What Obligation Do We Have To Wholesalers?
12 June 2020
Author: Jasmine Waters
Many industries – creative or otherwise – may currently feel as though they are navigating their way through a never-ending crisis. Within that, sub-sections may feel the same and one that is often overlooked is that of fashion wholesalers. As the backbone of many brands, their role in business may not be as accounted for as their position and livelihoods remain precarious. Is there an obligation to retailers have to their wholesalers and can relationships stay strong?
How is wholesale doing?
Several retailers of various sizes are looking to extend their supplier payments as a way of safeguarding their own businesses. As B2B companies are also quick to cancel any orders possible, it is likely that the present situation will change the way which clothes are bought and sold on a more permanent basis. Was this something that needed to change regardless? Many would think so. According to industry reports, there is a general feeling of inevitability that wholesalers would pass on a financial burden to designers, with delayed payments, cancelled orders and new discounting measures making up a new norm. But how is wholesale effected by this, and are they completely to blame? If we look back to 2008, wholesalers were frequently addicted to ‘deep discounting’ in order to retain a customer base, competing directly against the retail market and the likes of capsule collections. Fast forward to now and there is a looming question of whether the pandemic itself will force the wholesale system to address some already embedded issues, or whether it will collapse to a total breaking point.
Will anything change?
The feeling of many is that if would be a shame if we didn’t emerge from the situation with strong bonds maintained and some form of evolution taken place, fighting the idea of mass markdowns. From a small brand’s perspective, they are presented with a unique opportunity to take stock of their wholesale relationships, possibly having less to lose when asking for collection flexibility. With so little money coming in, now is the time to ask. As a result, this could lead to an increase in concession agreements alongside a new working model forming from the relationships between department stores and D2C brands – working around the issues from seasonal discounts and unsold merchandise. Some small and mid-sized brands cannot afford these kinds of concessions and will need to prioritise relationships that cater most directly to their needs. There is no question that there may be long-term damage in doing this, despite the ramifications of not making change being high, such as store closures. As the ability of shoppers being able to shift exactly how they buy products becomes more likely, brands will have to make tough calls in order to survive with all obligations aside.
Photo credit: https://www.pexels.com/@castorlystock