How Manufacturing is Different From Wholesale In The Apparel Industry?

In the apparel industry, it’s essential to understand the crucial components of the supply chain such as Wholesale and Manufacturing. The manufacturing apparel industry produces apparel products that get to the consumer through the wholesaler and retailers. The wholesaler receives apparel goods from the manufacturers and sells them to retailers. Let’s move forward into explaining more about the similarities and differences between manufacturing and wholesale in the apparel industry.

Apparel Industry in 2022

The apparel industry is one of the most attractive sectors to be in right now, with fashion being one of the largest online shopping categories in 2022. According to the most recent data available, the global apparel market is predicted to generate more than $1.7 trillion in revenue in 2022. Over the past eight to ten years, this represents tremendous growth. The size of the global clothing market in 2013 was little about $1.5 trillion

In terms of generating income and adding jobs, the apparel industry is crucial to the growth of a nation’s economy. Global sourcing and intense price rivalry are forcing a significant change in the sector. The worldwide apparel market has seen good growth as a result of favorable demographic considerations, rising disposable incomes, changes in consumer behavior, and a significant shift toward branded clothing.

What is The Definition of Wholesaling and Manufacturing in The Apparel Industry? 

Wholesaling is the practice of purchasing items in bulk from a manufacturer at a reduced cost and selling them to a retailer for a higher price so they can repackage and then sell the goods to customers in smaller quantities for an even higher price. The wholesaler can discount retailers since they buy goods in bulk from the producer at a lower cost. In general, wholesalers serve as a link between producers and retailers.

Manufacturing is the process of creating products—either manually or mechanically—that the company then sells to a client. Rough materials or smaller portions of a larger product are both examples of items utilized in manufacturing. An extensive production line using sophisticated equipment and trained workers is typically where the manufacturing takes place.

Similarities of Manufacturing and Wholesaling in the Apparel Industry

To start with, both are components of the supply chain, and that’s why many similarities can be found.

1. Both of them use the B2B (Business-to-Business) business model. Manufacturing companies find prospects and manage orders online. To retailers, this business model offers search and social networking functionality for communication, discovery, and buying. 
2. They use the same distribution channel. The second channel of distribution is often used by companies in the clothing industry and it’s called selling through intermediaries. It is also known as an indirect channel of distribution. When a producer wants to get their goods on the market, they use wholesalers and retailers. Retailers and wholesalers buy the product from manufacturing companies and assume the risk if it doesn’t sell well.
3. They sell competing items, manufacturers and wholesalers don’t enter into an agreement thus they can sell competing products. To get their goods to stores, wholesalers frequently collaborate with distributors. Wholesalers occasionally have the option of purchasing products directly from manufacturers without going through a distributor. The wholesaler is not required in this case to reach a deal with the manufacturer. The manufactured products are also marketable to the apparel industry.
4. There is no need for promotional activities for both of them.
5. They don’t have a direct connection with the customers. When manufacturers are finished with the production, can decide whether to sell them directly to a wholesaler or to sell them in their own stores.

Manufacturing vs Wholesaling in Apparel Industry

Let’s analyze the differences between Manufacturing and Wholesaling:

One of the main differences is that they play different roles in the industry. To begin with, manufacturing produces goods to be sold, whereas wholesaling works with distributors whose purpose is to sell goods. Consequently, the goods are provided to different buyers. In other words, manufacturing is selling to wholesaling, in contrast to wholesaling which is selling goods to retail. Working with apparel manufacturers involves adopting the concept of an “extended company.” The idea of an extended firm entails fusing the business strategy with every aspect of the producing machinery, from the customer to the supplier.

Furthermore, manufacturing has high levels of business volume, risk, and investment required. On the other hand, wholesaling has a moderate level of business risk. Another significant difference is the connections between processes. In particular, manufacturing is linked with the wholesaler, whereas wholesaling connects with both the manufacturing and retailer. Lastly, price variation is also a major difference. More specifically it is clear that the manufacturing price variation results from adding the material cost to the cost of making the overhead and the profit. As for wholesale, the price variation results from adding the manufacturing price the overhead, and the profit.

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In A Nutshell

To sum up, manufacturing and wholesaling have not only similarities but also differences in the apparel industry. Principally both are components of the supply chain which is a key factor in determining the success of the apparel business. An effective supply chain that includes manufacturers and wholesalers is crucial in any industry to ensure that the product is delivered to the consumer on schedule and in excellent condition. Therefore achieving the highest level of efficiency through supply chain optimization will result in increased productivity for the company.