Welcome to Chase your Dreams

Summary

In this episode, retail growth strategist Cristin Zaccareo shares insights on wholesale expansion for clothing brands. She emphasizes the importance of considering factors such as scale, profitability, and growth potential before pursuing wholesale distribution.

Cristin also discusses the challenges brands face in wholesale expansion and provides advice on overcoming them. She highlights the significance of brand positioning, differentiation, and consistent storytelling in standing out in the competitive wholesale market. Additionally, Cristin offers tips on pricing, negotiating, and maintaining brand identity across different retail channels. She concludes with advice for brands looking to expand into wholesale and recommends software and tools for successful wholesale expansion.

About Cristin Zaccareo

Cristin is a strategic leader with 15 years of experience working with leading luxury retail companies as well as mid- and mass-market retailers such as Estée Lauder Companies, Shiseido Company, Lord & Taylor, and Ross Stores. Cristin has a strong history of constantly finding new methods to unlock value, drive sales, and evolve business models in an ever-changing retail landscape.

​Her company CGZ Consulting strives to empower digitally native retailers to unlock their full potential through the implementation of wholesale expansion strategies.

Takeaways

Key Factors for Wholesale Distribution

Clothing brands should assess their current profitability, operational efficiency, and growth potential before considering wholesale distribution. This includes ensuring that backend operations are streamlined and ready for scaling.

Importance of Inventory Management and Systems

As brands expand into wholesale, managing inventory on a larger scale becomes crucial. Implementing ERP (Enterprise Resource Planning) and WMS (Warehouse Management Systems) can automate and optimize business processes, essential for managing increased inventory and operations.

Understanding Retail Buyer Cycles and Compliance

Brands must adapt to different buying cycles of retailers, which can range from three to twelve months. Also, being EDI (Electronic Data Interchange) compliant is critical for seamless transactions with large retailers, as it allows for electronic order transmission.

Negotiating Terms and Pricing Strategies

Brands entering wholesale must navigate negotiation challenges, including setting favorable pricing, payment terms, and promotional strategies with retailers. Ensuring profitability and consistency in pricing across various sales channels is key.

Brand Positioning and Differentiation

Successful wholesale expansion requires strong brand positioning and the ability to differentiate in the competitive market. Brands should leverage marketing materials and storytelling to highlight their unique value proposition to both retailers and customers.

Chapters

00:00 Factors to Consider Before Pursuing Wholesale Distribution

04:08 Challenges in Wholesale Expansion and How to Overcome Them

06:55 Key Factors to Consider Before Pursuing Wholesale Distribution

11:04 Scaling from Boutiques to Department Stores

17:25 Brand Positioning and Differentiation in Wholesale Expansion

18:25 Marketing Strategies for Wholesale Expansion

20:16 Creating Exclusive Products for Big Box Stores

23:05 Handling Returns and Cancellations in Wholesale

25:55 Negotiating Pricing and Margins in Wholesale

27:22 The Challenge of Pricing for Sustainable Brands

29:15 Advice for Brands Considering Wholesale Expansion

35:51 Brand Consistency and Storytelling in Wholesale Expansion

41:07 Software and Tools for Wholesale Expansion

43:58 Final Advice and Tips for Wholesale Expansion

Resources mentioned in this episode:

Route to Market Roadmap

List of Inventory Management Software

Contact info:

Email: cristin@cgzconsulting.com

Linkedin: https://www.linkedin.com/in/cristinzaccareo/

Listen on Spotify or Apple Podcasts

Transcript

Glynis Tao

My guest today is retail growth strategist, Cristin Zaccareo. Cristin is a strategic leader with 15 years of experience working with leading luxury retail companies, as well as mid and mass market retailers, such as Estee Lauder companies, Shiseido Company, Lord & Taylor, and Ross stores. Cristin has a strong history of constantly finding new methods to unlock value, drive sales and evolve business models in an ever-changing retail landscape. Her company, CGZ Consulting, strives to empower digitally native retailers to unlock their full potential through the implementation of wholesale expansion strategies. Welcome, Cristin. It's so nice to have you here. Thanks for joining me on the podcast.

