Wholesale now 57% of brand revenue and most profitable channel: Joor data

Wholesale has reclaimed its position as the dominant revenue stream and most profitable sales channel for fashion brands, reversing a decade long shift toward direct to consumer models. A survey of 350 brands conducted by Joor, the digital wholesale platform, found that wholesale now represents 57% of total brand revenue in 2025/26, while 52% of respondents identified wholesale as their most profitable channel.

The findings mark a significant reversal from the mid 2010s, when brands invested heavily in owned stores and e-commerce to capture higher margins and customer data. That strategy has faltered as customer acquisition costs have climbed, return rates have soared, and the operational complexity of direct fulfilment has eroded profitability.

For fashion executives, the data confirms what many have experienced firsthand: wholesale partnerships offer predictable order books, lower marketing costs, and transfer of inventory risk to retail partners. The challenge now is to modernise wholesale operations with the same digital tools that brands applied to direct channels, while avoiding the mistakes that made direct to consumer unsustainable at scale.

Why has wholesale become more profitable than direct to consumer?

The economics of direct to consumer have deteriorated sharply over the past three years. Customer acquisition costs for digital channels have increased as privacy changes from Apple and regulatory restrictions have reduced targeting effectiveness. Meta advertising costs per thousand impressions rose throughout 2024 and 2025 as competition for attention intensified. Brands that once acquired customers for USD 20 to USD 30 now report costs above USD 60 for apparel categories.

Return rates compound the problem. Online fashion purchases generate return rates between 25% and 40% depending on category, with footwear and occasion wear at the higher end. Each return incurs reverse logistics costs, refurbishment or disposal expenses, and lost margin on items that cannot be resold at full price. A 2024 study by the returns management firm Optoro estimated that returns cost U.S. retailers USD 743 billion in 2023, with fashion accounting for a disproportionate share.

Wholesale transfers these costs to retail partners. Brands receive purchase orders months in advance, manufacture to known quantities, and ship in bulk to distribution centres rather than individual consumers. Marketing costs fall because retailers provide physical and digital shelf space, seasonal campaigns, and access to loyalty programmes with established customer bases. Inventory risk also shifts: once goods are invoiced, retailers own the stock and manage markdowns.

Joor's survey data shows this translated into margin advantage. While the company did not publish absolute margin figures, 52% of brands identified wholesale as most profitable despite wholesale typically carrying lower gross margins than direct sales. The difference lies in operating costs: wholesale avoids the customer service, warehousing, picking, packing, and individual shipment expenses that consume direct to consumer margins.

How has the wholesale share of revenue changed over time?

Wholesale's 57% revenue share in 2025/26 represents a recovery from a low point around 2019 to 2021, when direct to consumer enthusiasm peaked. Industry estimates from that period suggested wholesale had fallen below 50% of revenue for many contemporary and premium brands as they opened flagship stores and invested in e-commerce infrastructure.

The pandemic initially accelerated direct to consumer growth as physical retail closed and brands shifted inventory to their own websites. However, the reopening exposed the unsustainability of the model. Brands that had closed wholesale accounts to protect direct margins found themselves without the multi-channel distribution that resilient competitors maintained.

Published financial results from publicly traded fashion companies illustrate the pattern. Capri Holdings, which owns Versace, Jimmy Choo and Michael Kors, reported in its fiscal 2024 annual report that wholesale revenue accounted for approximately 42% of total revenue, while retail stores and e-commerce together contributed 58%. The company has subsequently emphasised rebuilding wholesale partnerships, particularly in international markets.

The shift back to wholesale has been particularly pronounced among digitally native brands that initially eschewed traditional retail. Many have recognised that wholesale provides the physical presence consumers still value for discovery and trial, without the capital investment and long term lease commitments of owned retail.

Which brands have successfully scaled through wholesale partnerships?

Ganni, the Danish contemporary brand, has made wholesale central to its global expansion strategy. The company, which generates annual revenue exceeding EUR 200 million, maintains a balanced channel mix with wholesale representing a significant portion of sales. In 2024, Ganni announced expanded wholesale partnerships with Nordstrom in the United States and Selfridges in the United Kingdom, alongside selected independent boutiques.

The brand's approach focuses on selective distribution rather than mass availability. Ganni limits the number of doors per market and works closely with retail partners on merchandising and in store presentation. This maintains brand cachet while leveraging retail partners' customer relationships and physical locations. The company has stated that wholesale partnerships allow faster geographic expansion with lower capital requirements than opening owned stores.

