Dropshipping News

A clothing brand needs more than just winning apparel design to create a lasting wholesale plus size clothing business. It needs all the trappings of a successful business as well. Starting a successful clothing brand or clothing line from scratch means an emphasis on basic branding prowess and business acumen, compiled into these five steps.

1. Develop Your Clothing Brand Identity

When you start a new clothing brand, you must first develop your brand identity. Before you sketch your first rendering, ask yourself these important questions:

What identity do I want my Bangkok wholesale clothing suppliers and brands to project?

Who will want to wear my clothes?

What can customers get from my clothing brand that they can’t get anywhere else?

What makes my clothing unique? Is it high-end?

What is the most important part of my customer’s experience?

Your answers to these questions and others like them will build the core of your brand.

All of your future branding and wholesale clothing suppliers decisions should expand on these ideas. Your company name, your logo design and your web site design should all grow from the concepts you laid out here. For more on building a strong brand identity, take a look at 2019 logo design trends.

2. Fill in the Business Blanks

You will need to define the legal structure for your new business. After you determine your business’ legal structure, you’ll need to file the necessary paperwork. The U.S. Small Business Administration web site has the info you need to find out what sort of license or permit you’ll need to start a business in your state.

Next, consider creating a business plan. Your plan should include at minimum a statement about your wholesale online shopping sites, a general description of your products and a strategy for how you plan to sell them.

The Small Business Administration has a complete guide to writing a business plan.

3. Crunch the Numbers

Start at the beginning with your start-up costs. For a clothing line, these costs will include:

Your brand design: logo, business cards and web site

Any license or permit fees

Deposits and rent for a physical work location if you plan to lease your own workspace

Basic infrastructural costs such as phone and Internet service, invoicing software, etc.

Marketing and advertising costs

Sewing or design tools: sewing machines, scissors, rulers, fabric printing accessories, etc.

Materials for your first collection: fabrics, notions and embellishment decor

Hourly wages to cover your design and construction time

If you plan to hire employees, you’ll want to budget their wages into your start-up calculations as well.

Traditionally, new start-ups had enormous legal expenses, but fortunately, this area has experienced a lot of innovation. If you need help with employment or contractor agreements or agreements with your vendors, take a look at Quickly Legal, which offers entrepreneurs, small businesses and start-ups an easy and inexpensive way to create, sign and manage legal contracts and agreements.

Once you know how much it will actually cost to get you started, compare that with the funds you actually have. Then plan how you’ll make up any difference.

Setting Your Prices

To create a smart and effective pricing strategy, you have to start by knowing how much it costs you to produce your clothes also known as cost per unit, or CPU.

But, the CPU is only a starting point. It’s important to bake the cost of running your business and some profit into your clothing prices as well. Otherwise, it will be difficult to sustain your business over time.

Also, consider competitor pricing and perceived value. If you’re completely unaware of what your competitors charge, you may miss the mark entirely by either costing you potential profit if you charge too little, or sales if you charge too much. Perceived value is the amount that a customer thinks a product is worth. And, your competitor’s prices are a part of that perception. But, not the whole picture.

The appearance of your clothing plays a role. A poorly made shirt that looks fancy may have a higher perceived value than a beautifully made simple shirt. Most customers have no idea how much time, money or effort actually goes into making a particular garment.

Your branding can influence how your product is perceived, as well. A classy logo and high-end brand positioning will lead to a higher perceived value than discount brand positioning.

4. Build a Web Presence

Your web site is one of your clothing line’s most important ambassadors. So, put this vital business tool to work for your clothing line.

Start by ensuring that your web site design truly embodies your brand. Visitors should be able to understand who you are and what your brand is about as soon as they arrive. Your web site’s visual design and marketing copy should project your brand’s voice and identity. Here are some suggestions:

Use your brand’s colors.

Prominently feature your logo.

Write copy with your target audience in mind.

Showcase your fashion design aesthetic.

