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Hi, i am currently in preliminary discussions with a private outlet who are considering selling my shirts on a sale or return basis. As this is my first retail eperience can anyone give any guide lines for the average cut that retailers usually take. The shirts are going to sell for around £12 and I have costs of around £3-£3.50. Thank you.
 

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I hear that the general ruld of thumb for wholesaling is you sell to retailers at a price of 50-75% retail and adjust for the numbers (i.e., prices are a little more if they order less, and get cheaper as they order more).
 

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do you think the same percent decrease in price would be reasonable if I was going to sell shirts to a private retailer, which I already sell at a more expensive price, say $60. Bec depending what percent I decrease , they will be making a larger profit off of the t-shirt than I will.
 

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I was wondering if you (as the manufacturer) are able to mandate the selling price of the shirts to retailors? For example, if your shirts sell for $20 on your site, you don't necessarily want a retail outlet to undercut your e-business do you? You also wouldn't want them to sell your shirts for more then you're selling them online, would you? Maybe it doesn't matter, that's why I'm asking... :)


Is that all negotiated through a contract, or is it a bit less formal?
 

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Well I imagine that's really going to be retailer-specific. The only way to really know for sure is to talk to them; discuss all your important questions, such as the price they pay, what they'll sell them for, if you can advertise your website there too, etc.
 

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retailers would certainly not want you to undercut their prices on your web site, as you would not want them to undercut your web prices in their stores. More likely than not, you will have to sell to them at a fairly steep discount. Remember, they have costs associated with their business that you don't - insurance, payroll, rent, fed withholding etc. etc. They need to make a decent profit to make it worth their while.
 

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In most cases, would a retailer accept that your prices on your website are cheaper then what they are selling your tshirts for , considering customers to your website must pay for shipping?
 

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First off, If you are selling to a retailer I would try not to mention that you sell your shirts on your website because some might see that as direct competition.

Second, the price of the shirts generally sell keystone, which means if you sell the shirt to them for 11 dollars then the markup is usually 130-140 percent depending on the store. So, it would be in a range from 27-29.

In a lot of cases a retailer will ask you what your suggested retail price is because the last thing they want is to be priced higher then the guy down the street. It is for this reason that a lot of retailers will ask for an exclusivity agreement for a certain area.

Hope this helps.
 

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Twin85 said:
First off, If you are selling to a retailer I would try not to mention that you sell your shirts on your website because some might see that as direct competition.
that doesn't make much sense to me. why would a retailor want to pick up your designs without any previous sales information that would generate a decent sales forcast for their demographic?

Check out e-tailors like karmaloop and urban outfitters online. They sell shirts from labels like local celebrity, and local celebrity definitely has their own e-commerce site. There's no exlusivity deal that I'm aware of as I've also seen local celebrity shirts in the mall at stores like Journeys.

I guess I don't really understand what you mean.




My next question for this thread is how do you try to control your shirts' price when seeking international sales? Currency conversions are a killer, eh?
 

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RAHchills said:
that doesn't make much sense to me. why would a retailor want to pick up your designs without any previous sales information that would generate a decent sales forcast for their demographic?
Because they have no need for that information?

More often than not a real-world retailer will have more experience selling a product than their online counterparts. Even when that's not the case, it's still their job to know what will sell and what won't - their livelihood depends on it.

Online sales forecasts etc. are not particularly relevant. The demographics online store X and real store Y are aiming at are different. Their marketing is different (most likely in scale as well as style). Even if they're the online and offline version of the same store this applies, let alone if they're different companies. The retailer will have their own projections, based on how similar material sold in the past - much more reliable data for them under the circumstances.

Obviously what sells in one format has a good chance of selling in another, but a good buyer should know whether or not your shirt is going to sell just by looking at it - they don't need a sales record.

RAHchills said:
My next question for this thread is how do you try to control your shirts' price when seeking international sales? Currency conversions are a killer, eh?
I don't think it's a great idea to try.

If you did a straight currency conversion to GBP for example, a USD $18 shirt would cost GBP 9.75. How many shirts have you seen for that in the UK? Sure there's the occasional one for 9.99, but generally speaking the conversion to the UK is "whatever it costs in US dollars, it'll cost in British pounds". So USD 18 is simply GBP 18.

The more distance you put between the wholesale source and the retail end product, the less competition there is between them anyway. The majority of people are still not all that adventurous about going beyond geographical boundaries.
 

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Thanks for the insight on the sales figures.

Solmu said:
If you did a straight currency conversion to GBP for example, a USD $18 shirt would cost GBP 9.75. How many shirts have you seen for that in the UK? Sure there's the occasional one for 9.99, but generally speaking the conversion to the UK is "whatever it costs in US dollars, it'll cost in British pounds". So USD 18 is simply GBP 18.

