Latest / Exploring Fashion Futures With Dr.HB / Retailers vs. Brands? How they work together?
Transcript
- Jung: Wholesale. Have you heard about wholesale? What is wholesale? Obviously wholesale is different than retail. You know, believe it or not, the US government classifies industri you know, the companies in three different categories of retailer, wholesaler, and manufacturers. Everybody knows mostly retailers because that that's the stores that you see it in your neighborhood or Gap or HM and malls and all that stores, right? Those are retailing and wholesaling is in between manufacturing and retailing. So manufacturing is actually you make them, you make cars, you assemble clothing and whatnot. So obvious we don't see a lot of manufacturing of clothing and textiles in this country. We used to a lot hundred years ago. You know, I'm here in Columbia, Missouri. The Kansas City and St. Louis were very popular. popular manufacturing cities. Like you know, Kansas City was known for one of the women's dresses, cotton dresses. And St. Louis was very well known for children wear and shoe manufacturing. But today there are those making the assembly part is dumb in another countries, China, Vietnam, Bangladesh, El Salvador. So I used to travel a lot of those countries to assemble and make them. But the reality is though They don't just they don't come up with the design and they don't come up with patterns and whatnot. You know, the brands tell them what to make, basically. So the brands that you know of, like Kelvin Klein, Tommy Ilfigure, North Face, DK and Y, all these brands that you know, the brands that you see in the retail stores and let's say your department stores on Nordstroms and or Dillard's and Macy's and whatnot. So those brands are essentially wholesalers that they design, they brand, pattern make, they source, meaning they find the factories or they have their own factories to make them and then they sell them to the retailers. Then retailers receive all the products from them and then they sell them. Right. From de retailers perspective, they need buyers. You're gonna be a dress buyer in my like a retail store's big, it's a big dollars in big space, and that one person can handle it all. So like You're gonna be a women's dress buyer, you're gonna be a men's suit, you're gonna be the shoe, you know, women's shoe buyer, you're gonna be the children's sleepwear buyers. The retailers will have different buyers based on different categories like perfumes, the handbags, the shoes and accessories and dresses and sportswear and whatnot, right? But these buyers need to go to market or go some places to see what's out there. Okay. I I like this brands, I like that brands, I like that brands because I believe their products will be talking well to my customer. Cause I know my customer, because I'm a retailer, I see my customers every day. I know what they like, what they don't like. So knowing that knowledge, I'm gonna go out and see what I can buy for my responsibility, right? Buyer has that mission of Buying, for example, New York Fashion Week, right? All these brands are throwing, let's say fashion show, or they will like fashion shows are typically happening for ⁓ new designers or they want to be sort of ⁓ I want I'm I'm the trendsetter, I'm gonna dictate the trends. So if you're interested in my latest trend interpretation, come and see it. So once they have shows, then the buyers go to their showroom, like so you know. Show room g the their comp brands office to see the actual product and then negotiate how many of this suit should I buy. Maybe I want to buy this top with that pants with that sweaters, or I don't like this pants, but can you make it short? Or I like this prints on here, but I want them on that style. Like so they negotiate that and then they decide, okay, at the end of the day, I want to buy five million worth. products of how whatever that it is, like that might include so many different items, like 20 jackets and 15 blouses and 20 different colorways and whatever it is, they will decide to buy that $5 million open to buy. And then they decide and then buyer place a order, place purchase order. And then the brands make that $5 million worth of merchandise ready. And then give deliver to the buyer's stores. That's the buyer side of it from retailers, right? So then the brand side of it, which is a wholesale side of it. So let's say I'm a, you know, Calvin Klein brand, okay? Calvin Klein can be sold at all different levels. Some are being sold at discount stores like TJMX's world to full price Nordstrom. Or you know Six Fifth Avenue, Falmar, whatever you know, stores. All kinds of stuff. They also have their own stores like a flagship store on the Fifth Avenue in New York City and stuff like that, right? So from brand side, obviously the discount stores, Marshall's and TJ Maxx's customers, what they want is very different. That very different than outlet mall customer. Like people who are looking for Calvin Klein at Outlet Mall. They have a different needs and desires and price points, right? So they that in the meantime, people who are shopping at Nordstrom and work the Goodman, they have totally different expectations, right? Quality and price, right? So so from brand side, okay, you're gonna take care of Nordstrom buyer. 'Cause we need to make everything prepared for to make buyers' lives easy so that they will buy from me instead of my competitors brand, right? So you are going to take care of Nordstrom accounts. So your title is instead of buyer, your title is now account executive. Like you could be a junior accounting executive in the beginning or an accounting executive assistant. So you become an assistant to that accounting executive, and then you become a junior accounting executive and then senior accounting executive. So basically I take care of my Nordstrom buyer, but also it could be another. similar mid tier level like a Vomar buyer. So like I'm gonna take care of that world. Or I'll be responsible for discount store Marshalls or Outlet Mall buyers. So my accounts I have five different accounts for example. It could be Marshall, it could be TJ Maxx, it could be outlet mall like you know those. So I am an account executive for discount stores. I'm an account executive for full price Retailers like Nordstrom and Vomars and whatnot. And I'm an account executive for like really, really expensive pornies or Borgrupt Goodman buyers. So basically the buyers