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Hi everyone,
I like to start my own screen printing and embroidery business in Los angeles. I have a 4color/1station press and 12needle one head embroidery machine. i would like to get some business before I invest on a bigger machines.I was thinking about contracting out my big volume orders. but the thing scares me is ,if the contractor will later find my clients( base on their logo or designs) and contact them directly and offer them lower price and basicly stealing my clients.
I would appreciate any help.
Thanks
Allen
 

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Yes, this can happen. You just need to make sure the company you choose is reputable. Also ask for references of other companies they contract for so you can call and hear first hand experiences.
 

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It could happen, that a contractor may try and steal your customers. But contractors are not usually interested in the end user. Also, the industry is small enough that word will get around pretty quick and people will avoid them.

Do some research, find a contractor you are comfortable working with. If possible, visit their workshop and see how they operate.
 
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It's always a possibility when subletting work, like everyone said if you find a contractor that is honest to work with to limit the chance of it happening....the flip-side is do you tell your customer that you sub'd the work out? I'd say no.

Hope this helps.
 

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yes, as others stated it can happen. It's important to work with a reputable contract printer. Even then be careful, handle all the business yourself, don't have the printer in contact with your client or ship directly to your client. The printer may not go after your client but your client may go after the contract printer for a better price. Always have the contract printer ship to you, then you ship to the client.
I had a contract printer do an order for me and they packaged all the goods in boxes and taped sheets of paper with their company logo and contact info on it, on every box (the boxes were plain with no printing on it). Luckily i was picking up the order and reshipping so i had the chance to remove the papers.
 

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I had a contract printer do an order for me and they packaged all the goods in boxes and taped sheets of paper with their company logo and contact info on it, on every box (the boxes were plain with no printing on it). Luckily i was picking up the order and reshipping so i had the chance to remove the papers.
Thats why its important to have your contract printer blind ship to your customer.

Customer stealing is such an unethical business practice. I personally think it is bad long term business plan. But with the current state of the economy, and overseas sourcing businesses are getting desperate. Evenso, there are plenty fo honest screen printers out there.
The best way to avoid this problem is to ask questions. Ask for references. Ask your community for an honest sub contractor and ask any potential sub-contractor questions such as:
What is your customer base?
Do you work with end users?
Do you blind ship?

I have several out of state customers who come to me specifically because
1. we are not local, thus unable to steal their local client base.
2. our policy of not working with end users.
3. we blind ship.
4. i have developed a relationship with them and they trust me.

Call several contract screenprinters, ask questions and go with the one you feel most comfortable with.
 

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we do contract work and have had hundreds of opportunitys to steal peoples orders, for example a end user we have done work for call us for a price not knowing that we printed the job before for one of our wholesale customers. In that scenario rather then giving it away that the company that printed their shirts last time is outsourceing I just price mysel way out of the game. This way I dont steal the order and I dont let the end user know we did the order before. There is no point is losing a wholesale customer who orders alot over one job.
 

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Your contract should have a non-compete clause that prevents them from soliciting or doing work for your customers. It should also include a financial remedy if that happens.

Good luck.
 

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Your contract should have a non-compete clause that prevents them from soliciting or doing work for your customers. It should also include a financial remedy if that happens.
That sounds ideal, but very unlikely.

Here is a tid-bit of what my current situation.

I've been in screen printing for 20+ years in the same local market, I've cleaned screens, run presses, been production manager, and for the last 7 years have been a General Manager in pretty good size shop. Well, I recently left that Job, and started Printmark Industries which distributes the Calc-U-Quoter I created (hope you've heard of it). And I've also taken a job with a Sporting Good Supplier who put me in charge of all of the outsourcing of decorated apparel. So I have gone from Producer, to Supplier/Pricing Software and Contract Buyer.. in the same market.

