LOS ANGELES — December 16, 2019 — Fashion brands have had a rough run the past years with record levels of retailer closings that have dwindled their customer base. Continuing downward industry trends and ever-increasing cost pressures from the explosion of fast fashion have left clothing brands to deal with razor-thin margins and cut-throat practices from retailers. It’s clear that the traditional supply chain in fashion is broken and many clothing manufacturers are turning to a new direct-to-consumer model.
Oonana.com is an online retail marketplace started by manufacturers to provide clothing brands a low cost and low risk platform to sell direct to consumer. With Oonana, fashion brands can simply upload their existing product images on the site and defer the costly marketing and time-consuming customer service to the platform. As a marketplace, Oonana is also able to attract and keep more customers by offering a wider selection of vendors and styles. But unlike other marketplaces, Oonana can offer one central shipment of multi-vendor orders which eliminates multiple packages and higher shipping costs for consumers.
Oonana can do this by being in the heart of L.A.’s Fashion District and treating the district as one large Amazonesque warehouse where proximity allows the consolidation and quick turn of shipments. It also helps that this conglomeration of thousands of fashion businesses in a small area of Los Angeles counts for the majority of the clothing supplied to U.S. retailers nationwide, giving Oonana direct access to a hotbed of hot styles. Best of all, the direct access gives shoppers first availability on the newest styles and the lowest retail prices by bypassing retailers.
Among the many advantages direct-to-retail provides for the vendor as well, none is as important as Oonana’s full retail proceeds going directly back to the fashion brands (Oonana only takes a small commission). The rise of fast fashion over the years has already created an environment of miniscule wholesale margins but now, looming tariffs from Trump’s trade war has brands even more worried about profitability. The prevailing thought is that large retailers have accumulated enough buying leverage that they will simply pass on the costs of the tariffs to the vendors instead of the consumer. And it is this heavy leverage held by retailers that has led to other abusive practices over the years through “warehousing fees”, delayed payments, and the infamous margin make-up- a practice where retailers ask brands for cash back on all products that didn’t sell to target margins. Skewed practices and increased price pressures look only to get worse as the competition in retail shrinks.
Direct to retail marketplaces like Oonana give manufacturers easy access to a large pool of consumer demand and dollars for their creations. It also allows them to provide lower retail prices to the consumer yet earn higher margins than wholesale. More importantly, the direct-to-retail model give the brands control of their products and businesses back in their hands. Now this is a business model with a foundation on which the fashion industry can start to rebuild.
Oonana is an online fashion retail marketplace where apparel manufacturers can directly upload products and sell to end consumers. The site currently sells women’s clothing where customers can find the newest styles at the lowest available retail prices.
Posted December 16, 2019
Source: Oonana Inc.