For the Business of Apparel Decorating
Issue link: http://read.uberflip.com/i/178902
Printwear 2013 Q&A Business Management Is it worth it to discount my prices to try to win new customers? Probably not. There are several reasons for this. The most common justification for a discount (especially in a slow period) is to try to increase volume. But the numbers don't support this. Say you're selling widgets for $10, and they cost you $9 to make, leaving you $1 profit. If you run a 10 percent off sale, which means 100 percent drop in your profit, now you're breaking even, which is certainly not the goal. If you run a 5 percent off sale, that's a 50 percent drop in your profit, which means you need to get twice as many customers at that price just to break even with what you're doing today. Most of us find that's not realistic. But what if it is? This brings us to the next good reason not to discount: sense of value. If the market starts to find that a $10 product can be easily had for $9 (if they just wait for a sale), the market starts to recalibrate its sense of the true value of that product down to $9. You may think you're going to increase your ranks of customers by offering sale pricing, and you may even be right. But you'll be training those ranks that the sale price is the "real" price, and you will have taken one more leap in the dreaded race to the bottom. My two cents: improve quality and service; keep your prices firm. 2.Are they dedicated and enthusiastic about the business they are in? 3.How long have they been in business? Longer is usually better. It indicates that they have done something right over time. 4.Do they have control over their process or product? A supplier with little control usually disappoints when the going gets tough. 5.Do they inventory or do drop ship for yet another organization? 6.How consistent is their product? Predictability is very important for your business success. If the assay of your raw materials and supplies is all over the block, it will be hard to build any brand equity. 7.How financially stable are they? Most suppliers insist on your credit worthiness; you should likewise be satisfied they have the economic strength to survive the occasional bump in the road. 8.How well do they communicate? Especially, when things go wrong, do they have the tendency to hide? 9.How are their prices? Do they represent a good value for the price you will pay? H. Wayne Potter, Joto Paper David K. Anderson, Imprint Revolution With so many suppliers chasing my business, how do I know which one is likely to be a good partner? I encounter individuals with a very clear vision of what they want to do but little knowledge of what they need to do it. I try to spend as much time as possible educating them on the technical aspects of the process and equipment needed to accomplish their business goals. If I mislead them down a path that is economically good for me without any concern about them, I am not going to be a good supplier for them in the long term. It is important to evaluate suppliers in a formal manner. A framework and a checklist can help keep it all in perspective. Work down the list methodically for each supplier. At the end of your investigation, your choice should be obvious. Nine Essential Questions 1.Know-how is the corner stone of competency. You're going to relay the information and products of the supplier to your customer. Do they know what they are talking about? Should I purchase digital garment printing, sublimation, or screen printing to start a garment printing business? There are many factors that come into play when selecting which type of decoration process equipment to purchase, but before you decide on any specific equipment type or decoration method, one of the first things you should do is thoroughly evaluate your market. Understand what type of items you are going to print. Look at who your current customers are and what type of additional customers you are going to attract once you have this new decoration method available. Once you take the time to really evaluate your business, market and customer needs, you may reach the conclusion that any of these methods alone may not be able to satisfy all the decoration needs required of your growing business. Matthew Rhome, Brother 2013 October Printwear PW_OCT13.indd 75 | 75 9/18/13 11:50 AM