Under One Roof

Are The Days Of Blanks Suppliers Dead?

Under One RookApparel suppliers are increasingly focused on offering decoration services. Are the days of blanks suppliers dead?

What do distributors want from apparel suppliers today? Everything, it seems.

Many suppliers have heard from distributors that want a more one-stop-shop buying experience for apparel. The result? A concerted effort to move away from supplying just blank apparel, and moving toward also offering decoration services, as well. The key, these suppliers say, is being able to provide an easy ordering and delivery system for distributors. And, ultimately, that is what’s helping to enhance the customer service experience today.

“Absolutely it builds loyalty,” says Taraynn Lloyd, director of Edwards Garment Company (asi/51752), based in Kalamazoo, MI.

When the company began offering decoration services eight years ago, it had only a six-head and two-head embroidery machine. Now they have enough equipment to run 10,000 pieces a week, working three shifts a day.

“More and more customers are asking for this one-stop shop,” Lloyd says.

And that demand from distributors – and their end-user clients – is beginning to create a fundamental shift in the apparel buying process in the promotional products market. The move of suppliers toward providing decoration would start to shift the overall processes, timelines and expectations of distributors and their corporate clients, experts say.

“What we’re really seeing is decorating capability now on both sides,” says David Blaise, an industry consultant and president of Blaise Drake & Company, a consulting firm in Wyomissing, PA. By that, Blaise means that suppliers and distributors who now decorate have a hand in the decorating business in addition to decorators. For some, that may seem counterintuitive to the nature of this industry’s business model.

For others, though, it’s simply the future of where the market is going.

A Fundamental Shift? Those suppliers who have made the leap to decorating insist that they’re not throwing out the traditional client-distributor-blank supplier-decorator business model – rather, they’re offering distributors what they say they and their clients are looking for.

Companies like Trimark Sportswear Group Inc. (asi/92122), which added decoration capabilities 18 months ago, say that by including decorating among their offerings, they’re enhancing the industry, not simply altering it.

“Our offering is really moving the mindshift to branded apparel,” says Bill Horst, Trimark’s marketing manager. “We’re constantly looking at ways we can offer more value to our distributors,” says Horst, who adds that Trimark offers all its decorating services at the same price ($2.40 per piece) regardless of the decorating method, with prices of apparel changing based on the quantity ordered. “Whether it’s a $100 jacket or a $10 polo, $2.40 is the charge regardless.”

Horst says this simplifies the ordering process, a move that has encouraged corporate clients to become more specific and aggressive about their decorating specs. “We’ve made offers so simple that people are looking at other decorating options to be more brand-accurate.” In that sense, it’s a move that’s advancing the industry as much as the capabilities of suppliers offering decorating. Lasers and true-edge transfers have increased 400%, while embroidery, still the bulk of Trimark’s decorating service, is actually down, with only half of the garments being embroidered these days as opposed to between 60% and 70% in recent years, Horst says.

One-Stop Shopping More than anything else, simplicity (keeping orders and decorating in one location) is what’s driving the move to decorate, say suppliers who are offering those services. That’s largely a response to a marketplace of tight budgets and shortened turnaround times. “When budgets are tight and orders get more competitive, every dollar counts,” says Ira Neaman, owner of Avenel, NJ-based Vantage Apparel (asi/93390). “That’s why we’ve made it a priority to re-focus on communicating the hard dollar savings and benefits of a single-vendor purchasing environment,” he says. The company tries to make its decorating services as competitive as possible by offering same-day decorating with a one-garment minimum.

“It’s not a new idea, but one that seems impressively relevant given the current economic climate and industry shift to smaller orders with faster turnaround.”

The real expense in apparel items, Neaman and others say, is not the cost of the garment, but the cost to move it – from supplier to decorator to distributor to corporate customer. That’s a lot of shipping invoices, not to mention opportunities for packages to get lost or items to get damaged, they say.

