Counselor Magazine July 2012 : Page 59that couldn’t find another vendor that could perform the work properly. “Because of research we’d done on hoop-ing,” Albert says, “we were able to embroider the product just right.” This ability to impress clients and gain their loyalty is helping distributors that dec-orate apparel in-house increase their sales and improve their businesses. “There are people who come to us now because our dec-orating ability gives us even more credibil-ity,” says Boone, noting sales have doubled over the last year, a rise driven, in part, by in-house decorating. Similarly, embroider-ing and screen printing has, along with other business improvements, helped spur several years of 35% to 40% growth at Kotis. Impressive Imprints provides a great example of how a distributorship can tap into new revenue sources with embellishing. Like most distributors who decorate, Impressive Imprints began embroidering to meet its own stitching needs. But soon, other distrib-utors began coming to Albert’s company for stitching services. Seeing opportunity, Albert increased the setup from one four-head embroidery machine to multiple machines comprising more than 20 heads. He then launched Thread Branders, a contract decorating business that serves Impressive Imprints and a host of other distributors. The business, which has expanded to include screen-printing and laser-cutting apparel decoration, is a significant source of revenue. And to avoid potential conflicts, a confidentiality agreement ensures Impres-sive Imprints’ reps will not have access to or pursue the other distributors’ clients. Since business is booming at Thread Branders, clients clearly trust Albert. “We’ve invested just shy of $1 million in a new facility to meet demand,” he says. “If your clients do a lot of apparel, then decorating is a real value-added benefit that can give you an edge.” Tej Shah, Overture Premiums & Promotions ( asi/288473 ) dard-size left chest logos per day. “You can start smaller, but we had a big client base and we wanted to take care of their needs ourselves,” says Shah. Even operating on a smaller scale comes with significant expense. All My Best runs three screen-printing presses, a heat press and six embroidery heads, but in order to stay profitable, make payments on equip-ment and keep employee paychecks from bouncing, the distributorship needs to rake in an average monthly minimum of $40,000. If you want to decorate in-house, chances are you, like All My Best, will be paying for your equipment over time, rather than in a lump sum. But beyond that recurring expense, you must have cash at the ready for machine maintenance. While some fixes can be handled by staff, others may require a professional technician and expensive parts. “There are costs to upgrade machinery and keep it running well to ensure you’re provid-ing the best service,” Shah says. Naturally, distributors also need a large enough facility to store all that equipment. Finding a suitable place to rent can prove pricey, and even if you own a space, upgrades may be required to make it fully functional. Kotis, for example, has spent tens of thou-sands in building and electricity upgrades to accommodate its embellishment operation. Another expense – and challenge – to consider is the overhead involved with addi-tional employees. Having top-shelf decorat-ing equipment will be for naught without reliable employees to run the machines. All My Best, for example, brought on seven new staffers, while Kotis put another 12 indi-viduals on the payroll. Additions included management-level hires. “You need to hire someone to run the shop,” says Becker. To manage a shop effectively, distribu-tors must develop an in-depth understand-ing of decorating processes. Becker worked hard at the task through personal research and discussions with experts. “I’d say I knew more about screen printing than many other distributors, but even then there was a gargantuan amount of learning still to do,” he says. The acquisition of expertise involves learning how to decorate a wide variety of apparel. “There are so many different types of garments out there, and what works for one might not for another,” says Albert. “There’s a lot of testing you need to go through to get it right.” Beyond understanding the nuts and bolts of decorating, distributors must learn how to charge for their embellishment services. Not surprisingly, there a lot of variables to consider, from stitch count in an embroidery design and the palette of colors in a screen print to what you pay employees. In the end, pricing comes down to tabulating all the costs that go into producing orders and then setting a fee that allows you to make a profit without pricing yourself out of competition. To help achieve that balance, Boone says it’s essential to have, as she does, an experienced operations manager. “It can be a challenge to pinpoint the right pricing,” she says, “and you need that expertise.” Distributors Counselor spoke to, though, pinpoint the continuous overhead and main-tenance involved with managing an in-house decoration operation as the single biggest challenge. Plentifully supplied with a con-stant flow of orders, the apparel-decorating operation at Overture is rarely, if ever, idle. Whether machines are humming or not, Overture is paying for the equipment and the employees who run them. As such, if there’s no stitching or screen printing going on, decorators say they’re losing money. “One of the biggest things for companies is keeping machines running long enough to get their money’s worth,” says Shah. Given the challenges embellishing presents, it’s understandable that many distributors prefer to stick to their exper-tise – selling. But for those who’ve weighed the pros and cons and are willing to take the leap, much can be gained. “If you sell a lot of lower-end commodity items, then it doesn’t make a lot of sense to bring things in-house,” Shah says. “But if your clients do a lot of apparel and you’re looking to expand there, then decorating is a real value-added benefit that can give you an edge.” – E-mail: cruvo@asicentral.com; Twitter: @ChrisR_ASI 59 Decoration Challenges Despite the upsides, decorating in-house presents constant daily challenges and considerable start-up and recurring costs. When, for example, Howard Potter decided to start screen printing at his Yorkville, NY-based A&P Master Images, he paid upwards of $25,000 for equipment and supplies. Of course, the larger your opera-tion, the more you need to invest. Wanting to handle all decoration itself, Overture has spent hundreds of thousands of dollars on more than 150 embroidery heads and a number of screen-printing presses that enable the distributorship to print up to 800 shirts per hour and stitch 1,000 stan-COUNSELOR | JULY 2012 Publication List |