5. Plan Your First Collection

Before you can even consider the details of your first season’s designs, you have to decide what kind of clothing line you’re going to offer in the first place.

There are many different models for fashion businesses. A few of the most popular include print-on demand, custom wholesale, cut-and-sew or private label and custom couture.

The print-on-demand business model enlists the aid of a third party to print and ship pre-existing wholesale garments such as T-shirts, hoodies or leggings to your customers. Custom wholesale businesses purchase pre-made wholesale garments and then customize the clothing by hand. You can print, appliqué, embroider or otherwise embellish the existing garments to fit your vision.

With cut-and-sew and private label you will design your own clothing and then have it manufactured to your specifications. Couture garments are handmade to fit each individual client. This level of detail is both time and labor-intensive and expensive to execute.

Choose Your Niche

Is your clothing line a sportswear brand? Or will you be offering retro-inspired lingerie? Will you design for men? Women? Both?

It’s essential that you identify your clothing line’s niche before designing your first collection.

Design Your First Collection

You can branch out and explore new directions later, but your very first collection needs to preview what your audience can expect to see from you consistently as a designer.

Don’t be afraid to be unique. Uniqueness and authenticity are two elements that will help to set your clothing line apart in the crowded fashion marketplace.

Dropshipping and dropshipping suppliers started as a way for retailers to supplement their own offerings online, but has devolved into online businesses with no products of their own selling straight from manufacturers. (Aleksey Novikov/Shutterstock)It looked vaguely like the product he had ordered, but it came with foreign writing on the box. It also had European-style electric plugs, so it was wired to work on a 220-volt system not the 120-volt system used throughout North America.

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Virsunen contacted the company to complain, and after receiving numerous emails offering him a discount on his next purchase, he grew frustrated and insisted on a full refund. The company said it would do that if he could ship the item to an address in California something that would have cost more than twice what he paid for it in the first place.

He complained to Walmart again, and they eventually said they would refund his money if he returned the item to a store.

"We expect our sellers to honour their return policies," Walmart Canada told CBC in an email. "However if a customer is not able to receive a refund that is allowed under the policy, they can escalate their refund request to Walmart."

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While Virsunen thinks he will eventually get his money back, the experience was an eye-opening one for him, and his first foray into the murky world of something called "dropshipping."

Representatives of Zest Mall Inc. did not respond to multiple CBC requests for comment. But their business has the hallmarks of a practice where third-party companies known as fine jewelry dropshippers sell products to consumers directly from the manufacturer, without the need for a physical store of their own.

A murky world of retail

Traditional retailers sell products to domestic consumers that are often made by foreign manufacturers. Retailers make money by marking up the price to cover their costs rent for the store, salary for employees, warehouses to store the stuff and the technology to process payments.

In dropshipping arrangements, goods go directly from the manufacturer to the consumer without the added costs of the retail side. (CBC)

Dropshipping cuts all of those costs down drastically, because it circumvents or outsources most of those tasks. The dropshipper sets up a web store that's often little more than a photo catalogue of available items, and ships the item directly to the customer from the factory.

In some cases, dropshippers don't even have their own web store, selling their wares on the web portals of established retailers like Walmart, Amazon or Home Depot.

Payment processing is usually handled by an outside party, too. Canadian tech company Shopify is a big booster of the practice, via its app called Oberlo. Shopify says 85 million products have been sold through Oberlo.

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It didn't used to be that way.

"In the past, retailers would engage in a dropshipping arrangement for purely logistical purposes," says Mark Cohen, the former head of Sears Canada, who now teaches business at Columbia University in New York.

In Cohen's day, a brick-and-mortar retailer like Sears would partner with a foreign supplier to dropship "large bulky products it didn't want to stock on its own shelves that it could more efficiently simply arrange to have shipped directly from point of origin." It worked well for big-ticket items like appliances, many of which are made outside North America to begin with.

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But the rise of online shopping has turned dropshipping into something quite different, as consumers demand better deals and expanding selection.

