Wholesale clothing is purchased in lots by retailers at the price manufacturers charge. Retailers often increase the price by over 200%. Exclusive selling rights can result in overstock, leading to sales. Unsold inventory is sold to liquidators, with manufacturing often outsourced to developing countries.
Wholesale clothing generally refers to clothing purchased at the price retailers pay when buying direct from the manufacturer. Most of the time, to buy clothes in bulk, the buyer needs to buy in lots. The lots are divided into design, color and size. In many cases, the number of lots purchased has a large impact on the price paid for the lots.
Wholesale clothing purchases are generally seasonal. Shopping for fall lines typically takes place in the spring, while spring and summer shopping typically takes place in the fall. This gives manufacturers plenty of time to make and ship the garments that are ordered. Once retailers receive the clothing in bulk, they typically increase the price beyond what they originally paid. This margin is sometimes more than 200%.
Wholesale clothing to various retailers usually takes place in what is called a “merchandise market,” which is similar to a large trade show. Several manufacturers bring samples of their clothing lines so shoppers can peruse them and decide what clothes they want in their stores. These shows often take place months before the season for which the clothing is needed. This gives manufacturers enough time to produce the quantity of garments that are ordered.
To gain an advantage over their competitors, retailers sometimes arrange to have clothing lines exclusively sold to them. To obtain exclusive selling rights, retailers generally must agree to purchase all lots produced. This often results in an overstock of merchandise. When this occurs, retailers sometimes hold sales in their stores, offering the clothing at prices that are close to or wholesale. These sales usually happen when the fashion seasons are coming to a close.
In many cases, even after large price reductions, retailers can end up with unsold inventory. When this happens, retailers can even cut the price below wholesale cost to sell the clothing. These clothes are usually bought by liquidators, who then sell the fashion at various discount outlets.
The corporations and businesses that order wholesale clothing manufacturing are often located in the United States or Europe, however the actual work involved in creating wholesale clothing is usually outsourced to manufacturers in developing countries. . Wholesale clothing is frequently made in countries where labor and operating costs are low, such as China and other parts of Southeast Asia. Some economists argue that the outsourcing of jobs in the textile industry may have led to trade imbalances, especially between the United States and China.
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