Retail Location VS. Warehouse Location

1722 Views 18 Replies 5 Participants Last post by PatWibble, May 22, 2014

SilkRoad

Discussion Starter · May 21, 2014

I'm Currently managing a screen printing shop in LA cali.
We're a smaller retail location and we pull in about 25,000 monthly gross.

I have finally pulled together enough cash to get my own business off the ground.

After looking at locations throughout los angeles I find myself in a situation where I can either have a retail location or a back alley warehouse.

Which one is better.
IMO I dont like retail locations for screen printing. But is that me just thinking the grass is always greener or???

1 - 19 of 19 Posts

jim55912

· #2 · May 21, 2014

After 20 years we just took down our showroom. We are moving out of the softball, volleyball, dart team business.

I can't figure out how anyone can make money on less than 48 shirts, and even that is low.

If I had to do it all over again I would be in a back alley someplace with no name on the door.

You seek out the customers you want to deal with.

SilkRoad

Discussion Starter · #3 · May 21, 2014

jim55912 said:
After 20 years we just took down our showroom. We are moving out of the softball, volleyball, dart team business.

I can't figure out how anyone can make money on less than 48 shirts, and even that is low.

If I had to do it all over again I would be in a back alley someplace with no name on the door.

You seek out the customers you want to deal with.

I feel you. whats your next move?

jim55912

· #4 · May 21, 2014

We have been in business a long time. We looked at our list of accounts and realized that 90% of our business came from 10% of our customers. These were all companies that spent at least a couple thousand dollars per year. Surprisingly only a few had actually ever stepped foot in our showroom.

We have decided to focus our efforts on these accounts and on finding more accounts like them.

You can spend a couple of hours with a lady trying to figure out what color shirt each branch of the family tree is to wear at the reunion this summer, or you can take those two hours and make a few cold calls. Or... post on this forum..

Reactions: 3

20vK

· #5 · May 21, 2014

If you're pulling in 25k per month, where is it coming from? The retail location? If so, sounds like a retail location is absolutely necessary for you where you are. If not.....meh!

jim55912

· #6 · May 21, 2014

20vK said:
If you're pulling in 25k per month, where is it coming from? The retail location? If so, sounds like a retail location is absolutely necessary for you where you are. If not.....meh!

Maybe. My dad likes to tell me that if you buy something for a quarter and sell if for 20 cents, you have to make it up in volume.

I think it is really easy in this business to have one part of your business subsidize another part. In other words, your orders for 150 shirts make a profit that you then lose on your orders for 24.

SilkRoad

Discussion Starter · #7 · May 21, 2014

20vK said:
If you're pulling in 25k per month, where is it coming from? The retail location? If so, sounds like a retail location is absolutely necessary for you where you are. If not.....meh!

We are not pulling in 25k in retail level (walkin) sales. Our primary source of revenue is from in-calls from the internet or sales made by myself initializing contact with the client of my choosing.

PatWibble

· #8 · May 21, 2014

Warehouses are cheaper to run than retail, and you will not need to pay someone to deal with passing trade.

Unless you are geared up for DTG, cut vinyl or similar then a retail location could be a major distraction. Many of the potential customers will want items that are inappropriate for screen printing - primarily short runs. You will end up turning most of them away, which defeats the purpose of having a retail location. The danger is that you are tempted to add some form of digital technology and you spend more time weeding than looking for core business.

The downside of a warehouse location is is finding your initial customers, which is something you should consider before making the jump.

I guess that your real choice is between becoming a digital print shop happy to print anything or remaining a screen printer.

I'm very happy in my back alley. There are plenty of digital shops around to sub-contract larger jobs from.

Reactions: 2

valleyboy_1

· #9 · May 21, 2014

I think you should consider a mobile business also. Take and make the product to your customers. The mobile printing industry is completely wide open.

jim55912

· #10 · May 21, 2014

valleyboy_1 said:
I think you should consider a mobile business also. Take and make the product to your customers. The mobile printing industry is completely wide open.

