What is the difference between a fashion sales agent/ rep and a distributor & what are the main advantages & disadvantages? Expert Advice *

Who could benefit from this article? This is specific to fashion designers, apparel, accessories,?footwear and some outdoor, emerging and emerged, Global and local. ?Luxury – Premium- Commercial. Retail- Wholesale.?For larger retail brands requiring retail partners in new markets to open stores and ecomm, some of this is still relevant but this mostly reflects the wholesale b2b, even so the retail partners are an area I have done many introductions and is an extension of the below. Working with retail brands to set up wholesale is also a favourite area for me. ?

This article is intended a quick overview. I could write a book on this, some actually have. In most cases every brand/ agent/ distributor introduction I have been involved in was different, so I figure, why write a book when no two are the same? Also most articles I have seen on this were by a shipper or legal or other service provider than someone like me, a ragtrader for want of a better word. (see profile).?

“What is the difference between a rep sales agent and a distributor?” is a question I am either often asked or it needs explaining if the brand deals with me.?The real answer can vary in different markets.

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AGENT:

An agent basically gets a territory and a collection of samples from the brand, or nowadays may just work with a b2b site with a brand/ designer like Joor Access, Faire or Nu Order ( by the way those b2b sites would have made almost any book written 3 years ago out of date today). The agent shows the samples to buyers or invites them to their showroom/ exhibition and ?takes orders. The agent will have agreed a commission percent with the brand. A normal commission would be 14/15 % today though that too can vary like product category, volume and other things can come into play but to keep this on point 14% is a good one.

Some agents also charge a fee and commission. In my experience that can be fine and sometimes not. That’s another article for another day but if you are a brand facing that situation, by all means reach out (see below**).

The brand then takes the order, makes it or gets it out of stock and the brand invoices, sends the goods and gets paid. That can be a challenge shipping to regions that will incur duty etc. again, that’s another article another day. The brand gets paid by the retailer the agent sold to then on receiving an invoice from the agents ?the brand pays the agent 14% commission of the wholesale price without Sales tax/ VAT. So on e.g. a $/￡/€ 7000 order the agent will get $/￡/€ 980 net.?

DISTRIBUTOR:

The word distributor in fashion can mean different things in different territories/ countries and distributors can come in different guises. For my purpose I usually explain my definition in short: a distributor does the same as an agent but when we get to the step of the agent sending/ emailing the order they have taken from a retailer to the brand that doesn’t happen, yet! The distributor keeps all the orders taken by their salespeople (some of which are independent agents in their territory) then at a time agreed with the brand the distributor collates all the orders and gives one big order to the brand. When the goods are ready the distributor buys the goods (maybe by L/C, bankers draft/ guarantee etc.) The distributor will have a discount on the brands wholesale or retail price. At wholesale that is usually 30%, sometimes 20% sometimes 40% discount. (again another article for another day, do reach out**). The distributor in turn sells the goods to the retailer with a markup that will be near your wholesale price.?

There are advantages and disadvantages to both. The main advantage of an agent in my opinion is the retail customer is yours, you have direct contact with them when it comes to invoicing etc. and you know who they are. Of course they are the agent’s customer but still there is a relationship large or small with the retailer. With the Distributor the customer is theirs as they are buying from you, selling to them. In the event you start with one and three years later with 50 retail customers you lose the relationship with agent or distributor with an agency you can fairly easily maintain the customers, you have their details and sometimes more. With the distributor that may not be the case and you may lose most of the clients. Many years ago back in the early 1990’s our brand was selling ￡2m+ through a distributor in Holland. They started to copy/ import their own very similar brand and we had a big argument and stopped supply. We only managed to salvage around ￡100k sales. Had that been an agency I am not saying it would be plain sailing, but I believe we could have maintained ￡500k and more important a strong brand foothold.

The main advantage having a distributor is convenience and efficiency. It can be really taxing (literally) to work with an agent thousands of miles away, getting the goods delivered to retailers , duty paid. (Large and small Retailers generally wont/ don’t/ really don’t like importing) You the brand, wherever you are, wherever the retailer is must serve them as if they were dealing domestically in most cases. . Then you have the finance, customer service etc. So having someone that end to import is much easier and far less hassle which usually translates less costs despite a hefty discount .

I will say there are probably 50 agents to every distributor. Distributors generally don’t like starting with brands unless first year is likely to be $75k approx. so I have worked many times with brands to first get an agent, and later a distributor once sales are a bit more substantial. ??

Note: with both agents and retailers naturally there can be clauses in contracts to veto/ approve the retail customers so you will know who, even if just for your stockists page.?

With commissions and discounts they are varying these days but in my experience the higher they are normally the better the agent is. It is usually not a case that they are trying to have one over and it is worthwhile speaking to the agent/ distributor why their commission is what it is. Some have inhouse social media for their brands (handy of foreign language), some have a permanent showroom or do trade fairs etc.

I have now introduced around 300 agents/ distributor as well as retail partners (basically they are distributors who can also open stores for the brand). As I said not one brand to agent/ distributor case has been the same. But the above is a good template/ place to start.

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And never forget the number one rule! Do not let an agent or distributor take an order unless you are as certain as possible you will deliver it. They hate that, and quite rightly.

Sustainability within fashion is now naturally a huge issue and some agents/ brands are only taking sustainable and that is growing. It is an area I cover with all brands I speak to: non, partly or full as can be sustainable.

If you want to contact me I am easy to find. Just Google “Stephen Laundy Fashion Compass” and contact me through the website or if you are on Linkedin reading this connect/ message me.?

I love hearing from new brands! When a brand/ retailer/ designer contacts me to look at their brand, I do! Then?I send them an email with detailed references for my work, how I work and an offer as next step to do a video call. In 15 years none of those calls last less than an hour, usually an hour and a half, hence I charge for it. The fee for the call (￡75 or ￡55 for young designers/ startups) is refunded if we go on to do some reasonably substantial work. Conglomerates have paid it, startups and everyone in between too and some of the references will be specific to the call. If you are interested in working with agents/ distributors domestically or international trade for your brand, designer collection or fashion retail please request my info pack and I will also add comments specific to your brand.

The Head of sales for a ￡30million pound knitwear brand: “that is the best ￡75 this company has ever spent.”?

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I hope it is useful. Thank you for reading. If by any chance you did appreciate this article please like, share, and by all means comment feedback. There are other useful articles too. See below. ?

Sincere Regards?

Stephen Laundy

Fashion Compass London Limited.

(All photos in this article were supplied by former or existing clients)

The references to * and **:

* I put “LinkedIn expert advice” in the title as apparently Search/ Google likes those words :) I would never refer to myself as an expert in an industry that changes so quickly and even 40 years in the trade I am still learning.?This is the opinion of an experienced and very active person with agents and distributors and my advice is always and only based on “if I were in your position”.

**If?you are not ready for agents/ international, inquisitive, keen to know more without further work ?I do also do a nonrefundable “an hour” video call ￡45. I have done over 200 of these calls in the last 15 years. And I can supply references for calls as a separate entity. The calls can save a lot of time and money going forward.?

Fashion Compass supports: Prince’s Trust (14 yrs.), KOCO Knit One Change One (7yrs), Goods For Good (3yrs), Browsio (2yr). Either time volunteered or donations.?