One-stop shop or contract devocator? – Brief Article
Turnaround times, profit margins and time management are among the issues to consider
Promotional products distributors source most of their typical ad specially items from suppliers who handle everything. You order calendars, pens, coffee mugs, mousepads and thousands of other types of products, and it’s a given that the all-important embellishment is part of the order.
But things can be radically different for promotional apparel, where for years the mainstay of the business has been in providing blanks. PPDs typically source product from a supplier — either a wholesaler or a manufacturer — and then have them embroidered or screenprinted by a contract decorator, often by a decorator close to home. This extra step in the process has been the source of considerable debate in the industry.
There are a number of full-service suppliers, or “one-stop shops,” as they are often referred to, that decorate in addition to stocking wearables. The one-stoppers eliminate the extra sourcing step, but they aren’t necessarily faster, and there are a bunch of other factors to consider.
One sure way to fire up both the full-service wearables supplier and the contact decorator is to ask them why a distributor should go with them instead of the other option. Often they seem bewildered that a distributor would even consider going the other way without extenuating circumstances.
There are compelling arguments from both sides, and often one method will make more sense than the other, depending on the situation. If you’re not completely sold on your contract decorator, you owe it to yourself to explore other options. If you always go with the one-stop shops and think contract decorators are too much of a hassle, you may not be aware of what they can do for you.
It would take a book to fully cover all the issues. Full-service suppliers usually offer lots more than just product and decorating — things like custom garment programs and help with sales presentation materials. But we’ll stick to sourcing and decorating.
Here’s a look at some of the issues PPDs should consider when choosing between one-stop shops or wholesalers and contract decorators.
There are a number of full-service apparel suppliers who specialize in servicing the promotional products market. Among the bigger ones are ASI Top 25 Suppliers Vantage, King Louie and Hilton Corporate Casuals.
A number of other apparel manufacturers who focus on the industry also have embroidery capabilities — companies like Augusta Sportswear and Pineapple clothing Co., just to name a couple. Manufacturers with roots in the green-grass golf market that have ventured into the corporate market through PPDs, such as Sport-Haley and Antigua, brought embroidery over from their experience in the golf market.
Wholesale suppliers who offer a number of brands to PPDs, such as Alpha Shirt Co., Broder Bros., Staton Wholesale and SanMar, to name a few, typically do not offer decorating services, and the reason is purely business: In addition to servicing PPDs, screenprinters and embroiderers make up a significant percentage of their overall sales. Wholesalers that decorate risk alienating those customers.
At SanMar, a company with roots as a supplier to the screenprinting industry before embroidery and promotional wearables took off, going into the decorating business has never been considered, according to marketing director Linda Goldman.
“You are potentially taking business away from your customers,” Goldman says. “What we do best is inventory products and sell blank products. That’s our focus; that’s what we’re good at — to make sure the customer has what they need when they need it.”
One wholesaler that has ventured into decorating is Georgia Tees, based in Acworth, Ga. Georgia Tees began offering embroidery last November.
The company’s 1999 catalog features 262 styles from 15 different brands, including most of the major mills. The embroidery department at Georgia Tees has 49 heads, with another 12 on order. While the company still sells 95 percent of its goods as blanks, the embroidery machines don’t sit idle much.
“It’s been phenomenal,” says Georgia Tees’ Eddie Hall of the company’s embroidery business. “We’ve already gone from one shift to two 12-hour shifts.”
Hall says the embroidery department was added simply as a convenience for PPDs, and stresses the company does not sell direct.
“We turn down orders every day from customers who walk in the door wanting to do direct business. We give them a list of four or five companies (PPDs) in their area,” Hall says.
Vantage, based in Avenel, N.J., is a vertical manufacturer that is also one of the largest embroiderers in the country, operating eight domestic facilities with a total approaching 1,700 embroidery heads. Vantage embroiders about 7 million pieces per year, including contract work for other labels.
Vantage president Ira Neaman says his philosophy is that a distributor ultimately makes a purchasing decision based on reliability and time management.
“A distributor only has X amount of time during the day and they are most profitable when they are selling product, not tracking where their goods are, checking if this or that has been done,” Neaman says.
Christopher Duffy, Vantage’s director of business development, says the real question for a distributor is, “am I a salesperson or am I a traffic manager?”
