How Can Traditional Clothing Stall Vendors Upgrade the Business Models to Make Profits?
Introduction: The traditional wholesale model of the stalls continuously relies on the sales channels to the second and third-tier markets to achieve profits, contrasting with the increase in rental, and forming a strong contrast to before. Many stall owners with years of practice in the clothing wholesale markets have complained that it becomes more and more difficult to do businesses. Under such an uncertain economy environment, how to break the traditional model to achieve profitability?
Subject: How to upgrade the business model to achieve profitability in the traditional wholesale markets Participation: LengYun Fashion Group No.3
Moderator: ELAN – Shantou – Wool knitting design ODM.
Background: work in the first-line wholesale market as a salesperson and is familiar with the operation of the wholesale market. Own a factory with 7 years of experience in wool knitting development and design.
Baize – Ningbo – Second reporter: graduated from clothing design and engineer. In 2019, worked as an assistant garment pattern maker. In mid-2020, after the company introduced 3D modeling software, now full-time work in clothing 3D modeling. Hope that the garment industry will achieve digitalization soon.
Current Situation of The Wholesale Stalls
1. Wholesale Markets’ Selling Mode
Let me briefly introduce the current wholesale stalls’ sales model. In the heat of the Tik Tok, Kuaishou, Taobao live, some owners chose to accept the changes of the new era, integrating with the platforms to start their live streaming sales. However, most of the conservative owners chose to work with different streamers to increase sales. Although accepting the changes of the new era and actively expanding the sales channel, current wholesale markets still heavily rely on offline sales.
Second reporter Baize: Will it be too expensive for the stall owners to cooperate with the popular streamer?
There’s a problem, but if you do it yourself, the cost is greater, and there are some owners who gave up because there is not enough online traffic. However, if the streamers bring the fans, they can quickly cash out on the sales. So, a lot of stalls choose to work with some streamers.
Second moderator Baize:
Without any fan base, attracting traffic is a real problem. But in the long run, if you can do it, is their own customers pool, comparing to cooperating with the streamers, the cost is more controllable, the conversion rate will be relatively higher.
Also, the general asking price of the famous streamer is not sky-high, and generally acceptable. If he or she were a popular streamer they will work directly with brands’ marketing. So, I think the streamers’ costs should be the prices that the stall owners are willing to bear.
You say that until now they still rely on offline wholesale, what is the percentage? Who usually comes to pick up the goods?
Usually, the second and third line of the in-store wholesale, or some retail stores. Now some wholesale claimed that they are direct wholesalers they can pick up the goods with minimum quantities. And now they can unpack before buying the goods, in the past the goods were never unpacked before buying.
Big wholesale markets like the Thirteen Factories, the Four Seasons Green accept a minimum of 5 pieces.
It used to be all first-handed, full size and color, now it is not necessary. Lack of product differentiation is also a part of the reasons. If the customers do not purchase at yours, they can also get similar styles at others stores. Now customers will not wait, if the platoon is too long, they will ask for a refund. This year, the stalls increase prices, but then in fact the whole market is not always doing good, many owners said that the only good season is after the Chinese New Year. These are the difficulties facing the wholesaler now.
So, what’s the reason for this year’s increase in the price of the stall? Is it related to the COVID?
The specific reason is also not clear. According to our industry assumptions, it could be that stall owners who did not take over the stalls have boosted their confidence in the market after the COVID outbreak, and there is more stalls owner think alike, and then the stalls naturally price increase. Take the Shantou market, it is a wool production center since last year many factories have started cross-border e-commerce. Although the factory business of cross-border e-commerce is booming, the profits are low. Cross-border e-commerce is likely to attract more factories’ attention this year.
2. Optimize the Physical Wholesale Stores to Give Full Play to The Physical Advantages
Because stalls face challenges from online sales, especially live streaming platforms, many stalls realize the importance of the decoration of the stalls, pay more attention to customers’ experience and service, play the advantages of the entity. Like Guangzhou’s APM, last year many stalls were doing live streaming, decoration style is mostly Korean style; the other in favor of the metal industry style, which is becoming more and more popular and in line with the preferences of young people.
So, the decoration of the stalls is for the visual effects of the live streaming?
A part of the reasons is that there is a venue for the streamers to broadcast, and another side is because people who are buying the goods now also watch the renovations. Reference to the first-line wholesaler’s decoration. If well decorated, the customers feel the competitiveness and taste. Some stall owners are afraid of live broadcasts in the stall affect the entity wholesale, some markets prohibited the stall live broadcast. Like Sha Henan City this year prohibited the stall live broadcast. Now Panyu has a lot of live broadcast supply chain bases. And what entity wholesale now has to do is to give customers a good on-site experience
But the essence of live streaming sales is B2C, and your original wholesale stalls are different. The key is also two different business models. Customers who go to the physical stores mainly take many goods, need to communicate with the owner in many ways (delivery period, and style details), the purpose is clearer. And customers who watch live streaming value the experience more, or just to hang out, need to attract them in style and welcoming, their purpose is not strong.
Once heard from a host said that in the live broadcast, some of the guests in the store will bargain, which is not a good thing. I think even if you live broadcast at the stall, you must have a good soundproof place to be the live room. But if the audience can see the live broadcast with the high passenger flow, it will boost the audience’s shopping incentives. Just like offline shopping, many consumers like to “drop by”, there is a kind of attitude with the customers.
I also think that in the stall live broadcast room seeing the traffic does not have much impact on the customers, C-end customers essentially consider the style and price.
