Clothing Sales in the USA

Among our company's clients are designers and businessmen who would like to open their clothing sales business in the USA. Considering how often we provide consultations on this issue, we decided to create a detailed and understandable guide that addresses all the nuances and pitfalls in the clothing sales sector in America.

Where to Start

Of course, the first thing is the clothing itself. To start selling, you need a product, so there should be at least a concept, and ideally, a ready catalog of clothing. We will discuss this issue in more detail later.

The second is a company in the USA. If you want to sell in America, you will need to register a company here. This is primarily explained by the convenience of operations: to conduct payments, you will need an American account to accept credit cards, which can only be obtained by an American company. Moreover, customers in the USA (and around the world) prefer to shop with American companies. To build a client base and attract buyers, it's important to comply with local requirements.

The third is infrastructure. Sending goods from Kazakhstan or Ukraine (even from China, if production is located there) is too costly. You will not only earn nothing but also go into the red. Therefore, you will need an office, store, or warehouse (a special warehouse that makes small wholesale and individual shipments to clients), which can only be rented by an American company. This addresses the question of why you need to register your business in the USA.

Typical Mistakes

The success of a business largely depends on the timeliness of actions. Many companies have collapsed simply because they acted in the wrong sequence. Here are two of the most common mistakes faced by newcomers.

Target audience needs not considered. For some reason, many entrepreneurs create a product first and then start thinking about whom and how to sell it to. For example, a certain company began to sew stylish neck scarves. They are beautiful and unusual, but they only appeal to the entrepreneur and the designer themselves. As a result, there are no sales, but there are losses. To achieve successful sales, only a preliminary market analysis is needed. That is, you need to understand what exactly customers like and what they will buy.

Of course, there is a chance that your taste is so impeccable that consumers will immediately fall in love with your product. Or that you can introduce a new trend, making your clothing the fashion trend. But let's be realistic: the likelihood of such a turn of events is extremely low, so you need to base your approach on customer needs, not personal preferences.

Sales start after the product is made. Another mistake is to produce first and then think about how to sell. If you want to make a profit, you need to engage customers, find ways to promote your collection in advance so that it is anticipated just as much as a new iPhone. Therefore, marketing and PR should happen before the collection is produced.

Marketing: How to Promote Your Company

So how do you make your product desirable for buyers? As we mentioned, you need to think about marketing before the clothing is sewn and delivered to the warehouse. In fact, you should develop a sales strategy as a priority.

Start with market analysis. You need to understand what you are going to sell, to whom, and at what price. Who is your clothing aimed at, and what exactly will attract them? To gauge the success of the collection, conduct checks with focus groups. There is no need to sew a large batch right away; one sample for a photoshoot on a model will suffice.

Consider the differences in mentalities between different countries. If you created a clothing collection that became successful in Kazakhstan, it’s not a fact that it will be equally well-received in the USA. Therefore, checks should be conducted where you plan to sell your products. If this seems foolish, remember that leading fashion houses create separate collections for each country, considering the tastes and preferences of the target audience.

So, it is not at all necessary to release your collection under your brand. You can find (for example, in China) a ready-made collection that you like, or simply select and buy individual pieces from different manufacturers and combine them under a common brand. Chinese manufacturers can attach any tags to the clothing.

What nonsense, designers might exclaim. How can you go to China, choose models there, and include them in your collection? What kind of strange advice is this? Let us tell you an interesting story. How Domenico Dolce and Stefano Gabbana fought against Chinese counterfeits. They went to China and visited several factories that produced counterfeit D&G clothing. They simply bought the best-quality factories... After which they held meetings with the designers and management of their now-owned factories, reviewed the models they produced, and approved some of the designs!!! They included them in their collections. If famous designers Dolce and Gabbana found the models of Chinese designers worthy to include in their collection (both in design and quality), then it makes sense for you to visit exhibitions and showrooms in several cities in China to choose a collection that is more than worthy. This is business, not an exam at a design institute. The one who sells the collection wins.

You can negotiate with suppliers to obtain a ready catalog or arrange a photoshoot of the models you choose. By the way, you will see the quality of the tailoring at different factories, and you can place the production of your models there as well...

