How to turn discount clothes into a profitable business

mystery boxes

How to turn discount clothes into a profitable business

The fashion and apparel industry has been hit hard by the COVID-19 pandemic, with many recognisable names shutting their doors permanently.

Even for those who have survived, people aren’t buying like previous seasons, leaving a surplus of clothing that would normally be sent to outlet malls and discount stores.

But if no one is buying from those either, then what is to be done with all this surfeit stock?

An intriguing new solution has emerged, one which might become commonplace even after COVID has long gone.

The effect of COVID-19 on the fashion industry

We’ve spoken before about the pandemic’s damage on the apparel industry and how everyone, from CEOs to factory workers, have been affected.

Businesses of all shapes and sizes had to slow down or completely stop operations in 2020, cutting hours and laying off staff.

The poorest countries in the supply chain were hit the hardest, with manufacturing hubs like Bangladesh, India and China losing millions of jobs.

In the western world, some of the biggest names in fashion weren’t immune to the virus either.

Arcadia Group, which owns brands like Topshop and Miss Selfridge filed for bankruptcy in the UK, while in the USA, household names like JC Penny also went under.

closing down sale

Selling surplus stock

With all these apparel companies closing their doors, it left tens of thousands of items sitting in warehouses, unsold.

Even for brands that are still in business, sales are massively down, bringing the same problem of surplus stock.

The question is, how do you sell it without losing money?

Adversity breeds innovation

Two upstart companies, Heat and Scarce, have found a way to sell surplus clothing online.

Offering so-called “luxury mystery boxes” to customers, each box contains designer name items, with the RRP value of those items 2-3 times the cost of the box.

For those who spend big on designer names every year, the box is a no-brainer.

This box, for example, contains a curated assortment of 1-3 pieces, with possible items including anything from Dior to Gucci.

It’s available for $698, but the RRP of what’s inside has a value up to $1700.

There is a catch though; customers don’t know what they’re getting until the box arrives.

Opening mystery box

Why mystery boxes are a great idea

The mystery boxes are sold by gender, and users can add their pants, shoe and top sizes ensuring they can actually wear what’s sent to them.

It’s this “mystery” of what you get which is the unique selling point, rather than the money saved.

One of the co-founders of Heat explained that he and his partner discover this trend of opening mystery boxes on YouTube, and their idea for a company sprang from there.

The concept is a great idea because it taps into a trend that many younger people are already into.

Add to that the great deals they’re getting on designer clothes, and it’s no wonder sales are through the roof.

At the same time, fashion brands, stores and warehouses all sell their unwanted extra stock.

Everybody wins.

A solution for over-stocked retailers?

With the world of retail on its head thanks to the pandemic, any way to get rid of surplus stock while making a profit is welcome news.

Fashion brands, apparel manufacturers and large clothing departments might all be looking into mystery boxes as a future endeavour.

But it’s not just for the fashion industry.

Poor sales and excess stock have been a problem across the board for everyone in the retail business, not just apparel.

Everything from camping equipment to gadgets can make use of the mystery box approach, which in some form or other, has been around for a long time.

For fashion brands, this is also a better way to get rid of stock, instead of it invariably ending up in a landfill without even being worn.

Adapting to new ideas

These mystery box tactics are a novel way of dealing with an unforeseen pandemic.

With over 50 years of experience in the apparel industry, we have seen our fair share of surprises and bumps in the road, but we’re still here.

The reason is, we can adapt to whatever the industry – and life- throws at us.

COVID-19 hit the world hard, with many businesses unable to cope with the pressure.

We are still here, not due to luck, but foresight, quick decision making, and dedication to our clients.

In a post-COVID world, we are constantly assessing how our business model meets the new normal.

Our experience, professionalism, and global connections can help guide you through the most trying times, ensuring you come out the other side with your business intact.

If you would like to know more about how we can help you and your business, then contact us today and speak to one of our friendly and professional staff members.