The view is much the same at Hilton Corporate Casuals, according, to marketing director Jason Temme.
“The way we look at the relationship is that the distributor should do what they do best — create sales and sales opportunities,” Temme says. “When the P.O. is written the amount or profit that can be made is a fixed number. Any additional time spend on a specific order is time bot spent on creating the next sale.”
Contract decorators, oh the other hand, will tell you having more control helps you ensure that your customer gets what they wanted.
Lon Winters of Graphic Elements, a contract decorator in Denver, says using a local decorator gives you a chance to do direct proofing. “From a quality point of view and getting what you want, you’ve got a direct link,” Winters says.
Perhaps the biggest benefit of going with a full-service supplier is the reduction of paperwork and shipping hassles.
According to SanMar’s Linda Goldman, promotional products distributors (PPDs) don’t t want multiple invoices, which his what happens when a PPD orders from a wholesaler, has that order shipped to a contract decorator, and then shipped either to the PPD or directly to the client.
Goldman says SanMar is looking into figuring out a way to combine invoices from the supplier and decorator, because PPDs are asking for it.
“A single invoice — that’s a big benefit,” says Eddie Hall of Georgia Tees. “One invoice makes the bookkeeping a lot easier.”
At Vantage, Duffy says they figure the cost of generating a purchase order for a PPD to be about $75, including the paperwork, phone call, employee time, overhead and mailing costs. When you go with a wholesaler and contract decorator, you have to generate two purchase orders, coming out to $150 by the Vantage estimate. On an average-size order of 48 pieces, that amount is nothing to sneeze at.
“Is that managing your cost? It comes right out of your profit,” Duffy says.
While paperwork and cost is an issue, perception also comes into play. PPDs often have the last supplier in the chain — whether a one-stop shop or a contract decorator — ship the goods directly to the PPD’s end-user client once the job is finished. Often this package arrives with the supplier’s or decorator’s name on the box and shipping documents. However, many contract decorators, such as Target Graphics, a contract screenprinter in Naperville, Ill. Which works exclusively with PPDs, ship the finished goods with boxes and bills of lading identifying the PPD as the shipper. This lends the perception that the PPD has handled everything for the client.
Turnaround time is an arguing point between contract decorators and one-stop shops. Contract decorators will tell you they are faster, but some of the one-stop shops will offer debate.
When asked the primary difference between contract decorators and one-stop shops, Bill Cournan, president of Direct Embroidery in Depew, N.Y., has a quick response: “Speed, speed and speed,” Cournan says.
Direct Embroidery is strictly a contract embroiderer that has 220 embroidery heads producing 6,000 pieces per day in three shifts. The company has built its business on being fast and accurate, and Cournan says a quick turaround time is why he sees a lot of product from one-stop shops embroidered in his shop.
“We receive boxes from King Louie and Vantage all the time.” Couran says. “If vantage and King Louie can’t do something in 10 working days or lees, they (PPDs) come to us.”
Rush orders are one thing contract embroiderers deal with often. On the Friday right before Labor Day Weekend, Direct Embroidery received an order from promotional products distributor Ad Solutions to embroider 4,000 Gemline tote bags. Artwork was e-mailed, the job ran on Friday and Saturday, and the bags were in Washington D.C. on Monday.
Cournan says his company’s prices are competitive, and that the extra freight charges “come into play a little bit, but if the customer can have the goods on the day of his event, they’re willing to pay for that.”
While fast turnaround time is one thing contract decorators base their businesses on, one-stop shops won’t concede an advantage.
“We know that this business revolves around fast turnaround,” Vantage’s Duffy says. “How we actually schedule our embroidery production is based on due dates.”
Vantage has “Diamond Embroidery Service,” designated items in its catalog are marked with diamonds that can be embroidered and shipped in two to four business days with an approved logo disk on file. With its Diamond Logo Service, camera-ready artwork can be turned into an embroidered swatch in one to two days. Basically, even with new art, it’s possible to get Vantage’s most popular styles in about a week, and there is no extra “rush” charge.
“I think the premise behind rush charges is that it’s the exception and not the rule,” Duffy says. “It’s the norm and not the exception at Vantage.”
