Course 1 followed a T-shirt through ten stages, from fibre to customer. Between stage 7 (buyer/brand) and stage 9 (retailer), Course 1 treated "the buyer sells to the customer" as one simple step. It is not one step. A brand or a factory's customer can reach the final customer in more than one way, and the way chosen decides who designs the product, who carries the risk of stock that does not sell, and who actually owns the relationship with the person wearing the T-shirt. A merchandiser who does not know these routes can misread a new buyer's request, or assume a factory's two customers must be competing with each other when they are not. This lesson mainly teaches a decision: given a new order, which selling model does it belong to, and what does that model mean for who is responsible for what. By the end, you can name the main routes to market and place a real order into the right one.
You need: the ten stages from lesson 1.1 (Course 1), in particular stage 7 (buyer/brand) and stage 9 (retailer).
By the end of this lesson you can:
Not covered here: the detailed difference between private label and own brand (lesson 3.2), wholesale versus direct retail pricing (lesson 3.3), and how e-commerce changes ordering and returns (lesson 3.4).
| Term | Meaning |
|---|---|
| Selling model | The route a product takes from the maker or brand to the final customer, and who is responsible for each part of it. |
| Wholesale | A brand sells to other retailers, who then sell to the final customer; the brand does not run the shop. |
| Private label | A retailer commissions a factory to make a product to its own specification, sold under the retailer's own store brand. |
| Own brand (vertical retail) | A company designs, brands and sells through its own shops or site, with no separate retailer in between. |
| Pure retail | A shop or site that buys and resells other companies' branded products, carrying many brands, without owning a brand itself. |
| E-commerce | Selling through a website or app rather than, or as well as, a physical shop; a channel any selling model can use. |
| Store brand | The retailer's own brand name, used on private-label products it commissions, not on products it buys from outside brands. |
| Exclusivity clause | A contract term limiting who else a factory (or a buyer) may deal with while the agreement is in force. |
Course 1's ten stages showed a buyer or brand (stage 7) and a retailer (stage 9) as two separate boxes. In real trade, that gap between "made" and "sold to the customer" can be crossed in several different ways, called selling models. The selling model decides three things: who designs the product's specification, who carries the risk if the finished goods do not sell, and which company actually owns the relationship with the final customer. None of this changes what a garment factory does at stage 6; it changes what happens after the factory has shipped the goods, and it changes what the factory is asked to make in the first place.
The picture above shows three of the routes. Two more matter just as much: pure retail, a shop that carries other companies' brands without making one of its own, and e-commerce, which is not a separate route at all but a channel any of the others can use.
| What can differ | The shapes you will meet | Why it matters to you |
|---|---|---|
| Wholesale | A brand designs and brands a product, then sells it to other retailers (department stores, chains, independent shops), who resell it to the final customer under the brand's own name. Fairway Stores buying Northline Apparel products wholesale is an example. | The brand does not control the shop floor or the final price; it must win shelf space from a retailer that also stocks other brands. |
| Private label | A retailer commissions a factory to make a product largely to the retailer's own specification, sold under the retailer's own store brand, not the factory's name or an outside brand's name. | The factory works to someone else's design, and the retailer, not a separate brand, carries the unsold-stock risk on its own shelves. |
| Own brand (vertical retail) | A company designs, brands and sells through its own shops or website, with no separate retailer in between. Northline Apparel (export, own shops abroad) and Cedar & Co. (domestic, 12 local shops) are both own-brand examples, one exporting and one selling only at home. | The company controls design, price and the shop experience, but also carries the full risk if the goods do not sell; there is no retailer to share that risk with. |
| Pure retail (multi-brand) | A shop or site that buys and resells other companies' branded products, carrying many brands at once, without making or owning a brand of its own. Fairway Stores, buying from several suppliers including Northline Apparel, fits this shape alongside its wholesale purchases. | A pure retailer's buyer decides which brands to stock and how much shelf space each gets; a factory or brand supplying it is one of several competing suppliers on the same floor. |
| E-commerce (a channel, not a model) | Any of the four models above can sell partly or entirely online instead of, or as well as, through physical shops: a wholesale brand's retailer can be an online-only chain, a private-label retailer can sell only on its own website, an own-brand company can run its own online shop. | Do not treat "sells online" as a fifth selling model; ask which of the four models above the business is using, and separately, through which channel. |
None of these models is more correct than another. Most real brands, including the fixed cast in this course, use more than one at once: Northline Apparel sells through its own shops (own brand) and also wholesale to Fairway Stores. What matters is identifying, for any one order, which model that specific order belongs to.
