Wholesaling and Pricing

Most are unaware of the wholesale system in Japan and how it actually differs from other markets. An inside source gives insight into how, for starters, conventionally it is the buyers that set the retail price margins on their own prior to purchasing. Japanese fashion brands however set their own retail prices under guidelines found in fear marketing. This skews the profit margins greatly and cannot be compared with international finance. For instance, wholesale prices of 50%-60% of retail pricing is considered common, with certain discounts naturally depending on order amount or sheer quantity. Most brands however delve even lower, with wholesale prices reaching as low as 25%-35% of the item’s “in-store to the customer” price. This would ultimately break down to approximately 30% of the sale going to cost of the garment, 30% to the brand, and 40% to the store. Furthermore, the production affects pricing as well – traditionally the big brands’ method of production is purely in-house, while Japanese independent brands hire outside agents to aid in aspects such as pattern-making, production management and so on. Outside hire not only benefits the brand with unique styling that may differ season to season, but also requires independent salaries and a higher overall budget. Material procurement is also a factor, where Japanese brands produce zippers, cloth and buttons originally rather than source from other countries. A relative lack of trade show attendance solidifies this point; most Western brands visit such events as Premiere Vision in Paris on an annual basis to assemble their collections. Finally, one must keep in mind that the wages for workers in Japan is incomparable to those of Chinese or Indian workers, which in the end again goes into cost.

Customer Service

While Western patrons may not take notice of the shop they’re in, consumers in Japan tend to take their shopping experience a little more seriously. You’ll often find features in a boutique available that may not seem obvious or conventional, but are certainly appreciated. One retail outlet of considerable mention is A Bathing Ape, notoriously known for their finite details in their products but also in their retail locations. Exclusively constructed by famed design firm Wonderwall, their use of aluminum and concrete is only the tip of the iceberg in the appeal of the BAPE STORE chain. Keen eyes will notice the camo-embossed leather sofas, Ape Heads seared into the hangers, custom-made amenities like receipt holders and credit card trays, jaw-dropping displays of excess, etc. While all of this may seem unnecessary, customers find themselves visiting, returning and even traveling to new shops simply to experience the atmosphere. To further support the shopping, customers are treated with services not available outside of Japan, such as loyalty cards, item transfers from store to store, and on occasion even free delivery. Subscribers to BAPE MANIA, an exclusive annual membership loyalty program, are given special deals and exclusive gifts sent to them in the mail, plus a select number of “Premium Days” in the year where they can enjoy discounts on a large number of items.