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

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