The case we followThis course's Order A is Northline Apparel's 15,000-piece T-shirt order, made by Delta Garments. Northline Apparel designs the T-shirt, puts its own brand name on it, and sells it only through its own shops and its own website abroad. No separate retailer sits between Northline Apparel and its customer. This is the own-brand (vertical retail) model, and it is an export order: the customer is in another country from the factory.
Cedar & Co. gives a second, contrasting own-brand example. Cedar & Co. also designs, brands and sells through its own shops, so it is the same selling model as Northline Apparel. But Cedar & Co. sells only through its own 12 shops in its own country, a domestic own-brand business, while Northline Apparel sells abroad, through its own shops there. The selling model is the same; the market is not. Delta Garments makes for both companies, and for each one, the factory is working to that company's own specification, for goods that will be sold under that company's own name, in that company's own shops.
| Company | Selling model | Market | Who designed the specification | Who sells to the final customer |
|---|---|---|---|---|
| Northline Apparel (Order A) | Own brand (vertical retail) | Export | Northline Apparel | Northline Apparel's own shops and website, abroad |
| Cedar & Co. | Own brand (vertical retail) | Domestic | Cedar & Co. | Cedar & Co.'s own 12 shops, at home |
This is a count, not a cost calculation, because the point this lesson teaches is not about money; it is about who decides. Delta Garments is a garment factory, stage 6 in Course 1's chain, not a buyer or brand. A factory does not choose whether an order it makes will be sold wholesale, as private label, as own brand, or through pure retail; the buyer or brand placing the order has already decided that before the factory ever sees the order.
The factory's job is to recognise which of the five models applies to a given order, using the method below, because that recognition changes what the factory is being asked to do, not to pick the model itself.
The methodAnswering these three questions in order tells you the selling model: a separate brand's name, designed by the buyer, sold in the buyer's own shops, is own brand. A separate brand's name, designed by the buyer, resold to other retailers, is wholesale. The retailer's own store-brand name is private label, whoever designed it. Write the answers on the working template in block 10 for every new order.
The trapA common mistake is treating private label and own brand as one model, because neither one puts the factory's own name on the product. The real difference is who the buyer itself is. In private label, the buyer is a retailer selling the product under its own store brand, alongside other suppliers' branded products on the same shelves. In own brand, the buyer is a dedicated brand company selling only its own products, with no mix of outside brands to compete against. This distinction matters because it changes who else might be buying from the same factory at the same time: a private-label retailer's store-brand product competes on its own shelves with other suppliers' branded goods, while a dedicated own-brand company does not carry that mix at all. Lesson 3.2 goes further into this difference.
There is more than one way for a made product to reach the person who finally buys it. A brand can sell to other shops, which is wholesale. A shop can commission its own product under its own store name, which is private label. A company can sell only through its own shops or website, which is own brand. A shop can simply buy and resell other brands, which is pure retail. Selling online is not a separate way; it is a channel any of these can use. A factory does not choose which of these applies to an order; the buyer decides that before the order reaches the factory. To find out which one applies, check whose name is on the product, who designed it, and where it will be sold.
Delta Garments is already making Order A for Northline Apparel, an own-brand export customer. A large supermarket chain now approaches Delta Garments, asking it to make T-shirts carrying the supermarket's own store-brand label. Mona, the merchandiser at Delta Garments, receives the tech pack cover sheet for the new enquiry.
Does taking this new order create a conflict with the existing Northline Apparel relationship, given both companies would now be Delta Garments' customers? Decide before you open the decision.
Not automatically a conflict. Two facts decide this together.
