Top3 by design: Terri Winter

 

Top3 by design is a mecca for ideas and a one-stop-shop for a diverse range of design products. As well as stocking items by big international design houses including Missoni Home, Menu and Iittala, the company’s founder Terri Winter has a solid commitment to Australian design. Terri spoke to the ADU about the key things Australian designers should know about design wholesaling, and what it takes to play well with retailers.

Business: Top3 by design
Type of business: Retailer of international and Australian designer home products and personal accessories
Location: Online and Crows Nest and Bondi Junction, New South Wales, Australia
Founder: Terri Winter
Contact: www.top3.com.au

ADU: When did Top3 launch and what was the concept behind it?
Terri Winter: When my husband and I met we both worked in the advertising and design industry. Both of us have a passion for innovative, quality product, and when I became pregnant with our first son we decided that we needed to have a business that did not rely on a client’s 24-hour deadline. Shortly after we were in Germany at a cabaret show that included a variety of acts by performers who were the best in their field, and we got thinking about the things we like, and how we might edit them down to a selection of the best.

As consumers we were constantly frustrated by the ridiculous amount of ‘choice’ on offer from butter, to wine, to stereos and pepper grinders. We simply wanted to know what was good. We discovered that many of our friends also found the amount of choice did not give them a feeling of comfort, but was a source of frustration. Especially with the accompanying lack of information offered alongside the multitude of product.

So began the idea for a store that offered an edited selection of quality design, that followed the mantra of carrying up to three products per category deemed the best in the world by merit of design. We chose the name Top3 by design because we felt it best described the concept and opened the first store in November 2001.

How many stores do you have now?
We have two physical stores and an online store.

How many Australian designers are part of the collection?
We carry pieces by Kain Lucas, Belinda Giles, Charles Wilson, Rowen Wagner, Sarah Gibson and Nicholas Karlovasitis of Design by Them, Rachael Ruddick, Birgit Moller, William Rhodes, Jason Bird, Matt and Jude Ainsworth of Stukon, Cindy-Lee Davies of Lightly, Abi Alice, Marc Newson, Rohan Nicol, Susan Cohn, Robert Foster of F!NK, Ben McCarthy, Danny Cheung, Henri Spaile and Mark Armstrong for DOSH, George Plionis, Tomek Archer, Adam Goodrum, and Marc Harrison of HUSQUE.

How much of your stock do you source from local trade fairs and internationally or is most of your sourcing done through other means?
Given Australia’s geographic distance from Europe, many of the large companies have representation here in Australia through distributors. It makes no sense for everyone to be shipping individually from large suppliers. So all the key large brands are sourced from distributors here in Australia. However, we visit the international trade shows to know in advance what will be available and then we can discuss things with the local importer to ensure suitable stock levels and timing of arrivals.

What should a designer prepare before approaching you about stocking their work?
Anyone approaching us regarding product to be stocked needs to have a price list and samples of their products, including packaging ready for viewing. They also need to be familiar with top3 and the concept of the store, and have a good knowledge of the cost structures of getting a product from wholesale to retail.

They need to be sure that after the product is stocked they have a system in place to be able to re-supply goods in a timely manner, or be aware of the time frames necessary for redelivery and have that outlined on their price lists.

The first step in terms of contacting us would be to send an email with the price list and any relevant product information and images.

The price list should include:
– Item codes
– Wholesale price (excluding GST)
– Retail price (including GST)
– Any special delivery instructions. If there are any special delivery instructions or costs these should also be outlined.

Designers should also put a list of the businesses that they wish to have the product with long term, and a list of any retailers that already stock their product it if it is in the market already.

If we feel the product is suitable for the range we would then contact a designer to view samples or set up a meeting if that were required.

A designer also needs to have the best photography done that they can afford. If we have good high-resolution photographs on file we can send them to media quickly and easily.

In your opinion, how many designers understand the benchmarks of pricing – what a customer is willing to pay for a product based on quality, market sector, and other product competitors?
Most have done some research and some contact us early to ask us if they don’t know which is great. If you don’t know your full costs then you can’t establish the retail price.

What recommendations would you give to a designer in regards to pricing their work?
You need to be fully aware of what the real costs are for you in order to get a product to market. Yes, there are certain price points, but the first step should be to calculate full costs (including your profit) before setting the retail price.

If the price of the product is deemed too high for the market you won’t receive successful sales. You then need to go back and look at your production process to see if you can reduce the costs.

There is no point in simply reducing your retail price to match the market when it does not cover your costs. This will lead to re-supply issues for the store and everyone, including the customer, left waiting for goods and very unhappy.

