Trends don’t start at the brick and mortar of a big-box retailer. They begin at the boutique level, where tastemakers and trendsetters are relentless as they search for the new and amazing. This is why it’s important for your business to have a plan to connect with, and sell directly to, the boutiques where styles and trends are born. When your brand is discovered organically, viral waves of growth follow quickly.
As always, there’s a catch. Building a boutique wholesale business has its own logistic challenges that can grow too big for you to sustainably control. From the start, one must address the realities of the costs of doing boutique wholesale business.
Assuming that most wholesalers expect to maintain a profit margin of around 20%, you have to cut into your own margins in order to make the sale. For example, if you’re selling a sweater that cost $20 to make at $90 MSRP, the wholesaler price will be at most $72 and you’ll be left with a margin of $52. For big-box retailers that buy at large volumes, the margin cut isn’t so bad. However, boutique wholesalers don’t nearly buy as much at one time, so the margin cut rarely justifies the costs of maintaining these relationships.
Then there’s the cost of managing a boutique wholesale channel. The challenge is in the inherent diversity of the business. Instead of managing two or three big-box customers, you have to manage 30, 40, or maybe even 50 different customers with different agreements, different expectations, and different demands. It’s not a one-man job, it requires a team of people to engage with these accounts and process their orders. Hiring that team and accounting for their errors can cost you money against your already thin margins.
Simply put, if you want to heighten your chances of success with boutique wholesale, you need to automate as much of the process as possible. Your boutique customers will always want to maintain their own margins, so you can’t really optimize around that. But if you can automate your processes to cut down on human error, save on labor costs, and scale without worry, you can make your boutique wholesale business grow in a quicker, better, and more sustainable way. Let’s not forget, growth is crucial in making boutique wholesale viable; the more boutiques you’re able to place your products in, the more chances you have of catching the eye of those valuable tastemakers.
The best part of boutique wholesale automation is that it’s simpler than ever to achieve. Commerce platforms nowadays can unify the D2C and wholesale experience under one site, which makes it infinitely easier to automate the entire wholesale process. Customers can now log into your current site, where they’re given a personalized wholesale experience with the assigned terms and credit limits applied. Orders can get processed automatically and shipped out within a specified window. You minimize the touchpoints needed to get your products into their boutique, which also eliminates headache of human error and cuts down on the team needed to manage this channel.
Becoming the next big thing only happens when the tastemakers embrace your brand. Since these trendsetters do their hunting at their trusted boutiques and not mainstream department stores, it makes sense to build the best possible boutique wholesale channel. As your offline business grows, it drives your D2C channel as your new customers look to engage in a deeper way with your brand. This virtuous cycle is what propels your brand into unprecedented growth, the kind that turns good brands into iconic ones.