Getting What You Pay For
Below is an excerpt from my book, “Made to Make It: A Guide To Screen Printing Success.” Learn helpful tips and tricks on how to run a screen printing business.
When I started Ryonet, like a lot of other business start-ups, I had NO clue about purchasing. I bought things from whoever I could get them from, without any consideration of price or quality. To make the screen printing kits I started selling on eBay, I went to a local supply house and bought shirts and quarts of ink at retail. I bought lumber and hardware from local hardware stores and Home Depot; bought boxes from a retail box store, and took my packages down to UPS every day with retail stickers on them. I made the kit for about $150 and sold it for $200. That’s a LOT of work to do for $50 of profit. This was all, of course, before I started an official business. When I decided to do this full time in 2004, I knew I had to buy stuff for a lower price. I called manufacturers like Ulano and Union Ink and asked if I could get set up as a distributor and buy at a wholesale. They essentially laughed a bit, then referred me to a local distributor, so I started shopping.
I found a supplier that would work with me on price and a sales rep that knew a lot about the process of screen printing. He was able to give me some guidance on the process I should be following, and provide me with the right materials and supplies. I was still buying things at retail pricing from a distributor, but I did get a little bit better price, and I started purchasing in bulk. Eventually, we ended up hiring that sales rep and asking him to help us develop manufacturing relationships where we could buy at wholesale pricing. As our business grew, we began to notice things that we could make ourselves for a lot less. We started making our squeegees, scoop coaters, light stands, exposure units, and even tried our hand at making screens.
We eventually bought a screen manufacturer that became Nortech Graphics, an offshoot of Ryonet. We later purchased Riley Hopkins and started making equipment. Now we even make Green Galaxy Ink and some of our chemicals. We are just about as vertically integrated as any company out there, but it wasn’t always like that. To this day we hold valuable relationships with other manufacturers that allow us to benefit from their ability to produce a better quality item more efficiently than we can do ourselves. In the US and Canada, for example, we hold an exclusive relationship with ROQ equipment.
Along the way, our most important consideration when purchasing materials, supplies, and equipment has always been buying the best quality products, at the most affordable price. Quality should always come first when making your buying decisions. If you can negotiate,or partner, to buy quality in volume, even better.
Types of Purchases
These are the essential items that you will purchase, becoming part of the “Bill of Materials” (BOM) that comprise your finished product. Things like shirts and ink fall in this category. When buying materials, keep in mind your niche, and the quality of the final product. What is the experience you want your customers to have with your brand?
These items are needed to produce your product, but they are not part of it. Things like squeegees, tape, and screens fall within this group. When purchasing supplies, don’t forget the impact they have on your production process. Buy supplies that accentuate production, not delay it.
These are the things that you use to produce and fulfill your finished product—ranging from computers and software to screen printing equipment and shipping scales. When shopping for equipment, think of it as a long-term investment that needs to deliver lasting performance. Do you want to be penny-wise or pound foolish?
Pay Your Dues
If you think you’re going to start out in business buying at the best price, you’re naive. Until you have enough volume to negotiate, your best bet is to spend your time getting good at producing and marketing what you do. When it comes down to it, the big shops who have been doing it for years aren’t paying a whole lot less than what a new shop can purchase things for in the “wholesale” market. A small shop, with dialed-in processes and a good niche, can make 5-10X the profit per garment (if not more) than a large contract shop that’s printing for pennies a piece. As you grow, yes, your volumes will increase. As your volumes increase, your margins will decrease. As they decrease, you will need to offset that by decreasing your costs, but by then you’ll have the justification to do so and much more buying power.
Volume Speaks Volumes
If you don’t have the volume, another option you have is to use someone who does to assist with purchasing. Going through a broker isn’t a bad way to start out as a small business. Companies like www.shirtspace.com make purchasing t-shirts easy and have 1000X the buying power of a small operation. A lot of times you can buy things from that site for less than buying direct from a shirt warehouse! We still use freight brokers at Ryonet because they do so much freight that their prices are less than our negotiated contracts with UPS and FedEx.
Be a Good Customer
Make it easy on your vendor to do business with you. At Ryonet, we actually rank the level of our customers’ professionalism and ease of doing business with. Clients who email us purchase orders with exact parts and pricing or use the backend of screenprinting.com to place their orders make it much easier to fulfill orders than those that randomly call or text urgent needs for “white ink” by tomorrow. I can’t count how many times that “white ink” really needed to be “poly white ink” and the sales rep sent cotton white ink—putting the customer in a bind and forcing us to next day air additional product, all because the order was not placed through a documented system. Use a purchasing software if you can, and if you can’t, use the website and tools the distributor has provided you. You’ll get better service, and you won’t be up a creek without a paddle.