and account executive, buyers from retailer and wholesale, ⁓ account executive from wholesaler, which is brands, they work together. So buyers represent the stores, retailer, like let's say Nordstrom. An account executive on the counterpart represents the Kelvin Klein brand. So make sure that Kelvin Klein brands will be represented in the Nordstrom store correctly to reflect brand's identity. And Kelvin Klein customers will be satisfied when they go and find their product at Nordstrom. And they're which they are different. Look at everything what I said could be different if my account, you know, my responsibility is for TJ Maxx, Calvin client buyer. So these two always hand in hand. It's the same math, it's the same idea, it's it's a symbiotic relationship because the when retailers sell well and their lives are happy, account executives are happy representing the brands, right? So we're doing it together, we're ultimately wanting the right thing, but The wholesale side of it, account executives, essentially they are sale if this is a sales position, right? But you're not selling directly to the consumers, you're selling to another business. So it's a B2B business to business relationship between wholesale account executive and ⁓ buyers. retail buyers. So in the retail buyers, you're gonna start with the junior, you know, like a so assistant buyer, become associate buyer, become full buyer, and then become like director of buying and all of that, that hierarchy. And wholesale side of it same thing. So sometimes you call it showroom help, showroom assistant, junior account executive, become senior account executive, and then like director of account management and things like that. So that's how these are set up. So let's think about how many stores we have. I mean, you know, believe it or not, stores come and go. Like, you know, some stores been here for a long time, but some stores also close. But the but at the end of the day, as long as our population doesn't shrink, the The amount of clothing that are needed in this country is the same. Like if population grows, we need more clothing. That's just a simple math. So that means that you will have a store, whether it's a department store, whether it's a like a standard alone stores, whatever it is, you will have stores. It's just different type of stores, right? So like, you know, some retailers close, but some other retailers pop up. So that's that. So as long as the stores are there, the buyers need to fill up that store. So that means they need they need to buy their product to sell them in their store. So then they need the brands. Like a brand has a brand identity. They a lot of consumers coming into your store just for that brand, because the people know that brand already, right? The brand side of it, make sure that their brand identity, their target consumer, everything is consistent. No matter what stores they're going. So that's their ⁓ goal. Having said that though, not whole industry is organized this way, meaning like HM's case, they're they're the product developer, designer, sourcer, and retailer. So we call it like full package. It's it's a direct, it's a vertical. Everything is done by HM. But Nordstrom's case, the majority of the brands that they have are some other global brands and they buy them. Occasionally Tillards and Macy's, they have their own brand. They they try to like design their own product. source their own products so they can sell directly. So if they want to become a vertical, but the but that's a relatively smaller portion. Although that's what they want to do more, because they get to have more margin and get to make more money at the end of the day. But it's just requires different skill sets to do so. So especially global brands like Nike's and Calvin Klein's and DK and Y. e already have a global brand identity. So it's just easier to buy them from, buy buy them to put them in their store. So that's the relationship between retailer, buyer, and wholesale and account executive. So now that we talked about two different differences between brands and retailers, Wholesales and retails. So in terms of jobs, retailers and wholesale, they they have a similar job, but there are bases that are slightly different. So retailers, they always trying to find what's my target retail price and then how much money I'm gonna make out of this each product. So they calculate markup differently, but they still need assortment planning, they need planning, like how many, how many white shirts in size small. Do I have to have for this style in my we call it like southern door? Like if if my store is in Florida compared to the same style, but if it's a white color and size small, you may not sell as much if you're in North Dakota, right? So somebody has to look at the national like geographic trend as to what consumers want because of the weather pattern or lifestyle. Patterns so that you gotta place the right size, right color, right item in the right store. Cause especially retailers like stores like Walmart has more than 4,000 stores all over the country. So like assorting it all and planning, there's whole jobs behind it. Wholesalers, same thing, you know. Wholesalers the same in terms of selling, but they're not just selling. So like if I'm a Kelvin Klein, I got a design. I gotta make patterns, I gotta make sample. I want to make sure that this new collection represents the new trend and new consumer lifestyles. So wholesalers tend to have like brands tend to have more jobs for designers, pattern maker, product developer, sourcing team, production team, but still selling part is account executive. And then for for account executive to sell better, they also need planner. They also need a merchandiser. Like how should we organize? How many short shorts and short sleeves and long sleeves and long dress and suits and jackets and sweaters should we assort for this buyer? So you also need a merchandiser. So you're just going to have a lot more diverse job titles and job opportunities out there. So having said that. Because at the end of the day, those brands are the experts in that product category. So they know like if they are TK and Y, they know how to communicate New York fashion style for young professionals, right? If they if they're like like you know, yoga brands, they know that yoga fabrics, like the functionality and things like this. So they are more product experts. While retailers are more selling