First, the two orders are different selling models for different customers. The supermarket's order is private label: it is sold under the supermarket's own store brand, to its own store-brand specification. Northline Apparel's order is own brand: sold under Northline Apparel's own name, through Northline Apparel's own shops abroad. A factory commonly serves multiple buyers across different selling models at the same time; that alone is not a problem, and the selling-model difference itself is not the issue.
Second, what actually decides it is contractual and practical, not the selling model. Mona needs to check two things: whether Delta Garments' existing agreement with Northline Apparel contains any exclusivity clause restricting who else Delta Garments can produce for, and whether production capacity allows both orders to be delivered on time. If there is no exclusivity clause and capacity allows it, Delta Garments can take the supermarket's order without putting the Northline Apparel relationship at risk.
This is framed qualitatively, because the risk depends on the exclusivity clause and the size of both orders, not on a fixed figure this lesson can calculate. If Delta Garments' agreement with Northline Apparel does include an exclusivity clause, and Delta Garments takes the supermarket's order without checking it, Delta Garments would be in breach of its existing agreement. Northline Apparel is the larger, ongoing relationship of the two; a breach found later could put that whole relationship at risk, not just the new supermarket order, for the sake of an enquiry that had not even been confirmed as a signed order yet. The method's third question, checking the contract before taking on a new buyer, is what protects the factory from this risk.
The workbook has one sheet, "Decide". It asks the three method questions, one per row, each with a drop-down: whose name is on the product, who designed it, and where it is sold. A fourth row's formula reads your answers and states the selling model.
Fill in "Your order" for a real order, choosing an answer from each drop-down, and check the result.
| Question | Order A / Northline Apparel (filled in) | Your order |
|---|---|---|
| Whose name is on the finished product? | A separate brand's name | |
| Who designed the specification? | The buyer | |
| Will it be sold in the buyer's own shops/site, or resold to other retailers? | Buyer's own shops/site | |
| Selling model (calculated by the sheet) | Own brand (vertical retail) |
[Download the Selling model decision sheet](../../templates/T01-C03-selling-model-decision-sheet.xlsx)
1. What is the main difference between wholesale and own-brand (vertical retail) selling?
2. Does a garment factory choose which selling model an order falls under?
3. A trading company buys 8,000 hooded sweatshirts from a factory in its own name, then resells them to several independent shops that each stock many different brands. Which selling model best describes what those independent shops are doing?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Selling model | نموذج البيع | Modèle de vente | Satış modeli | The route a product takes from the company that makes or brands it to the final customer, and who is responsible for each part of that route. |
| Wholesale | البيع بالجملة | Vente en gros | Toptan satış | A brand sells to other retailers, who then sell to the final customer; the brand does not run the shop. |
| Private label | العلامة الخاصة | Marque de distributeur | Özel marka | A retailer commissions a factory to make a product to its own specification, sold under the retailer's own store brand. |
| Own brand (vertical retail) | العلامة التجارية الخاصة (بيع تجزئة عمودي) | Marque propre (détail vertical) | Kendi markası (dikey perakende) | A company designs, brands and sells through its own shops or site, with no separate retailer in between. |
| Pure retail | تجزئة متعددة العلامات | Détail multimarque | Çok markalı perakende | A shop or site that buys and resells other companies' branded products, carrying many brands, without making or owning a brand itself. |
| E-commerce | التجارة الإلكترونية | Commerce électronique | E-ticaret | Selling through a website or app rather than, or as well as, a physical shop; a channel that wholesale, private label and own-brand businesses can all use. |
| Store brand | علامة المتجر الخاصة | Marque du distributeur | Mağaza markası | The retailer's own brand name, used on private-label products it commissions rather than on products it buys from outside brands. |
| Exclusivity clause | بند الحصرية | Clause d'exclusivité | Münhasırlık maddesi | A contract term that limits who else a factory (or a buyer) may deal with while the agreement is in force. |
You now know the five main selling models. The next lesson looks closely at two of them that are often confused, private label and own brand, and at who owns the design and who carries the unsold stock in each one. Back to the course map