The Lessons I Learned Running an Online Shop on a Shoe String - Guide on Finding the Suppliers, the Best Deals and Avoiding the Traps
Finding Wholesalers: Clothing
Each niche and stock is different, but clothing is particularly tricky – you cannot offer just one size or one color of the item – you will be losing customers who want different size or prefer other colors. You have to offer least 3 basic sizes [Small, Medium and Large] and possibly few colors as well.
Let’s say you want to sell skinny jeans, but you don’t know which ones to pick: plain black, denim blue, red or maybe zebra print? Are you going to shoot in the dark and buy one size of each color? Or maybe have a full selection of sizes in just one color? Which approach is more likely to bring you sales?
When you are starting out and have a limited budget, these are the choices you have to make.
Follow great advice by a business analyst Stacey at Brazen Profit Labs – “Don’t buy product just because it’s cheap, cute, or because you personally like it. This business model will leave you with lots of unsold stock that you end up having to sell at steep, steep discount, if at all.”
Agree To Return the Products That Don’t Sell
Buying new merchandise involves a possibility it won’t appeal to your customers, but you need to do it anyway to keep expanding your collection and stay fresh. Helpful tip from Ecommerce Experts: agree with a supplier you can return the stock if it doesn’t sell and swap it for a different style.
It means you won’t need to store unpopular items but swap them for different ones that might make you money. Bear in mind not all wholesalers will agree for the swap, and you should respect it. We all have a business to look after.
Ask For Express Delivery
Make sure to ask for an express delivery. You can then offer the products you don’t physically have in stock, just to get the money in and have a positive cash flow – very important in business, more on this later.
As soon as you get the sale in your store, order the item from the distributor [again, no minimum order comes in handy here] – if he can ship it the same day, you get the item the next day, ready to send to your customer. Perfect! Finding the supplier who is located close by is a bonus.
I had to find the way to show I have plenty of stock on my website without physically storing it. This is the beauty of selling online – you can be selling plenty of products on your website and run the whole operation from the back of your bedroom.
Right now, the dropshipping business model is widely used and profitable, and I recommend taking full advantage of it when starting out.
According to a SmartLittleMan.com, “In order to start with dropshipping you must be associated with at least one dropshipper. There are services for this. By far the best is SaleHoo where you will find a large number dropshippers and " wholesalers " available. As soon as you've got a foot inside here is the great opportunity to start making money.”
Getting Big Brands on Board
Is there a way to attract big brands when on a budget? Yes, but according to Ecommerce Experts, you have to start small and be choosy with your products. Often when I was talking to popular brands, such as Cupcake Cult, FLY or Criminal Damage, they wanted to know what other labels I already offer.
They wanted to assess if their brand will look good in my store and not hurt their reputation. They worked hard on their brand perception and knew if they began to appear in lesser online stores, their status would suffer. Therefore, I needed to be selective with my stock from the very beginning.
Don’t Fall For the ‘Cheap’ Trap
During my first 2 years of trading, I was driven to buy only the cheapest items [of course I didn’t have the funds to afford better brands], at no minimum order.
I used to buy from this particular wholesaler based in London, selling printed T-shirts and Hoodies. The products were pretty cheap - ladies t-shirts were £0.80, a man’s t-shirts £1.25, hoodies were about £5. They became my only supplier – and that was another mistake, which I’m going to analyse later.
But sticking to the cheap brands has got its limitations.
You see, customers don’t buy on the price alone – people want a great style, design and quality products that will last a long time. So by selling cheap clothing that fades and gets misshapen after a first wash [come one, what can you expect from a T-shirt for 80p?] you alienate your customers.
So if I made £4.20 gross profit of the sale, net profit was reduced to £3.20 – laughable amount considering the time spent packaging the product, trip to a post office, countless hours spent working on the website and marketing.
Now, with these costs in mind, see below how different a profit can be when selling premium brands.
Work Smarter, Not Harder
Let’s say I bought a hoodie from wholesaler for £20 and sold it for £60. Suddenly the gross profits jumps up to £40, and let’s not forget the running costs are still the same.