experts. That's how they marry together and make this happen. So then in terms of entry level petitions, the difference between sales and wholesale level and sales associated at the retail level, we talked about it briefly. You know, folding sweater and the gap store is actually at a retail level and it's a very, very entry level, not even an entry level, it's a transition transitory level. Because when a job because most, you know, people do that when they're college, when they're in college and making extra bucks, you know, while going to school. But that's where the products are being met. Like no matter who brand it is, the products are this is where the product really meets the ultimate consumer. So it's a really important job and you really learn a lot about consumers' insights and behavior, but use that experience to become a county executive or wholesale or you become a buyer at retail. So that's that's a great position to have. Like even if you're in high school, you want to have a summer job, consider going and going to local mall or any sort of a fashion store and get an entry-level position. And anything that you learn at the retail level will eventually open up a door for both retail side and wholesale side job opportunities. Okay. So I said about y you know, ⁓ retailers at level like I s told you about like a buying position, like the junior buyer, senior buyers buying director and goes up and then wholesale goes into junior account executive and senior account executive. Well I talked about that. But ⁓ but what's also interesting is that these brands tend to be segmented based on the product category in the industry. That means, let's say, if you are in a coach's world, they know everything about all the leather product, the buckle, the hardware, inner fabrics, and you know, think metals and things like this. So the the specialist, like the special product knowledge you should have, you know, how many leather options do do you have? Like we have tons of leather options, right? So each leather has a different personality, characteristic, quality, you know, to it. So y you tend to be more specialized to that world compared to men's suit second sector. That's like a men's suit is so complicated. The fabrics are very, very, very different, mostly woven, but the fibers and then the the yarn size and the weaving technique is very and then then the construction of suits required different types of different level of sewing skills and manufacturing skills. So, you know, I can buy anything. Meaning if you if you learn how to buy the if you learn the science of buying your merchandise from the retailer, you tend to less focus on the product. Like, you know, yes, I used to buy diapers for ⁓ for my Walmart stores for 4,000 over 4,000 stores to now I'm buying perfume. So like the mechanic of it is is very similar. It's a transferable. But the wholesale The brand side of it, of course you can learn. I mean, everybody can learn anything. You know, after all, after you graduate your college at the age of 22, you may or may not retire until 70. So you have the next 45 years to learn. So of course you will learn anything, but the learning curve of knowing that products can be very different, especially if you are a pattern makers or product developer. You really need to know that. leather, for example, and you know, 10,000 different types of leather and metal and and suiting fabric is so different than leather. And especially like intimate, like a bra industry is so complicated. That's more of an engineering. Like designing a bra and making bras are like almost like engineering. Like so the wholesale, the brand size require more product. and material knowledge. So that's kinda be different. Like watches and handbags and perfumes. They just need a totally different kind of knowledge, right? So knowing that, then what should you do? Like do I then need to decide what product category I'm gonna Go into like today. No, like you you're starting like it you just want your foot in the door first. So you may or may not like accessory industry at all. Who knows? You thought you like cosmetics and then I don't like cosmetics. So you just never know. So you just open to the idea that I need to continue to learn. I learned the basic science and mechanism behind brand development and wholesaling. And then specific product category, I'm gonna tackle them as I grow my ⁓ career. The accessory people tend to be tend to stay within the accessory segment and then you move, you know, between your competitors. The men's people tend to be in the men's section. Like I've just seen it. I'm not saying that's the way it is, and I've seen that way. So with this, I hope this was interesting thing for you to learn. With this, next week, I'm going to interview with one of my alumni. So I think she's been out there for about what seven, eight years or so, I'm not sure exactly though. So we will sit down and talk about how she got her first job and whatnot. But she's working for a global luxury menswear brand. Like if we if I tell you what that brand is, almost all of you know it. It's it's the level where like if you Google their if you look at their merchandise and you're gonna see like two to three thousand dollars jacket, a one piece of jacket, a one Sweater would be $2,000, a pair of pants will be $1,500. So it's a very, very, very high-end, globally well-known brand. Although we're not gonna mention this specific brand name, she'll tell you what she does, ⁓ you know, what her job is and how she got her first job and her advice for ⁓ younger self. So hopefully you learn something from it. I'm excited to have that conversation with her and you will learn. you know, many things. And now that I talked about the brand and the retailer, you're gonna start seeing it differently once you go to retail store. And every time you look at the brands and there's a wow, people like that. People like Molly exist for every brand. Like every brand that you see, there are tons of jobs behind that and performing services and work ⁓ responsibility that Molly's gonna talk about next week. So I can't wait to have that conversation with you. I look forward to seeing you back. next week and enjoy the interview with Molly. Thank you for joining in Mike Podcast Exploring Fashion Futures with Dr. HB, guiding the next generation of fashion professionals. So please subscribe, follow me, and let us know what you want to know more. Okay? Thank you. Bye. ⁓