So how should I classify the business?
I’m at the pre start-up phase of my business and I have a question regarding how I should classify the company? I am designing a specialty line of clothing that will be produced by a contract manufacturer and the items will be sold via my eCommerce site. So would I be considered a developer, manufacturer, wholesaler/distributor or retailer?
-
Thank you all for your insights regarding the classification of the business. I also need to mention that I hope to offer other types of products pertaining to this market . . . Some I will develop, others I may be private label. – Carmen 13 years ago
3 Answers
For most practical purposes you are a reseller, or some variant thereof.
The bulk of your money is earned by purchasing a product, and reselling it for a higher price.
In this case, the product happens to be built/made to your specifications, but you are still primarily a retailer, with a "simple" markup (from an accounting perspective).
If you were taking multiple raw materials (eg: pieces of fabric) and assembling them into a new product, then you would have some aspect of manufacturing (and the various accounting issues that go along with it).
It sounds "cool" (maybe) to be a "manufacturer" or "designer", but trust me it is easier for now just just be a reseller and let someone else deal with the issues around manufacturing, accounting for raw materials, supply chain issues, etc.
Confusing.. I understand your dilemna. I would say you are the manufacturer and distributor of a clothing line because you designed the line.
It sounds like the core of your business is designing clothes. Manufacturing and the eCommerce site to sell them are tools you are using, but you are clothing designers?
