Stuck with Stocks Dilemma

[asteria]

Hi everyone,
I am currently stuck with $10000 worth of clothing apparel from Korea. As my items include Korean designer and brands, my price point are definitely higher than stocks from Thailand and China. So far, people who enquired for wholesale or consignment commented that the price is high. It seems that singapore retailers/buyers are more keen on selling cheaper goods. Is there a place for high quality apparels anymore in Singapore market? I carry authetic korean designer apparels thus, i cant compete or bring down my price to the level of China and Thailand goods. Any suggestions what I should do or who should I approach? Thanks.

[meinteel]

Sell below costs. That's the reality. You can't expect to profit - not even a little because when you import the goods, it was never meant for distribution. Whatever price you got, they could have gotten it at around the same price or cheaper. The source of the product doesn't matter much to retailers and consumers simply because there is no foolproof way of ascertaining the source of origin. Furthermore, just because it is from Korea doesn't mean it is of better quality then that coming from China.

[GerryT]

Hi what price you selling them

[asteria]

Originally Posted by meinteel

Sell below costs. That's the reality. You can't expect to profit - not even a little because when you import the goods, it was never meant for distribution. Whatever price you got, they could have gotten it at around the same price or cheaper. The source of the product doesn't matter much to retailers and consumers simply because there is no foolproof way of ascertaining the source of origin. Furthermore, just because it is from Korea doesn't mean it is of better quality then that coming from China.

Hi there,
Thank you for your reply. We are selling premium apparels. Those items are branded Korean designer clothes and are purchased from various boutiques. It comes with the brand tag, brand plastic and origin. Therefore, we are trying to sell the brand not merely an apparel. Why would it not be meant for distribution when we are a registered company that does supplying?

[Shuimu]

Yes what is your price range?

[meinteel]

Originally Posted by asteria

Hi there,
Thank you for your reply. We are selling premium apparels. Those items are branded Korean designer clothes and are purchased from various boutiques. It comes with the brand tag, brand plastic and origin. Therefore, we are trying to sell the brand not merely an apparel. Why would it not be meant for distribution when we are a registered company that does supplying?

When you say stuck, I assumed that you are offloading/clearing stocks that are no longer wanted due to closure or something.

Since you asking from distribution point of view, then you must consider another set of rules.

1. Designer Clothes - sells brand & not apparel. Question, how well-know is the brand in Singapore? What form of marketing & advertisement has been done in the past 3 years? What form of advertisement will be done for this year? It can be "designer" from korea, japan or wherever, if people don't recognise it then it is good as a no-brand product. Advertisement, advertisement & more advertisement.

2. Range & Sizes
If I was to retail your brand(s), what is the range of designs & sizes EACH particular brand has? Maybe you have two brands, say "xxx Korea" & "Korea YYY". Each brand (xxx/yyy) should have at least 30-50 designs, with at least 1 new design every month & we aren't just talking about different colour. If its male apparels, then the design range can be slightly lesser at around 10-30 but you still need to have sufficient range. Sizes - free sizes give the cheapo feeling. You need to have at least 3-5 sizes per design to choose from.

3. Margin
When talking about clothes, they will require at least 35-60% profit margin. If your retail price for a piece of clothing is S$100, then your selling price to be cannot be more than S$35. The less well-known, or slower your products sell, the higher then margin required.

As a retailer, there are many hidden costs that adds up quickly. Rental is extremely expensive, it is many times the costs of your warehouse/office. Malls typically charge anywhere between $20-45 psf compared to $1-10 psf for warehouse/office. To add on, malls take up a % of the REVENUE of the shop - even if they are selling below costs. Furthermore, labour is even worst. Mall Shops are required to be opened 12 hours a day, 7 days a week. The labour costs adds up - who wants to work in the evenings & weekends right? When there's a sale, the owner must consider the bank transaction costs. 2% for NETS & about 3.5% for Credit Cards on the REVENUE. All these lowers the margin which they earn.

Last but not least, consider this. If I am a shop owner, do I need to PURCHASE the stocks from you to sell, or are you willing to CONSIGN? If I need to invest a large sum to sell your stocks, why don't I import them myself? I could always get some other brands that are similar in designs but with higher profit margin. No? Is there some kind of benefit I get opposed to importing myself? Exchange of slower moving stocks? Free advertising & promotions?

[asteria]

Hi there,
Thank you for your detailed reply. Alot of good points you mentioned that I will need to consider. Understood that branding would need extensive marketing and promotions. Will have to work on that.

I also understand the undertakings of retailers. However, I will still try to find retailers for my goods, will not give up yet. Nonetheless, if all else fails, guess I will become a direct retailer of the goods myself.

Thank you for your valuable opinion and time spent replying to the post.

Cheers,
Asteria

Originally Posted by meinteel

When you say stuck, I assumed that you are offloading/clearing stocks that are no longer wanted due to closure or something.

Since you asking from distribution point of view, then you must consider another set of rules.

1. Designer Clothes - sells brand & not apparel. Question, how well-know is the brand in Singapore? What form of marketing & advertisement has been done in the past 3 years? What form of advertisement will be done for this year? It can be "designer" from korea, japan or wherever, if people don't recognise it then it is good as a no-brand product. Advertisement, advertisement & more advertisement.

2. Range & Sizes
If I was to retail your brand(s), what is the range of designs & sizes EACH particular brand has? Maybe you have two brands, say "xxx Korea" & "Korea YYY". Each brand (xxx/yyy) should have at least 30-50 designs, with at least 1 new design every month & we aren't just talking about different colour. If its male apparels, then the design range can be slightly lesser at around 10-30 but you still need to have sufficient range. Sizes - free sizes give the cheapo feeling. You need to have at least 3-5 sizes per design to choose from.

3. Margin
When talking about clothes, they will require at least 35-60% profit margin. If your retail price for a piece of clothing is S$100, then your selling price to be cannot be more than S$35. The less well-known, or slower your products sell, the higher then margin required.

As a retailer, there are many hidden costs that adds up quickly. Rental is extremely expensive, it is many times the costs of your warehouse/office. Malls typically charge anywhere between $20-45 psf compared to $1-10 psf for warehouse/office. To add on, malls take up a % of the REVENUE of the shop - even if they are selling below costs. Furthermore, labour is even worst. Mall Shops are required to be opened 12 hours a day, 7 days a week. The labour costs adds up - who wants to work in the evenings & weekends right? When there's a sale, the owner must consider the bank transaction costs. 2% for NETS & about 3.5% for Credit Cards on the REVENUE. All these lowers the margin which they earn.

Last but not least, consider this. If I am a shop owner, do I need to PURCHASE the stocks from you to sell, or are you willing to CONSIGN? If I need to invest a large sum to sell your stocks, why don't I import them myself? I could always get some other brands that are similar in designs but with higher profit margin. No? Is there some kind of benefit I get opposed to importing myself? Exchange of slower moving stocks? Free advertising & promotions?

[KittyMi]

Hi Asteria,
I have an online shop retailing children products imported from brands in USA, Australia and Europe. Some of the brands are very established in their home country. We do not stock knock-offs, inspired styles and not factory over run stocks. I am considering diversifying my product mix as we do have quite a number of mummies to pamper too. Please PM me if you are willing to consider consignment. Thx.