Being well known in the local market, I'm not just another contract buyer, I actually have my pricing system utilized by some of the shops that I sub work out to, so they know I am technically knowledgeable in the Printing Process, Pricing and the local market --- There is NO chance that I could get any of them to sign a Non-Compete with me just because I am a contract buyer, no more than I could when I was another producer. Do I worry about them stealing our clients, not for a minute. It is truely not in there best interests, Unless...

The nature of the business is this:

Corporate Customers
are not likely to change services if your doing them a good job at a fair price. It's just simply not worth the change unless they are getting poor service or feel as though they are being ripped off.

Contract Customers will be loyal as well as long a service, print quality, turn-around is all good, but most importantly, you need to have a consistent pricing structure, because they "sell the order" before they even get a firm price from the printers, so they need to know, or be able to guess really closely on what those charges are going to be upfront. Any inconsistency here will result in a cut into their margins and the relationship will sour quickly, no matter the quality or service. Another way to keep Contract Customers loyal is with progress updates on their orders. Good communication is key to them, more so than the average corporate or institutional customer, because their business relies on it.

Institutional Customers (Schools and Governments) - Are and always will be fair game to solicitation by any printer or contracted salesman. This is just simply due to the amount of work that is available from these sources and the turnover of the decision makers at these institutions. If you think for a minute that John Doe High School is YOUR client and it is unethical for someone else to solicit them.. think again!

Corporate Customers - Hold Closely
Contract Customers - Service Well, Communication are key.
Institutional Customers - You need to work them, but worth it.

Printmark
 

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That sounds ideal, but very unlikely.
We don't contract with any competition unless we have a non-compete. period. any outsourcing we do is trade only unless we have a binding non-compete.
 

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So, If I come to you with a nice contract order for Local High School, would you agree to stop soliciting orders from that High School?

You'd be crazy if you did.

Printmark
 

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We don't contract with any competition unless we have a non-compete. period. any outsourcing we do is trade only unless we have a binding non-compete.
If you think about it, it's called "contract" printing for a reason. The term is used too loosely now. Contract print should involve a contract, otherwise it's just someone outsourcing their work. When a contract is signed, it is usually because there is volume to justify it and they would get better pricing in the end if they worked with you as a company. It's security for future business just as long as you are holding up with your end of the contract.
 

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let's face it, there are honest printers out there and printers that will do anything to get business (which is why we all do this ? to make money). if you have a order that you can't fill you can do a few different things :

1.sub it out
2.hire or buy more equipment to take bigger jobs
3.work like a dog to fill the order
4.don't take the order

i'm sure there are a few more in there but you get the idea. most contracts are only for that job. not forever. almost 100% of your business comes from a customer who used someone else but did not like their work or your price is better. we all will lose customers to guys who will undercut your price just to get the order. some will come back and some won't.
 

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If you think about it, it's called "contract" printing for a reason.
The reason is pricing. You contract with me to provide printing services for an agreed upon price (in writing /or contract) it can also apply to turn around times and any misprints or waste allowances. So that I know how to price the goods that I am distributing an can assure my customers they will receive them in a timely manner.

A non-compete is something that you should have your outside salesmen sign so they don't leave your business with all of your customers. It is almost unheard of to have another business in the same industry sign a non-compete clause.

Printmark
 

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So, If I come to you with a nice contract order for Local High School, would you agree to stop soliciting orders from that High School?

You'd be crazy if you did.

Printmark
if i had no business with that school and you offered for me to do a specific volume on a regular basis then yes. after all, a non-compete has to be reasonable to be enforceable. it isn't forever, just the length of the contract plus a period of time, typically a year.

so if you came to me to print 50 shirts one time for one club then i would agree not to solicit that club for 3 months. if it is 1000 shirts then maybe a year. if you don't come back to me next year then it is fair game.

if i had business with the school then the non-compete would not make any sense because i am already there. in that case we would do a specific job clause that i wouldn't bid on that particular job.

non-competes are not unreasonable, they just protect the interests on both sides from current and near future contact where that contact would not have otherwise existed.
 
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