Another example comes from the athletic and lifestyle sector. On Running, the Swiss performance footwear brand, has scaled rapidly through a hybrid model that emphasises premium wholesale partnerships. The company's 2023 annual report showed wholesale revenue of CHF 689.7 million, representing approximately 60% of total net sales of CHF 1.8 billion. On Running works with specialty running retailers and selected department stores, providing technical training and point of sale materials to ensure proper product presentation and fitting.

The company's wholesale strategy has supported geographic expansion while maintaining brand positioning. On Running's 2024 fiscal year results, released in early 2025, showed continued wholesale growth alongside direct to consumer channels, with wholesale partnerships providing entry into new markets before the company invests in owned retail or regional e-commerce infrastructure.

What technology infrastructure do modern wholesale operations require?

Digital wholesale platforms have become essential infrastructure, replacing the physical showrooms and paper order forms that dominated until the mid 2010s. These platforms allow retailers to browse collections, place orders, and track shipments digitally, while brands gain real time visibility into order patterns and retailer performance.

Joor itself operates one such platform, connecting thousands of brands with retailers globally. The company reported in 2024 that its platform processed over USD 20 billion in wholesale transactions annually, with order books increasingly placed during virtual market appointments rather than physical trade shows. Digital showrooms allow buyers to review full collections with filtering by category, price point, and delivery date, then submit orders that flow directly into brand order management systems.

Integration with enterprise resource planning and inventory management systems has become critical. Brands need to allocate available production capacity across wholesale accounts, reserve inventory for direct channels, and provide accurate delivery dates at the moment of order. Manual processes create errors, double bookings, and customer service friction that damages wholesale relationships.

Data exchange has also evolved. Leading wholesale partnerships now include sharing of sell through data, inventory levels, and customer demographics. Retailers provide weekly or monthly reports showing which styles are performing, enabling brands to adjust production and offer reorders on bestsellers. This collaborative approach benefits both parties: brands reduce overproduction and markdowns, while retailers improve in stock rates on high demand items.

How are department stores and multi-brand retailers adapting to renewed wholesale importance?

Department stores and specialty retailers are upgrading their wholesale proposition to attract brand partners. This includes modernising technology infrastructure, improving payment terms, and offering value added services that justify wholesale margins.

Nordstrom has invested in its wholesale platform as part of a broader strategy to differentiate from off-price and fast fashion competitors. The retailer works with brands on exclusive capsule collections, in-store events, and digital content that highlights product stories. Nordstrom's fiscal 2024 results showed that the company's anniversary sale and seasonal campaigns drive significant traffic to wholesale brand partners, creating value beyond simple distribution.

In the United Kingdom, Selfridges has positioned itself as a partner for emerging and contemporary brands seeking premium placement. The retailer operates a curated buying model, with dedicated teams for different categories who work with brands on assortment planning and in store merchandising. Selfridges has also created dedicated spaces for rotating brand residencies and pop-up concepts, giving wholesale partners opportunities for storytelling and customer engagement that pure e-commerce cannot match.

Payment terms remain a friction point. Traditional wholesale often involves 60- to 90-day payment cycles, creating cash flow challenges for smaller brands. Some retailers have responded by offering early payment options, sometimes facilitated by third party financing, to make wholesale more accessible to emerging labels. These arrangements typically involve a small discount in exchange for payment within 10 to 15 days of invoice.

What are the risks and limitations of wholesale dependence?

Over-reliance on wholesale creates its own vulnerabilities. Brands that derive most revenue from a small number of retail accounts face concentration risk: the loss of a major customer or a retailer bankruptcy can eliminate significant revenue overnight. The struggles of department store chains over the past decade have left many brands with bad debt and cancelled orders.

Margin pressure remains real. Wholesale typically requires brands to sell at 40% to 50% of retail price, leaving retailers room for their own margins and markdowns. Brands must manufacture efficiently and control operating costs to achieve acceptable profitability at wholesale prices. This becomes harder as input costs rise and minimum wage increases affect production.

Brand control also diminishes in wholesale channels. Retailers determine merchandising, pricing, and promotional strategy. A brand's products may be discounted heavily during sale periods, appear next to competitors, or be presented in ways that conflict with brand positioning. Luxury brands in particular have limited wholesale distribution to maintain exclusivity and control over customer experience.

