The Complete Guide to Wholesale for Streetwear Startups

This article is for informational purposes only and does not constitute legal, business, or tax advice. For specific advice applicable to your business, please contact a professional.

We penned this guide as we noticed that although countless streetwear brands are created every single day, there tends to be a singular focus on building the modern ‘digital’ brand - one that purely exists in the realm of 0’s and 1’s. The type that shied away from a physical presence - whether it was through pop-ups or inventory in physical retailers.

Coupled with a sordid lack of actionable information online, we hoped to draft a simple reference guide that distilled around 8 years of our knowledge in the land of streetwear and hip-hop, as a distributor and collaborator for fashion labels across the world. These simple tactics helped us land customers, close wholesale orders, and navigate in the world of fashion and hip-hop, so we hope this guide can do the same for you. 

What we will touch on are the affordable methods for a new brand to break into wholesale. We will not speak on the more expensive options such as trade shows which require significantly more capital to pull off.

This guide is not for everyone. If you’re reading this at the start of your journey, your initiative is commendable. But the reality is that you already do need some traction for this to work as well as possible. 

So before you take on the world of wholesale, be sure to get your eComm affairs in order. Make sure your product testing is complete and your brand identity is sound. Your marketing funnel is set up and collections are in demand. When you reach that point, then you are ready to take action to develop your next sales channel - wholesale.

Why Apparel Wholesale?

Okay, let’s dig into apparel wholesale - what is wholesale, and what does it mean for you to dive into this world? The main benefit is that you can build up a list of wholesale accounts that buy your product in bulk. Instead of the individual, bite-sized sales of eCommerce, you transact larger volumes in exchange for a bulk discount. It is currently a $10 trillion dollar industry with no signs of slowing down. 

Wholesale is a practical channel strategy across every aspect of the retail world. As most companies tend not to be vertically integrated - this means that they are always going to be buying product from somewhere else, marking it up and selling it in their respective regions.

The Benefits of Apparel Wholesale

The beauty of apparel wholesale is that its benefits compound. It lets you increase your brand footprint either in your country or globally. It also legitimizes your brand. How? As you can now link your brand to reputable businesses. This thereby creates a positive cycle that lifts and compounds your revenue. 

You also enjoy an additional sales channel for your business. So instead of relying solely on eComm, you can also rely on wholesale orders. Which, in time will generate a fresh, consistent stream of revenue for you.

And finally, the most underrated benefit of wholesale is the economies of scale. By boosting your pre-orders, you can scale up your production runs. This drives down the price of your COGS (cost of goods sold), and naturally pushes up your margins. So that t-shirt now costs $8 instead of $14 to produce. You do the math. The best bit is this scale impacts not just your wholesale orders, but also the margin on your eCommerce channels.

“But I don’t want to be a sell-out”

This phrase is common, especially in bright-eyed, young streetwear brands. They don’t want to get into bed with retailers because that’s like ‘selling out’ in their eyes. 

To be honest, there are two ways to look at this. If selling out means that it is easier for more people to access your product, then yeah sure it is but don’t take my word on it. The founder of Chinatown Market’s, Mike Cherman speaks on this controversial topic (with Jeff Staple) and how he perceives the retail market and streetwear. As you can imagine, he forcefully disagrees with this school of thought. When you boil it down, it's real simple - do you want a brand or a brand that makes money?

Is selling wholesale aka B2B selling worth it?

There is a huge misconception that B2B customers won’t shop online so it's difficult to grow this channel. The reality is that B2B commerce is an effective solution where you can get other businesses to handle customer acquisition while allowing you to reinvest your time and energy into other parts of the business. 

All you need is a few consistent accounts to generate the equivalent of hundreds, if not thousands of B2C orders. Considering the average cost of acquisition on Instagram sits around $10-15 per sale, the risk to reward of B2B can be especially tantalizing for fashion brands, as it lets you increase your sales without increasing marketing spend, which tends to be the second-largest expense on a company balance sheet.

