as selling jeans. But, if you plan on just selling jeans, well know that you need to be more specific than that.

One of the areas where this comes up A LOT is children's clothing. Yes, there is a large market for children's clothing. I know this, I have children. But the fundamental aspect of children's clothing (when it comes to off price) is that there really is only so much someone will pay for it, no matter what it is. Listen, women will buy a $15,000 Chanel coat on eBay for $3000, a $800 pair of Manolos for $300 and so on. But you are only going to get a few bucks per piece of children's clothing. Sure there is the Gymboree and the (insert other brands here) that people pay a premium for. But that premium is much lower than what is paid for "grown up" clothing.

Anyhow, most of the time people are only making a few bucks per piece of clothing, three, five maybe more, maybe ten dollars (for few items) or more. Yes there are some doing very well, but here is where most people fall. So obviously, they think they need more volume. And I have to ask a lot of them, do you really want to do more work? The goal, at some point, is to break the link between time and money or at least improve the ratio of time to money. So if it takes you X amount of work to sell 1 item (the amount of work is the same no matter how much the item costs) do you really want MORE work or do you need to figure out how to make more money per item?

I mean, there are only 24 hours in a day.

Lessons Learned in 2003, part 2

I learned that some people are way too sensitive and just aren't cut out for this business

Off Price isn't easy. Even some of the best jobbers can be curt when you try and deal with them. But people expect to get Nordstrom treatment in this industry. Really. And they get all tizzy when you don't bow down and kiss their feet. Really. Some people need to just get a thicker skin. Mostly it's women that get all offended and sensitive. People read my site and email me asking how I can be so rude. No dear, I'm to the point. And I'm about as open as you are going to get, you know.

I remember years ago when I was first speaking with an old timer in the business. He was short and to the point. You know, sometimes you want people to nod in agreement and pat you on the back, tell you all your ideas are fabulous and you're going to be a big success. Well, that's what family is for. But when you ask real people real questions, expect to get real feedback.

Anyway back to this guy, he told me like it was. And it took me a day or two to recover, to get over what he had said. And I just had to suck it up because the guy had been in business for decades, and if my ideas were whack, he was going to tell me. If I was looking for agreement, I had other places to go to get that, but I was looking for honesty.

I'll give you honesty, if you ask, if you can't handle the truth, don't ask.

I'm learning more and more that deals are everywhere.

People constantly amaze me with where they get merchandise. I don't tell everything I know because some people relay a source in confidence. As a result, there are companies I know about that are not in the guide. Every company in there is there by a vote of confidence from a buyer or some buyers. So sometimes, when there is a company and I get feedback that they are cool, I put them in. But if someone comes and tells me about some obscure source that is now their best kept secret, well I won't go and tell that secret, you know. I respect what people have to do to stay in business.

People don't understand that deals are all around you. But you have to get involved in the business, you have to make connections, and you have to get off the internet sometimes (most of the time).

I learned that you have to respect the limitations of the marketplace
There is a finite amount of merchandise to go around. When you are a normal regular retail buyer, and you need 200 pieces of something, you pretty much get it. They take orders, the make a little more than what was ordered and they deliver.

When you are off price, you are basically trying to get a piece of a finite amount of merchandise. No one manufactures an unlimited quantity of merchandise for the of price market.

The reason this comes into play is that someone will email me or a vendor saying, "I want 200 pieces of Betsey Johnson." And it's like, okay because, you know, I just happen to have 200 pieces sitting here that just got overlooked by all my other customers. One jobber said to me, "I'm lucky to come up with 20." Limited quantities. Limited quantities and it also sells so fast that you'd have to have that relationship with that jobber, make your needs known BEFORE the merchandise arrived.

Some jobbers sell out of something so fast it's amazing. Hey, if they still have it after a few months it probably wasn't that good to begin with (or is overpriced).

Lessons Learned in 2003, Part 1

At the end of each year I usually reflect on stuff. Maybe you don't want to read my lengthy expositions, but I think about what I have learned. What has changed, what has remained the same. Blah blah stuff like that. Sometimes it inspires me to make huge revisions to the guide, sometimes not. Over the next few days I am going to write about the things I learned in 2003. Starting now, I suppose.

