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When I started Ryonet, I had NO clue about how handle purchasing for a business. It’s easy to get lost in the debate of how much to sell your own product, but just as easy to forget that a big part of that number comes from the prices of the materials you purchase in order to make it. Getting the best price on screen printing materials and supplies is critical for determining your profit margin. The smaller the cost, the more money you can make.
Sounds good, right? Every screen printer should go out and try to get the best price on screen printing materials. But, how?
When I first started making screen printing presses, I didn’t give any consideration toward the price or quality of where I bought the supplies necessary to make my products. I bought things from whomever I could get them from. I went to a local supply house and bought quarts of product at retail prices. I bought lumber and hardware from local hardware stores and Home Depot. I bought boxes from a box retail store and took my packages down to UPS every day with retail UPS stickers on them.
After all of that upfront material, my kits ended up costing me about $150, and I sold each one for about $200. That’s a LOT of work for only $50 of profit.
Once I decided to do this full time and make Ryonet an official business in 2004, I knew I would have to start lowering my material costs. So, I called up some big name suppliers and asked if I could get set up as a distributor, to buy their goods at a wholesale price. They essentially laughed and referred me to a local supplier. So, I found a local supply house that would work with me on the price and a sales rep that knew a lot about the process of screen printing. I was still buying things at retail pricing from a distributor, but I did get a slightly better price and started buying in quantity to reduce my costs.
Eventually, we ended up hiring that sales rep and asking him to help get us set up with manufacturing relationships where we could buy at wholesale pricing. As our business grew, we started notice things that we could make ourselves for a lot less. We began doing what is called vertical integration by making our own products and supplies in-house. Squeegees, scoop coaters, light stands, exposure units, we even tried our hand at making screens (that didn’t work out so well so we decided to buy a screen manufacturer who eventually became Nortech Graphics and a split off of Ryonet).
After awhile, we ended up buying out our press manufacturer, Riley Hopkins, and started making our own equipment. And, even more recently, ventured into doing some chemical and ink production ourselves. Now we are just about as vertically integrated as any company out there, but it wasn’t always like that. Even to this day we value competency and relationships that can do things much better and more effectively than us; like our exclusive relationship with ROQ equipment in the US and Canada.
Learning the art of purchasing was quite a process, though. With a lot of trial and error. A few years ago, I sat down and to identify this part of our Ryonet’s journey, and here are some of the things I learned.
Seven Insider Tips To Get The Best Price On Screen Printing Materials:
1. Volume speaks volumes!
You can’t start out buying at the best price out of the gate, and it is foolish to try and do so. When you are a beginning screen printing business, your best use of time is to hone in on making the best products and marketing what you do, versus trying to find and negotiate the best price for everything. When it comes down to it, the biggest shops aren’t paying a whole lot less than what a new shop can purchase things for in the wholesale market. You will gain more leverage as your business grows, but it takes time. Make sure you have the demand from customers before you make demands as a customer yourself.
2. Make it an official business.
Get a business license and get resale accounts set up with your vendors. This will only help you in the long run, from setting up wholesale pricing to a number of other benefits, depending on the type of business you choose to create.
3. Buy in bulk.
Whenever you can, buy by the case or the drum. Most retailers and manufacturers offer bulk pricing discounts. You can save much more than when buying smaller quantities, even at a reduced rate.
Take a look at how we price our Green Galaxy Comet White Ink, for instance:
Pint – $19.99
Quart – $27.99 – You save 30% vs. buying a pint.
Gallon – $59.99 – You save 47% vs. buying a quart
5 Gallon Pail – $229.99 – You save 24% vs. buying a gallon, but 59% vs. buying a quart.
You save so much, just by buying in bulk. And, with something reusable, like ink, you can afford to make less frequent purchases of larger quantity and stock up at a discount.
4. If you don’t have the volume, use someone who does.
Going through a broker ISN’T a bad way to start as a small business. Companies like Shirtspace make purchasing t-shirts easy and have 1000x the buying power of a small business. A lot of times you can buy things from that site for less than buying directly from a warehouse.
5. Make it easy on your vendor to do business with you.
This seems pretty straightforward, but you’d be surprised at how little some customers consider the ways that their own actions and attitude effects their vendor experience. Customers who email us purchase orders with exact parts and pricing, or use www.screenprinting.com to place their own orders make it much easier to fulfill orders vs. customers that randomly call or text urgent needs for “white ink by tomorrow.” I can’t count how many times it has happened that “white ink” really needed to be “poly white ink” and the sales rep sent cotton white ink, putting the customer in a bind, causing the need for next day air, and additional product. Just because the order wasn’t placed through a documented system and was rushed. Use a purchasing software if you can, and if you can’t, use the website and tools the distributor has built for you to make buying easier. You’ll get better service and you wont be up a creek without a paddle.
6. Buy a little extra, in case you run out.
Everyone pushes the re-order line. The difference between those who make it through without issues and those whose production is halted is a little preparation. That means extra ink, extra screens, or extra blanks, because when a mistake happens you can fix it right then and there. You are going to save more time and money by keeping production moving vs. the negative price of a few extra dollars added to the initial order for extra quantities.
7. Buy nice, not cheap.
One of my favorite sayings is “cheaper isn’t better, better is better”. Don’t just get the cheapest garments or ink, or you might find yourself surprised to be in the hole. A cheap price on something upfront can easily turn into a costly mistake when quality is inconsistent or something fails. Invest in good quality products, and use it to differentiate yourself and get even more customers.
Follow these steps and you’ll find your overhead dropping and profits raising. It all starts with a few tips to get the best price on screen printing materials.
Interested in setting up bulk pricing for your business? If you’re a certified business making regular purchases, contact us about getting an account manager.
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