Even with wholesale’s leaner margins, you will find that customers from wholesale accounts will eventually end up finding their way to your website and ordering from you directly later down the line, ultimately boosting the Lifetime Value (LTV) of your customers through cross-channel pollination. 

What do I need to get started?

There are four key areas you need to get started in wholesale and they are: 

1. Product

2. Lookbook 

3. Line-sheet/Order Form

4. Wholesale Pricing Model

1. Product

If you’re reading up to this point, then it’s safe to assume that you not only have the product on hand, but your product has started to see some positive traction online. It is ideal to have traction, as selling online is an early proof of concept for your product and is essential to have before going head first into wholesale.

2. Lookbook

A well designed lookbook is required as that is what you will share with buyers through email and in your pitch calls to them. 

4. Wholesale Pricing Model

Most brands who start selling direct to consumer usually have not set up a ground-up approach when it comes to their pricing strategy. Instead, they usually focus on a top-down approach, by figuring out a pricing model which does not factor in production costs effectively, but rather what the ideal price for a customer is.

When stepping into wholesale, you are given an opportunity to revise and review your existing pricing model. Most importantly, to be profitable in wholesale, some changes will need to be made. 

This classic wholesale pricing model, which works just as well for direct to consumer is as follows:

Cost of goods x 3 = MSRP

Following this rule of thirds, you can divide your pie into 3 parts - ⅓ for cost of goods, ⅓ for marketing/overhead and ⅓ for profit.

With this calculation, you also now can offer a 50% discount to wholesalers while still retaining a healthy margin on your bulk sales.

Let’s use a t-shirt as an example:

Setting up a wholesale channel

You have many options in how to create a wholesale channel and it really depends on how your business is currently set up. Below we will run through how you would set it up.

1. Use a third-party app

There are plenty of wholesale apps on Shopify/WordPress that can enable you to access wholesale rates while shielding your customers from seeing these volume discounts. The benefit of these is that you can directly access your inventory and offer scaled-up discounts with ease. The downside is that this requires an initial investment, so it’s not ideal if you want to do it affordably. 

• Shopify wholesale apps

  • Wholesale Club ($24/month)

  • BOLD Custom Pricing ($39.99/month)

• WordPress wholesale apps: 

  • Wholesale Suite ($139/year)

1. Use a virtual line-sheet app

Instead of paying for the direct integration, you can use external line-sheet makers to create beautiful line-sheets, which can be shared with potential buyers at your ideal retailers. These services can also match-make you with retailers around the globe, automatically to smoothen out the process from end to end. 

These can take more time but many come with freemium offerings meaning you can save money before diving in with both feet.

Brandboom - Our personal choice and for good reason - it is free to use if you have less than 50 products, and the line-sheets they create look amazing. Technically, Brandboom is incredibly intuitive and simple to get started. Plus, it combines your line-sheet and order form into one for maximum efficiency!

Choosing the right retailer

So now you’ve created your line sheet, you have all the essentials ready and you want to start reaching out to stores to find your perfect buyer. The first step is to find the right retailers, one that truly reflects your brand in its most authentic form.

I recommend this because it’s much better to be precise and find a list of 20 to maybe 50 stores around the world to reach out to. Find those who are the perfect fit for your brand - the ones who mirror your ethos and beliefs. For example, if you’re a renewable brand you’d want to target retailers that value sustainability.

Your other pathway is to target retailers that already stock brands which are similar to yours. Whether that similarity is in its design aesthetic, the materials used or overall vibe, you will have to do your own research to find out what is the right store for you to partner with.

Finding the elusive wholesale buyers for clothing

Once you have that list your next job is to get in touch with the key decision-maker, who in this instance is the buyer. For larger stores, especially ones with numerous departments, there will be specialist buyers who will focus on one specific category. They might also be called a category manager - these people decide what gets stocked in a retailer. For smaller stores, the owner is generally the buyer. Think single retailers or a small chain for example.

