Q:How do clothing companies get their merchandise sold on major retailing websites? (Karmaloop)?

A few friends and I are starting a company. We are all college students, and as you may suspect we have big dreams and a few innovative concepts. Im just wondering, how do these clothing companies find their actual clothes being sold by the big retailers?

A:Your real question is, How do I get distribution?

Many people face this same problem when it comes to manufacturing like record companies with CD's, Film companies with their DVD and yes apparel companies with their clothes.
Most people don't know but anyone can get distribution! Yes, it's true! You have to remember one key thing before approaching a distributer. They buy anything that sells!
Whatever is in demand, they will buy! If they feel Mr. Potato head is the best thing in the world and a bunch of people keep coming to their stores asking them, “Oh my god where are your Mr. Potato Heads?” You’ll be dam sure they are going to try and carry a bunch of Mr. Potato Heads. A Good example is the Tickle Me Elmo! Hey, who would have thought?
You must first build demand for your clothing before shopping them to a buyer at a distributor. When giving a proposal to a buyer, you must cover the following basis.
1. Take your marketing plan to outline how your promotional campaign will help sell your product as their store inventory.
Example: Let's say I have a clothing company, I would take my marketing plan to show them how my TV commercial campaign covers the market most of their stores are located. This means, say I'm running Advertising on MTV, VH1 and BET in the San Francisco Bay area and most of the stores I'm pitching my product to are located in that market. It might be real appealing to them to carry my line because people might go out to their stores and try and buy it. If they had a bunch of my product, they'll sell a bunch of it. Like I said, They’ll buy whatever is in demand.
This will be a perfect opportunity to work other deals with them. Example: Let's say they buy because I informed them of my aggressive TV campaign in that market, maybe they might want to work something out with me so I can mention their store on my TV campaign!
Another Example of this is: Check out the new Fantastic clothing line, Now available at any Wal-Mart!
Keep in mind, Magazine, Radio and TV campaigns all generate demand for products, this will help create awareness and demand at these KEY locations and will help you sell more inventory! Use your marketing plan to butter up your distributor.

2. All distribution companies work in "Terms". They might be 30 day terms, 60 day terms, or 90 day terms. This means they will carry your inventory and order your product but they don't have to pay you anything until the agreed term, 30 day, 60 day or 90 day is up. Then there is "Returns", not because your product is whack, just means the following:
A. Sometimes your inventory gets damaged!
B. There is an error in your product like a rip in the material or a misprint.
C. Your line is out of season and is left over from the last order, which will lead and go hand in hand with "D".
D. Your inventory didn't meet the demand and didn't sell as much as they anticipated!

Hey it happens and that’s why you see a bunch of real good clothing at discount clothing stores. This is a lesson most companies run into and never get passed. It's called "Supply and Demand".
Example: Let's say my apparel line is selling like hot pancakes, let's say they keep selling out every week. Due to my contract with the Buyer (Distributor), they don't have to pay me nothing until the term is up, which is 30 days, 60 days or 90 days! So my line keeps selling and they keep ordering but guess what I don't have money to keep making my product and they keep ordering! I must "Supply" my "Demand"! Get it?
Some buyers are real cool and will cut you a check for the remaining balance but still, it's a risky business. Let’s say I made such a demand I have a new distributor that comes along and says, "Wow, I love it, let’s do business". You then say, "Fantastic, where do we sign". They say, "Right here". You sign, then they say, "Ok, when you ship us our 2 million t-shirts?" Then you say, "Huh?" You must supply your demand buddy. This is a common problem most businesses reach and never get past.
It happens allot in the music and film industry with independent companies. I would then do the following: Example: I get a big order from, let’s say Wal-Mart and they want 2 million T-Shirts! I would then take their request, contract and invoice and go and get a BIG bank loan. Banks are going to want to know why you need this much money and proof that the inventory once made will be sold, but you have to forecast or estimate what you are going to make back after your terms contact is up along with returns.
Keep in mind, after your terms are up they will give you the balance of what was sold and returned whatever inventory wasn't sold or sometimes they'll keep it and order more and maybe sign on with another term contract!

3. Take your catalog with your wholesale and suggested retail price listed to use like a One Sheet. Your suggested retail price might go up or down based on the market and/or the promotional campaign you have with that specific retailer

HUNDREDS SCREEN PRINT SHOP

22 October 2012

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