When Times are Tough

The Tough Get Going

 The word is on the street…our economy is suffering. People are cutting back, and many embroiderers are worried that any level of recession will cause the consumer to cut back on non-essentials—and they fear that embroidery and embroidered goods may be way at the bottom of any list of necessities.

An embroiderer lives with one foot in each of two worlds. On the one hand we are the consumer and are looking for the best bargains, the best shipping and operate on a JIT system, which means “just in time”…not a lot of pre-buying and storing of essentials like backing, thread, needles, etc. On the other hand, we are the provider, and our customers are going to be looking for the best prices in order to continue to use our services.

It is human nature to look for the best deals and the lowest prices. We remember that when we are the ones doing the shopping—looking for a used machine, case or bulk pricing on shirts, fire sales where one person’s misfortune becomes our gain. When we are watching our pennies, it is hard to look on the other side of the deal, but the best price is negotiated with dignity and is fair for both sides.

I have always been a believer in the “don’t compete on price” philosophy. We give in to the pressure the customer brings to bear when they tell us that the shop across town is much more reasonable than we are. Some lower their prices and may end up pricing themselves to a below-profit level—the going out of business sign is the next step.

I think better avenues to explore are cutting our costs in effective ways so we can hold the line on pricing or offer a discount for good reason, providing service to justify price, adding other streams of revenue to our business to draw in the customer or finding an exterior outlet for product and services whether we are adding additional retail exposure to our business or finding a retail spot to augment a home-based operation. There is always room for the creative in embroidery, whether it is in marketing or in design.

With these things in mind, let’s explore some methods that will keep the madness at bay and perhaps benefit our bottom lines. Suggestions often stimulate the mind into finding solutions, so put on your “embroidered” thinking cap as you read.

 Cutting Costs

 I have told this story in my seminars—and perhaps in a previous column—but it is always a good thought-provoker when talking cost and price.

Years ago, the price of candy bars was set to rise. One candy company did not participate in the price hike and their sales shot up. Closer observation (my Father had a hand in this) showed that the price stayed the same—but the candy bar did not. It was smaller, just by a fraction of an ounce, than the other bars. The company was able to hold the price—something in which the consumer is (sadly, sometimes) most interested. I am noticing the same thing today in the ice cream aisle. Going out to buy a “half-gallon” of that confection means coming home with a tub that holds 1.75 and even 1.50 quarts. The company is able to maintain quality and still get what is essentially a higher price for their product.

We can do the same thing in our shops. We can hold the line on excellence while finding ways to boost the price “internally.” Maybe we can experiment more with backing and find ways to use one piece instead of two. If you buy the more expensive pre-cut backing, maybe it is time to buy it by the roll and cut your own,  giving you a selection of small pieces for smaller designs. I even use the very smallest as packing when shipping my books and other products. The smaller pieces can even be recycled into holiday greeting cards. Stitch an appropriate design and then slip into a “window-card” for a message that shows what you do.

Maybe we can explore ways to use underlay (a little more thread) and eliminate the more expensive topping. We can search the internet for sales on the embroidery essentials; check out auction sites for liquidations of small—and large—shops. Perhaps we can boost our production by running the machines faster—something that is very possible when the goods are hooped very well and the design is digitized with an eye to efficiency as well as smooth stitching.

If your business is solid, consider buying a multi-head so you can do more than one at a time, keeping the profit for you, not passing it down to the customer. A $30.00 shirt on a single head equals $120.00 on a four-head—and times are tough for the machine dealers as well so you could work a very sweet deal and boost your production capability.

 Service Justifies the Price

 Consider offering delivery or “free” shipping if you can work the cost into your price. We all know that there is nothing really free, but you can find ways to offset costs and offer “free” stuff. One thought here…I never discount embroidery. I will discount product bought through me in bulk, but my embroidery quality is based on education, knowledge, application and experience. Teach your customers to value your work as a professional…and one way to do that is to hold the price on your experience.

Make sure you honor your commitment and earn a reputation for reliable service. Good service holds a customer far longer than low prices and fast talk.