The loss of customer data is another concern. When a consumer purchases through a retailer, the brand typically does not capture the transaction details, email address, or shopping behaviour. This limits the ability to build direct relationships, conduct lifecycle marketing, or understand customer preferences. Some wholesale agreements now include data sharing provisions, but implementation varies widely.

How does wholesale performance vary by product category and price point?

Wholesale economics and strategic importance differ significantly by category. Footwear and accessories show particularly strong wholesale performance because these categories benefit from physical trial and have lower return rates when purchased in-store. Handbags, small leather goods, and shoes are also easier to merchandise in multi-brand environments than ready-to-wear, which requires more space and styling context.

Contemporary and premium brands at price points between mass market and luxury have embraced wholesale most enthusiastically. These brands lack the resources for extensive owned retail networks but need quality points of sale to justify their pricing. Wholesale partnerships with Nordstrom, Bloomingdale's, specialty boutiques, and international department stores provide access to affluent customers without the overhead of owned stores.

Luxury brands take a more restrictive approach. Companies such as Hermès, Chanel, and Brunello Cucinelli limit wholesale to a small number of prestige department stores and maintain strict control over presentation, discounting, and e-commerce availability. For these brands, scarcity and experience are part of the value proposition, making selective distribution essential even as wholesale contributes meaningfully to revenue.

Activewear and athleisure occupy a middle ground. Brands such as Lululemon have built large direct to consumer businesses but also maintain wholesale partnerships with specialty sporting goods retailers and international distributors. The category benefits from wholesale when retailers offer fitting expertise, community programming, or access to specific customer segments such as serious runners or yoga practitioners.

What role do trade shows and market weeks play in digital wholesale?

Physical trade shows and market weeks have not disappeared despite digital wholesale platforms. Instead, they have evolved to focus on relationship building, product education, and collection launches rather than order writing. Buyers use trade shows to discover new brands, meet with existing partners, and understand seasonal trends, then place actual orders through digital platforms in the weeks that follow.

Major markets such as Pitti Uomo in Florence, Coterie and Magic in Las Vegas, and Paris Fashion Week trade shows continue to attract thousands of attendees. However, the nature of these events has shifted. Brands invest in experiential showrooms and presentations that communicate brand story and product innovation, rather than simply displaying merchandise for ordering.

The COVID-19 pandemic accelerated the separation of discovery and transaction. When physical markets closed in 2020 and 2021, brands and buyers proved that orders could be placed digitally. As markets reopened, many participants appreciated the efficiency of digital ordering while recognising the value of in-person connection for building trust and understanding product quality.

Regional market weeks for domestic wholesale have seen more significant decline. U.S. regional markets that once served independent boutiques have consolidated or closed as buyers increasingly travel to major markets or conduct business entirely digitally. This has created challenges for smaller retailers with limited travel budgets and for emerging brands that relied on regional markets for exposure.

Frequently asked questions

What should fashion companies do now?

1. Audit channel profitability rigorously Calculate true operating profit by channel, including fully loaded customer acquisition, returns processing, fulfilment, and overhead costs, not just gross margin. Many brands discover that apparently high-margin direct channels are loss-making after all costs.
2. Invest in wholesale infrastructure Implement digital showroom platforms, integrate order management with inventory and production systems, and create processes for rapid retailer communication. Wholesale partners expect the same operational excellence as direct customers.
3. Segment wholesale accounts strategically Classify retailers by volume, geography, customer demographic, and brand alignment. Provide differentiated service levels, from key account management for major partners to efficient self-service for smaller doors. Not all accounts deserve equal investment.
4. Negotiate data sharing agreements Include sell-through reporting, inventory visibility, and anonymised customer demographic data in wholesale contracts. Regular data exchange allows responsive production and reduces markdown risk for both parties.
5. Develop wholesale-exclusive product Create capsule collections, colourways, or SKUs available only through retail partners. This reduces channel conflict, gives retailers merchandising differentiation, and protects direct to consumer margins on core styles.
6. Redesign trade show participation Shift budget from large generic booths toward immersive brand experiences, private appointments with key accounts, and product training. Use physical markets for relationship depth, digital platforms for transaction efficiency.
7. Build retailer enablement programmes Provide sales training, point-of-sale materials, visual merchandising guidelines, and product knowledge resources. Wholesale success depends on retailer staff effectively presenting and selling your product.