Another important point is the difference in body types. Be sure to test the patterns on American customers before launching large-scale clothing production. Very often, what is a medium size in Europe is a small in the USA. You certainly do not want to face a mass return of items.

All of this will help you prepare the ground for sales, although it does not guarantee resounding success, but at least you will avoid losses right from the first stage of operation and be able to assess the needs of your customer and understand which models to focus on in the future.

How to Find Your Customer

After registering your company and evaluating the products with focus groups, you need to make sure that people know about you. For this, you will need several things.

• Website. American clients have long been living on the internet, and a company without its own website will simply not be taken seriously. Moreover, the website must be made well and interestingly: the better the presentation, the more trust it evokes. Make sure that the first page includes the company's history and goals, even if your firm is only three days old and there is no history to speak of. Beautiful text, high-quality photos, a detailed catalog—these are what will help you win over customers at first glance.
• Brand. To become recognizable and gain the trust of clients and distributors, you need a personal brand. Otherwise, there is a risk of getting lost among Chinese no-names, which means an instant death of the business. Even if your collection appeals to a client, how will they find it without a brand?
• Social Media. Today, social media is a world of its own, and if you are not there, consider that you are nowhere. Almost all residents of the USA use social media daily, so you must launch advertising there. It is the fastest and simplest way to communicate information about your brand to clients, find a customer base, and start promoting clothing.
• Merchant. To accept card payments for purchases, you will need a merchant account, which can only be obtained by an American company with a functioning website and a checking account in an American bank. You will also need a PayPal account, and for full operation within the payment system, you must undergo verification and confirm your details. By doing this at the very beginning, you will save yourself from many difficulties.

Creating Infrastructure

The next thing you will need for operation is your own infrastructure. Shipping goods from Kazakhstan or Ukraine will be too expensive, and if you do not plan to send purchases directly from the supplier to clients, you will need your own warehouse and office.

You need to establish a system for receiving and processing orders, packaging and shipping, returns, and handling money. Therefore, you have two options:

• Rent a warehouse, hire people, and handle everything yourself;
• Find a company that specializes in packaging and shipping.

Having your own infrastructure has another advantage: you keep your clients' personal data confidential from suppliers and manufacturers, which is extremely desirable in the competitive environment with Chinese firms.

But if you are not sending at least 2,000 items a day to clients, then operations of your own warehouse will be unprofitable. Think about that.

Exhibitions as a Means of Forming a Distribution Network

You can use only social media and a website to find distributors, but experience shows that this is not as effective as participating in exhibitions. In the USA, this is a common practice, and all companies that want to enter a large market regularly participate in exhibitions. Let’s consider why this is so important and how it works.

Exhibitions are huge platforms where companies present samples of their products. Hundreds of professional buyers come to the exhibitions to find goods for their stores, department stores, and boutiques. Many buyers already work with proven suppliers, but no one refuses new partners, especially if the product is interesting. Buyers can be attracted by items that are potentially going to be popular in the next six months as well as completely new models. So, you have a choice: follow trends or create your own clothing line.

It is common practice for buyers to arrange meetings in advance through a social media group or website. Therefore, it makes sense to launch advertising in advance and try to find potential customers. If you did not receive a single response before the exhibition, it may be worth reconsidering your business concept, changing your collection, or working on your advertising. Overall, buyer interest is an indicator, and if no one is interested in you, you need to urgently find the reason and eliminate it.

Prepare yourself for the fact that at the exhibition, you are unlikely to conclude contracts with large partners. For a new company, the first clients are small and medium-sized companies that are not afraid to work with new brands. If you can establish cooperation with them, within two to three years, with active work, you have every chance to reach large networks. This is provided that you continue to improve the quality and design of your products, keep up with fashion trends, and constantly release new collections.

Of course, there is a possibility to start working directly with the "giants," for example, if you have come up with something unique. But be prepared for the fact that the buyers of fashion giants will be extremely picky, will arrange negotiations and discussions regarding packaging, delivery, quality, and design, and then will buy a tiny batch as an experiment. This is also good, but clearly not the ultimate goal.

Immediately specify such a moment as the minimum sales volume. This will show your supply capabilities. For example, you can agree to supply only size ranges or discuss the minimum quantity in a batch of one item.

