Retail vs Wholesale

For some wholesalers, moving into the retail space is about taking control, for others it’s more a natural progression.

Cameron Bayley talks to two business owners who have made the move and are enjoying the benefits of giving their wholesale business a retail shop front.

Active ImageWhen Kirsty Andruszko set up her pet accessory business Puppy Phat as a side interest while running a restaurant, it was all supposed to be very straightforward. “Send an invoice, send a product, not dealing with anybody,” she says, summing up the intended process. However, her ideal of a “simple little home-based business” wholesaling her product didn’t last long.

Although she was getting her unique designs into some big-name stores, Andruszko had little control over where they were putting them. She visited one well-known giftware chain and after much searching found her distinct pet tags on the top shelf in the kids’ department. She also found herself in a catch-22 situation: until her products developed a name she couldn’t really dictate how they were displayed, but being tucked out of sight on the wrong shelves was hardly going to boost sales. The only other option was to distribute them to pet stores, which wasn’t her ideal destination for the funky range of products.

Andruszco had already sold her restaurant with no particular plan to move into retail when she came across a retail space in Daylesford, outside of Melbourne. And despite the ninety-minute drive from home, she took a punt and opened her first store, hoping to capitalise on the heavy tourist trade in the area.

Designing the perfect store was something she had in the back of her mind from the early days. “I always imagined the store would look as it now does,” she says proudly, with the design based on a gift fair stall she’d used to launch the products.

Active ImageFor Renae Pilkington, founder and designer of the Papinelle sleepwear range, moving from wholesale into the retail space was a little more organic as her brand began to flourish. “I knew it would sell, it had market acceptance, and so it was just a general step forward. It was very attractive to us that it would all be showcased in the one place.” Having a Papinelle store is a big plus, she feels, in terms of advertising and marketing her collections. Like Andruszko, Pilkington’s decision was largely based around distribution. Although the Papinelle range was successfully being sold in several stores, it was being done in a way that tended to fragment each collection. “Homeware/lifestyle stores would only have the pyjamas. The lingerie stores got the lingerie pieces. It was very hard to have a point of reference with everything,” she explains. “People can really feel the essence of it in a shop.”

When retail space became available in Sydney’s Paddington, an area where the products had sold well through a former stockist, Pilkington saw an opportunity. A design and branding consultancy finalised the location, and took charge of the store’s fit-out.

A major concern for any wholesaler opening a retail outlet is whether or not to continue the wholesaling arm. The key consideration for Andruszko and Pilkington was the brand. For Andruszko, who chose to stop wholesaling not long after opening her store, it was about keeping her products exclusive. With three stores now and franchising just around the corner, her priority is her future franchisees. “Why would someone buy my franchise if they can buy my stuff wholesale? It diminishes the power of it. Then my franchisees don’t have anything special. They’re the one believing in me and my products.”