The Miracle of Sales & Mktg

I spent nearly 2 1/2 hours talking on the phone with “M”, a retailer who’s expanding into manufacturing (she’s so brilliant I almost feel I should be paying her). As is usually the case, we swing off on tangents, kvetching over DEs. As a retailer, “M” has had ample opportunity to see what problems new designers can create for themselves on the sales and marketing end of things. Here are some of her comments (so it’s not just my opinion). The biggest problem are unrealistic expectations and inappropriate priorities.


“M” says that DEs who don’t have a sales rep are more likely to rely on mail pieces to sell their products. While you do have to start somewhere, DEs don’t realize that glitzy piece-mailers and catalogs are a turn-off to retailers because it’s not what they need. Many promotional pieces are designed as though they were intended to appear in Vogue magazine but those are unhelpful because the retailer needs to know the particular features of a product in order to sell it. An art piece cannot convey that. Simple line sheets with feature content is your best bet. DEs have a similar problem with hang-tag design. “M” mentions that not only do most consumers read hang-tags, they read them avidly. Your hang tags should educate the consumer and retailer regarding the benefits of your product. Retailers also dislike glitz because they know they’re paying for it since the cost is rolled into your pricing and they resent paying for something they didn’t want or need. Similarly, they’ll wonder how much of the product’s price is directly related to one’s failure to prioritize spending in other areas they don’t know about. “M” says a DE could load the pretty stuff onto a web site -retailers are rarely motivated to visit- but that it’s fine for marketing to consumers. Just remember that if you sell on web to consumers, you can’t undercut your wholesale accounts. You can’t sell products at a lower price than your retailers. You are allowed to put your stuff on sale but the benefit needs to extend to your buyers; the discounting must be a planned event and not because you’re short on money this month.

Selling at market has changed because many retailers are not buying at market anymore. “M” says that most buyers have filled 95% of their OTB (open to buy) before they ever get to market which means they’re relying on reps or the DEs to come to them first. They just go to market to validate what they’ve already bought and to make sure they haven’t missed that one hot item. For this reason, more retailers are receptive to a first approach from designers at the store level. By the way, if you sell the stuff yourself and get a sales rep later on, make sure you keep your previous accounts as “house accounts” and have those listed in your representation contract with the rep. Otherwise, you’ll end up paying your rep 10% for these clients you managed quite well on your own. Unless of course you’d like the rep to assume the duties of servicing that customer.

Eventually you’ll need a rep and it’ll take time to build credibility so you shouldn’t expect much until after several markets because the sales rep is not going to move other products they represent out of the way and put yours up front; it’s the opposite. Your stuff will be in the back until the rep meets with a buyer who’d be more inclined to take a risk on you. “M” says switching reps frequently is a red flag to buyers. You have to give the rep time to sell your products. Once you gain credibility by filling your purchase orders, the rep knows you’re able to weather the vagaries of manufacturing and your product line will gravitate forward in the booth. If you fail to deliver your products as promised and on time, it makes the rep look bad to the buyer and could affect sales of other lines the rep sells. Developing credibility takes time, over time. For this reason, acquiring house accounts (before you get a rep) can lend credibility to reps and buyers.

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2 comments

  1. kathleen says:

    This is a compilation and crude importation of all the comments posted at the original site for this document. Feel free to add your comments.
    ——————————

    4/5/2005 12:28:51 PM Mike C said:
    >> You are allowed to put your stuff on sale but the benefit needs to extend to your buyers; the discounting must be a planned event and not because you’re short on money this month. Jess said:
    I’m referring to my typeface site when I say that I don’t like the idea of sales. It seems to me that the customer would hesitate to pay full price later on cause they would just wait on a sale and doesn’t SALE just scream, nobody’s buying?

    4/15/2005 12:05:59 PM MW said:
    I just wanted to clarify since I made the original comment.

    I have seen smaller companies that, for one reason or another, often have old styles of merchandise from previous seasons. These companies would hold sales or sample sales to clear out their merchandise but would not actually allow their retail accounts the chance to purchase these items.

    One could argue that it encourages their retail accounts to wait for special prices, but it is very common for larger companies to offer special promotions to their retailers to give them the option of either:

    A) Running their own promotion without sacrificing their profit margin
    B) Sell the items at full retail and benefit from an increased profit margin

    As a retailer, I don’t mind if a company provides a promotion or sale so long as they extend the same courtesy to the retailer, but don’t leave the retailer out when they could have helped you clear out excess merchandise and enjoyed a better price as well.

  2. SB says:

    ” A) Running their own promotion without sacrificing their profit margin
    B) Sell the items at full retail and benefit from an increased profit margin”

    We have about 90 retailers for our products, and we do both of these things (we choose not to sell directly to consumers). We have a yearly anniversary sale, before which we provide product to our retailers at a discount. Then we spend money advertising the sale, and driving biz to our retailers.

    And when we want to clear old inventory, like discontinued fabrics, we discount them to our retailers. Often they will use these as either demo products in the stores, or as loss-leaders to pull people in.

    Both of these strategies work really well for us.

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