Cristin Zaccareo

I'm excited to be here.

Glynis Tao

Can you please introduce yourself and tell us a bit about your background as a retail growth strategist.

Cristin Zaccareo

Yeah, so you covered a lot of it, but I've held various positions, mostly on the merchandising side. So whether it's financial planning and analysis, merchandising, buying in beauty and apparel with mid to mass market. So I've dealt with everything from really teeny brands to really big political brands.

And about a year ago, I started a consulting practice, um, helping direct to consumer companies implement strategies for wholesale growth. After having my second child, I took a little bit of a pause and realized that, you know, I was lucky enough to need a little bit of flexibility and able to, to have that. Um, so, you know, I started out. Okay, I want to be a retail consultant. Here's my entire background. And that was entirely too broad for people. So I started to speak to some founders and VCs and private equity companies and found out that there was definitely a need after this massive DTC boom that we've had over the last 10 years. And especially during the pandemic, because now, you know, marketing costs are sky high and there's not as much funding as there was.

And the customer is extremely picky where before it was so easy to make, it was like free money everywhere. Um, and now, you know, we have to be a lot more thoughtful with how we're spending money and a lot of that means that there needs to be an omni-channel growth strategy. It can't just be, um, direct to consumer.

So I'm helping companies understand the key differences between brick and mortar and digital. Um, some of them might wanna just do a wholesale in the digital model, and that's okay. And then others might wanna say, hey, I need to understand stores. So I'm here to kind of help, you know, guide the way and figure out what are the key differences and, you know, how can we approach retailers showing that your brand fills white space and coming across as really enticing.

Glynis Tao

Excellent. What are some common challenges that clothing brands face when it comes to wholesale expansion? How do you typically advise them to overcome those hurdles?

Cristin Zaccareo

So I think that the biggest one as any company is experiencing growth is planning and managing inventory on a larger scale may require some changes to your operations. So you might need to implement ERP or WMS systems.

If anyone is not familiar, ERP is an enterprise resource planning system. And so it's designed to automate processes across your entire business. So it includes anything from marketing and sales, human resources, and then inventory and financial planning. And then WMS is warehouse management. So it's truly used to optimize warehouse operations. And that's really when you get to be a little bit bigger. ERP is the best place to start. So just understanding that those are things that you're gonna need.

Other key differences is the buying cycle is different. So a direct to consumer company might be able to place an order, you know, 60 to 90 days ahead of when they need it and they're gonna get their inventory. That's not how retailers buy, depending on if it's off price or more full line, like a department store. They might buy three to 12 months out. So if it's a beauty brand, it could be 12, nine to 12 months out. And part of that is because they need to change their in-store setup. They might need to change their staffing models, in apparel, same thing. So they're going to need to change their floor setup, depending on its seasonality, what does staffing look like? What does marketing look like? So aligning your buying cycle with that of a retailer can be really helpful. That also gives you more scale with your manufacturers, which should allow you to negotiate better pricing.

And then something that is really an older school thing that some of these bigger box retailers are gonna want is are you EDI compliant? So can you transmit orders electronically? And that, you know, at first is gonna look like a little bit of a manual process for you.

But over time, if you're a denim brand, it's extremely easy where the retailer sells one week, let's say 50 units of your size 27 jean. And then the next week, they're just going to send you an order of, hey, the system automatically will generate, we sold this, we need this, we're going to forecast that we're going to need this much more. So it's really, it's not, no longer becomes a manual process. So just understanding those components and talking that language is really helpful when you're starting to look into doing wholesale business.

Glynis Tao

Okay, great advice. In your experience, what are the key factors that clothing brands should consider before deciding to pursue wholesale distribution?

Cristin Zaccareo

Yeah, I think you need to look at, you know, what is the scale that you want? How profitable are you right now? And can you scale growth? And do you need it to make, to become more profitable. So if that's something that, you know, your growth plan of your company is looking for, then that's, you should definitely look into wholesale, but you should make sure that, you know, your backend is tight and running smoothly.