3. Wholesale stall product development model
Next, let me talk about the development model of the stall product. Now, most of the stalls are operating as companies. Although the company must hire professional designers, most of them copy the designs. In the era of the internet, the missing piece is not finding the design styles, but in many styles, how to filter out suitable for their brand positions, coupled with the creative inspiration, to make really valuable things. Can fashion designers keep up with the market and implement it into the real consumer market?
Many stall designers directly modify the clothing styles. I think the ability to modify is more powerful, but also more suitable for the mass market.
What is the difference between a modification and a copy?
Copying is to build the same product, and the modification is to change a bit based on the original design. But now the market version is copying original designs, homogenization is particularly serious. Many designers are currently design based on their aesthetic taste adding some popular elements, not tailored to the market, and the interactions with the product department involve some contradictions.
Recently in the group chat, many said the selection of the product is to understand the goods and understand the database. But now most designers do not analyze data, they are smoldering. I do not know if you have heard a designer introduce the collection, and mainly talking about his or her design ideas rather than introducing them from a consumer’s perspective.
Data is important, but only half of the story. The other half still needs designers to have a sense of fashion and anticipate fashion trends.
Market goods can learn about professional brand companies, there is a professional team of buyers to analyze market information, feedback to designers, so that more accurate development, reduce waste of resources.
How To Self-Study To Achieve Traditional Model Innovation
- Learn new ways to promote your channels
What channels do you think can increase the exposure of the stalls?
For example, online channels like 1688 can establish in-depth cooperation with brands.
Tik Tok live I know there is Guangzhou Dayuan, DANSO quality women’s wearing, these two do very well, you can search.
But for the live broadcast, as mentioned above, need to set up a special live broadcast center, increase the exposure of the entire market. The stalls do not know the feasibility of social media?
Since last year, many stall owners create personal IDs, shot a lot of small videos to gain fans, through the individuals to drive the traffic of the stalls. Some did well because the individuals got popular online, the stalls also became famous. And Xiaohongshu, in my opinion, mainly increases the exposure and market visibility, and if do a good job on the Tik Tok and Kuaishou, can indeed cash out and sell goods.
2. Focus on millennials’ fashion preferences
Next, focus on generation Z, the fashion preferences of Millennials. By creating a personality label, gives the brand empowerment, and creates a network of internet stars. Have you found out that now people are building an online famous store? For example, this year the outdoor trend is popular. Stores in all aspects to create own personalities, label the stalls so that more people will remember this stall. Although each stall has its positioning style but combined with the preferences of each generation of young groups, I think it is also important, after all, the market goods focus on popularity.
Generally, can attract the generation Z of the internet-famous stars, what are the characteristics?
Generation Z closely followed the fashion trends, like new things, and have their personality. So social media is also away.
3. An Upgrade in Product Development Mindset
In terms of style development, designers should focus on the market because market-oriented development fulfills the real demand for products, rather than self-aesthetic development. Many companies have good designers with design capabilities, but the styles developed are either exaggerated or do not meet the needs of the market. And the owners often go to the market, pay attention to the market, with years of experience they can grasp the market more accurately. In this regard, the owners have the responsibility to the designer to upgrade the mindset, not just to take the traditional form of copying the designs, or to design styles for personal preferences. The final product, that gets market recognition reflects the real value and achieves profitability. Companies that want to achieve the product development model should continue to explore and upgrade. Many designers are in the office, using the computer to find pictures and reviewing versions. Designers need to go to the market. Sometimes you must be creative and do something special? Is it necessary for the wholesale market?
I think it is very necessary to innovate in the wholesale market. There are risks, but you can lose your competitiveness if you keep following trends. Plagiarism costs are too low, and many consumers do not understand fabrics, only find the most cost-effective ones.
Costume innovation, national trend design said quite a long time. But plagiarism in the clothing industry is so severe that original designs are hard to sustain. For example, The Tide is now very hot, I interviewed a seller, she was very attentive in doing the Australian clothing brands, the price belongs to the mid-range price. But when peers saw the market, they competed with low-end fabrics for the same design. She could not hold on and quit.
Speaking of domestic design, now more and more domestic designer brands are hit and indeed do a good job. There are also domestic niche designer brands that do a good job, but many price points are as expensive as designer brands.
This reason is very complicated, I remember Dr. LengYun especially has a video about designer brand pricing. I think on the one hand is continuous innovation, many people began to follow the trend, a style was overdoing, we must innovate again to maintain their uniqueness. After all, no one likes wearing the shirt, and today’s young people are also pursuing unique personalities. In addition, to control the proportion of goods, with an 80/20 law, there will be less risky innovative styles.
The Moderator’s Conclusion
Current Situation of Wholesale Stalls
- Cooperate With the Live Steamers with Still Focus On The Offline Bulk Selling
- Optimize The Physical Wholesale Stores, Play the Physical Advantages, Upgrade Decorations, Pay Attention To Experience And Service
- The Stall Product Development Model by The Hiring Of Designers, Designers Are Mostly Direct Copying
How To Self-Learn To Realize Traditional Model Innovation
- Learn New Channel Promotion Methods To Increase Exposure. Increase The Exposure On All Kinds Of Social-Media Platform Such As Xiaohongshu, And Tik Tok. Reference To Guangzhou Dayuan, DANSO Quality Women’s Wear As The Assessment.
- Focus On The Fashion Preferences Of The Millennials And Generation Z. Create Personal Label, Empower Own Brand, Create Internet Famous Stalls
- Product Development Mindset Upgrade, Focus On Innovation And Market-Oriented, To Develop Real Demand For Products.