Fact of life: traditional wholesaler-to-retailer-to-consumer models are no longer working like they once did, so smart industry execs are discovering new ways to do business. For Lucky Nahum, who once owned the premier fashion store in Rochester, NY before designing/manufacturing men’s sportswear, the new business model is both vertical and mobile!
“Today is not yesterday,” explains Nahum, “not at wholesale or retail. About 10 years ago I began to realize this: fewer stores to sell to, a capacity to produce outpacing a capacity to consume. I saw that the internet presented not only obstacles but opportunities so I devised a system where I could partner with retailers online. This partnership program divided stores across the U.S. and Canada by zones (determined by zip codes); for sales from my website that came from their zones, they’d receive the retail portion of the margin. In the case where more than one retailer resides in said zone, the margin would be split based on the percentage each store bought as an upfront order per season.”
Since the conception of this plan, however, Nahum realized that extending credit had become risky, so he switched to payment upfront. His business further evolved to what he calls Designer Direct To You: selling direct to consumers with the added dimension of a mobile pop-up shop housing about 500 shirts. So far, he’s been doing it locally: when customers purchase online, he delivers their orders with a truck full of related merchandise, a store on wheels, increasing the odds of add-on purchases. “The 500 shirts are backed up by a full warehouse, and a pipeline to Turkey and Italy where the shirts are produced, “explains Nahum. “The real benefit of the truck is partnering up with corporations to offer their employees fashion at a VIP discount. We go to their workplace, offer box lunches and employees enjoy shopping from the truck. We also do private events and house parties. The word-of-mouth factor has been sensational, making this our biggest source of revenue.”
Nahum’s ultimate goal: to build the business to three or four successful trucks and then franchise the concept. “I’m hoping to provide young entrepreneurs the opportunity to own a franchise that allows them to sell fashion with higher profits than owning a specialty store, with the added benefit of a flexible lifestyle. Important in all this is a supply chain without seasons, i.e. factories supplying a regular flow of new product every day. With the seasonal model no longer working, visionary suppliers are adapting to new ways of doing business.”