Q I’m thinking of adding contract decoration to my current end-user business model. Do you have any advice for me on deciding whether it’s the right step for me?
I’m thinking of adding contract decoration to my current end-user business model. Do you have any advice for me on deciding whether it’s the right step for me?
If you’re a decorator, by now you’ve probably already thought about this a time or two. Some have now shifted in that direction entirely, while others offer it as part of what they do, continuing to sell direct. If you’re still on the fence, there are good reasons for taking the plunge.
Contract work is a great way to diversify your business – it can widen your network and it helps feed the machines you have running in your shop. But, if you’re going to be a contractor and only have a couple of machines, then you’re probably only going to be able sustain a couple of major customers, and you’ll end up working for them. If you’re a promotional products distributor who runs machines, it might be hard to get other distributors to work with you, because now you’re a competitor. You’ll need to take a hard look at what you want your business model to be and how much demand you can place on it.
As a contractor, your product is still the same. However, what’s involved is not. One benefit of contract work is that the initial legwork on a direct sale has already been done for you. You don’t need to find a product your client will like, sizing and collecting prices from assorted apparel suppliers, for example. You can focus on the manufacturing.
“When considering venturing into contract decoration, it’s important to review your shop’s capacity.”
Your responsibility involved with an order will also change. You still need to make sure you give an excellent product on time, but now that you’ll be working behind the scenes, discretion becomes an important factor. You don’t want the word getting out that you sold business to someone’s account that trusted you to only run a job for them. This will hurt you down the road, not to mention that you’ll lose your customer. Keep in mind that part of the reason you’re taking this on is to widen your network. Contracting gets you in front of a lot of clients, so protect your clients’ accounts.
In my opinion, the best way to do this is to offer contract decoration only. While some may have found a way to straddle the two, most times, these models don’t mix well. As a contractor, your only focus is running your machines. You leave getting the customers to your distributor client, and this works because the distributor will then be looking to you as a source.
In the next issue, you’ll learn some ways to make your shop more sustainable and still turn a profit. See you next issue!
Your clientele becomes advertising specialty industry professionals. Although working with distributors present its own challenges, in most cases, it’s easier to work with them. They field end-buyers’ questions. They understand the information, artwork and more that you need to run the order, so they don’t need you to walk them through the process as much as a brand-new end-user client. Other decorators or apparel suppliers in the industry could be another source of contract work. Decorating firms sometimes have issues with overflow, and if your shop is big enough, you can take some of their workload and create a symbiotic relationship.When considering venturing into contract decoration, it’s important to review your shop’s capacity. This is vital information when you’re taking on jobs and even more important when you’re focusing on filling up your shop with orders. Production and turnaround times are very important, as this is information you’re going to convey to prospective customers quite a bit. If you haven’t already, you’ll want to start recording your production output now and determine what you can take on while still producing in a timely manner.
You’ll also want to look at your assets. How many machines do you have? Is your business housed in a location where you’re able to grow? Machines are expensive, so review the costs of running your shop. This is important when it comes to pricing. Larger shops can put out more units at a time, allowing them to charge less on the bulk orders. Smaller shops are built to run smaller orders. A large job could tie up their machines, but their price point may be lower on those moderate-sized orders. Ask yourself: What stage is your shop in now, and is it at a good size to take on contract work?
Tracey Tyree started as a customer service representative for Stitch Designers (asi/741145), a contract decorator in Louisville, KY. She has been in the industry and with Stitch Designers for the past 11 years, and is now a national accounts manager. Contact: (800) 883-6152 or email@example.com.
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