Either way, this is the contact you need to start building relationships with. If they like you or your brand (it can be either, or both), they will give you a chance if all goes well.

The first challenge is to get your foot in the door and start the conversation with this buyer. You should be aware that they are generally bombarded with lots of brands pitching to them, so you need to do your best to stand out and that’s where strong line-sheets, look books and especially press come in handy. All of these should be regarded as opportunities to create your point of difference before you even have a conversation.

Wholesale buyers in your network

Before reaching out to new buyers, it’s always best to mine your existing network to see if you have an existing relationship with a buyer. The path of least resistance is always preferred. Reach out to them, ask for 15 minutes of their time and take it from there.

But I don’t know any wholesale buyers?

And that’s completely fine. More often than not we didn’t have existing relationships, so then we went and took the scenic route to develop them.

This means that we found out who the right buyer was for the stores. Then we followed them on LinkedIn, and on Instagram, then we engaged with their content. Use this time to gain insight into who they are, what makes them tick and discover any edge that will help you get their attention initially. 

Then we finally would send them an email (or LinkedIn Message) pitching our wares.

Apparel Wholesale Buyers List

Collecting and finding buyers' emails can be an arduous task. Buyers, like anyone else, change roles frequently and what once was a valued contact is then lost. Yet like with anything, where there is a will there's a way… to finding the right emails!

To find buyer contact information, one must use a healthy mix of technology and common sense. We used a mix of email computations - finding the likely string match of an email and then sent it through email server testers to ensure they don’t bounce. Once we confirm that, we know the email is good to go.

You can use tools such as Hunter.io or Snov.io to find this information. Although both run you around $50/month for the privilege of getting around 200 emails per month. If you’d prefer to just get a list, we do have an up-to-date list of 500+ streetwear/fashion buyers that we have built up for you to access. As much as we’d like to give it for free, that could result in buyers getting spammed. So instead we included a small fee, so only brands taking a serious next step can access it. You can absolutely use the above to find emails, but if you want them right now, there is no easier way than using our list. 

The Wholesale Buyer’s Mentality

As with all sales, it is important to understand the buyer and what they are looking to find in you and your brand. Understand that they want to find a great, new brand to stock. Many assume they are looking for reasons to reject you, but that is not the case.

That being said, buyers are faced with the pressure to select brands which they believe will sell well. They must also intersect this with the demands of the company. For example, Nike had a huge focus on female empowerment in 2020, so their buyers were on the lookout for female-founded brands which mirrored these goals to collaborate with. Leverage annual reports to learn more of company-wide objectives and you’re ahead of 99% of the pack. 

This pressure I touched on is their driving force. Like a sales rep is measured on sales, a buyer is measured on how well their brand selections have sold. So if your brand is not following certain trends they are looking for, or lacks an x-factor or point of differentiation, the buyer does not have enough reason to risk their reputation on a failed wholesale order. So it’s your efforts that must convince the buyer otherwise and to take a new brand (your brand) on.

Emailing the Wholesale Buyer

So now have the perfect store for your brand, you’ve got the buyer email and you know  a little about who they are now - now it’s time to pitch all the wonders of your brand to them.

We’ve included some customizable email templates in our PDF to use and we recommend only customizing each one uniquely. This is because the buyer does not want to be spammed, and they definitely don’t want to receive some cookie-cookie cutter email. Ultimately, you need to have your own personal flourishes in these introductory emails for them to be the most effective.

With our two examples, you can see we want to focus on being succinct and to the point. Focusing on the price-point and brand story helps the buyer paint a picture of your story. If the email catches their eye, hopefully, they will click on your lookbook or your line-sheet to learn more. 

