Welcome to the Executive Focus Group, a Glossy+ member-exclusive series driven by monthly focus groups with subject matter experts. The bi-weekly series offers actionable takeaways for business leaders navigating the rapidly evolving beauty and fashion industries.
This month, Glossy brought together a group of fashion brand founders and leaders to discuss the state of the wholesale market. As tariffs have shaken the retail market, more brands are turning to retail partners to help shore up their business. However, wholesale comes with its own set of challenges that can be tough for brands accustomed to direct channels to manage. Below is a recap of the discussion segments related to the effects of wholesale on a brand’s direct channels and the “beautiful dance” of getting retailers to buy the right assortment and not mark things down.
Focus group members:
Devon Grief, the CEO and Montce Swim, a Miami-based swimwear brand with a strong wholesale business making up around 30% of revenue. Montce Swim is carried at a number of big retailers including Nordstrom and Revolve.
Devyani Ramani, the COO of both the designer brand Rebecca Taylor and its parent company, The Ramani Group. Ramani and her husband, Deepak Ramani, bought Rebecca Taylor from Vince in 2022 and have established a strong network of wholesale partnerships in the years since.
Kris Avakian, the founder and CEO of the Canadian designer footwear brand Black Suede Studio. Avakian started at his family’s jewelry business before founding BSS in 2017, launching the business with big department store accounts before branching out into specialty retail.
Does your wholesale business have a halo effect on your direct business?
Avakian: “Sometimes. Because the customers are searching and maybe they make their first purchase of the brand at Saks. Then they want to see what the brand has on our site because maybe we’ll have something new. That’s why it’s nice to have different products on your direct channels compared to your wholesale assortment. So that when people come to your site, they have a reason to shop there.”
Grief: “But it goes the other way, too. We get 65% of our click share on branded search terms, but I haven’t had luck with getting the drop shippers we work with to not target any of our branded search terms.”
Grief: “We spend a lot of money on celebrity collabs, partnerships. You build your brand and you get people coming to you by searching your name, but then they click on a retailer’s ad instead of your own. And you think, ‘OK, well at least they’re buying us from somewhere.’ But that’s not necessarily true. They might land on a swim page, not a Montce page, and end up buying something from another brand.”
Avakian: “We also haven’t gotten retailers not to bid on our ad terms. But we do have an SEO and ads team, and it’s a must that you buy ads on your own name. If not, anyone can bid on your name, and they’ll overshadow you in the search results. And because they have commission links, people can put ads on your brand name, and then people will buy your product, and they’ll get the commission through LTK or any of those sites.”
Grief: “The affiliate thing is a total racket sometimes.”
How do you exercise some control over pricing at your wholesale partners?
Avakian: “The difference between a brand and a private label is we set our prices and the retailers have to respect them. Sometimes retailers require a few percentage points more margin but the retail price stays the same.”
Grief: “Through the use of MAP policies (minimum advertised price, an agreement that sets a minimum floor below which retailers cannot sell a product), you can exercise some control. You can tell them when and by how much they can mark things down. But apparently, those are illegal in Europe, which I wasn’t aware of until recently, but it’s something we’re looking into. Sometimes you will have to offer a markdown to the retailer, but I think it’s more important to control the cadence of markdowns.”
Avakian: “I think you have to talk to the retailer about the assortment ahead of time. You might have one product as a bestseller and another that isn’t selling, and they’ll want to markdown the one that isn’t selling. So you want to make sure they’re not buying too much of a product that isn’t going to sell.”
Ramani: “I call it with my sales team ‘the beautiful dance.’ Buyers come into the showroom, and there’s this dance we have to do, a little back and forth, to get them to buy in the right proportions. A lot of times, they have their selection and we tell them, ‘We really feel like you’re missing something in this assortment based on historical data,’ because they’re not buying something you know will sell. And then you also want to make sure that different retailers have a different mix from each other. There has to be a little bit of a silo. And then when you do have a bestseller, then you can bring the buyer back and continue with them.”
Grief: “But also if a product is selling well for you and not selling well for them, you can sometimes take it back and sell it yourself. That’s worked for us. Also, because we’re swimwear and summer is the most important season, we ask our retailers, ‘Please don’t mark anything down until the end of summer, even if it’s not new.’ And we have a little leeway there.”