Vantage’s price sheet includes a 4,000-stitch logo. Deduct 41.25 for blanks, and add $.25 for each additional 1,000 stitches above 4,000.
In its 1999 catalog, Hilton Corporate Casuals lists seven business days for standard embroidery service for orders of stock items with existing approved embroidery tape of the logo on hand. Without an approved tape, standard art service takes five business days, plus the seven days for embroidery service.
Hilton offers “Platinum Service” for an additional charge, which promises embroidered stock items in five business days with an approved tape, and 48-hour Platinum Art Service that will turn camera-ready art into an embroidered approval swatch in two days.
Hilton’s embroidered prices include the garment and one embroidered logo, up to 6,000 stitches, with no setup charge on orders of 48 and up. For example, on a quantity of 48-143 units, Hilton’s Bastion Golf Avondale shirt wholesales for $31 unimprinted, and for $36.90 embroidered.
At The Antigua Group, the embroidery department decorates 8,000 units per day. Logos can be embroidered in up to seven colors, and can be placed on the left or right chest, on the sleeves or on the collar. The minimum initial order is 72 units, with a minimum reorder of 24 units.
The delivery time on initial orders is four weeks, and two to three weeks on Reorders. If you have the time and want Antigua shirts, having them embroider would be the way to go — the unembroidered price for Antigua items is just $1 less then the embroidered price (for one logo up to 8,500 stitches, with no charge for one embroidery disk setup).
At Georgia Tees, PPDs are offered a 10- to 10-day turnaround from approval of artwork, but Hall says, “We’re hitting seven to 10 days.”
The damage rate in decorating is most frequently put between 2 and 4 percent, meaning rougly three of every 100 embroidered or screenprinted shirts are ruined during the decorating process. Who eats the cost of the damaged goods often depends on whether you go with a full-service supplier of a contract decorator.
When you go with a full-service supplier, that cost is generally picked up by that supplier, and the distributor usually never even needs to know any shirts were ruined at all. When the full-service supplier ruins a shirt while decorating it, they will go back and instantly pull another off the shelf to replace it.
“If you call for Crystal Springs (shirts) and we mess five up, all we have to do is walk out to the shelf and replace them,” Hall at Georgia Tees says.
“The distributor never incurs any spoilage charges if a garment is ruined during the decorating process,” Hilton’s Temme says.
When you go with a contract decorator, the distributor typically pays the cost to replace the damaged shirts, and has to wait for those shirts to be reordered and received by the decorator.
Lon Winters of contract decorator Graphic Elements in Denver says the industry average for spoilage might be around 3 percent, “but there’s no reason it shouldn’t be 1 percent if you know what you’re doing.”
Bill Cournan at Direct Embroidery says his company’s damage rate is less than a percent.
When it comes to the quality of the decorating, both full-service suppliers and contract decorators will argue an advantage.
Contract decorators, obviously, specialize in decorating. They are used to printing or embroidering on a wide variety of different fabrics, and know what will work best on which fabric. They can see potential problems coming and know how to avoid them.
“All we do is screenprint and embroider, so we’re going to be better at it than someone who does 100 different things,” Winters of Graphic Elements says.
One area where contract decorators can often go the extra mile is when you need multimedia designs or something unusual. Most full-service suppliers tend to stick to standard embroidery or screenprinting techniques.
Georgia Tees doesn’t offer multimedia capabilities, Hall says, “because we don’t want to tackle anything where we feel we can’t deliver the best product possible.”
Vantage’s embroidery department, with eight locations nationwide, has created a number of award-winning embroidery designs. Duffy says Vantage will do some applique work, using tackle twill or ultrasuede along with embroidery, which can offer a different look and also act as a cost-server since it cuts down on stitch counts.
Many manufacturers of brand-name labels are hesitant to even sell blanks – particularly ones that always embroider their own log on each item (a la Cutter & Buck). Ouray Sportswear by SCI puts its own log on its items. Vice president of sales Mark Mussellman says Ouray Sportswear doesn’t like selling blanks because they can’t control the quality of the end user’s logo, and if that logo is poorly done, it reflects poorly on the garment and the brand.
But that would never happen to a promotional products distributor who’s on the ball when it comes to selecting who decorates their wearables.
Brian Anderson is the Managing Editor of Wearables Business
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