Sometimes, sadly, the costs of a product are simply too high to be justified by the consumer. This is a sad reality but must be considered before full investment by designer or retailer into a product’s future.

Can you give me some examples of some key mistakes designers have made when approaching you? What are some of your pet hates?
People who have not done any research on our business and do not understand how we can help each other are a waste of everyone’s time and energy.

Achieving successful sales in a retail environment requires a relationship that is more like a partnership – the product needs to suit the store, it needs to have support from both the store and the designer and both the designer and retailer should be able to make money from the product. If a designer has queries about any of the above details, then they should raise them in the first conversation or meeting.

I dislike designers who think that the store is ripping them off taking a margin, who feel hard done by in giving retailers a cut. The retail store is the way to access your consumers, you should work with them in a partnership and support them as much as you can. Don’t make retailers feel that you are hard done by as the designer because you can’t make enough money etcetera.

It is up to you to make your pricing the best and most competitive that you can without losing money. Don’t produce work at a loss unless you have a long-term view in which you can improve unit cost and efficiency to gain your profits later. There is no point putting something on the market at a loss and feeling annoyed the entire time because you feel the retailer is making money and you are not.

A sudden increase in price after the product has gone to market is not good form either. You must think your costs and profit requirements through before getting the product on the shelves. A designer not making ANY money from their product cannot afford to produce any more. For me a relationship is successful if it is a win-win situation for both the designer and the retailer.

Never have a website of your own offering an online retail set up for your products that competes with your retailer on availability or price. While having periodic sales in which you discount your own product I guess is normal I don’t encourage it when you also supply to retailers.

If you are going to have a sale of your product on your own website it is best to let your retailers know in advance, or offer them a reduction on price so they can promote it at the same time.

On the topic of designer’s with online retail spaces within their own websites, a wholesaling designer should not offer a special online price that is different to the recommended retail price as an incentive for customers to buy direct. If you do this the interest in your product will very quickly drop in store among both retailers and their customers.

Do you expect designers to have a thorough understanding of the existing brands that you stock prior to approaching? How much should they know about you prior to getting in touch?
They should understand where they think they might sit in the collection and understand how they could be a benefit to the range.

What are some key pieces of advice that you have for designers getting started?
Think it through, get your costs in order – you can’t produce, promote and successfully sell a product that is not profitable.

Support your retailers, they will provide access to a large number of customers for you.

If you are confident about your product and are having trouble getting into store – offer it on consignment with all paperwork ready for quick entry into the system and you will probably find you get reorders and then payment for your first delivery.

If it doesn’t sell, both yourself and the retail store need to rethink it anyway!

How do you prefer designers to contact you, I guess you are very busy?
Generally we prefer a phone call, then an email with relevant information, then a follow up call after a couple of weeks if they have not heard back. At certain times of the year, as in the lead up to Christmas, designers need to be aware that we just don’t have time to consider new products.

Do you expect designers to supply you with collateral to support the sale of their work – price lists, brochures, packaging, high-resolution images?
It is an absolute necessity to supply a price list and a product overview sheet for staff. It is helpful if you can also provide a digital text version of this document as well so it easy to cut and paste that information to make it available online.

We need high and low-resolution images, including individual images of products in each colour and style. Stands and point of sale material can assist and be helpful when retailing, although this varies on a case by case basis, so it is best to discuss with retailers before investing in support material.

After the initial order, at what point should designers approach you again about a follow-up order?
We are very happy to hear from them a couple of weeks after their product has appeared in-store. Continuous calls can be difficult to manage, although ironically it tends to be card suppliers who call the most frequently!

Do you think there are some common mistakes or areas that Australian designers and suppliers don’t understand about wholesaling that their international counterparts, or distributors that you deal with, take for granted? If so, what are they?
No not overall, the larger Australian distributors are very professional. If anything it is some of the international distributors who don’t understand the geography and scale of the Australian market and don’t realise that the length of shipping times is very different when dealing with Australia compared to their European counterparts.

The difficulty I do come across is when I am working with small-scale distributors who are often running their business as a sideline project and have indented product, which means they do not hold stock but get their manufacturers to manufacture in response to a retailers order. I do not want to work with people who are operating more like an agent or distributor for their own product. I refer to these businesses as ‘indent managers’ and I do not need to pay a margin to ask someone to order for me.

A supplier or distributor is responsible for holding an acceptable level of stock to supply the market. Naturally, there can be colours or styles which unexpectedly sell through, but the collection they represent or supply should be held in the country and be available for reordering.

