The idea of a customer that frequently hands you orders to produce on a steady basis has a lot of shops constantly considering becoming a contract printer. After all, there are employees and bills to pay, and the attractiveness of “easy” money makes it seem like a great idea.
However, there needs to be some thought behind this step as there can be many landmines along the way. First, it’s a great idea to start with a business plan focused on this idea solely.
Who are your contract customers going to be? Promotional item agencies? Other decorators? Larger institutions such as online apparel websites?
All of these companies will have different ways of doing business, different methods of paying your shop, and different demands on your time. Reaching out to them is fairly simple. Just look them up online with a search and find their contact information. Larger firms will have pre-written lists of how they work. Smaller companies, such as other decorators, may do things on a job by job basis. Either way, contacting a few companies can give you an idea on what they pay, their turn times, and the difficulty level that you will be facing.
With that information, can you do the work? Normally you might make a lion’s share of your revenue from marking up the blank inventory. What if it is supplied by the customer and you are only getting paid to decorate it? Now, add in the fact that they are only allowing you a reduced rate to charge for the decoration, as they have to mark it up too...and you can see that you will be working for far less than you are used to.
If there’s one thing in common that successful contract decorators all have and that’s they have their finger on the financial pulse of their shop. They constantly monitor, to the penny, what it costs them in labor and materials/overhead to do any work. Driving these costs down by becoming more efficient, with higher quality, and faster speed is their daily zen focus. Do you know yours? A lot of shops don’t even calculate this, as they don’t want to do the math. However, this is how you determine if you can do contract work or not and still be profitable. If you are running a shop that just uses a matching price list from the shop down the street, I would be careful before getting into the contract printer game.
If you are going to work in the contract printing arena, here are some tips that you might want to consider to make it an easier journey:
Contract printing can be a very lucrative and great way to scale the success with your shop. Be careful, deliver on expectations and ask your customer questions if you don’t understand something or if you are missing any information. You can do it!
Printavo is simple, shop management software. We work with screen printing, embroidery, awards & engraving, signage and digital printing companies to make your workflow easier. Our software helps you keep your shop organized by handling scheduling, estimating, quote approvals, workflow, payments, accounting and more. This all allows you to work smarter, not harder.