The clothing online marketplace is growing at an impressive pace and, if it continues to grow, will be a huge opportunity for brands to earn a profit and expand their reach.
But some are questioning the viability of a business model where so much of your income comes from selling clothes, especially as online shopping becomes increasingly competitive with physical retailing.
Wholesale Clothing and Electronics is one of the largest online retailers of clothing and other items in Australia, with more than 500,000 members and nearly 7,000 online retailers worldwide.
Its founder and CEO, Adam Jones, told The Australian Financial Review that the site is now able to pay its staff more than $100,000 per year.
“The value of the business is now so high that it is actually growing a lot faster than the business as a whole,” he said.
“I think a lot of brands have been able to make money off of their clothing.”
They’ve got a large amount of money to spend and have a lot more cash flow coming in.
“Jones said he hoped that the growth of the site would eventually lead to more and more brands adopting the site.”
You can actually see brands actually making money off the site, so it’s an exciting time for retailers,” he explained.”
If they’re really happy with what they’re doing, they will be looking to us.
“Jones, who started the business in 2014, said he started by buying clothes online but that he later bought some from other companies as well.
He said the website has now grown to about $80,000 in revenue and the company has raised more than a million dollars in funding.
He says that most of his business is in the US, Europe and Asia, but he is hoping to open up new retail sites in Australia.”
We’re looking at Australia as a new market and if we can continue to do that, it’s going to be really beneficial for our growth,” Jones said.
He explained that the majority of clothing retailers were doing well, with a significant percentage of their revenue coming from apparel and accessories.
However, some retailers have questioned the value of a wholesale clothing business.”
There is no question that a lot people [who shop on the site] do not know that it’s actually a very different business model from buying a piece of clothing online,” Jones told The AFR.”
Most people don’t really understand the difference between a piece [of clothing] and buying it at a retail store.
“Jones hopes that with his business model, he can start a wholesale business in Australia and that he will be able to keep the clothing business viable.”
What we do is we buy clothes and we resell them to retailers in Australia,” he told The ABC.”
That’s why we’re able to buy a whole bunch of clothes at once and resell it at wholesale rates.
“The Australian Competition and Consumer Commission has told the Financial Review the ACCC is investigating whether the business model violates the Competition and Markets Act.
Topics:consumer-protection,business-economics-and-finance,commerce,fashion,industry,fashion-and.-design,online-commerce,online,australiaContact Kate TaylorMore stories from Australia