Glynis Tao

I had interviewed Misty-Dawn Paulson, who is a fashion wholesale agent recently about a similar topic. There's a previous podcast episode that I did. And she was talking about how some brands may not necessarily be ready because either their pricing or their margins are not quite, you know, they can achieve the right margins to be profitable. And also with their production in order to be able to, you know, scale up and produce the products in a timely manner that could also be an issue.

Cristin Zaccareo

Yeah, I mean, that's definitely true. As far as the scale, you're not gonna get paid until you deliver the goods to them. So you need to be able to fund this on your own. And there's always a chance that you get stuck with inventory. So you should really be at a place where this is not a huge, it's always a risk but it shouldn't be a make or break financial burden for you. And then as far as margins go, this is a typical model.

But retailers are going to want to sell your product about 50 basis points higher than, so like they call it keystone. So it would be a 50% profit margin. And in an ideal world, you are also getting that 50%. So, you know, minus marketing costs and all of those other things, or without marketing costs and all those other things. So If your cost is $25 on a sweater, you're gonna sell it to a retailer for 50 and then they're gonna sell it for 100. So that's an ideal world.

Now, if your cost is $30, is it still something that you can achieve? You need to look at that financial planning. If your cost is $35, is this still something that you wanna do? Yeah, maybe it does make sense because maybe then you go to your manufacturer and you say, hey, if I start to bring you, you know, let's say 50,000 units a year, what does my cost go down to? And then it goes down to that $25. So is it a risk that you take in the short term, but you know, you're still making a decent profit margin. You need to look into, you need to think about all those things. You don't have as high of a marketing cost when you're going into, you know, a brick and mortar or an online wholesale, you still might have the marketing costs.

Um, so, you know, you need to weigh, weigh all the pros and cons and, and look at the financials of it all before just signing up and saying, Hey, this is something that I want to do. Smart growth.

Glynis Tao

Yeah. A question that just came to my mind as you were talking just now is I was to ask you because say a brand want to get to retail and say, you know, they can say they're selling to boutiques right now, right? Independent retailers and boutiques, that sort of thing. But then they have their eye on department stores or like big box stores. Like it's a whole different scale, right?

Cristin Zaccareo

Yeah.

Glynis Tao

So how would they handle that?

Cristin Zaccareo

So I think boutiques are a really great place to start, especially if you're lucky enough to get a chain where they might have 20 stores or 10 or 15, even if it's five stores, because it's not just one location. So you're able to potentially get a different client base in each store and you can get feedback and still be really close to where the product is if you're lucky enough.

For the bigger box people, the business model is going to be similar. You're gonna want the pricing to be very similar because it's a small chance, but you don't want a big box store to go into a boutique and see their item, that item at 40% off, and then they're gonna want it to be 40% off and they might charge you for that 40% off. So the underlines of what it takes to make it are very similar. It's this production scale that you need to make sure you can handle as you go into the bigger box stores.

And in some of the bigger box stores, your payment terms might be different. So a boutique might pay you in, I don't know, I'm not as familiar with the boutique model, but maybe they pay you in 15 days. And the big box store might wanna pay you in 20 to 45 days. And then it depends on when it hits their warehouse because a bigger box store is gonna have a much bigger warehouse than just delivering it to a little boutique. So maybe then if it hits their warehouse towards the end of the month, you might not actually get into that billing cycle and it might be 60 days. So you need to make sure that all of that is palatable to you.

I would negotiate marketing costs so that you're not paying for any promotions that the big box store runs ahead of time. And maybe your product can be coupon excluded or only run in certain sales throughout the year.

You don't want your product to not be enticing to that store, but you don't want it to be on sale all the time. And you don't wanna pay back that markdown. So all of those things should be talked about upfront as you're going into those stores. And they might say, well, everyone else pays for markdowns. Why aren't you? And you can say, maybe you have a really great social following. I'm gonna, you know, have this social following that is gonna potentially bring customers into your store or, you know, what white space are you filling to the brand? Maybe you can also say, I'm gonna do events in store. So certain other things that you can offer to make yourself enticing as you're approaching them.