After taking away £1.00 as we did earlier, I’d make £39 net profit – more satisfying amount for the same amount of work, isn’t it? Even if I sold fewer premium Hoodies than cheaper T-shirts, I would still make more profit, while having more time to grow my business, promote it, research new suppliers, instead of spending hours each day packing, labelling and shipping products.
This is one benefit of selling items that are more expensive.
Keep Growing Your Company
Many business analysts will agree that by stocking cheaper merchandise you limit your chances of attracting brands that are more desired. Remember how I mentioned that labels are picky where they want to see their products being sold?
By stocking only cheap un-known labels, you damage your chances for growth. I’m not saying you shouldn’t do it at all, but don’t treat it as a long-term tactic. Make sure to move forward and attract better brands and finer stock. How can you approach popular labels when on a budget? Let me show you.
Trade shows normally last 3 days, and on a last day, the exhibitors are more likely to bend their rules to secure a sale. After all, this kind of shows hit hard on their pockets, so they want to make the most of their time there. How can you strike a deal?
Discount is one of the possibilities, but, if you are on a shoe string and can only order small quantities, the wholesaler won’t be likely to give you a discount. Another tactic is to approach the supplier you want, and ask if they can lower their minimum order requirements.
If you are nice, understanding and persistent, they will agree.
Split a Bundle
Another thing I found useful is to ask to break the pre-packed bundles – this might not be to their liking though, so thread carefully.
What are pre-packed bundles?
Let’s say you order red t-shirt. Some suppliers pack a selection of sizes in a bundle to give you a full set: 1 x-Small, 2 small, 2 medium, 1 large and 1 x-large. That’s already 7 t-shirts in a pack. While it’s great to have a full selection, it also means you have to order in bulk – not your cup of tea when on a budget.
General rule of thumb in retail is that the most popular sizes are small and medium [hence there’s more of them in a pack]. You can ask if the wholesaler is willing to break up the pack so you can order only 1 x small and 1 x medium to test the design in your store first, before ordering a bigger pack. After all, you do not want to buy 7 t-shirts just to find this style doesn’t sell.
Some suppliers will be ok [more likely on a last day of the trade show], but some will be less willing to do it, as they would be left with less popular sizes. That’s ok, and you need to understand.
If they say no, do not insist. Just move on. If you really like their clothing, approach them the next season or maybe next year when your cash flow is better and you can buy in bulk.
As you can see, finding quality stock on a budget is tricky, but possible. You just need to search long enough to see a crack in the door. Then push it and step with one foot forward! Don’t be afraid you will come too forceful, wholesalers are not shrinking violets, they are used to clients driving a hard bargain.
If you had few suppliers, this fact wouldn’t hit you so hard, but if you rely on a single source, this can lead to a loss of sales, sleepless nights, stress and desperation. I’ve been there many times myself in the first few years of doing business.
After a while, you learn on your mistakes, but in the beginning, it can be very discouraging.
Keep Looking for New Traders
My tip: secure a supplier as soon as you can, but don’t feel complacent. Never stop going forward.
Reach to find another one, and then another, even if you end up ordering only few pieces from each. You never know where they will be in few years’ time; they might grow their collection and offer some sought after designs. By that time, you will be their regular client and be on more favourable terms.
They will add interest to your collection, people will appreciate your brave choices and while you might not sell these items right away, the benefits you will have from offering these rare design are un-measurable.
What do I mean by a rare design? A cyber techno jacket with spikes and ultra-long sleeves is a great example – an item your customer would wear to a theme party or a show, but not on an everyday basis.
By sticking to the rule above, you’ll find it easier to pick the right merchandise.
After a while, you will discover which of the items are your ‘bread & butter’, which to continue ordering and source similar styles from new traders.
Have a passion for what you are doing and believe you will make it work. Educate yourself constantly on the subject or speak to someone who is already successful in your field to see how they overcome the obstacles you are facing. Good luck!
Freelance Content Strategist. Helping brands find a right voice, one story at a time. Passionate about animal onesies, meaningful conversations and well-spoken people
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