When we think of a merchandising plan, the usual image that comes to mind is a clothing retailer using different strategies and planning methods to generate more sales. However, a merchandising plan is equally essential when it comes to manufacturing. The roles of a retailer and manufacturer may differ significantly when making a merchandising plan for their fashion business but the end goal remains the same – that is to optimise sales and build loyal customers.
Having a clear understanding of the differences between the two functions is essential to making our brand run smoothly. In this blog, we will realize manufacturers’ roles in merchandising plans and how they differ from retail ones.
Understanding Merchandising in the Manufacturing Sector
Manufacturing revolves around ensuring good-quality production and its distribution to retailers and B2B customers. In manufacturing, the merchandising plan is mainly focused on providing expedited delivery of raw materials while keeping them cost-effective and of good quality. When we compare this to retail, they focus more on customers and their demands.
The Crucial Elements of a Manufacturing Merchandising Plan
1 Product Development This is the beginning of the merchandising plan for manufacturers, which begins with designing their clothing. They first have to find suitable material for their design. This process involves a lot of trial and error to ensure quality is the best. This is to find a good-quality product that also meets the demands of the industry.
2 Demand Predictions For the manufacturers, demand prediction is a boon if they do it accurately, as it helps them get ahead of their competitors. They are constantly analyzing the market, sales, and trends. By doing so, they can plan their productions ahead of time.
3: Managing the supply chain to maintain a good inventory and maintain smooth production. To keep a stable supply of raw materials and safe contracts, they usually maintain good relations with suppliers.
4 Production scheduling Production must be set ahead to minimize standby time and increase output to meet consumer demands. They also have to coordinate all departments involved before time to avoid running out of stock and giving a timely delivery to retailers.
5 Quality Control Regular quality checks are essential for manufacturers, as they want to meet the retailers’ standards. If this doesn’t happen, they might face returns or exchanges.
6 Cost management Manufacturers need to plan out the cost of everything, like materials, workers, etc., without compromising the quality of the product.
How are manufacturing and retail merchandising plans different?
You may have noticed a few major differences that separated retail and manufacturing. The primary focus for retail is generating the maximum possible sales, and for manufacturing, it is producing good products while maintaining costs.
Similarly, the target audience for both is different too.
For manufacturers, the target audience is much broader as they supply to many different retailers and distributors. They have to produce clothes for a broader niche. In comparison, retailers deal with the end customers and can focus on their particular demands.
When it comes to core functions, the manufacturers ensure that the production is scheduled, the deliveries are done on time, and the production happens at the lowest cost and highest quality possible.
Retailers are pivoting to bringing in the best merchandise that matches their needs, marketing, and maintaining a profit margin at a price that doesn’t put off their consumers.
Both sectors require forecasting of demands, but they differ as manufacturers rely more on market trends and retailers focus more on what their consumer base will be coming in for. This demand prediction is even more detailed for manufacturers as they calculate the production units so that they aren’t over or understocked.
Retailers may have to worry about this a bit less as they might readily order or put items on sale. This story is different for manufacturers as production is a long, time-consuming process.
There are many more differences, and some are listed below.
| Feature | Retail Merchandising | Manufacturing Merchandising |
| Primary Focus | Selling products to end consumers | Efficiently producing goods |
| Supply Chain vs. Consumer Experience | Emphasises consumer experience | Focuses on supply chain and production efficiency |
| Demand Forecasting | Predicts consumer behaviour and trends | Predicts needs of retailers or B2B customers |
| Inventory Management | Ensures stores are stocked | Manages raw materials and finished goods |
| Cost Control | Maximises profit margins | Reduces production costs and improves efficiency |
| Product Development | Curates product selection | Designs and produces products from scratch |
| Time Horizon | Shorter, focused on seasonal trends | Longer, focused on production cycles and supply chain stability |
In conclusion, while there are plenty of differences between these sectors they work together and have their merchandising plans intertwined.
Conclusion
We hope this list of The Role of a Merchandising Plan in Manufacturing: Key Differences from Retail gave you a good starting point for you to build something that stand the test of times. If you are looking to start a clothing brand, we recommend that you read our guide – how to start a clothing brand.
If you have already started a fashion brand and you are looking for suppliers, do read our guide on how to find clothing manufacturers and do not forget to download our checklists. If you want to get in touch with us, please connect with us here.
We also have a separate section – Commonly asked questions about the most expensive clothing brands, it is worth checking out.
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Learn more:-
- Merchandise planning for buying offices
- How to create a merchandise plan for a retail brand
- Why Retail Merchandising plans focus on consumer trends
- Compare merchandising planning across retail brands vs. manufacturers vs. buying office
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