You should own insurance that covers the value of all goods in your shop, including any customer–supplied goods. A fire or flood can wipe you out if you are not insured. Let your customers know their goods are insured—it can be touted as another “service” you offer.

 Expand your Horizons

 Nothing adds more excitement to a business than adding other streams of revenue to draw in the customer. It is exciting for them to discover the many different and mixed decorating processed we can bring to our work but, more important, it brings excitement, and challenge to our lives. Our whole outlook on business and possibilities (my favorite word) can change drastically when a new procedure is mastered and then offered to an appreciative client base.

A low cost investment is a heat press which can be used to apply ready-made transfers (and then add a dollop of embroidery!) or even for something as simple as heat pressing your embroidered logos, a trick I learned from Pat Baldes of Personalization Solutions. The heat setting not only pressed the embroidered area to reduce any puckering or cupping (lasting through washings in many cases) but also tames any little thread ends that can mar the appearance of even the most professional embroidery.

Now that you’ve got the heat press, learn to use the CAD cutting machine that is sitting in the corner, or buy the one that is sitting in the corner of another shop. Save time and stitches by using material in appliqué and tackle twill creations or just add a touch of material as an eye catcher. Don’t overdo it and use fun colors and patterns and it can really perk up a design. At the same you will stimulate interest in your services and products because of the new look.

We can use that same cutter to cut out transfers made with an ink jet printer and apply them with that new heat press to offer an alternative to the more expensive embroidery process, We can combine printed designs with embroidery to offer shirts with a “punch” that is less costly to the consumer than just embroidery but adds the wallop of a mixed media product.

Save the leftovers from the Cad material and make labels for your custom shirts and other creative goods.

More Exposure

 You can beef up your exposure not only by adding new application processes, but also whole new departments in your existing retail shop.

I recently read some inspiring stories and talked with people who are doing just that.

One retail embroidery shop, already offering sewing alterations as a side-line, added a room of gently used, high-quality garments—some purchased outright, some on a consignment basis. They were able to sell an evening dress and a wedding dress at lower than the original price, but still at a nice profit, by being able to offer “free:” alterations for the client on the spot.

Another embroidery store that specializes in sports and hunting embroidery, added a section that sells new (close-outs) and gently used sporting and hunting clothing and equipment. They are helping their clients realize some return on consignment items as well as adding to their own profit. An added bonus is being able to personalize the cases and garments purchased.

High end artistic boutiques exist that allow you to put your products in on consignment. One that I have joined charges rent as well as a 10% commission, but the store advertises on the Internet, holds art receptions and civic gatherings and thus caters to a clientele that can afford more than a shopper in a flea market environment. I can offer embroidery as a service, sell blank goods and exercise my creativity by filling my booth with creative things—not only to see “what works” but also to creatively eliminate overstock or other slow-moving goods by decorating them in a one-of-a-kind fashion. I have worked hard to offer unique hand crafted and judiciously assembled gifts and gift baskets to present an image not found in other booths in the building. Many of the shops are filled with merchandise purchased from the well-known gift marts…things that can be found in any gift shop. Strive to be different and you will catch many an eye.

One enterprising embroiderer I know cut a “window” out of a personalized shirt that was unsalable and used a beautiful place mat to fill in the window, creating a new shirt that was recycled on two fronts.

 Final Thoughts

 Don’t forget to educate your customers about the tax deductions allowed for advertising. If they are looking for ways to boost their business in these difficult hours, why not do it with employee shirts or give-away caps and get wearables and good-will as well as advertising and the deductions allowed for it.

Be heartened that many companies that have bought in large quantity from overseas markets might be willing to visit—or re-visit—the idea of buying locally. Drop in to see them…nothing makes it more personal than a face-to-face, which they don’t get from the thousands-of-miles-away shops.

Sell them on the idea of the same JIT ordering technique you use when you order products. Just in time, which is easy with a local provider, can save storage space and cost. Investigate the idea of setting up a “company store” for them on your website (I hope you do have one, even just to use as a brochure)  They might just love the idea of sending employees there to order what they want. Consider making labels for their shirts with your leftover CAD material with their company name on them.