1.6 Identify the right sales channel
With your market, audience and brand identity in place, the next step is to find a platform where you can sell.
Now, you must be wondering why this step comes first. Shouldn’t you have the assortment ready before selling them?
Why distribution matters
Most brand owners often make this mistake of channelling all resources into creating the perfect product… only to realise nobody knows about it. Your products are important, but so are your distribution efforts. After all, you need to know how to boost brand awareness when they actually know where to go.
This also helps when you’re sales forecasting (under Course 2), so you’ll know how much to allocate for each sales channel.
With that out of the way…
- Standalone shop in shopping malls
- Standalone shop in high-street
- Pop-up store or weekend stall in bazaars
- Consignment counter in department stores/multi-label speciality retailer stores
Renting standalone shops (traditional brick-and-mortar stores) is a decision that requires heavy research. It’s vital that you study consumer traffic and key demographics before fully committing. For a comprehensive understanding, spend both weekdays and weekends at different hours to observe consumer traffic and shopping behaviour.
Here are other key things to take note of:
- Location is key. But remember, one that commands high visibility also means higher investment.
- There is a high capital outlay if you decide to go with this sales channel, including upfront deposits payable to the malls or landlords, interior design engagement and construction, as well as technical equipment such as POS system, security system, etc.
- Regardless if you’re renting from a mall or a street fronting store, both require a longer time commitment. Lease terms for malls, as an example, are at least up to 3 years long.
- From store designs to construction, there are many decisions that first require approval from the mall. Since operational regulations are set by the mall, you need to adhere to mall operating hours too.
- With that said, operations for street fronting stores are more flexible. There is no governance on design, construct and operating hours.
Pop-up store or weekend stall
For this sales channel, you only need to handle a booth or a small shop for a short period of time. It’s a good avenue to start or trial new collections since there is a low capital outlay and low investment on fixtures and display.
The lease terms are significantly shorter too, ranging a span from 3 days (a weekend) to 14 days.
However, do take note that for this method, you need a solid marketing plan in place as:
- There’s high competition as you’ll most likely be competing with other pop-up stores or weekend stalls.
- Lack of branding visibility as it will have the same layout as the rest.
- Location may not be ideal.
In simpler terms, consignment is a business arrangement. The consignors, who are usually the sellers from department stores or multi-label speciality retailer stores, would sell your stocks in exchange for a commission fee.
Like a pop-up store or weekend stall, it’s a good avenue to start or trial new collections. Of course, the same general rules apply:
- You still need to research on the traffic and store location.
- If you’re interested to consign, you can negotiate for an ideal location in the store itself.
- You have the privilege of leveraging on your consignor’s marketing efforts, but when it comes to clearance sales, be sure to discuss which party will bear the discount.
- Commissions fees are almost always determined by them, but you can try negotiating.
- Discuss time commitments – in the event you want to pull out from the store, what are the consequences?
Examples of department stores: Parkson MY, Isetan SG.
Examples of multi-label speciality retailer stores: SocietyA SG, Pestle & Mortar MY, The Goods Dept. ID.
- Social media
Selling on your own website is the best way to go about it since you can customise and stylise according to your brand identity.
The best part is that in today’s day and age, you don’t need to know how to code to build your own website. There are plenty of available e-commerce providers for you to choose from!
3 of the most popular e-commerce platforms are Shopify, Woocommerce and Wix. All three are good choices, and have the basics:
- Inventory management
- Optimised for mobile
- Ability to create coupon/discounts
- Support (even though Woocommerce’s support is via forums)
- Apps and add-ons
- SEO tools (Woocommerce’s is an add-on)
However, there are some features and design flexibilities that are only available in the respective platform. Here’s a quick overview:
|E-commerce platform||Features||Cost||Product Attributes||Design flexibility||Perfect for…|
||$9 – $179||3 – Size, colours and materials||
||Free, though no hosting is included||Unlimited||
||Free – $24.90||2 – colours and sizes||
Another option you have is consigning to online marketplaces. The platform is a great way to expand your reach since most marketplaces already have an existing customer base. This is why some brands and retailers are available elsewhere even when they have their own website. You can either sell on different marketplaces or exclusively sell on one – both are viable choices.
With that said, there are downsides to this form of distribution.
#1 No creative control
Some marketplaces display your product images as such, such as Lazada or Shopee. However, there are others that want to keep the imagery consistent – so you may lose creative control in terms of how your products are styled, displayed and sometimes, priced.
#2 Disruptive cash flow
Listing on marketplaces may affect your cash flow. You not only have to pay a monthly subscription fee and commission fee, but your profits made on the marketplace may also be delayed. Most marketplaces usually only pay after a certain timeline, which means you won’t see your profits only after a few months.
#3 Different target audience
Not every marketplace is suitable for your brand. Some marketplaces may offer fashion pieces, but visitors are there for something else. In other cases, your brand may be buried beneath thousands of other brands they have.
So before you sign that contract, research the marketplace first. Do you both have the same target audience? Are there any costs involved? Are there certain rules you must adhere to? What is their payment policy like?
For example, ASOS targets 20-year-old fashion lovers. They have a monthly subscription fee of £20, as well as a 20% commission fee on every sale.
Here are a few places you can start:
Europe – Zalando
This distribution method is the newest entry amongst the three and is considered the easiest alternative. You only need a social media account and you’re all set. In fact, many brands started their fashion journey by selling on social media, before eventually moving on to their own website or standalone shops. The most common platforms are Instagram and Facebook.
However, do keep in mind that unlike the other two, social media does not have a standardised checkout method. Customers may order by commenting, direct messaging or even calling.
Be sure to standardise a method or schedule hourly checks in between.