Glynis Tao

Okay. As you were speaking, I just thought of a whole bunch of other questions to ask you about this. Let's go back to pricing later because I have a question that addresses pricing and margins and that sort of thing. You have something called a route to market roadmap. Can you explain what that is to our listeners and maybe walk them through it?

Cristin Zaccareo

Sure. So maybe we can share it at the end of the podcast so everyone can get a peek of what that looks like. Basically, it's a way to identify, plan, negotiate, and grow your business. And it's a super simple, well, it can be a very simple way to figure out where should I look to be in wholesale and what are some things that I should think about. And this is something that I always help my clients plan out so that we can be extremely planful because you know, as you're starting out, you should really ask yourself, where do I wanna see my product? What white space do I fill for that retailer? Because you can't be everywhere and you can't be everything to everyone. And your initial, if you're starting out and you've been in no stores, you shouldn't say to yourself, I wanna be in Target, because that's just not really realistic

 Down the line, that might be your goal, but why? And is there something smaller that you can start out with to test and make sure? Because as you were talking about boutiques versus brick and mortar versus big box, if you get burned by a boutique, it's a much smaller financial burden than if you get burned by a big box because you don't have your operations set. So first really look to identify where to play and what is needed for success at each retailer.

And then you can do this by initiating key introductions with priority targets. You could do this through a broker, a consultant, or as simple as reaching out to a buyer via LinkedIn. They might not always respond. And then the second step in the route to market is to plan your engagement with the retailer. So as I meant, talked a lot about operations. You should ensure you have your inventory logistics, your pricing, your marketing and then your new buying cycle in place to make sure that your buying cycle aligns with that of a retailer.

The third step is to negotiate. So what is your pricing going to look like? Are you offering the retailer better pricing than online? If so, what are they gonna do for you? Is it better floor space? Is it in-store support? Is it signage? And then what do your payment terms look like? This should be a profitable relationship for both of you. And if your white space is really valid, then you should be able to negotiate better payment terms.

And then the final step is what does growth really look like? So you can go to a retailer and say that, hey, here's what I have to offer you now, but they're always gonna wanna remain fresh and innovative. So what does business innovation look like for your company in the future and make sure you offer?

Glynis Tao

What your company is projecting and offering for growth when you're pitching retailers. What role does brand positioning and differentiation play when it comes to wholesale expansion? How can a clothing brand stand out in a competitive wholesale market?

Cristin Zaccareo

So in my experience, especially right now, the market's really tough. Consumers are extremely tricky. They're very picky right now. So I keep talking about white space, but you really need to highlight your value add to customers. And I wouldn't just talk about what, when you're pitching a retailer, I would talk about the customers because any good retailer is going to talk about putting their customers first. Um, so what can you bring to their customers and how can you cross pollinate together to increase basket size and foot traffic?

Glynis Tao

And so marketing, how does that come into play? Like, can you partner up with the retailer and to put together some kind of a marketing, you know, promotional strategies, like how does it work? Does it, is it different for different retailers or how can they approach that?

Cristin Zaccareo

Yeah, so your marketing strategy is gonna look a little bit different depending on who, what retailer you're approaching. So if you're approaching a promotional big box retailer, then, and let's say you have your sweater brand, or I think if you're in a promotional big box retailer, you better have some promotional product.

So you're gonna want it to be an exclusive product so that if you do have a boutique or an online business, not going to look like you're cannibalizing that. So it doesn't need to be an extremely different product, but let's say your best seller is a black dress with a bow on the back. You're going to want to change it up a little bit, but still ensure that the retailer is getting one of your best sellers. And then that product you're going to want to, let's say add to their promotional calendar. So maybe in October for the Columbus Day sale, you're going to go down 25% and then for Black Friday, you might go down 30%.

