Wholesale now 57% of brand revenue and most profitable: Joor 2024 data

Wholesale has regained its position as the dominant revenue channel for fashion brands, accounting for 57% of total revenue in 2024 and delivering higher profit margins than direct-to-consumer operations, according to Joor's latest annual wholesale report. The data marks a clear shift from the pandemic era, when brands aggressively expanded their own e-commerce and retail operations, and signals a recalibration of channel strategy as executives confront the true cost of customer acquisition and fulfilment in owned channels.

Why is wholesale more profitable than direct-to-consumer?

The profitability advantage stems from structural cost differences between channels. Wholesale eliminates or significantly reduces customer acquisition costs, which have risen sharply across digital advertising platforms in recent years. Brands selling through multi-brand retailers and department stores also avoid the fixed costs of operating their own stores or e-commerce infrastructure, including rent, staffing, warehousing, and last-mile delivery. While wholesale typically carries lower gross margins due to retailer mark-ups and trade discounts, the reduction in operating expenses often results in superior net margins at the bottom line.

Industry analysts have noted this dynamic for several years. The economics of direct-to-consumer became less favourable as digital marketing costs increased and consumers proved less loyal to single-brand shopping than early DTC evangelists predicted. Wholesale partnerships allow brands to access customer traffic that retailers have already built, shifting marketing investment from acquisition to brand building and product development.

How has the channel mix shifted since the pandemic?

The 57% wholesale share in 2024 represents a reversal of trends seen during 2020 and 2021, when store closures and lockdowns forced consumers online and brands rushed to build direct relationships. Many fashion companies reported direct-to-consumer shares approaching or exceeding 50% during that period, driven by e-commerce growth rates above 30% in some quarters. As physical retail reopened and digital growth normalised, brands found themselves managing costly duplicative infrastructure and competing directly with their own wholesale partners.

The rebalancing toward wholesale reflects both strategic choice and market reality. Brands have closed unprofitable stores, reduced digital marketing spend, and renewed focus on selective wholesale distribution. At the same time, multi-brand retailers have improved their own digital capabilities and inventory management, making them more attractive partners. The result is a more balanced portfolio that prioritises profitability over channel control.

What are the key drivers of wholesale profitability in 2026?

Several factors contribute to wholesale's margin advantage in the current environment:

• Lower customer acquisition costs: Brands pay wholesale discounts but avoid digital advertising, store marketing, and performance marketing fees that can exceed 30% of direct-to-consumer revenue.
• Reduced operational complexity: Retailers handle fulfilment, customer service, returns processing, and inventory risk at the point of sale, reducing headcount and technology requirements.
• Capital efficiency: Wholesale orders provide cash flow earlier in the season and reduce the working capital needed to fund inventory speculation in owned channels.
• Geographic reach: Multi-brand retailers provide access to markets where brands lack the scale to operate profitably on their own, avoiding costly international expansion.

These advantages are most pronounced for emerging and mid-sized brands that lack the resources to build global retail and e-commerce operations at scale. Even large luxury groups have acknowledged the value of wholesale partnerships, particularly in regional markets and for secondary product categories.

How are brands changing their wholesale strategy?

The renewed focus on wholesale has prompted brands to approach the channel more strategically than in previous decades. Rather than pursuing maximum distribution, brands are curating partnerships based on alignment with brand positioning, full-price sell-through rates, and data-sharing capabilities. The goal is to avoid the margin erosion that comes from excessive discounting and off-price liquidation.

Technology has enabled more sophisticated wholesale management. Digital showrooms and order management platforms allow brands to control assortment planning, monitor inventory levels at retail partners in near real-time, and respond to demand signals more quickly. This reduces the risk of overproduction and end-of-season markdowns that have historically plagued wholesale relationships. Brands are also negotiating more flexible terms, including smaller minimum orders, shorter lead times, and shared responsibility for unsold inventory.

At the same time, brands continue to invest in their own channels for specific purposes. Direct-to-consumer operations provide valuable customer data, serve as testing grounds for new products and marketing approaches, and maintain brand control in flagship markets. The most successful companies view channels as complementary rather than competitive, allocating products and marketing investment based on where each channel delivers the best return.

What does this mean for brand strategy going forward?

The Joor data suggests that fashion executives should evaluate channel profitability holistically, accounting for the full cost of customer acquisition, fulfilment, and working capital rather than focusing solely on gross margin percentages. Brands that over-invested in direct-to-consumer infrastructure during the pandemic may need to rationalise store portfolios and digital operations, redirecting resources toward product quality, sustainability initiatives, and strategic wholesale partnerships.

The shift also has implications for organisational structure and talent. Wholesale requires different capabilities than direct-to-consumer, including account management, trade marketing, and supply chain coordination with external partners. Brands may need to rebuild wholesale teams that were downsized during the pandemic and develop new approaches to collaboration and data sharing with retailers.

Looking ahead, the optimal channel mix will vary by brand, category, and market. Digitally native brands may find that wholesale provides a path to profitability after years of growth-at-all-costs strategies. Established brands may use wholesale to enter new geographic markets or product categories without heavy capital investment. In all cases, the focus is shifting from channel share to channel profitability, with wholesale emerging as a critical component of sustainable growth strategies in 2026 and beyond.