Why is is completely wide open?

valleyboy_1

· #11 · May 21, 2014

Think about the millions of events that goes on in a calendar year. And think about the different target markets you can go after? Find your interests and go after it.

valleyboy_1

· #12 · May 21, 2014

Research mobile printing business on here and you'll see many folks are pretty successful out their on the road

PatWibble

· #13 · May 21, 2014

Been there done that, and now I'm happy in my warehouse.
The problem with events and festivals is that you are entering the realms of retailing and holding inventory.

And your competing against a bunch of guys who are doing it for lifestyle reasons. They usually work for naff all and are happy to live in a van all summer, as long as they can get back on the 'Marakesh Express' for the winter.

If that is your bag baby there are easier ways to go about it than printing stock and hoping for the best.

SilkRoad

Discussion Starter · #14 · May 21, 2014

PatWibble said:
The downside of a warehouse location is is finding your initial customers, which is something you should consider before making the jump..

This is obviously going to be my biggest challenge within the first few months. Fortunately I have enough capital to pay for 6 months of rent. But barely skating by at the beginning is not want I'm looking to do.

I am curious how you developed new clientele at the very beginning of starting your "off-sidewalk" shop?
Were you out there pounding pavement or?

valleyboy_1

· #15 · May 21, 2014

I do not print stock and hope for the best. I print once payment is in my hands. Working my market as we speak and have plenty of business lined up for this summer. I guess it's different strokes for different folks. I was just trying to put another idea out there for the OP.

jim55912

· #16 · May 21, 2014

VB is right, to each his own. Maybe I am too old...

My target market is someone that is going to by a couple hundred to ten thousand shirts. My advanced years have wiped away any patience I had for dealing with that guy with the softball team and 18 sponsors that thinks a napkin with the bar's logo is camera ready art.

I worked for a bunch of years at carnivals and county fairs selling hot dogs. That crowd seems suspect to me.... On the other hand, I had a blast.

PatWibble

· #17 · May 21, 2014

I originally got into screen printing to produce stock for by Fashion stores, so I did not have to build a business from scratch.
Over the years the screen printing business out-striped the retail side of the business and six years ago I decided to concentrate on it.

Now I send out flyers and samples to various target sectors, along with some cold calling. I had lots of contacts within in the event industry - we had a van out doing County Shows and Music Festivals, and I have various directories with contact details for thousands of events. They all need work wear and even correx signs.

Try contacting local embroiderers and digital shops who don't screen print and offer to print for them.

SilkRoad

Discussion Starter · #18 · May 22, 2014

PatWibble said:
Try contacting local embroiderers and digital shops who don't screen print and offer to print for them.

already do contract printing for a few embroidery shops in the area. Its nice to get orders from these shops but the problem is, they are comfortable saying "YES" to questions the customer asks that i would normally say "NO" to. Now all the sudden im doing 200 gold foil prints on the top of a baseball cap's bill ...WTF

PatWibble

· #19 · May 22, 2014

SilkRoad said:
already do contract printing for a few embroidery shops in the area. Its nice to get orders from these shops but the problem is, they are comfortable saying "YES" to questions the customer asks that i would normally say "NO" to. Now all the sudden im doing 200 gold foil prints on the top of a baseball cap's bill ...WTF

That is probably the downside, the up side being that they have to do the 'face time' with the customer in the first place.

Have you contacted any local tourist attractions, water parks etc? I have a couple on my books. I sold the idea to them that being local I could re-stock them within a few days. Had to price the job (both simple 1 colour prints) on the basis of their total volume to get the work. Now most Monday mornings form April to September they each order 100 or so garments. The shirts are delivered to them by first thing Wednesday morning. They're happy because they have better control over and less quantity of inventory, I'm happy because every week the overheads are taken care of.

Aside from that just be 'at large' in your local community. Use personal contacts, family and friends, and social media to get your name out there.

I agree with Jim55912 about the time spent with smaller 'walk-in' customers, but in the early months and years they will probably be a necessity. I know I dismissed digital printing in an earlier post but at first it may be an idea to get a small cutter and cheap heat press. Just to reduce the amount of business you turn down whilst you are growing. Get rid of it when the printing takes off.

On the other hand... for the same money you could get a used Graphics vacuum table and add correx signs to your revenue stream. As a bonus graphics tables are the easiest way I have found for doing all-over prints on t-shirts.

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