And then when they want the product to be gone around Christmas time, you might be at 40%. But you should build in that cost that maybe at that 30% mark, you're still getting that 50% margin. They're still getting that 50% margin. So a big box retailer would call it owning at the low. So they own the product to be able to do the business at the 30% margin and still be happily profitable. Does that make sense?

Glynis Tao

Yeah, it does. And so would you advise that in this case to have a different collection or create a special makeup for this? big box retailer that's different from what you currently offer, maybe say to your smaller boutiques retailers, so that if they're doing the promo, you know, with the big discounts and stuff that it doesn't kind of cannibalize, I guess the, the stuff that you have on your website and stuff. So it's like, different enough, right?

Cristin  Zaccareo

I would have it be just different enough. So so slightly different that you can call it exclusive.

because in an ideal world, you're still getting the production costs for both of those as one. So you don't have to change, you know, your tech packs are gonna change slightly, but not dramatically. So, you know, you can still go to your manufacturer and say, this is basically the same item. I wanna look at it as one so that you're not, you can still use the volume that you get from that big box retailer to help your brand overall.

Glynis Tao

Okay, that's a great strategy to use because then you have the benefit of the large volume numbers to hit your production as well as being able to create something that's separate, a little bit different from what you offer. Yeah, but it still would fall within the order, like minimum orders like in order to hit your target price.

Cristin Zaccareo

And if you get lucky enough at some point to be in multiple big box retailers, then you might have to get a little bit more creative. But at first, I think that that's a really good strategy. And depending on how picky they are, you might still be able to just be slightly different for each one. 

Glynis Tao

Yeah. And from your experience, have you found like with department stores and big box stores, are they looking like do they usually buy off the line or are they looking for like something little different or they ask for you to make something different just for them?

Cristin Zaccareo

It depends on exactly what's working right now and how great your costing is. Let's say you know one of their best friends is going out of business or has just raised their costs they might take the to come up with an item besides like a sweater. They may take the woven shirt that was one of their best sellers. And now that their costs are much higher, they might give it to you and say, Hey, what's your costing on this? This was a best seller for us. Where can you be?

And I think overall, it really depends on if they're going to buy off the line or if they're going to want to develop something that's much more exclusive.

Glynis Tao

Okay. So another question I just thought of was returns. Yeah, how do brands handle that? And, you know, can department stores return something that's like, that was made just for them, right? It's just a style that was produced for them. Because I've heard stories of stores canceling last minute, and you're stuck with the order and having to pay for this now.

So is that a potential risk that brands should be aware of and how can they kind of navigate through that?

Cristin Zaccareo

It's definitely a risk. It's something that I would talk about with the brand from the beginning so that you have an idea on where they stand. So you're not, there can always be surprises but you can at least say, hey, you know I'm not taking this back. If this doesn't work, I'm making this specifically for you.

If that doesn't go and go over well with them and you feel like this is still an item I really stand by, you know, is there padding that you can do on the back end for you where let's say you have to take it back from them, do they pay for the shipping costs for it to come back to you? And then you have an exit strategy with an off price retailer.

So there's certain things that you can be a little bit planned for ahead of time, but I would say I overall try to talk to the retailer saying like, I can't take this back, this is exclusively for you. Otherwise we can't do exclusives

 If you're much newer and you don't have the ability to do that, I would try to talk about, try to figure out, you know, can you charge them a little bit more for this? If I do need to take this back, I can take back X percent and you need to pay for shipping costs. So I would definitely try to negotiate.

Glynis Tao

Mm-hmm. And is that something you do to help your client? Do you help your clients with that and the negotiation process?

Cristin Zaccareo

Yes. So the negotiating and talking like a retailer is something that I definitely help my clients doing. My background is really on the retailer side, not the brand side. Although I have had fantastic partnerships with so many brands, I think the thing that has always made me really successful when I was sitting on the retailer side is being flexible and trying to understand both perspectives. And I think I really bring that to my customers as they're working through what their journey should look like.