Use an email tracking tool to track email link clicks to gauge the interest of buyers. These little indicators can help you prioritize how interested buyers are in your collection. A free tool to use would be the Gmail add-on Streak. It’s effective to use as a quick and dirty CRM right in your inbox too. 

Ideally, you should also compare your brand to a similar brand/s in their store. Do not compare it to a brand that is on sale - sale items can be assumed to have not sold as well as the buyer expected, hence why they are now on sale.

Email Automation and Expected Results 

So now you have a list and you realise it’s more than just 20 stores, so maybe you have 50 stores around the world that you really want to pitch to all of them. This is a healthy number of stores for an initial reach-out, as you must keep in mind that in our experience we see about a 5-7% reply rate in the first email. Out of those, only a fraction will end up becoming wholesale accounts. And understandably so - this is a cold reach-out and it’s probably their first interaction with you. 

That’s why we tend to use email automation flows. Email automation flows essentially set up a 5-7 email journey over a 40 day period, which constantly sends follow-ups until the recipient replies. 

We do this as we know buyers are incredibly busy folk and they might not catch your first, second or third email. But even if they miss those, they will no doubt see the fourth, fifth or sixth follow-up you send them.

Across an email journey as such, by the end of it you should expect a 10-15% reply rate. Download our full guide here to access the 6 series email journey and recommended configuration.

Email Automation Tools

You can either send each email individually, and set reminders to follow-up on scheduled days, or you can use email automation tools to do this process for you. Below we will review two options that can be useful for you to partially automate this part of the process.

Mailchimp

Mailchimp is a crowd favorite, and for good reason. It’s easy to use and its product has a freemium option for under 2000 emails. For $9/month you can get access to their ‘Multi-Step Journey’s’ which is exactly what we are looking for.

Gmass

For a solution that you can integrate directly into your Gmail inbox, then Gmass is the option for you. As it uses your Gmail email, you usually get straight into the recipients inbox - it’s a handy way to stop being pushed into the ‘Promotion’s section and out of the real inbox. 

Email Automation Tips

• Emailing from your @gmail.com account is a no-no. Ensure you use your web-domain email account. E.g. bobby@thehundreds.com. It’s professional and expected.

• When writing your email, create your first template like you’re talking to a single person. Then you can swap out key details as you please. This simple tactic ensures your emails always feel natural. Be human.

• Don’t trick people with a fake ‘RE:’ in your subject line. It’s the quickest way to get sent straight to the trash.

• The more customization, the better. It takes longer on the front-end, but results in a way higher response rate.

• Schedule your emails for before 8AM or after 5PM for store owners. They are ‘always on’, so it makes it easier to catch them when their inbox is quiet. For buyers, send around 9AM or 3PM mid-week. Don’t send emails on Monday or Friday.

Meeting the Wholesale Buyer

Once they reply, they will generally request for more information - where you’re based, what other stores stock you, is the stock available now or made to order, and where your goods are produced. Share what else you can with them and request a brief meeting to discuss in greater detail. Aim to lock this meeting in as fast as possible - you want to connect with them while you are still on their radar. Every day you delay booking this meeting could be a day where they see another brand that catches their eye - and now you’re stuck competing with them for that buyer’s time (and budget). 

In part due to COVID-19, buyers now are more than happy to have meetings over Zoom or Google Meet and that is exactly what you should do. Book them in within the week and run them through your brand, your vision and how you compliment their stores. Do this with the camera on so they can see and feel everything that this brand means to you. They must feel your passion roaring through their laptop screens.

If they are still interested, they will take this back and review it with their team. Best case scenario is a filled order form by the close of business. But we live in a world of reality, so again, keep checking in with them until you get a hard answer. 

An end-to-end deal can be as short as a few emails for a small order <$3k, or for bigger orders it could take weeks or months of negotiating. 

But they aren’t interested

And that’s okay. Thank them for their time and ask them what periods they generally are buying in. Note it down and get in touch with them again during those buying seasons. Keep an eye on their new arrivals and see what the buyer is looking for. Do they like seasonal trends? Are they marching to the beat of their own drum? Iterate for your next collection with that in mind. 

