The clearest example of 2moda's ability to pair quality materials with very low price points is that in the before-school season, their largest segment of customers is charitable organizations. 2moda's sturdy, well made backpacks are purchased by churches and other goodwill organizations, usually paid with donations, and then given to needy and underprivileged children.
David Semel, President of David's Wholesale, which owns 2moda, said, "Organizations buy from us because we are the best bag for the lowest price. That is what we deliver." The other attraction, not only for charitable organizations but for numerous other market segments, is the number of items 2moda keeps in inventory. Said Semel, "If someone wants to order 100,000 backpacks, they could call me and it would be shipped within a day. That is our niche, and we are known for it. People can buy them at the time they need them."
Although 2moda carries other items besides backpacks, they are currently the hottest items because of the time of year. "We'll have as many as 500,000 backpacks in inventory. They are probably 70 to 80 percent of our sales," said Semel. "I do not know too many companies that carry the number of units we do, especially at the price points we sell them for. Other market segments that are loyal customers include convenience stores, general merchandise retailers, drugstores, flea markets, national chains and mom and pops, and all appreciate quality products at low price points. "We are known for price," said Semel. "We are much less expensive than people carrying similar items."
Semel puts a great deal of care and experience into producing a product that provides such exemplary value. He began 21 years ago with handbags, and then grew into various accessories, adding cell phone cases and flat wallets within the last few years. "I have been able to develop an eye by seeing what people carry," said Semel. "I watch what people are wearing and what the stores are showing and selling. When I go to China, it helps me know what to buy."
Flat wallets are also a big item for 2moda these days. In the last two years, Semel has noticed they are catching on. "I have seen women pull the one they are using out of their purse while they are buying another one. I do not think it is just a fad; it is going to be an accepted new wallet design." The variety in 2moda's flat wallets is primarily in the materials they use. Semel's trained eye shows in the quality of their flat wallets, too. "We look through thousands and thousands of swatches of materials, based on what is hot right now," said Semel. "The material market in China has so many options for colors, fabrics, and types of material with different looks and textures. We find what we consider the best of the best, and then give that to the factory."
Semel said they frequently pick up new customers on price. "We keep our overhead down. We are good buyers, and we negotiate and deal directly with the factories. We have our own staff in China attending to quality control, and because of our volume, we have additional negotiating power and can pass the savings on to the customer." 2moda will also dropship by the case. Semel said they will ship it on the customer's account and put the customer's name on the label. They will also put the packing list on the box. "If they do not have a freight account, we'll add the charges to their order," said Semel.
Trust and respect for their customers factor in strongly. "We do not contact our clients' customers. We have been in business long enough that people who work with us know how we operate. It is a two way street. We protect each other." Overall, he wants to make it easy for the customer. The minimum order is only $50 to facilitate customers' ability to test a product. "If they want two dozen, $3 wallets, they can get those. We allow small orders, so they are not forced to spend $200 and be stuck with a sample pack," he said. "We are confident in our merchandise and in our price points. We know that they will continue to buy, once they get their first order."
Recommended mark up varies with the retailer, but Semel said all items provide a minimum of a 50 percent margin. The bulk of what they sell is between $2 and $4, excluding the luggage, and he said many customers retail the items between $5 and $20, depending on if they are a boutique or a discounter.
It is not surprising 2moda has continued to grow. "We have experienced 25 percent growth each of the last three years, if not more," said Semel. "We provide trendy items at low price points and great customer service. That is why our customers are loyal to us. They have helped us grow."
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