Glynis Tao

So is there always room for negotiation? Like when you enter into a contract?

Cristin Zaccareo

You hope so. I think sometimes there is and sometimes there isn't. I had...not a client, but someone that I was speaking with that Wholefoods approached her. Um, and this is a food, food brand. So not apparel, but you know, there was really no negotiation. It was like, can you fit your price into this? Um, she had, she had a little bit, but not much. And she was like, you know, I really can't fit into this price point. You know, I have a 15% profit margin. This just doesn't make sense for me right now. Um, and there was really no negotiation, even though her product was different than that price point that they were comparing her against, she offered more value, they still weren't willing to change it.

So there's certain times where the answer on your side might be no, this doesn't make sense for me right now. I can't, they're not willing to negotiate and this doesn't make sense for my brand. And that's okay, because there will be a time where you are gonna get the growth that you need and want, but you shouldn't push it if it doesn't make financial sense. And I think that's why so many of these direct to consumer brands are struggling right now, is that it was like a growth at all costs attitude for so long and it really doesn't make sense to grow unless you're profitable. It just becomes a bigger pain the bigger you get.

Glynis Tao

Yeah. So speaking of pricing. I mean, just want to circle back to the question about like, how do you advise clothing brands to approach pricing and margins when entering the wholesale market? And what are some of the best practices in this area?

Cristin Zaccareo

So yeah, I think using that like 50%, 50% is a good starting point. I think that there's always room on your side, if 40% works for you, there are plenty of brands that do 40%. There are plenty of brands that do 30%, especially if you have no marketing costs or the marketing costs are extremely minimal with the retailer. It still might make sense for you to do that number. It might make sense for you to do 25%. So you just need to make sure that it works within your financial matrix.

And you need to make sure that your pricing is similar on your different platforms. So you don't want your retailer pricing to be a lot lower than what you're offering on your site. If you offer a 10% coupon on your site for new customers, like that's something that you should talk about with the retailer and say, you know, I'm paying for shipping costs. This is a way for me to grow my business. This is a cost that I'm absorbing. Like if this is something that you wanna do as well, that's fine, but I'm not absorbing that cost.

So there's gonna be some negotiation as far as, especially on your own site, if you're offering signup, you know, I'm gonna offer this as far as what's palatable.

Okay. So what do you, as people that you're interviewing with or speaking with, even in your own business, what do you think is the major challenge that some of these brands are having as they're trying to go into wholesale?

Glynis Tao

I think the biggest challenge that I see that the clients that I work with is the pricing. Many of them are, you know, smaller, independent brands, focusing on sustainability. So the products are most likely locally made. The costs tend to be a lot higher, right? And so they're not able to price their products in order to be profitable. Like they might not even be making even the 25% that you mentioned. And I've come across brands who are like, well, let's just, you know, we'll take a hit on our margin, maybe even take a loss, get into wholesale and hopefully eventually we'll get our numbers up. Is that a good strategy to use?

Cristin Zaccareo

I don't think so. I don't think you should ever be taking a loss. You have scale, you can lower your costs, but I mean, look at everything. Look what you pay for groceries now. Like costs just keep going up and up. So yeah, if you wanna start and say like 10 or 15%, fine. But I think the loss is so hard for me to make sense of it all. And I think that that's the problem is it was this growth that is everybody was doing, not everybody, a lot of people were doing this and making it kind of okay.

I mean, I held a wholesale workshop in July and someone asked me the question of, should I go into the retailer and buy my product so that it looks like it's turning? And you're not giving yourself a real shot. I mean, you wanna make sure that this makes sense.

I don't know if you have any of your money tied up in this, but you certainly have other people's money tied up in this. And you don't wanna create false pretenses, of can your brand actually be successful? You might need to change your business model if it's not. And for some of these sustainable local brands, the answer probably is not big box for them because I think they could do it on a really small scale.