But the trend for suppliers to do so is increasing because of added costs associated with buying blanks and shipping them to an independent decorator. “People are realizing how their costs are just skyrocketing for really no good benefit,” Neaman says. With multiple purchase orders, the costs of potential apparel damage and the impact on customer service those problems can have, people are seeing the benefit of blanks and decorating coming from the same place.

The ease of ordering from a one-stop shop apparel provider is ultimately what today’s increasingly diverse suppliers are pushing to their customers. The opportunity for problems exists when goods travel from the supplier to the decorator. “I don’t care how smooth a distributor thinks their current program is,” says Tom Flippo, senior vice president of Dunbrooke Apparel, Reebok Corp Apparel and Eagle Dry Goods (asi/50930), based in Independence, MO.

Too many mishaps can occur along the way, from simply getting the blanks themselves to machinery issues and everything in between. “I could make up a ton of reasons why an order couldn’t be completed,” Flippo says.

Throw a glitch – any glitch – into the process of decorating apparel and an order can get bungled for days, if not longer, some insist. One or two missing shirts could put decorating on hold until the issue is resolved, often a messy situation when supplier and decorator both point fingers. It begins to escalate, and suddenly both sides are losing time. Suppliers who offer one-stop shopping eliminate that process entirely, Flippo says, by simply replacing lost items without ever having to tell the distributor there was an issue.

Purchasing Shifts Whether these suppliers are driving the changing habits of distributors or the distributors are themselves are driving the need for one-stop shopping, the shift is occurring on the purchasing side as well. Plenty of distributors are starting to see things the same way, particularly with certain orders. “When you buy blank goods and send them to a decorator and a decorator loses or damages a piece, now you’ve got to get one piece,” says Susan Gillard, a sales rep with Image Group Inc. (asi/230059), based in Vancouver. Suppliers have inventory at their fingertips and can replace a single piece instantly. “If you’re buying goods that you’ve got to ship to a decorator and then the client, you’re looking at double freight, and everybody’s watching their money these days,” Gillard adds.

Still, the idea of supplier-as-decorator disrupting the market isn’t an idea that’s entirely arrived yet, some say, particularly the decorators in the industry. “Most of our distributor customers are still looking for a multi-source vendor relationship,” says Rob Dubow, CEO of Dubow Textile Inc. (asi/700107), based in St. Cloud, MN. In fact, Dubow says his clients are coming to Dubow Textile for image consistency. Corporate customers seeking a unified look may not get what they’re looking for if they use the decorating services of the various suppliers fulfilling a particular order. Having the same decorator apply every logo or image, regardless of technique, means the colors, artistry, style and application are the same from order to order, something distributors can’t promise to their clients if they place one apparel order with a supplier and fulfill another order with another supplier, critics say.

Still, as both distributors and corporate clients demand more streamlined processes, suppliers are starting to deliver, with same-day turnaround on decorating and multiple shifts to make that happen. But not all suppliers are set up to make the transition. For those who have pursued a sales model that’s heavily reliant upon decorators, suddenly switching to decorating and taking business from some of their top decorator clients could seriously damage their current business relationships. SanMar (asi/84863) is one large-scale supplier that has no plans to start offering decorating services. “SanMar is a supplier of blank apparel, bags and caps, and we believe that’s where our expertise lies,” says company marketing executive Lee Strom in an e-mail statement. “We’ll leave it to our customers to be the experts in decorating and logoing our products.”

Strom went on to say, “We don’t see our competitiveness being compromised by not offering decorating services.” Others say the SanMars of the world are simply too entrenched in the blanks side of the business to make the transition to decorating.

Yet even for those who can provide blanks as well as decorate them, there remains a fine line between satisfying a decorating niche in the marketplace while not stepping on too many decorators’ toes. “It’s a smart business model as long as the business model doesn’t take away from your core business,” says Flippo.

Offering decorating services isn’t necessarily a cash cow, those who do it point out. “Our embroidery is a loss leader,” says Dunbrooke’s Flippo. “It’s kind of like a convenience store advertising milk as being $2 when it’s $4 at a grocery store. They’re just trying to get you to come in there and spend money on stuff they really make money on.”

