AboutJames E. Dion Expertise Most questions about trends in specialty retail, how customers are changing both in the US and Europe. Demographics for all countries as they relate to retail trends and issues. Store Operations, Buying and Merchandising.
Experience
Past/Present clients Microsoft, Harley-Davidson, Ritz-Carlton, Hummer, Ace Hardware, Coleman Spas, Aldo, Intel, Dell, Safeway, New Balance, IBM, Kodak, Bata International, Nortel Networks, Honey Baked Ham Co., Man Alive, Highsmith
B.S Chicago State University
M.S. Chicago State University
PhD (abd) Illinois Institute of Technology
Expert: James E. Dion Date: 2/6/2008 Subject: Wholesale
Question QUESTION: James,
I guess in regards to my last question I have found a price point where I will obtain a 60% margin for a luxury mens shirt. What is the avg margin for this type of product? Also, do I want to try to have the same type of margin if I wholesale? Would it make any sense to also wholesale, but at the same final retail price, thus I would only make around 28% margin when it comes to wholesale.Or would I need to up my final retail price so I could obtain a wholesale margin of at least 50%?
ANSWER: Terry,
Unless your name is Armani or Lauren you are not likely to get 50% on wholesale! Much more likely is the 30% that is common. Again, if you simply up your retail price, why would anyone pay it? To think that going from $190 to $240 for a shirt is simple, realize that the market for $190 shirts is very small to begin with and over that price it gets even smaller.
---------- FOLLOW-UP ----------
QUESTION: James,
Thanks for the super quick reply and the 30% answer for wholesale. The shirt will be made in England and will be the only one on the US mkt besides turnbull and asser which retails for $280. All of the fabrics are the best in the world and half the shirt is made by hand. Competitors prices made in a similar or less way retail for 200-$400 per shirt. There are many small boutiques in NYC doing quite well retailing lesser quality shirts for $275 and more, which won't be able to touch my quality. The men's dress shirt mkt is very similar to women's shoes I have found, it is the one guilty pleasure men will splurge on in their wardrobe since they can where it to work and out at night. So in a nutshell I am offering a top quality shirt at a price much less than my competitor. Any more feedback would be appreciated. Thanks again.
Answer Terrance,
Sorry for taking so long to reply. I thought that this was just a follow up answer from you. If you keep your market small and really deliver a superior quality product you have a real chance of making it work. Why do men frequent the stores they do now? What will make the retailers switch to you? You need to ask some of the retailers what it would take for them to buy from you or how you can market directly to that very small group.