"Consumers don't care where the goods are coming from," Cohen says. "They see it, they want it, they buy it, they expect to get it."

More and more, that suspiciously cheap item online is coming to a consumer from a dropshipper "without the retailer they engaged having anything to do with the handling of it," Cohen says. "And they don't really care as long as everything is as promised."

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A worker assembles ornaments at factory Xitanon village in the outskirts of Wenzhou, China. Dropshipping allows online stores to sell imported products at deeply discounted prices because they ship directly from foreign manufacturers. (Qilai Shen/Bloomberg)

Andrew Youderian runs an ecommerce consultancy and community called eCommerceFuel, but between 2008 and 2016, he ran several dropshipping businesses that collectively netted more than $1 million in annual sales.

Back in his day, he says dropshipping was a viable business plan for real-world entrepreneurs who wanted to offer more products without having to take on the risk of adding expensive inventory that has to be stored, and may not sell quickly.

"Six or seven years ago," he says, dropshippers like him "worked with reputable suppliers and legitimate businesses."

Now, he says a lot of the industry has just devolved to mean "people selling really cheap stuff directly from the factory to consumers."

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Amazon's journey to becoming an online colossus played a big part in the evolution of dropshipping, first by making it harder for their real-world competitors to sell stuff themselves online, and now by working closely with third-party sellers. Some of them are legitimate retailers, but many are just dropshippers with no products or stores of their own.

As Virsunen puts it, "[Amazon] used to compete with them, but now they're letting them on their platform."

"If your whole strategy is trying to resell someone else's products ... it's really hard to out-hustle Amazon," Youderian says, which is part of why he got out of the business entirely.

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But not everyone thinks the same way. One of the ways that dropshippers now get noticed is by advertising on social media feeds to try and nab bargain-hungry browsers. Once you click buy, you're bombarded by even more ads for products, since dropshippers know you're open to buying them.

Consumer-focused chat forums are replete with countless stories of consumers angry aboutbeing sold shoddy merchandise based on ads targeting them in their social media feeds.

"A bogus manufacturer creates a picture and body copy describing this wonderful product they're going to make available for an incredibly low price, and the consumer opts to buy it," is how Cohen describes the process. "Then, when they get [the item], they get a package full of sawdust."

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"They complain and discover the retailer that sold them the box of rocks is gone," he says, "doing business under a different name."

In the past, consumers trusted that retailers were screening the items they were selling, Cohen says. "If they viewed the product as shoddy or substandard or not living up to its claims, they would typically reject it."

Prices that are too good to be true are a hallmark of the dropshipping process, as items often take a long time to arrive, are of suspect quality and are very hard to return. (Pete Evans/CBC)

That's not happening as much any more, which is why Virsunen says he feels duped.

"It's kind of false advertising," Virsunen says of his experience. He says he's unlikely to buy on Walmart's Canadian website again, despite the fact that Walmart said they will give him his money back.

"I ordered something off a Canadian website, I was expecting something that would at least work in Canada," he says. "Who are these people [and] how are they allowed to just willy-nilly sell stuff?"

In an email to CBC News, Walmart said all third-party sellers it works with are "carefully vetted and reviewed before being invited to join Walmart's marketplace community to ensure our customers receive the quality and service they deserve."

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But Zest Mall's page on Walmart's official marketplace sellers list is littered with poor reviews that are reminiscent of Virsunen's experience.

Walmart says it makes it very clear on its website if any available product is being sold by a third party, as such items will have a "sold and shipped by" line next to their products. Walmart adds that customers can return any item from a third party to a Walmart store, "subject to the return policy of the marketplace seller."

Virsunen says that's not good enough.

Cohen says bad experiences with suspicious-looking deals online are a good reminder of the age-old retail advice: buyer beware.

"It's like caveat emptor on steroids," he says. "You took your chances, it seemed too good to be true and it was too good to be true."