I mean, they're certainly never gonna be like a Walmart or somebody like that. Could they get into like a Nordstrom and only be in a couple stores? Yeah, maybe. And maybe they focus on the stores that are in their regions, so they can go there and touch and feel the product and do, because it's a higher price point, they can do education sessions with the sales associates on the floor. But they should be profitable.

Glynis Tao

Oh, I agree with you. And I said, I say the same thing as well. I would never, you know, go in taking a loss from the beginning, I would always have price my products to be profitable from the beginning. If it has to be higher costs in your retail, maybe a little higher, but you have to be profitable. Like, okay, so yeah, I think we're on the same page with that.

Cristin Zaccareo

I'm curious because it's interesting when you speak with different people about what the biggest hurdles are. So I love asking that question to any client that I work with. And I think just coming from a place of curiosity as a brand owner and as a consultant is extremely knowledgeable.

Glynis Tao

Mm hmm. Yeah, because I imagine that every brand is sort of different. Right? Depends what their product is, so needs to be handled differently. And maybe not all the, you know, certain retailers might not be the right fit for them.

Cristin Zaccareo

Definitely.

Glynis Tao

Right? Because I know brands who strive to be in Sacks or big department stores, they're like, yeah, I want to do that. That's my goal right off the bat. But I mean, as a newer brand say, what would be your advice to them? If they wanted to just start off with doing wholesale right off the bat.

Cristin Zaccareo

Yeah, I would say like boutiques in your area are such a great test market. And I think that the store associate is really overlooked these days. They're overworked, they're stretched, they're probably underpaid. So I think if you get into a boutique in your area, you should go in there, bring the store associate some coffee. This is something people used to do all the time and it's super prevalent in the beauty area.

Um, so it's really, these people are in charge of selling your products. So get them excited about your product. Um, if you're able to at certain times of the year, you can run contests in stores. So let's say you have a higher price point brands, your items are two, $300 each. Sell $2,000 of my product. Here's a hundred dollar gift card. Um, like what kind of things can you do to get the associates a little bit more excited about your brand?

Those are things that can be done in bigger box stores as well. They're sometimes a little bit harder to execute but all of those things get the associates but the education component of a higher price brand is so important because depending on the market it's hard for a customer just to pick something up that's three to $500 and sell it to themselves. Sometimes it's super easy, but the store associate definitely can add on to that sale maybe, or make it a lot easier.

Glynis Tao

How important is brand consistency and storytelling in the context of wholesale expansion? What strategies do you recommend for maintaining a brand's identity across different retail channels?

Cristin Zaccareo

So I think strong marketing materials are very helpful. So you should have a one pager. You might have something that's four or five pages with your brand story. It should be really enticing to both the customer plus the retailer. And that can kind of tell the story, if you know something as easy as hang tags that maybe say something, if you're sustainable, that should definitely be marketed on your product. If you're made in Canada, made in the US, made in Peru using organic materials. Like that should be on the product. That should be loud on your marketing materials that you're distributing to people as well. Um, so I think that making sure that you have consistent messaging on your marketing materials, um, if you're lucky enough to be put in advertising for free with retailers you can ask them for approval. You shouldn't be super picky. It's not gonna look like you're marketing, but it should be somewhat consistent.

If you're a brand that has a $500 jacket, you shouldn't probably be with a $20 pair of jeans. And then I would say about like running promotions, just be consistent there as well. So my brand is part of promotions, my brand is not part of promotions. And then from a margin perspective, which we talked about a little bit before, you should agree not to pay for any markdowns that the store is the promotions that the store is running those markdowns, they should be a cost that the store has to incur.

Glynis Tao

Okay. And I mean, I used to work as a product manager for a brand and we used to make a lot of catalogs, collateral, that type of thing, but physical copies of catalogs. Do stores still look for that? Like they want the physical or copies or is digital okay?

Cristin Zaccareo

I think that you should not spend a ton of money on paper, but you should, like the buyer should have some paper. They should have digital too. If you're in a couple of boutiques, give them paper because the store associates behind the register, do you need to spend a ton of money on this? No. Do you need to use like super thick card stock? No. But it should look presentable. It shouldn't be printed out and stapled probably because the store manager might have the email to your marketing material, but the associates on the floor might not have your materials. So I do think that paper is still in. So I think having both right now is important.