I learned a newfound fondness for eBay
Sometimes when I speak of eBay, people get the impression that I hate it. Well it's not eBay per se, it's what I call the "eBay mentality" which is basically thinking inside of the eBay box. I have gotten to speak with a person here and there from eBay and have developed a level of respect for what eBay is trying to do. However because of the way eBay is set up, sometimes their interests clash with yours. For example, eBay heavily solicits wholesalers, manufactures, distributors and jobbers to sell at auction. The thinking is that they can sell wholesale to some of you. And I suppose that's one way to look at it, but the way I look at it is that most of you would roll over and die if your supplier started selling on eBay, whether they were selling wholesale or retail, it would just kill a lot of you.

But I think eBay is cool, for some people, that's the best place for them to sell. Others are capable of moving outside that box, but for whatever reason, won't.

I learned that some people don't want to be helped and there isn't anything I can say
The people who are always looking for the pie in the skill deals just kill me. And they never stop coming. There will never be a shortage. They always want something for nothing. It's funny how they say a fool and his money shall be parted. It's true. Some people email me and say they wish they had seen my site a year or two ago or before they bought this or that deal. But sometimes I wonder if I would have even gotten through to them then. A mind won't accept a certain message until it is ready to accept that message. I always joke with some of my associates that the best customer is the one that has been ripped off because they are a lot more realistic than the idealistic new buyer. A LOT more realistic.

I learned that some people never learn
They don't. They just don't. Some people like being in their "rut" and don't really want to be helped out of it no matter how much they ask for help, suggestions or feedback. Truth is they like being where they are but want to give the image that they are trying to do something.

I learned to appreciate the difference between milking a cash cow and hopelessly following trends
Lots of people want to know where to buy the hot this and the hot that. For the most part, I don't even try. There is a difference between spotting a cash cow and wanting to milk it while you can and just following what's hot. Some people have a niche, that niche serves them well, they know what they are doing, know what they are selling. And then there are those that don't have a clue that just want to sell whatever they think is hot for the moment. Don't know the difference between Seven or Paper Denim or Blue Cult, but want to sell it just the same. Can't tell the knock off hoodie from a real Juicy but want to sell it just the same.

The printed version is officially more epensive

Ever since I have been offering a printed guide, I have been printing and binding myself. Printing is no big deal as I have a high capacity network printer (which in and of itself is another story as THAT thing decides that sometimes it doesn't want to print an entire page or even work at all), but the binding is a pain. You know, punch paper punch paper punch paper, bind and again. Anyhow, there comes a point where I run out of guides and have to print and bind more. And I dread binding those guides.

So I go back to the issue of outsourcing the printing and binding so that I don't have to bind them myself, but you know it costs more money. So much more money, in fact, that I'm going to have to charge more for the printed guide. But THAT'S another story.

I hate to do it, because I wanted to keep the guide affordable, but it is 120 pages and, well, having something printed and bound and Kinkos or Copymax is just an expensive endeavor.

Quite possibly I will find less expensive printing solutions. I don't want to print them in volume, because I like being able to change it as I see fit so that people always have current info. And I never like sending out "old" guides.

And heck, shipping costs might go up as well because the guide might get too heavy to be shipped at a first class rate.

So if you are wondering why it costs so much more, there you have it. It just does.

When People Don't Listen

One of the reasons my guide is better than many others out there is because it's not hit and run. I don't just find some companies throw up a list and take your money, I answer your questions. But I get so tired of people asking me questions that are covered in detail in my guide.

Let me change that, it's not just any questions, it's the constant question from someone looking for "the source" for Vuitton, Prada or whatever. Sometimes I want to ignore these emails but I don't want people to think I am rude. But if someone is promising you the hookup with a wholesaler of Vuitton, it's not happening and I think from now on, when people ask me, I'm just going to stop explaining.

None of the high end designers have a "wholesaler". They sell direct or through their showroom. I wish people would listen to me when I tell them that. I cover it in the guide and in this blog (read the archives). But sometimes I want to tell them to buy from the "wholesaler" and just throw their money away because they only want to hear what they want to hear.

If this is what you are going to do for money, educate yourself and learn how the industry works. It will save you a lot of stress, and a lot of money.

When People Don't Listen

One of the reasons my guide is better than many others out there is because it's not hit and run. I don't just find some companies throw up a list and take your money, I answer your questions. But I get so tired of people asking me questions that are covered in detail in my guide.