The minimum purchase amount is also important. The higher it is, the fewer small buyers will be able to work with you. Many buyers take a few items "for trial," and an experiment with a large batch of an unknown brand is not affordable for many. The optimal solution is to set a minimum purchase amount of $100. This way, you won’t scare off small entrepreneurs (who can grow significantly over time), but you also won’t miss the opportunity to communicate with more solid potential partners.

How to Set Prices

In the clothing sales sphere, there is a standard retail price (markup), which is 2.2-2.4. That is, to get the retail price, you need to multiply the wholesale cost by 2.2-2.4. Your task is to set the retail price of your product within market requirements, and the price on your website should be the same.

Also, keep in mind that in the USA, there is a practice of making product delivery free after a certain price. That is, if the buyer has selected goods worth a conditional $100, you will cover the delivery cost. This is a kind of incentive system, but it should not bring you losses, so keep this in mind when setting prices.

What to Prepare for the Exhibition

If you plan to participate in an exhibition, you need to consider several points.

Firstly, it is not as easy as it seems. To become a participant in a large exhibition (do not bother with small ones if you want to work seriously), you will have to go through an evaluation by the "Brand Committee," which is established to determine the level of potential participants and weed out hundreds of nameless Chinese companies.

After passing the competition, you need to ensure that everything necessary is available at the exhibition:

• Best samples. The quality of the material, tailoring, packaging—all must be top-notch; otherwise, you will immediately lose all clients.
• Detailed and colorful catalogs with excellent photographs.
• A system for working with buyers: a computer and printer, working internet.
• A functioning merchant system to pre-authorize the buyer's card or accept payments.
• Bags for promotional materials.
• A large number of business cards.
• Printed or ready-to-sign standard distributor contracts.

And, of course, there should be people at the booth who know everything about your products and can make a good presentation. There should be at least two people, but ideally three or four, so they can take turns if necessary, step away to eat or use the restroom, and also talk to each interested buyer.

Types of Customers at the Exhibition and How to Work with Them

During the exhibition, you will encounter three types of buyers (there are certainly more, but these are predominant):

1. Buyers who are immediately satisfied with everything and place an order on the spot.
2. Clients who get to know the products in detail, take the catalog, and leave.
3. Just passersby.

The first type is the easiest to work with. They know exactly what they want and do not like wasting time, so there should be a computer with working internet at the booth to finalize the contract on the spot and send them an invoice.

You should also ensure the ability to pre-authorize the credit card immediately. Since the money is usually deducted from the card before the goods are shipped, the purchase is considered paid, but you must have financial guarantees for the transaction, and those guarantees will be the funds blocked in your account. They may simply buy some of your samples after the exhibition.

The second type of clients are your potential partners. They are either representatives of a company and do not make final decisions on their own, or they are very meticulous buyers who first go around as many booths as possible and only then conduct “elections” in favor of certain brands. A good presentation and a colorful catalog with detailed information will clearly tip the scales in your favor.

The third type is not your clients, but even they can be attracted by holding a small prize draw. Just place a bowl for business cards, and at the end of the day, hold a lottery by simply pulling a random winner. Sometimes those who win in such a contest come to claim their prize in the next few days, and at the same time, they can buy something. This is also a good way to promote your brand.

Lastly, do not forget to collect contact information from everyone who visited you—this will be a big step toward building a customer database.

The next 1 to 2 weeks after the exhibition are the most productive in terms of closing deals: this is when the main influx of calls comes from those who saw your products. After 3-4 weeks, the calls will dry up. During this period, you need to create an email newsletter to the addresses listed on the collected business cards to attract as many buyers as possible.

A very important point: you must be able to fulfill the orders that come in, deliver them on time, and ensure the quality of your work. You are building your reputation now, and you need to present yourself in the best light as a reliable supplier.

If you have decided to sell clothing in the USA but do not know where to start, we offer professional assistance. Our company's specialists can help with company registration in America, website and brand creation, social media promotion, and infrastructure search. We have been working in this field for several years and know how every cog in this mechanism works, so we can help you avoid typical mistakes that could ruin a good idea.

You just need to voice your concept, and we will offer the best scenario for successfully bringing your idea to life.