With financial pressures bearing down on retailers, it’s likely that fashion wholesalers will adopt a new approach to sales of apparel, footwear, and accessories in the near future. Offering credit to retailers is an economic game of Russian Roulette: with many retailers stretched financially in the wake of the Covid-19 pandemic, wholesalers could find their own viability tested if their customers are unable to meet their financial obligations.
A concession-style sales model could, therefore, become the norm, whereby fashion brands retain ownership of their stock until it’s sold to the consumer. There are several challenges that will need to be addressed. An industry-specific ERP, such as STYLEman, can support new business models by controlling supply and demand and optimising the supply chain.
Concession model does need financing (i.e., the wholesaler likely has to wait longer for their money), and unless they’re careful can get a lot of unsold returns (from the retailer) back at the season end, when they’re very much clearance items.
On the positive side, they can expect a higher margin on goods sold since the retail margin is generally split between the store and the wholesaler.
Greater transparency is at the heart of STYLEman ERP. By creating a real-time repository of data, STYLEman ensures everyone in the supply chain is fully informed with up-to-date information about stock levels, shipments, delivery dates, and account statuses. Delays are anticipated and mitigated, while customers can take action to keep their accounts in good order while meeting consumers’ expectations for prompt, reliable service.
With a concession-style sales model, it’s more important than ever to manage inventory effectively. Overstocking becomes a bigger risk, causing storage problems for the wholesaler as well as imbalances upstream in the supply chain, with knock-on effects for suppliers.
STYLEman ERP enables more effective inventory management and streamlines manual tasks. Greater transparency and access to data helps to optimise stock levels through the provision of real-time accurate information, while STYLEman WMS can transform the organisation of the warehouse to facilitate more efficient stock management.
For seasonal based companies this could be an issue as they could get a lot of returns at the end of the season which they then have to job off at reduced cost. That now has a major effect on the bottom line and possible concession is not the panacea.
A concession-style business model can also affect costs for wholesalers, so an ERP that provides incisive analysis of costs and margins can help reduce the financial implications for the business. STYLEman ERP can ensure that every step in the supply chain adds value to the business by reducing unnecessary spending, generating efficiencies, and protecting the brand from outside influences.
To find out more about STYLEman and how it could support your business in times of change and financial pressure, why not arrange your free, no-obligation demonstration of our software?
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