Why Are DTC Brands Moving to Wholesale? JOOR CEO Kristin Savilia Explains

The golden era of DTC appears to be over as an increasing number of fashion brands are making the move to wholesale. So who better to ask about this industry trend than Kristin Savilia, CEO of the industry’s leading B2B platform JOOR which has processed over $100 billion in wholesale transactions. We asked for her expert insight into this market shift and sought her opinion on how brands can successfully make the move from DTC to wholesale.

More and more DTC brands are moving to wholesale. Why do you think this is happening?

A lot of the “DTC darlings” are realising that their business model wasn’t as profitable as it first seemed. When you’re a DTC-only brand you are burdened with significant costs, not just the free shipping and free returns all customers have come to expect, but also the costs of constantly finding and converting new customers. This can quickly eat away at your profits, and a lot of DTC brands are now realising that opening up to wholesale can give them a much healthier margin to grow their business. Plus wholesale is a great avenue to raise brand awareness and introduce your brand to new audiences that are already primed to shop.

Is this increased interest in wholesale something you are seeing at JOOR?

Yes. In the last 12 months, former DTC-only brands including Fabletics, Bandier, Merse and J. McLaughlin have all joined our platform to accelerate their wholesale growth. JOOR’s most recent Market Survey also found that nearly two-thirds of the brands we spoke to considered wholesale to be their most profitable channel. It’s clear that brands are recognizing the benefits that a diversified distribution model can have on their business.

As a wholesale expert, what advice do you have for brands thinking about making the switch?

You should not turn your back on DTC completely. Adding wholesale to your distribution strategy will allow you to acquire new customers, test new markets, and profitably scale your business. You’ll need time to adjust to the sales cycles and payout dates traditional retailers adhere to, so don’t rush or be closed off to any opportunities when adopting this new channel. I’d also highly recommend having a solid strategy behind your move. Take the time to establish your wholesale product offering and think about designing exclusives you can offer particular retailers to make your brand more appealing to them.

How should DTC brands approach finding new retailers?

It can be a long and tedious process if you’re doing it the traditional way i.e. cold calling, approaching retailers at trade shows, following up on network recommendations. I’d recommend that any DTC brand that wants to successfully make the move to wholesale use a software platform like JOOR. Our network of 650,000+ buyers represent high quality and vetted retailers across 150 countries. You can use our Find New Retailers directory to filter and identify boutiques that are the right fit for your brand — easily drill down into the exact demographic, location, and type of store you want to target as well as the other brands they carry, then click to reach out and contact the buyer. Think of it as fishing in a stocked pond versus fishing in the ocean. It's an essential tool for a brand looking to build new retailer relationships.

What’s the biggest mistake you think DTC brands moving to wholesale can make?

The biggest mistake is focusing on single transactions as opposed to building lasting and mutually beneficial retail partnerships. There are many marketplaces that facilitate an initial order but do not provide the tools to build long term relationships and repeat business. By contrast, over 78% of new connections made on JOOR lead to repeat business which is why brands are selecting us to support their wholesale expansion. A digital platform like JOOR makes it easier for buyers to engage with your brand, build their assortments, and place orders. Not having digitized processes and systems in place will make it near impossible to succeed in wholesale. Invest in a digital B2B platform and you’ll save yourself time as well as accelerate your ability to build trusted partnerships that propel your business growth.

Find out more about JOOR, the leading digital wholesale platform