Do you think there are benefits for working with local designers based on locality and in theory a quicker delivery program?
I love to work with local designers, however it does not really equate to faster turn-around. Small-scale designers generally have supply issues and we work with them as closely as possible to minimise the problems on both sides. Fast efficient turnaround on a regular basis leads to more orders as instore staff are confident they will obtain the items for their customer and will be happy to ‘push’ the product. If experience tells the sales staff that the customer may be let down by erratic delivery, they will suggest something ‘safer’ to avoid a customer service issue.

What is the acceptable turnaround for orders?
Generally within a week unless otherwise stated. If preparation is needed or manufacturing to order is required you need to be clear about the time it will take to deliver so it can be outlined to the customer. A period of two weeks to wait for a special order is fine for customers. If the wait is going to be longer the customer simply needs to be forewarned and often they will have no issue with waiting period, even if it going to be months rather then weeks long.

But knowledge in advance is the key. Don’t be shy about extended delays. Be upfront and advise your retailer as soon is possible. The situation will not correct itself if you keep saying ‘It will be soon, soon, soon’ when you know it won’t be. Be honest and pre-emptive.

If a designer was hoping to have their product stocked in store for Christmas, what would be the ideal time that they should show it to you? How far in advance do you buy for Christmas?
We would want to see it by August/September if they have stock already available. The actual product needs to be available (in the country!) by mid-October to be ready in time for Christmas marketing.

What other key times throughout the year are key buying periods for you?
March is great after the wash-up from Christmas, and ties in with preparation for Mothers Day too. It depends on the product but key periods are Mothers’ Day, Fathers’ Day and Christmas.

What do you consider are the characteristics of a truly professional designer – the ideal model for a happy and successful business relationship?
It requires a good sound understanding of the relationship between the customer, the store and the supplier. They have to all work together. If the designer begrudges the requests of customers or retail stores and is difficult or obtuse with turnaround times the relationship will very quickly be strained.

Suppliers need to understand that the store is under pressure by the customer for product and the supplier needs to back up the store as efficiently as possible on a regular basis. Erratic supply times create problems.

We require an invoice with every delivery. Poor paperwork is not acceptable and is time consuming for everyone!

Do you think the local design industry has matured since you launched? How would you describe the industry here? And what opportunities do you see ahead?
It has absolutely matured. We started in 2001 and back then the concept of a ‘design store’ was not recognised. If I said to someone I had a design store I would constantly be asked which fashion labels I carried. People do tend to broadly understand the concept of a design store now.

Many people were surprised when we opened our store in a Westfield shopping centre complex. However, it has been an important part of our process and philosophy that design is not for an elite group but is for everyone to appreciate.

It is important to us at Top3 that design is not seen as an elitist concept because a design process is involved in the development of every product some are just simply not well considered or are executed poorly.

We are very excited about the future of design in Australia. Customers do understand that you get what you pay for. The ‘get the look’ era of disposable fashion buying has been replaced with an understanding that products that are of good quality, do what they do well by functioning better, enrich our daily lives and are respected and understood to have intrinsic value.

Designers are finally getting the understanding that they deserve – it does not have to be in a flashy superstar designer way, but in the everyday appreciation of what they can achieve. We are excited because we can help people understand that the simple details good design can bring will change their day – it does not have to be in gigantic once in a lifetime purchases of iconic pieces – but in the thoughtful, well considered purchases every day.

We certainly will continue promoting Australian designers shoulder to shoulder with the world’s best. We feel that Australian designers don’t need to be pandered to and pulled out and identified as ‘Australian Designers’ but can stand their ground Internationally. They just need the support of customers and retailers alike.

I was honoured to be involved as a judge in the Bombay Sapphire Design Discovery Awards this year and can certainly say that there are plenty of designers ready to take on the world stage – I hope we can be of some help getting them there!

Interview by Heidi Dokulil and Madeleine Hinchy.

Some Rights Reserved. View ADU Creative Commons license here.

The ADU has published a comprehensive guide to wholesaling on the Toolkit (Going to Market) page with the assistance of Terri Winter and the team behind Workshopped. To download it visit here.

To read more ADU creative entrepreneur profiles visit here.

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Published 17 December 2009.

Comments (2)

2 Comments

  1. Safari Lee 20 December 2009 9:31 am

    Fantastic interview! As a jeweller, I agree wholeheartedly with the sentiment “The retail store is the way to access your consumers, you should work with them in a partnership and support them as much as you can.” I <3 my stockists, and appreciate they present my product to many customers who would otherwise not know me.

  2. Rochelle 29 July 2010 11:56 am

    We have been supplying to Top3 by Design for many years now and agree with Terri that design should not be viewed as an “elitist concept”. Top3 support the quality products we represent which is why our relationship has been so long standing.

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