Transitioning from Direct-to-Consumer (DTC) to Wholesale: Navigating the Proper Pathway
In the beginning of 2023, I penned an article discussing how direct-to-consumer (DTC) brands began embracing wholesale due to improved margins and increased exposure. Yet, this trend has taken off like wildfire, with prominent DTC stalwarts such as Warby Parker and Glossier publicly diving into the wholesale market. Even giants like Nike and Adidas have done an about-face, abandoning their DTC-focused strategies and reconnecting with their wholesale partners.
Our company, JOOR, has witnessed a surge in brands flocking to join us in their quest for wholesale growth over the past year. This surge is not all that surprising considering a recent survey we conducted, revealing that for most brands, wholesale is their most lucrative distribution channel.
As I pointed out a year ago, transitioning from DTC to wholesale can seem like a confusing process for brands venturing into it for the first time. That's why it's crucial for DTC brands contemplating wholesale to create a solid strategy.
Leverage Your DTC Knowledge
Delve into your existing DTC data to pinpoint appropriate regions and markets. For instance, if you receive a high volume of Eastern European online orders, wholesale partnerships with retailers in that region are likely a good fit. Aim for long-term retail relationships, focusing on those that best complement your brand.
Embrace Technology
Identifying suitable retailers can be challenging without partnering platforms. Researching online and cold calling retailers could yield minimal results. Instead, look for platforms where retailers are vetted and eager to make connections, saving you both time and effort.
Be Realistic
When communicating with potential retailers, be upfront about your business constraints. Overextending could lead to crumbling under the pressure, while maintaining honesty builds trust with retailers.
Curate Your Assortment
If you want to successfully move from DTC to wholesale, strongly consider fine-tuning your product assortment. Not all award-winning DTC products may have the same impact in a multi-brand environment. Instead, focus on what retailers are searching for and cater to their customer needs with appropriate products.
Creating specialized products or collections for your wholesale channel may also boost your appeal to retailers. Furthermore, these offerings help differentiate between your DTC and wholesale consumer experiences.
Build a Dedicated Team
Consider investing in a wholesale expert to support your transition strategy. While your DTC team possesses valuable skills, hiring a wholesale specialist can provide the sales cycle knowledge, product insights, and industry connections essential for wholesale success.
Enhance Your Software
To successfully transverse the shift into wholesale, make sure your software can handle enhanced operational processes like order and returns management, payment processing, and communications between you and your various partners.
Outdated processes can lead to bottlenecks and missed opportunities in your wholesale journey, so investing in software now can significantly impact your long-term success.
In conclusion, transitioning from DTC to wholesale can yield significant benefits, but it also comes with its challenges. Devising a strategic approach, leveraging your DTC data, fortifying your software, and employing a dedicated wholesale team can set your brand on the path to wholesale success.
Kristin Savilia, the director of strategic partnerships at JOOR, shared her insights on the shift from DTC to wholesale in a recent webinar. Savilia emphasized the importance of being transparent with retailers about business constraints to build trust, and she suggested fine-tuning a product assortment to cater to their needs for success in a multi-brand environment.
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