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Zip Code Protection for Boutiques
by Michael Satterfield
Recently in a business group, a series of questions were posted about, the nature of zip code or radius protect retailers, specifically independent boutiques. My answers in the original thread were well received and generated a lot of discussion. Since that is a private group I decided to share the questions and answers here so anyone could access them. Hope you get something out of it.
Original Post:
"Hi everyone, I wanted to generate some thoughtful conversation with everyone (boutique + brand) today based on our conversation at The Boutique Summit about the importance of zip code protection.
Please use this thread to ask questions, get feedback, and generate thoughtful direction for the future! I know there are SEVERAL brands wondering about how to best handle this, and frankly, it can be a little dramatic trying to keep multiple parties happy."
1. Is zip code protection still relevant? Or is mile radius better?
I don’t think it is as important. I believe it comes from an old mindset that is no longer applicable in the current retail climate. While we don't offer any kind of zip code protection we do check out the applicants and make sure they are a good fit and if they are in the same area as one of our existing retailers we make a point to double check. Since our brands have such a broad range of products we might have two retailers in the same town they may carry a completely different product mix. The only exclusive products we protect are of course private label and our collaboration products we do with some of our largest retailers. Since we have some retailers that only buy one of our lines, like jewelry or signs, blocking out retailers who want to carry our jean and menswear line doesn't make sense. Our apparel brands have been around for over a decade now and it has never been a problem for our retailers.
2. What about online boutiques wanting to purchase if they are in a location with another retailer?
Online boutiques are just that online, blocking someone online who sells globally because there is a local retailer who stocks products doesn't make sense. But vetting them is important and making sure that the right online retailers get our products is key. We ship to retailers in every state and 26 countries, we have online retailers, catalogers, and event retailers, trying to carve up that map would be insanely complicated.
3. What if your markets are different?
This is why we offer a wide selection of product lines from Western to more of a boho vibe.
4. Should volume and minimum orders matter? Should priority be given to volume and history?
Of course, I can't tell you how many times the person who is calling upset that we won't give them the exclusive rights to an area is the one who doesn't even carry a full run of our products. Or they have spent $300 in the last year and are expecting us to block off an entire city or county for them. If exclusivity is something you demand, we have developed custom private label products and done production for some of the best-known boutiques in the US and abroad. From producing custom branded apparel for a store to a collaboration where we produce products specifically for that retailer under one of our own brands. It has done well we have produced products for Japanese retailers and even done production for Coach.
5. What best practices do you see?
With the high turnover of boutiques opening and closing, online sales, and the speed of how products come to market these days, it doesn't make sense for brands to provide zip-code production. It is more of a personal connection we make, while it takes a lot of time, we not only send an email and password we take the time to call every new account and talk to them, answer questions, and make sure they are a good fit. We also hit the road and visit our retailers, take photos to share, and promote them through social.
In the end, zip code protection provides a false sense of security to the retailer, today you as the boutique are selling to a hyperfocused or localized client base, customers are watching your Instagram story and swiping up to order, not looking up the authorized retailer in their area.
Original Post:
"Hi everyone, I wanted to generate some thoughtful conversation with everyone (boutique + brand) today based on our conversation at The Boutique Summit about the importance of zip code protection.
Please use this thread to ask questions, get feedback, and generate thoughtful direction for the future! I know there are SEVERAL brands wondering about how to best handle this, and frankly, it can be a little dramatic trying to keep multiple parties happy."
1. Is zip code protection still relevant? Or is mile radius better?
I don’t think it is as important. I believe it comes from an old mindset that is no longer applicable in the current retail climate. While we don't offer any kind of zip code protection we do check out the applicants and make sure they are a good fit and if they are in the same area as one of our existing retailers we make a point to double check. Since our brands have such a broad range of products we might have two retailers in the same town they may carry a completely different product mix. The only exclusive products we protect are of course private label and our collaboration products we do with some of our largest retailers. Since we have some retailers that only buy one of our lines, like jewelry or signs, blocking out retailers who want to carry our jean and menswear line doesn't make sense. Our apparel brands have been around for over a decade now and it has never been a problem for our retailers.
2. What about online boutiques wanting to purchase if they are in a location with another retailer?
Online boutiques are just that online, blocking someone online who sells globally because there is a local retailer who stocks products doesn't make sense. But vetting them is important and making sure that the right online retailers get our products is key. We ship to retailers in every state and 26 countries, we have online retailers, catalogers, and event retailers, trying to carve up that map would be insanely complicated.
3. What if your markets are different?
This is why we offer a wide selection of product lines from Western to more of a boho vibe.
4. Should volume and minimum orders matter? Should priority be given to volume and history?
Of course, I can't tell you how many times the person who is calling upset that we won't give them the exclusive rights to an area is the one who doesn't even carry a full run of our products. Or they have spent $300 in the last year and are expecting us to block off an entire city or county for them. If exclusivity is something you demand, we have developed custom private label products and done production for some of the best-known boutiques in the US and abroad. From producing custom branded apparel for a store to a collaboration where we produce products specifically for that retailer under one of our own brands. It has done well we have produced products for Japanese retailers and even done production for Coach.
5. What best practices do you see?
With the high turnover of boutiques opening and closing, online sales, and the speed of how products come to market these days, it doesn't make sense for brands to provide zip-code production. It is more of a personal connection we make, while it takes a lot of time, we not only send an email and password we take the time to call every new account and talk to them, answer questions, and make sure they are a good fit. We also hit the road and visit our retailers, take photos to share, and promote them through social.
In the end, zip code protection provides a false sense of security to the retailer, today you as the boutique are selling to a hyperfocused or localized client base, customers are watching your Instagram story and swiping up to order, not looking up the authorized retailer in their area.
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