DTC Dictionary- Wholesale
A little preview of an upcoming pod
https://www.threads.net/@seanwallet
https://twitter.com/SeanEcom
On Wednesday we drop a great pod
We have my LONG TIME ALLY Jeremy comes on the pod.
Casandra, his wife, started kitsch over ten years ago.
Today, kitsch is a multi hundred million dollar brand with both of them still in the biz full time.
Jeremy is an operators operator.
You wont find him on panels, the only place to find him is the warehouse.
GRINDING
Kitsch is a killer business.
They have the best collabs outside of streetwear.
Buy some of these barbie hair ties while YOU STILL CAN
But they are also the most diversified business I have seen.
Huge in DTC, huge on amazon, and huge in wholesale.
But what does wholesale mean?
On the pod we launched a new segment, DTC dictionary.
We are going to go DEEP on terms, channels, outcomes we have all seen, but no one every explains.
Want to know the inner workings of an LBO (leveraged buyout) or 1st or 3rd party on amazon? That is coming up on FUTURE OPERATORS PODCAST EPS
But for right now….
a sneak peak into what wholesale means:
When you sell “into wholesale” you could be selling into any different type of retailer.
And those retailers have different margin profiles, customer types, etc
Wholesale sales type:
Big Box
This is the Target and walmarts of the world
Largest volume of NON perishables are sold here
Huge PO writing ability, most sophisticated and analytical buyers
They are in control and they know it, everyone wants in
Grocery
Kroger is the big player
Huge buying power in perishables
Weaker in non perishables and beauty
Used to lower margins, so wont break you as hard
Instead, you have to deal with THEIR SYSTEMS
They are designed to sell milk, your gadget isnt as important as milk
So you will do it their way (which is horrible)
Convenience
7/11, speedy, arco, etc
Over 150k doors in the USA
Low cart value, small purchases
You will not sell a $90 item here
Low expected turnover of skus
Selling 1 thing a week in a store is a win
Big for the bev and alcohol market
Club
Costco and Sams club
They just want LOW PRICES
They operate on close to zero margin
They just need sub drivers and traffic drivers
Semi gated channel, gotta pay to shop their
“Specialty”
This is a kicker word, use to catch any sub category
A retailer that “specializes” in a category
Best buy in electronics, Dicks in Sport
Department as a category is dead, so most people will refer to department in two buckets
Specialty, which is nordstrom’s
And discount
But specialty could refer to outdoor stores, natural grocery, or non traditional channels
Think spas, selling to other brands, etc
Selling tees into equinox is a speciality wholesale relationship
Lets break Speciality into small box and big box
Speciality small box tends to be higher end and has lower buying power
and they tend to be emotional buyers, they can fall in love with a brand more than a 7/11 can
They will also “work with you”
flexible margins, payment terms, you can operate near their system, not in it
Examples are nordstrom, boutiques, REI, etc
Speciality big box is:
Best buy, Lowes, Home depot
Places with 300+ stores
This operate more like the targets of the world, and can drive the same volume
But you wont find video games in lowe’s or clothes in home depot
So they arent TRUE big box
Discount
Need stuff that has to go away?
TJ max, marshals, ross, etc
will take whatever, will be flexible with terms and process, but they are giving you close to cost
There biz is quiet volume
AND EVERYONE USES THEM
Even gucci has a small tj max biz
Drug
This is big box pharmacy
CVS, Walgreens
Massive, more health and wellness focused players
A mix of big box and grocery, but with more a “specialty” focus in health
Can be huge volume, and they are EVERYWHERE, especially in cities
But a bit slower of a mover compared to the razor sharp target team
Anyway, if you guys want more…
let us know and we will include it in the pod
TELL US WHAT YOU WANT TO HEAR ABOUT
Great insights, thanks sean!