Fashion Unknown Fact – Selling to Major Retailers, You Get Seven Cents on the Dollar

Selling to the “Majors” may not be all that profitable for certain brands.

Major department stores [‘Majors’] use their shipping department as a profit center.  According to Brian Kastner, Sales Manager of Centric Software, a technology firm that specializes in PLM [product life-cycle management] for the fashion industry, the ‘Majors’ treat their shipping department as a “money maker”.  He says, “if you ship $100,000 worth of goods, you’ll get $70,000.  The vendors [brands] are expected to invest in Electronic Data Interchange [EDI] software – a computer-to-computer exchange of business documents to coordinate shipping.  One of the main ‘cons’ in working with the ‘Majors’ are the operational charge-backs.  On an average, they can reduce the invoice amount by about 30%.  These charge-backs are markdowns, shipping mistakes such as wrong sizes, incorrect labels, PLM mistakes, and some testing requirements.

“The ‘majors’ have been doing that for decades and other stuff too, says Laura Tanzer [comment from this article post in LinkedIn].  I prefer to sell to boutiques for a more fair and personal treatment.  Better for the customer too.”

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Rhonda P. Hill

Founder, Publishing Editor