Wholesale’s virtuous cycle: your products are selling at the highest possible margin, there is no inventory left in your warehouse and your retailers are screaming for more.

Operating in the virtuous cycle might sound like an unattainable dream, but it might be more achievable than you think. In order to operate in the virtuous cycle, your company will need to meticulously and purposefully adhere to calendars and sacrifice short-term sales opportunities for long-term goals.

The hardest part about getting into the virtuous cycle is breaking current habits: not accepting those late preseason orders, over-ordering products to hit a sales goal, or focusing too much on immediate gains. Below we’ve outlined 5 critical components to a wholesale virtuous cycle and suggested some ways to get your train on the right track. Working to develop processes and cultures that incorporate these ideas will allow your brand to drive full steam ahead!

Wholesale Strategies: The 5 Elements of Wholesale’s Virtuous Cycle

#1:  Collect Preseason Orders Before Placing Factory PO’s

Once your preseason order deadline has been determined by your production timeline (see below), set the tone by rewarding good behavior: incentivize your sales reps and buyers. Preseason discounting and trade show specials will encourage retailers to place orders while they still have open to buy dollars available. In addition to their standard commission, foster healthy competition among reps by publishing each reps percent of sales towards their goal and offering prizes accordingly. Once your brand picks up speed, customer service teams will spend less time putting out fires and can be incentivized to proactively reach out to your customers as well.

Jumping onto the virtuous cycle track from this stage is easy in theory but painful in practice because it means you’ll have to reject or ship incomplete any orders that come in past the preseason deadline. While it may feel uncomfortable to turn away business, the best way to ensure retailers adhere to your deadlines in the future is to stick to your guns in the present.

#2: Accurately Forecast & Plan Your Production for Demand

The easiest way to accurately forecast and plan for next season’s deliveries is to collect orders prior to placing factory PO’s (see above). Given the significance of cash-flow for a consumer goods brand, the importance of accurately buying product cannot be overstated. Having additional inventory on the shelves of your warehouse can be crippling to any business, regardless of size. Not only do cash constraints mean that are you unable to invest in additional product or marketing efforts, but you also erode your margins quickly by having to sell your prior season’s product at a discount.

To jump your train onto the virtuous cycle track from the forecasting and planning stage, consider ordering exactly to the preseason demand or perhaps even 5% less than it. While the missed opportunity of late preseason orders and in-season re-orders may hurt in the short term, this outcome is far better than too much inventory, and the pent up demand will set the stage for on-time preseason orders in the future.

#3: Develop a Production Calendar and Hit Delivery Dates

The best way to execute a production calendar and hit delivery dates is to receive an accurate forecast and plan your production around demand (see above). In conjunction with this data, a meticulously prepared production schedule that accounts for every link in the supply chain as well as the possibility of unforeseen events will enable you to hit your delivery dates. After design, development and sampling, production calendars often include opening molds and reserving space on the factory production line. Standard production lead times should account for national holidays and shipping timetables should include additional time for customs importation as well as local travel to your warehouse.  Once received and accounted for, getting your products on retail shelves before your competitors will help you establish trust and build a relationship with your retailers.

Jumping onto the virtuous track at this point in the cycle can be extremely challenging and the solution may be to skip an entire season. Although this can have a hugely negative impact on your brand, you will ultimately have to choose between delivering late, risking poor sell-through and having the non-virtuous cycle repeat itself versus cutting your losses on development and samples, rolling over whatever products you can and start planning for the next season. If you’re a smaller brand or startup in this scenario, keep in mind that admitting defeat on one season may enable you to live and fight another day.

#4: Drive Sell-Through and Support Your Retailers

Wholesale businesses that deliver on time have the best chance for sell-through success and delivering on time starts with a well-executed production schedule (see above). More so than ever, the “if you’re not first, you’re last” expression is ringing true for competitive brands in retail shops and online. Without overlooking the importance of making a well-designed and developed product in the seasonable or fashionable colors, having more time on the shelves earlier in the season is one of the biggest advantages a brand can have.

In addition to on-time delivery, servicing your accounts by providing in-store clinics for more technical products or simple sales contests for store employees will help drive awareness of your brand and ultimately, sell-through of your product.  Take it a step further by launching or building out your retail marketing team to focus on key accounts and store employees. Getting these influencers on board with your product and brand is a great step in getting your product out the door.

Also, plan your marketing campaigns well in advance of your launch and remember that it’s all about the details. Engage customers across multiple platforms – web, social media, events of all shapes and sizes, from grass roots to larger scale music festivals and charitable events.

#5: Collect Re-Orders & Bigger Preseason Orders – Perpetuate the Cycle

The virtuous cycle completes itself and starts again when retailers have sold through your product and they want more. The teeter-totter between ordering to demand and having inventory on-hand to chase sell-through will change as your brand gains traction with consumers and confidence in forecasts and production timelines increase.

Regardless of what stage you are currently in, getting your brand train on the right track is possible – stay focused on the big picture and you’ll be fine.