Wholesale Terms in Japan for International Brands
Wholesale in Japan means a brand sells products to retailers or select shops, which then resell them to consumers. The first thing to understand is not the jargon but who buys at what price, who sells at what price and who carries the inventory risk.
- Retail price, wholesale price and wholesale rate describe the price relationship
- Check MOQ and payment terms as part of profitability
- Define import costs and responsibilities before orders begin
How does wholesale in Japan work?
The brand sells to a Japanese retailer and the retailer sells to the final customer through a store or ecommerce channel. This differs from direct-to-consumer selling because the buyer and inventory structure change.
The retailer needs its own margin, so it buys below the intended consumer selling price.
What do retail price, wholesale price, wholesale rate and MOQ mean?
In Japanese trade, jodai means the intended consumer retail price and gedai means the retailer's purchase price. Kakeritsu is the wholesale price expressed as a percentage of the retail price. A ¥10,000 item wholesaled at ¥5,000 has a 50% rate.
MOQ stands for Minimum Order Quantity. It is the minimum amount required for an order, such as ten units per style or fifty units in total.
How should the wholesale price be set?
Simply converting the Korean retail price into yen is not enough. Consider the Japanese target retail price, retailer margin, the brand's costs and profit, and import expenses together.
A workable wholesale rate is one that leaves both parties enough margin to continue the relationship.
Who pays for import, duties and domestic delivery?
Shipping from Korea to Japan can involve international freight, customs duty, import consumption tax, customs clearance and domestic Japanese delivery. Rates depend on the product and transaction.
Agree which costs and procedures belong to the brand, importer and retailer before the quotation is finalized.
What needs to be agreed beyond price?
Order quantity, delivery schedule, payment timing, defects and returns, markdown rules and sales territory all affect the deal.
Also define who owns unsold inventory. A normal wholesale purchase usually puts inventory risk on the retailer, while consignment may settle only the units sold.
What should a brand prepare before starting wholesale?
Prepare a product list, Japanese retail price proposal, wholesale price, MOQ, lead time, stock levels, product images and brand materials.
Brands with little Japanese sales history may also build proof through pop-ups, ecommerce and PR while developing wholesale conversations.