Let me change that, it's not just any questions, it's the constant question from someone looking for "the source" for Vuitton, Prada or whatever. Sometimes I want to ignore these emails but I don't want people to think I am rude. But if someone is promising you the hookup with a wholesaler of Vuitton, it's not happening and I think from now on, when people ask me, I'm just going to stop explaining.

None of the high end designers have a "wholesaler". They sell direct or through their showroom. I wish people would listen to me when I tell them that. I cover it in the guide and in this blog (read the archives). But sometimes I want to tell them to buy from the "wholesaler" and just throw their money away because they only want to hear what they want to hear.

If this is what you are going to do for money, educate yourself and learn how the industry works. It will save you a lot of stress, and a lot of money.

Question & Answer

Question

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Hi,

I wanted to show something to you on Ebay- I found it interesting. I found an Ebay seller and she is selling "Brand X samples"- tags removed, etc. She has some really cute things. I bought some from her and they are quite nice, tagless no inside size or fabric content tags, no signs tags were ever sewn in. They have the Brand X style, but are definitely not an Brand X level of quality (but that's ok with me because I really like them) She says they are samples, but when Ichecked back through her feedback (curious me, wanted to see her other items) I saw that she had multiples of most styles in various sizes. I'm just curious as to what you think she's doing- because she is making a killing on some of these auctions. She's located in California. I know its not ethical to say something is Brand X when it isn't, of course- she is definitely getting away with that. I have never seen items like hers on Ebay or in any catalog or store, for that matter. Anyway, sorry to ramble- just thought you might find what she is doing of some interest.

Answer

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Samples are usually all one size or one group of sizes. For example, usually all of a rep's samples will be a size 6 or maybe 4,6 and 8. I've seen a sample where there was supposed to be a screenprinted design on the tee shirt, but they didn't have time to get it screenprinted so a printout of the design is taped to the front of the shirt. No kidding. I don't recall seeing a sample without a label, but then again, I don't recall looking. It might not be uncommon because samples can be defaced in some way to prevent them from being sold. Tag missing or cut, marked as a sample, etc..

Since samples tend to be the smaller sizes, if the seller has a full size run, like 2 through 12, then I would doubt they are samples. Most sales reps don't have a dozen samples of the same piece, so if they have too many (of each style), then they probably are not samples.

Now, getting back to the point, I am pretty sure that it is absolutely illegal (and you read my bit on using the word illegal where it does not apply) to SELL garments with no label. I am pretty sure that the FTC guidelines prohibit that. They must at least have the fabric care/content tag and a RN number and country of origin. I am pretty sure that's the law. A sample probably is not required to have this info because it is not for sale. Having said that, I don't think a company would sell merchandise with no fabric care/content label, so I am wondering who removed the labels. It's highly likely that the eBay seller did.

The reason she would remove the label is to prevent you from searching by the RN (Registration Number). The FTC law for the US is that a label must either have the legal name of the company on it or the RN number (redundant, I know). The FTC keeps a RN database and you can type in the RN and get the contact info for a company. Now if someone is selling some no name brand and calling it Brand X, then they would remove that fabric care/content label (often called a joker label) because they donâ?™t want you to find out who the real manufacturer is, if itâ?™s not Brand X.

It is not unusual for someone to pull a trick like that. For instance, in looking at her auction (I only looked at one), I see no mention that the brand is Brand X IN THE ACTUAL AUCTION, only in the title. When called on it, she could say that she is keyword spamming and not selling counterfeit merchandise because she did not specifically state that it was Brand X. Typically when a seller has a desirable brand, even if that label is only delineated or cut, they will try to show the label to get higher bids.

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
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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 merchanidse.

Hope that clears things up for you

I thought it would be a cool idea to have a blog

Introduction:

I thought it would be a cool idea to have a blog. Sometimes I just have random thoughts, too insignificant to become part of the guide, too urgent to wait until a newsletter update, so this is a good way to get things out there, off my chest, for you all to read.

For those of you that are unfamiliar with this site, and what I do, you can read about my guide here. If you haven't bought it, it's a great thing to read, good content, but what else would you expect me to say.

Well, that's enough of an introduction, I'm not one for gabbing when I'm tired so we can move along.