Why More Brands Are Embracing Wholesale and Multi-Brand Retail

Why More Brands Are Embracing Wholesale and Multi-Brand Retail


For a long time, young brands and independent designers have been able to use the tech and e-commerce boom to control the way they run their businesses: advertising on social media, owned e-commerce channels and direct-to-consumer sales. However, the retail landscape has changed markedly and many young brands today are competing in a crowded space, where it is easy to get lost in the sheer amount of products and services that consumers are offered everyday. As a way to counteract this issue, independent brands are entering wholesale partnerships with enterprise retailers to build their brick-and-mortar presence alongside their digital footprint.

While running their own e-commerce operations allows brands to control the entire customer experience or how they merchandise their wares, there are a lot of benefits in having their products sold in well-known department stores and online retailers such as Nordstrom, Shopbop and Revolve. Read on to discover some reasons why wholesale retail is a good choice for up-and-coming brands.

 

Stable revenue stream

By expanding into wholesale, independent brands can create a more stable revenue stream by diversifying their customer base. Rather than relying solely on direct-to-consumer sales from their own e-commerce websites, wholesale channels provide an additional source of revenue that is less susceptible to fluctuations in consumer demand. This also reduces the risk of over-reliance on a single channel.

Increased brand exposure

Wholesale and multi-brand retail channels can help small brands reach a wider audience and increase brand exposure. By partnering with established retailers, brands can tap into the retailers’ existing customer base and reach consumers who may not have discovered the brand through its own channels.

Wholesale retail can also help small brands expand into new markets and regions, where they may not have a significant online presence or where there are logistical or regulatory barriers to selling directly to consumers.

Lower costs

Partnering with retailers can help independent brands lower their customer acquisition costs. Instead of spending money on digital advertising and marketing to attract new customers, brands can leverage the retailers’ existing customer base, in-store shoppers or site traffic.

Wholesale can also offer brands economies of scale in terms of production and distribution. By producing larger quantities of products, brands can achieve lower unit costs, which can improve profit margins.

Access to new tools and technology

As brands expand into wholesale retail, they may need to adopt new tools and technologies to manage their relationships with retailers. This can include inventory management systems, EDI integrations, and other software solutions, such as the Connect all-in-one platform, that can help streamline operations and improve efficiency.


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Image courtesy of Nordstrom

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