The more distance you put between the wholesale source and the retail end product, the less competition there is between them anyway. The majority of people are still not all that adventurous about going beyond geographical boundaries.
I think I understand what you're saying. International shipping is expensive despite the dollar's weakness.

However, if your pound to dollar price conversion is the case then presumably I could sell my shirts to a retail outlet in London for very close to what my own online price is, being that there is generally an actual 1.5:1 pound to dollar conversion ratio...
 

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RAHchills said:
However, if your pound to dollar price conversion is the case then presumably I could sell my shirts to a retail outlet in London for very close to what my own online price is, being that there is generally an actual 1.5:1 pound to dollar conversion ratio...
Depends why the markup is so high in the UK.

If they are simply gouging their customers, then maybe wholesalers could gouge them in turn. On the other hand if their business costs are a lot higher (e.g. higher rent, more expensive utilities, etc.) they may be running on lower profit net profit margins, so they may still need their wholesale costs to remain low.

I know nothing about what it's like behind the scenes in the UK, only the retail front as seen on the internet.
 

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RAHchills, what I meant was as a startup, don't tell them you sell online because it's direct competition. Especially if you are selling your shirts cheaper online then the store itself because then you are undercutting them.

A brand like Local Celebrity has already proven its place in the market and it doesn't have to worry about that.

I didn't say close down your webpage, but I will tell you that I have walked into appointments with stores and they have seen my webpage printed on my tag and not purchased for that reason.

Thats all I meant
 

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bige211 said:
do you think the same percent decrease in price would be reasonable if I was going to sell shirts to a private retailer, which I already sell at a more expensive price, say $60. Bec depending what percent I decrease , they will be making a larger profit off of the t-shirt than I will.

Looks like it ate my post.

My understanding with wholesale is that you only use the retailers potential profits as a basis for your price range. Remember, there projected profit is not certain (i.e, sales, coupons, overstocks, etc.)

The thing with wholesale is your get a sum of money now and have an alternative outlet to promote your products. You don't want to undercut yourself, but don't want to lose potential business, that could be re-occuring. So, be sure to do all the research.

HTH
 

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RAHchills said:
I was wondering if you (as the manufacturer) are able to mandate the selling price of the shirts to retailors? For example, if your shirts sell for $20 on your site, you don't necessarily want a retail outlet to undercut your e-business do you? You also wouldn't want them to sell your shirts for more then you're selling them online, would you? Maybe it doesn't matter, that's why I'm asking... :)


Is that all negotiated through a contract, or is it a bit less formal?
To be certain, negotiate w/ a contract. I plan to offer only certain designs wholesale, keep a limited stock in my online store, and then direct people to other retailer when out. Also, I plan to invoke a price floor clause in my contract. This way, we can help each other w/o cutting out the biz of the other. I hope that makes sense :)
 

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mailman2 said:
In most cases, would a retailer accept that your prices on your website are cheaper then what they are selling your tshirts for , considering customers to your website must pay for shipping?
It's possible, b/c your market bases may be totally separate and independent of each other i.e, your designs appeal to 18-34 year olds alike, but most of your customers cost concious prefer ease of shopping online and are in the 25-34 age range. While the retailer gets many carefree 18-22 year old impulse buying college students that frequently the store.

The store buyer should be knowledge of the demographics when you discuss the nitty, gritty details.
 

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No worries. Sorry if I came off harsh. I'm not currently in the biz yet, but from what I've gathered on the net I'm assuming you'd want to get retail distribution to appeal to a larger demographic, or a market in another country.

I was also assuming that the retailor would want previous sales info to show that you've established some sort of customer base, a buzz for the label. (Like before a new artist gets signed to a big contract to a major label in the record industry) If that's not the case with shirts, then that''s cool.

I know what happens when I ***/u/me... And I'll try not to let it happen again. :)

-c

Twin85 said:
RAHchills, what I meant was as a startup, don't tell them you sell online because it's direct competition. Especially if you are selling your shirts cheaper online then the store itself because then you are undercutting them.

A brand like Local Celebrity has already proven its place in the market and it doesn't have to worry about that.

I didn't say close down your webpage, but I will tell you that I have walked into appointments with stores and they have seen my webpage printed on my tag and not purchased for that reason.

Thats all I meant
 

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It's fine, don't worry about it...

There are just two paths in this business:

1) Online, sell as many t-shirts as you can and just get your name out there

2) Retail, get your shirts in reputable stores and build a following.

and yes, there are many who do both, but most focus on one off the bat. For us, we went right after the boutiques and then once we got rolling backed it up with the online store.

Local Celebrity is an exception to the rule, they are one of the few brands that started online and now can be found in a majority of department stores. They must have an awesome sales team behind them....
 
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