A Wholesale Nightmare: A Tell (Almost) All

Sharing one of my own war stories + lessons you can take away

Over the last few weeks, I’ve delved into getting into wholesale in quite a bit of detail, hopefully it was helpful for all of you, on the journey to $1MM in sales for your fashion brand. I’ve tried to take an objective take on selling to retailers, highlighting the benefits and challenges of this revenue channel.

In this week’s newsletter, I wanted to share one of my own retailer experiences with you, NOT a good one btw, and chat through some lessons I learned that you can take something from as well.

OK girls and boys, buckle up, it’s going to be a wild ride.

Photo by Anne Nygård on Unsplash

It's September 2021. COVID is raging, athleisure sales are booming and everyone is WFH, keeping busy doing Zoom workouts with friends.

I get a call from my VP of Wholesale and she’s really excited.

She says: You’re not going to believe this but ABC Retailer (no, I’m not going to drag this company through the mud although they deserve it) wants to place a MILLION DOLLAR ORDER.

This would have been our biggest order to date. We’d worked with ABC in the past, but not at this level. With athleisure demand increasing, they wanted to take advantage of that desire for our product - makes sense, right? They also wanted the goods to ship in phases over the next 12 months.

Photo by Japheth Mast on Unsplash

At this point in time, if it were you, you’d be jumping for joy, right? A 7-figure order is a HUGE milestone for any young brand. And I was EXCITED. My whole team was pumped for this opportunity.

As a small, self funded brand, we did not have that amount of inventory just sitting around waiting to be sold. So, we needed to MAKE most of that inventory for ABC. And, what does that mean?

It meant investing 6-figures of our cash, and weeks of our time, into producing the goods over the next few months. Buying fabric and trims, paying the factories, paying for duties, customs, shipping to our warehouse. You know how that goes.

But still, it’s worth it right? We’re getting $1 million for all our hard work and our investment! Yay!!

Photo by DESIGNECOLOGIST on Unsplash

Dear reader, this is where the story takes a dastardly turn.

Six months pass, and we finally start to ship parts of their order in the Spring of 2022. Meanwhile, we’re still busy producing (and paying for) the goods for their orders set to ship later in the year.

One day, we get a call from our buyer at ABC. She tells us, that unfortunately, she was TOO OPTIMISTIC about her customers wanting to buy athleisure. Sales were not where she expected them to be, and therefore, she needed to cancel our future orders.

EXCUUUUUSEEEE MEEEEE?????

Photo by Bobby Mc Leod on Unsplash

You mean to tell me that you miscalculated the demand and now you’re making us take the financial hit, while you walk away with no consequences?

That was not a good day. In fact, it was a terrible, awful, really shitty day.

We eventually convinced ABC to take part of what they had ordered, but we were left holding the bag on thousands of units that had already been produced. Did you know how long it took us to sell through the rest of the stock that we had specially made for ABC? Inventory that we would never have sent into production, if it were not for their order.

TWO. FREAKING. YEARS.

Needless to say, that was the end of our partnership with ABC for a while. They have placed orders since then, but nowhere near 7-figures, and honestly, that’s a good thing.

Now let’s dive into some lessons I took away from this incident, and what you could learn as well, so you can avoid this happening to you.

4 very important lessons learned: