Independent showrooms are an important part of the fashion business. Most designers don’t have the time to call retailers, hold sales appointments, or deal with all the customer service that comes with selling a fashion line. Showrooms can be a cost effective way to get your product into the marketplace quickly and get feedback from influential buyers.
Before meeting potential sales agents, you’ll need to prepare to do some selling of your own. Independent sales reps and showrooms are not only looking for new brands but brands that have potential and complement the collection of lines they currently represent.
To start, you’ll need to show that you already have at least a handful of retailers buying your collection. Not only does this prove that you are capable of delivering a product but it also shows that you’ve been busy pounding the pavement to build your brand. You’ll also want to show that your brand has received press coverage. A press kit is a great tool for a showroom to introduce you to their buyers and, this too, proves your ability to market your brand.
Finally, you’ll need to sell your vision, passion, and experience to a potential sales showroom. Be able to talk about your brand and your customer clearly and with conviction. Share your previous work experience or if you have investors backing your brand. This is your opportunity to prove that you are capable of delivering product and supporting growth when sales begin to roll in.
But a meeting with a prospective sales agent isn’t a one-sided conversation. It’s important that you learn all you can about your potential sales partner. Here are 10 questions you should ask when interviewing a showroom to represent your brand.
1. How much is all of this going to cost?
The most important factor in selecting a showroom will be whether you can afford it or not. Most agents work on a commission basis, usually 10-15%, on everything the agent sells. Some showrooms will expect to be paid a draw, a monthly payment against future commission, which provides the showroom monthly cash flow necessary for day-to-day operations.
You may also be required to pay a showroom fee, a monthly rental fee for space in the showroom. If a showroom fee is part of the deal, then you should expect to be paying a slightly lower commission rate than a showroom that only charges commission.
2. When is payment due?
Traditionally, sales reps are paid only after the product has been shipped to the retailer. Some showrooms expect to be paid within a fixed period (30 days) after the product is shipped. Others expect to be paid only after you receive payment from the retailer. Either way, taking on a showroom will mean added accounting work on your part. Be sure you are clear on the payment terms and that they work for your business.
3. How many years have they been in business?
In my experience, fashion showrooms come and go. A showroom that has been in business for many years proves not only that they have experience, but that they are able to adjust to changing trends in the industry. A showroom with long term experience should also have well-developed relationships with retailers, press and other fashion lines. Don’t be afraid to ask for references of retailers the agent currently does business with or of lines the showroom has previously represented.
4. What services do they offer?
The primary service offered by showrooms is to sell your product. But many showrooms offer additional services, which may or may not be an additional cost. Most sales showrooms will handle customer service and follow-up on issues that may impact their ability to continue selling to a customer, like collecting on open invoices. As strong sell out performance is also in the interest of the showroom, in-store sales support is another area that showrooms may provide. A good showroom will also provide you feedback on things like product development and merchandising to ensure sales growth in future seasons.
You may find some showrooms provide more full-service operations like public relations, account invoicing and receivables, and even warehousing and shipping logistics. Of course, these services will come at an additional price, but may be something worth considering. For example, working with one team on both sales and PR, while limiting the number of samples you’ll need to produce, could offset the added commission or monthly fees. Having a showroom manage not only your sales but your invoicing and receivables could free up a lot of time that you would otherwise need to be matching payments with open invoices.
5. What territories do they cover?
Be clear on the geographic territory the sales agent expects to have exclusive rights to. Some agents have multiple showrooms in key market cities and will expect to have the exclusive rights to sell your line throughout the country. Other showrooms may only focus on a specific region, meaning you may need to hire multiple showrooms to cover the sales area you want to target.
Aside from showroom representation, “road reps” spend a considerable amount of time traveling to regional retailers to sell their collections and can be a good option depending on the market level of your line and your need to develop very specific territories.
6. What other lines do they represent?
Before meeting a potential sales agent, you should research the lines they represent. You want to find a showroom that carries lines that compliment your own collection, rather than compete with it. Consider things like the target customer, price point and quality level of the other lines in the showroom. Make sure that the showroom is already attracting buyers who will be interested in your collection. Being the featured jewelry line in a ready-to-wear showroom may seem exclusive but your line probably won’t be getting exposed to department store and specialty jewelry buyers who don’t regularly visit an apparel showrooms.
7. What retailers do they sell to?
You’re not only hiring an agent to sell your collection for you, but also for the relationships they have with buyers. It’s important that the showroom is already working with your target stores. Ask specifically about the retailers you want to sell to and see how the agent responds. You’ll be able to tell the kind of relationship the showroom has with those buyers.
If your goal is get into major retailers like department stores or national chains, you’ll want to ask specifically what kind of relationship the agent has with these retailers and make sure they work with the right buyer for your collection.
8. What is the sales structure?
Showrooms often operate differently depending on the number of lines they represent and the volume of business they generate. Large showrooms employ account executives, even sales managers. Ask whether there will be a dedicated sales person for your collection, or if the whole team will be selling your line. It’s also important to understand who you’ll be directly dealing with. Will it be the owner of the showroom, a manager, or a dedicated salesperson?
9. What trade shows do they participate in?
Trade shows can be an important way to get exposure to buyers who only travel locally or who don’t have time to make showroom visits when they do travel. Good agents may only have one showroom but they understand the importance of participating in regional trade shows. Discuss which shows the sales rep will want you to participate in and what the additional costs will be. Showrooms can often get a discount on booth fees when several of their lines participate in a show.
10. How long is the contract?
Although some showrooms may offer to test your line for one season, most are going to expect you to commit to a contract, usually 1-3 years. Launching a new brand into the marketplace will take a lot of hard work and a good sales agent will want to know that they will benefit from their hard work for several seasons.
Hiring a showroom or sales agent is an exciting event in the development of an emerging fashion business. It represents the growth of your brand and your ability to delegate a key function, allowing you more time and energy to focus on other areas of the business. Do your research and trust your gut when interviewing potential showrooms. And before signing any contracts, it’s always a good idea to seek professional legal advice. The marriage of a compelling product with a strong sales team can launch a fashion brand into a massive brand; I’ve seen it happen.
About the Author:
Eric Fitzgerald is an independent business consultant with nearly two decades of experience in the fashion industry. Learn more about Eric here: http://mrow.co/EricFitzgerald