How do the buying seasons work?

Wholesale differs from direct to consumer as there is some preparation required on both ends for it to be a success. The driving force behind the fashion buying calendar, sell and delivery dates.

Bigger retailers will have a set phase for sell dates depending on both location and category. They will be looking to buy 3-6 months before the product is actually sold on the shelves. This means you too must be prepared early to pitch to them to get your juicy wholesale order sales.

For the Southern Hemisphere, you can reverse this timeline. Considering this region tends to be one season behind, it’s a great opportunity to sell any unsold stock to stores in the lower half of the world as your collection winds down.

Sending Samples - Yay or Nay?

Sending samples en masse can be hit or miss. You could send 100 samples to 100 buyers and you can strike gold. But factoring in the production and shipping expense and this can be a steep undertaking. It’s safer to send samples once a line of communication has been created with a buyer. 

Wholesale Terms and Negotiations

When you walk into these negotiation meetings, it's best to be prepared. Firstly, it builds on trust from the buyer's perspective, and it suggests that you will be easy to work with (which we’re sure you will be). 

Payment terms

Bigger organisations will have requirements to supply a Net 30/60/90 day terms. This means it gives them a certain number of days to pay you - basically time for them to receive the product and start selling it. It’s important to know when the terms start - is it when you ship or when they receive the goods? Spell it all out here during negotiations.

Smaller retailers will tend to pay for the order up-front, or work out some kind of deposit, generally 30% of the order.

Consignment

For untested brands, they may opt you in for consignment. It can be hit or miss, but a great way to build up your brand reputation. Consignment means you only get paid when the item sells in-store. This means there is no pressure on the buyers to sell your goods with urgency, as anything unsold will just be sent back to you. Ensure you request for monthly sales reports or you will just get lost in the mix on their end.

Order Minimums

As a brand, you must decide on your order minimums - what the minimum dollar value for you to ship out an order. It can be as low as $500 or as high as $10k - it depends on where you are at the stage with your brand. A safe order minimum is $1.5k - this gives you enough wiggle room to push it down if requested and still keep both you and the buyer happy. 

Discounts

Retailers aren’t shy about asking for discounts. Especially when they’re the 800 pound gorilla and you’re the banana. If you’ve priced your apparel correctly, you will have room to give a discount. Ensure the discount is on the total wholesale value (not the MSRP) and it can sit between 1-10%. 

You can up-sell buyers by offering scaling discounts. E.g. If you buy $5k of our stock we can increase our discount from 3% to 5%.

Remember, this is the start of a budding relationship. These small concessions can make way for re-orders and content business partners, which is invaluable in the whole scheme of things. Play the long game. 

Shipping

As always, the big retailers will expect you to handle shipping costs, and potentially also cover VAT/taxes for landed goods. This depends on the regulations of the country the goods will land at. 

Smaller retailers will pay for shipping in most cases and in return they will request you to mark the invoice with significantly lower prices. This doesn’t mean they pay less, but at times, customs of respective countries will add a tax based on the invoice number. It’s unscrupulous, but it’s a part of the business to be wary of. It’s up to you if you want to do so, but smaller retailers will always appreciate it. 

Offer free shipping to smaller retailers in exchange for a slight increase in their order size. But do the math yourself first to make sure it financially makes sense on your end too. 

Payment Methods

• Wire transfers: You must verify the cost of receiving wire transfers before you offer this as a payment method. Costs of sending wire transfers can be expensive for suppliers, so consider an alternative if you deal with small orders, and always be sure to include a term that all wire transfer fees (except for the fee your bank charges you to receive it) need to be covered by the supplier. Some department stores will not pay the wire fees, and this is unfortunate as they can get costly if the funds are being moved internationally. 

