One important decision facing any merchant getting into the wholesale apparel business is whether they should sell famous name brand or non-branded clothing. There are advantages and disadvantages to either choice. A comparison of the two and a consideration of the alternatives will help a retailer make the best buying decisions for their business.

The biggest advantage to selling the biggest names is also the most obvious one, brand names are well known and come with a built in set of customers. Brand name clothing is highly recognizable to customers since the manufactures spend millions of dollars on marketing and have built up years of positive consumer identification.

Inversely, clothes manufactured by factories overseas or those made by less well-known companies lack the kind of name recognition that drives the sales of famous designer apparel. Of course, this disadvantage is mitigated by the fact that off brands are far cheaper to obtain. The name on the label won’t provide sells but the lower prices certainly might.

While this information presents no clear winner between the two types of apparel it does lay the foundation of the essential debate, the fame and expense of brand names vs. the affordability and obscurity of off brands. So, which to choose is determined by knowledge of a merchant’s perspective customer base.

Any business, particularly a retail business, is dependent on accurate market targeting. If, for example, a business has been enjoying success selling imitation leather handbags and perfumes that compare to certain name brands they are unlikely to have tremendous success selling authentic Versace apparel.

If a merchant’s customer base is largely low income they should probably stick with off brand apparel. People with less income might well want name brands but simply can’t afford them. While it certainly not always they case, generally economics will win out over fashion and status and the lower income customer will stick to the cheaper off brand merchandise.

If the targeted customer base has a higher income it is better to stick to name brands. Generally speaking, even if of similar style and quality affluent customers will select the names they know and believe will communicate to them social status and have a better perceived quality of garment.

There is however a middle ground and the choices don’t have to boil down to strident divisions based on economic affluence. It is possible for a merchant to buy name brand apparel at prices low enough to put them within the reach of nearly any customer.

In order to find this middle ground between name brand recognition and expense many merchants are turning to overstock and returned merchandise to meet their customer’s needs. Overstock apparel are articles that for one reason or another have not sold in a department or high-end clothing store and have been returned to the wholesaler or manufacturer. While the returned items are usually in excellent condition department stores want to clear them out to make way for newer and possibly better selling items.

The returns are then resold to businesses either directly from the wholesaler or through closeout agents. This makes it possible for a small clothing retailer to brand new clothing from leading brands at a fraction of the regular wholesale price.

As this is not a perfect world there are some drawbacks. It is generally necessary to purchase returned merchandise in unspecific bulk quantities. This means that when a retailer purchases overstock clothing they will receive a wide, and often unpredictable, assortment of styles and sizes. Usually the cases of returns offered will be identified by their brand name and the general classification of the type of apparel in them. For example, sporting apparel, lingerie, plus sizes, or the like.

Returned merchandise has become a cornerstone of online and small merchant sales. Internet shoppers are in the habit of expecting merchandise to be less expensive than equivalent items purchased at a traditional brick and mortar store. Without overstock merchandise and wholesale returns many online and discount stores would never be able to meet the demands and expectations of their customers and stuck firmly on the horns of the name recognition versus cost dilemma. Overstock clothing might not work if a business needs a full range of sizes for a specific apparel item, it will certainly provide a low cost manner to buy brand name clothing at lower than expected wholesale prices.

Art Micklewraith is a freelance writer and regular contributor to Wholezilla. He can be reached at Content and Solutions or by email at artmicklewraith@gmail.com.