I think you should also ask the store, you know, how do you guys distribute marketing materials? How would you like my brand education? Because they're going to have a better insight into how they operate than me or you.

Glynis Tao

And like, would you have the opportunity as a brand to be able to present, you know, do some product knowledge training with to the associates or is that something those stores just completely take on themselves?

Cristin Zaccareo

No, I would promote that you can do that and that you're able to do that because I think that that's a value add. You know your brand like nobody else. And if you have enough money to, let's say you get into 10 Nordstrom or Saks stores and you're on the West coast and you're able to contract out, education people that they wouldn't just work for your brand, they're gonna work for multiple brands, but they can do that as well. In Southern California, if you're located in Northern California or you're located in Vancouver. So I think the education component and you saying that you're gonna take that on is a total value add to the stores. Hey, amazing.

Glynis Tao

As we look ahead, what advice do you have for clothing brands that are considering wholesale expansion as part of their long-term growth strategy?

Cristin Zaccareo

So I think walk before you run, which we've talked about. So test yourself, I think in local markets first. If you get an opportunity, let's say you're West Coast, you get an opportunity in New York, take it. But I think start out small and then go for growth.

Make sure that you have your operations and your inventory in check first. And that is just gonna make, if you're pitching a retailer, making sure that you have the foundation set is gonna make you a lot more attractive and much more credible.

Glynis Tao

Hey, we talked a little bit about software. So, just wanted to kind of circle back about that. Can you share any resources or tools that you'd recommend clothing brands to dive deeper into for wholesale expansion? You mentioned a few different things before, but can you, are there any, is there software that you recommend for brands who want to get started?

Cristin Zaccareo

Yeah, so some of the software that This, so SIN 7 is one, but it's expensive and that's gonna be an ERP and WMS, I believe system. I think starting out, you know, to do inventory planning you probably use Shopify if you're direct to consumer.

So I think creating a model in Excel for stores that is similar to how you're managing your inventory in Shopify will be helpful for projecting. You can hire, if you don't have an inventory planning team, you can hire contractors out quite quickly. It's something that I can help with as well. But then for the bigger systems, I'll send you a list of an article. I can't remember exactly where I saw it, but it basically describes different systems. I think it was Forbes, but describes different systems and what they can do. I mean, there's smaller ones, like I think ShipBob's pretty cheap.

There's some much cheaper systems and then there's some like Sin7 and NetSuite that are thousands of dollars a month. So it depends on what you can afford. But there are some that are really affordable that you can start out with. And then as you grow and scale, you get a bigger one that can do a lot more things and make your life a lot easier.

Glynis Tao

Yeah, if you have that list you can I can put a link to it in the show notes so that people can go in and look at it. Look at it. Do you have any final advice or tips to share with our listeners who are looking to expand into wholesale?

Cristin Zaccareo

No, I think, you know, it's an exciting journey wherever you are in your retail. I just use journey, but I was going to say in your retail journey. And it's you know, I think the hardest part is getting started and it's super challenging. Roadblocks are thrown at you all the time, but you know, keep trekking through. Be smart with your growth and be profitable with your growth. So, you know, I know growth is something that everybody wants as a founder, but be smart about it. You also wanna make money. So just to make sure you have everything sort of together before you expand at a much larger scale. Amazing.

Glynis Tao

Where can people find you if they want to get in touch with you? Yeah, so my email is Cristin, cristin@cgzconsulting.com. You can also look me up on LinkedIn with my name that Glynis is putting in the podcast.

Glynis Tao

Yeah, all your contact information will be in the show notes. Thank you so much for being here today and sharing your insight and knowledge about the wholesale business with us today.

Cristin Zaccareo

No problem. Thank you so much for having me and for empowering people and women especially. It's something that I really love to do. I think that more of it can be done everywhere. I think we should all just try to lift each other up.