Decorating Survey: Who's Decorating What
Some suppliers offer decoration services; most don’t. We surveyed top apparel suppliers to find out which offer embellishment services and which don’t – and why.
It only makes sense that a distributor who needs 250 T-shirts decorated for a client should rely on his supplier to order and decorate those shirts, right? Perhaps.
But toss that idea over to Mike Little, president of Team Mates Inc. (asi/90674), a decorator, and you’ll get quite a different answer. Suppliers that offer in-house decorating services, he says, “put themselves directly in competition with every independent decorator in the country, many of whom were once customers” of those very suppliers. What’s more, suppliers that offer decorating services upset the balance of an industry that relies on, or at least encourages, distributors to place orders (and share business) with both suppliers and decorators.
Some suppliers seem to agree. In fact, suppliers themselves are perhaps the most hesitant to make the decorating leap. A recent survey conducted by Wearables of the industry’s top 16 apparel suppliers revealed that only a quarter offer in-house decorating services. Most said they thought offering decorating capabilities would either not be profitable for their company or not be part of their business focus, which, for most companies, zeroed in on blank distribution only. Other suppliers, however, said they feared that offering decorating services would interfere with existing relationships they have with independent decorators – relationships they say are too valuable to risk losing.
A perceived threat
While some feel that in-house decorating makes sense, because it simplifies distributor ordering processes, plenty of suppliers and decorators are alarmed at the notion of combining such services in companies with a history of only selling blanks.
Part of the issue, Little says, is that suppliers, which already have a commodity to offer, cause “confusion in pricing in their attempts to establish themselves and provide business for their equipment,” much of which comes with sizeable debt. To manage that debt, suppliers might offer free digitizing of designs or free freight if distributors place embroidery orders with them. That’s not something companies such as Team Mates can (or desires) to compete with, Little says.
But it’s not just decorators who are leery of supplier decorating services. Some suppliers fear a backlash from decorators or distributors who perhaps see suppliers that offer embroidery, screen-printing or appliqué services as too aggressive in the market.
“I think distributors feel as a whole that they’ll be knocked out of the picture if a supplier is printing also,” says Robert Bizzell, sales manager for Eye-Dye (asi/53448), a supplier that also offers decorating services.
In fact, suppliers worry so much about the perception of increased competition they’ll bring to the market if they offer decorating services that at least one has gone to great lengths to make sure it’s not seen as overly aggressive, even setting up multiple companies under one corporation to obscure the fact that it offers both ordering and decorating services to the industry. “The distributors that have in-house decorating – their perception could easily be that we’re competing with them, but we’re not because we’re really competing with the contract decorator,” says Rick Mouty, CEO of ProFill Holdings, (asi/300152), a company with two brands, TSC Apparel (asi/90518) and WearMagic (asi/45180), which fulfill blank orders and provide embroidery and screen-printing services, respectively.
But even independent decorators shouldn’t feel threatened, says Mouty, whose company decorates T-shirts and other apparel. “If you think about that supply chain … in promotional products [regarding] the promotional products distributor that has in-house decorating and then the promotional products distributor that doesn’t, the one that has in-house decorating is just going to buy a blank,” he says.
“The one that doesn’t can either buy a one-stop, blank and decorating purchase from WearMagic, or do a multi-vendor order where they buy a blank, drop ship it to a contract decorator and then have it shipped to their customer,” Mouty says.
The problem lies in the perception that a company such as WearMagic would sell directly to end-users, bypassing the distributor altogether, a practice Mouty says his company doesn’t do. “It’s really a perceived threat, not a real threat for distributors because our companies are set up to serve distributors better and not to go around them,” he says.
In fact, Mouty says, one of the reasons his company created WearMagic was to gain a market advantage, for his company as well as distributors, both supplying and decorating apparel so distributors could spend more time working with clients rather than managing orders through multiple vendors. About 75% of WearMagic orders are placed through TSC Apparel, Mouty says, with the rest through outside suppliers.
The decorating dilemma
Not sure why your supplier doesn’t offer in-house decorating? Below, we take a look at the arguments for both sides.
• One-stop shopping. Suppliers that offer decorating services argue that they’re the ultimate resource for distributors looking for complete order fulfillment. But others, certainly independent decorators, say that suppliers that offer decorating services encroach too much on their businesses and offer an unfair competitive advantage.
• Proper decorating management. An embroidery machine can cost upward of $200,000. Suppliers that buy them and then venture into the decorating side of the business often don’t understand how to properly maintain profit margins on decorating orders and can’t always offer a sustainable business model, some say.
• Business competition. For independent decorators who rely on suppliers to place decorating orders with them, suddenly seeing that business dry up after suppliers start decorating themselves is not only bad for business, but a poor business practice, some decorators say. Suppliers counter that they still steer plenty of business to decorators.