• Credit card: Retailers like to pay by credit card as they get points and they pay no fees, however you will pay a fee to the credit card company, ranging from 2-3% on average. The upside to this is you can normally get the card number quickly as it isn’t a lot of work for the store, but the downside is that it costs you a percentage of the transaction. 

• Paypal: Paypal has similar fees to a credit card but is normally easier to set up than a merchant bank account. Like credit cards, Paypal always favors the buyer, not the seller, so if there is a dispute you will need to be ready to provide evidence that you fulfilled your end of the bargain, but again, this rarely happens with wholesale sales.

Ship-to date

This is the final date your collection will be shipped out to retailers. Draw a line in the sand with this to let buyers know the timelines of your collection. Without it, they have no real time-pressure to lock in your order and eventually what was a guaranteed sale may no longer be the case. Painfully so, this is a hard lesson we learnt in our experience. 

Exclusivity

You can offer a 6/9/12 month exclusivity clause with a retailer, assuring them they will be the only stockists of your brand. Be sure to keep this at a regional level, and ideally up-sell this for an increased order size. Use sparingly. 

Other Terms

• FOB: When you will pay the shipping and expenses of the goods up until a certain location, and then the goods become the property and responsibility of the buyer.

• Ex Works: the buyer takes charge of the goods while they are in the warehouse, and they handle the shipping, duties, taxes, and any brokerage fees. We recommend this for smaller brands selling internationally as it is far simpler to manage.

• DDP: Delivered Duty Paid is when the brand delivers the goods directly to the store, with all the costs included (original product price, transport fees, customs, duties, taxes, insurance, currency conversion, crating, handling and payment fees) except the regional taxes. You will need to work with a shipper to do this, and there are fees involved.

• Landed: Landed prices are the same as DDP except the wholesale price also includes the regional sales tax. Most stores get their VAT (or other similar tax) refunded to them so they tend to go for DDP prices instead, but some stores may request landed prices. Again, you need to work with a shipper who can help you deliver landed goods.

• Domestic: domestic orders do not usually have any complicated shipping terms, so you need to decide if you are charging them for shipping, or if they are providing you with a courier account to ship the goods.

Marketing

It is ideal that you push and ask for what kind of marketing they will be doing whether they will be shooting it locally or including in-store promotions. Discover what kind of promotions will be worked into the drop and get a general idea of what their plan is. And if there is anything you can do on your side to help, do it. Because at the end of the day it is your mission for this to sell as well as possible in their store.

If the store is in your area, go in there with your buddies and buy as much stock as you can. Ask your followers to go check out the store too - forget about your eComm margins and make it your mission for your brand to be a roaring success for your wholesale account. 

The collection selling well for the retailer is the first step in cultivating a strong relationship with your buyer. So if it flies off the racks, you will be making stacks.

Final Steps

Once negotiation has been completed there may or may not be some agreements or paperwork required on their end. Your order will have a land date and depending on your country that it lands there could be some tariffs otherwise known as import taxes.

Once the goods have landed there generally is some kind of QA (quality assurance) and inspection where if you have any potentially defective stock they will either request for a refund for those items or a credit on your next order. Obviously it is best to lead with an offer to give a wholesale credit and if they insist then serve them with that refund. Thankfully these refunds are far less than a direct to consumer refund that you normally would pay out as it only is on the wholesale value. 

Small insights for big outcomes

The deal is not over when the item lands and you get your sweet wholesale dollars. Rather it has only just begun. Once the item is in their stores, check in and find out what is selling, what is not selling and use that data to help formulate your next collection. These insights can inform you on what sizes, colors or styles to prioritise and also conveys to the buyer that you are invested in the success of your brand in their store, and not just as a potential wholesale account. 

Conclusion

And there you have it. There are many ways to skin a cat, and just as many to successfully enter the wholesale game. This is but one path and we hope that this guide provided you with even a single nugget of useful information. If so, then our job here is complete - and yours begins!