Buy a Little Extra
This means extra ink, screens, or blanks. Because when a mistake happens, you don’t want to wait to fix it, when you can fix it right then and there because you have extras. You are going to save more time and money by keeping production moving vs. the cost of adding a few extra dollars to the order.
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. Use good quality product, and use it to differentiate yourself from all the others that don’t! And this doesn’t just apply to materials; it goes for your supplies as well. While your supplies aren’t part of the finished product, they DO very much either add or take away value from the production process, which affects your bottom line. Cheap supplies can drag production times, costing you money!
I do want to take a moment to dig into the last point a little bit deeper, related to the quality of your supplies. Let me give you a couple of specific examples of supplies that are critical to your production process, and why quality matters.
Yup, you can buy CHEAP screen tape. Lots of printers use a standard box or masking tape; this saves them $2-$3 a roll compared to buying low adhesive screen frame tape. That’s big, right? $2-3 a roll, which could be a 50% savings! But wait. What costs more, tape or time?
Screen Cleaning Chemicals
Yup, you can buy some VERY cheap chemicals that get the job done. They stink, and they aren’t friendly to your printers, or to the environment. But who cares about that? They do what you need them to, right? Not so fast.
Neil Rackham’s SPIN Selling suggests that you ask four types of questions when talking to potential customer:
Hmm…you might be thinking, but that’s pretty much the same amount? Is it really, though? At the end of 2 hours, you either have an employee that is ready to go to the next task—who feels great physically and mentally about the day—or, you have an employee with a headache, who’s been reminded how much he hates screen cleaning. What do you think the difference in productivity is going to be between these two employees for the rest of the day, 30%? That’s $5 lost per hour!
Before wrapping up this section, I do have a personal story I’d like to share related to choosing products that aren’t just good for your bottom line, but also for your employees. One of my screen printing mentors was Marvin Guillot, whom you can still see on many of our old YouTube videos including the Ryonet Pocket Pro and the Low Rider Dryer video which you can search on youtube and probably still find. Marv was a big dude and an industry vet. He had his way of doing things and that way involved using a ton of the “good products” that got the job done. He grew up in screen printing production using solvents to clean and produce like they were going out of style. I always hated when he went on a cleaning frenzy before class because the whole shop smelled so bad, like screen opener. He went through cases of it.
It was a running joke at first, but when his health began to deteriorate, his doctor attributed his failing liver to years of using these products, accentuated by an unhealthy lifestyle. His attitude completely changed on the use of these products, and he became an advocate for greener sustainable products like pallet glue, eco washes, and water-based inks. One of my last conversations with him pertained to writing an article and doing some industry videos to bring this critical discussion to the forefront of the industry. Unfortunately, we never got around to doing it.
Marv died in December 2013 after helping one of his first Ryonet clients (and friend) Sasan, from One In A Million www.oneinamillioninc.com, with installation and training as he upgraded his shop to a new ROQ. His passing was a total shock and unexpected. Marv had his pluses and a lot of minuses, but he didn’t deserve to go like that. Since his death, I have made it my mission to elevate the need for greener products and business practices in the industry.
JARROD HENNIS, FOUNDER OF PIRATE NINJA PRINT SHOP AND ROCKFORD ART DELI, ON BUYING FOR YOUR NICHE:
“One of our challenges has been that we don’t order the same volume as big shops. Our average run is maybe 50-100 shirts. But our niche is ‘American-Made,’ and we’re committed to that. We buy American Apparel. It costs more, and that means it’s not for every customer. But it’s right for OUR customer. They offer high quality, with a huge variety of color choices. Even better, working with a distributor, TSC Apparel, we can buy from them at an affordable price, and with awesome service.”
KEVIN CORCORAN, CO-FOUNDER OF FORWARD PRINTING, ON BEING A GOOD CUSTOMER AND PARTNER:
“We have accounts with several distributors like most screen printers do. One thing we’ve learned over the years is that service is more important than price. We operate using a ‘Just-In-Time’ (JIT) strategy, which means reliability is crucial. We choose relationships where we know we can trust the supplier to go the extra mile for us because we’re a good customer. Even if it costs us a little bit more.”
DAN CORCORAN, CO-FOUNDER OF FORWARD PRINTING, ON CHOOSING QUALITY OVER PRICE:
“Service isn’t the only thing that’s more important than price. So is quality. Saving $20 on a gallon of ink doesn’t mean much if it ends up slowing your production down by 100 shirts an hour. We need the presses to be spinning all day. The wonderful thing about having strong relationships with a variety of distributors is that it allows us to shop around for the best quality materials and supplies.”
Like what you read? Get more great business tips on running a screen printing business from my book, “Made to Make It: A Guide To Screen Printing Success.”