For example, Dunbrooke clients are offered free embroidery on certain orders, particularly if they’re a regular or high-volume client. “We’re not making money on the embroidery,” Flippo says. “Our business model isn’t to make money on the embroidery – it’s to bring in apparel orders as a result of having a one-stop shop.”

The Business of Decorating Many suppliers offering decorating services say that’s not where they make their money – an interesting admission considering the substantial investment required to offer decorating. Decorating’s real purpose, they insist, is to bring in and retain business. For customers who order both apparel and decorating services with a supplier, “we see an increase in garment sales overall with those customers,” says Chris Clark, vice president of sales, eastern U.S. for Ash City Worldwide (asi/37127), based in Richmond Hill, Ontario.

That retention and business expansion rate is so stark that the percentage of growth from clients requesting decorating services on the blanks they buy is growing by double digits every year, says Clark, making the company’s $1 million investment in embroidery machines (300 in their Kansas City location and 150 in Canada) well worth the money.

Ordering and decorating in one location also saves hours, says Judy Guerrero, an account executive with Northbrook, IL-based distributor Corporate Imaging Concepts Inc. (asi/168962). But Guerrero, like other distributors, isn’t willing to let go of the supplier/decorator model just yet. “I order from other decorators too,” says Guerrero, who places a portion of her apparel decorating orders with Edwards. She estimates that she sends about one-third of her apparel to an outside embroidery company.

Those orders, Guerrero says, run like clockwork. In fact, for distributors accustomed to the traditional model of ordering blanks that are then sent to a decorator, stepping away from what’s worked in the past can be a difficult tradition to break. Part of the problem may be in the size of the firms they’re dealing with. Small decorators may be limited in the size of decorating orders they can handle. “I’ve got a 700-piece jacket order and my supplier is doing all the decorating,” Gillard says. “I would never dream of buying that and sending it to my decorator. That’s too big a job for my little decorator.”

However, a smaller decorator may have fewer customers, which means they can give each client more attention. Despite the convenience of one-stop shopping with large apparel suppliers, “you’re in a big queue with a big company,” Gillard says, “whereas if we just order blanks they go out the door right away.” Those orders are sent to a few select decorators, all of whom Image Group gives a lot of business to. These decorators give good turnaround times because of the amount of business they give, and in a world where everybody wants immediate results, that’s an important element to the order-fulfillment process.

Still, distributors like Gillard are starting to recognize that a natural split is being created in the industry between traditional decorators and suppliers who now also decorate. As Image Group relies more and more on suppliers to decorate blank goods, they’re remaining loyal to existing decorators but with specific size orders. “I like having both options,” Gillard says. But she also recognizes the potential benefits of supplier-decorated apparel. “They’re responsible for the goods,” she says. “If a supplier makes a mistake additional inventory is right there.”

And that saves on additional shipping of replaced pieces. It probably doesn’t make decorators any happier, but as Gillard notes, “there’s always going to be somebody who’s unhappy.” She adds that if smaller decorators get knocked out of the marketplace that may make smaller distributors unhappy. Ultimately, she adds, it’s nice to have suppliers and decorators providing the same service – as long as there are enough orders to sustain that balance in the marketplace.

That’s really where concerns are appearing, say experts, although, so far, nobody seems to be nosing anyone out of a job. “If an end-user can go directly to a supplier and get apparel decorated and a distributor is cut out, that’s different,” says Blaise.

So far, nobody’s saying that there’s been any shift in the natural order of things –corporate clients order from a distributor who orders apparel from a supplier, whether it’s blank or decorated. But one thing to consider, Blaise adds, is that now suppliers are essentially becoming manufacturers rather than simply distributors of apparel products.

Those are all necessary steps to remain competitive in the industry, says Vantage’s Neaman. “Understanding how to leverage a complete source for logo apparel will enhance a salesperson’s profits and overall book of business,” he says, which is why it only makes sense for apparel suppliers to continue to offer decorating services. “The real challenge is to be equally successful and competitive at both.”

– E-mail: betsycummings23@gmail.com