Tuesday, January 04, 2005

Anatomy of a Deal

A few years back, my wife Serena and I went on a grand Boho adventure. We gave up our apartment, put our stuff in storage and ran off to live and travel in Mexico for half a year. We had the time of our lives, starting with a 5 week visit to the jewel like city of Guanajuato on the central high plain called the bahio. From there it was on to Puerto Vallarta for a week before bouncing south down the coast via first class bus, stopping in various coastal hamlets, until we ended up in Peurto Escondido in Oaxaca state. A hair raising bus ride over the Oaxacan coastal mountains brought us to the city of Oaxaca, where we hung for several months, enjoying life and engaging in creative pursuits. We even found time for side trips to San Cristobal de las Casas in Chiapas state, and to Mexico City itself.
Before this trip, I'd spent ten years building up my clientele for Hey! Activewear, my custom screen printing shop in Oakland. It was quite liberating to ditch my business for half a year, but I wanted the business to continue while I was away.
From it's inception, my friend Mike had worked closely with me on the production end of the business. Indeed, he had an ownership stake in the shop. So, before blithely taking off on my trip, I prepared a memo for Mike on how to run the shop while I was gone entitled "Anatomy of a t-shirt deal". He knew the ropes, knew what to do, but I created this memo for him to aid in his execution of the job.
So, I am reproducing the piece here as an illustration of how traffic routes through my shop. It's the bare bones nuts and bolts of my business. Just one guys way of doing it. I've edited it and updated it a bit. The biz has changed since I wrote it in '97. The most obvious thing, graphics have gone almost completely digital since then. A lot of stuff is done via email that used to be in person or over the phone. But the basics are the same. This piece is specific to the wholesale custom screen printing business. It's pretty dry. But maybe useful to some, so here it is:

Anatomy of a T-Shirt Job
1. Customer asks for a quote and places an order. Ask them the basic variables of any job: Quantity of shirts, type of shirt (T-Shirt, Hoodie, American Apparel Women’s T, etc.), color of shirt, sizes, and number of colors in the print (again, this can confuse people. They will count the shirt color as one of the colors, or will forget to count black as an ink color).

· How many shirts? AND SIZES! XXL’s cost more.
· What style of shirt? What brand?
· What color shirt? Color ink?
· How many colors in the design?
· Is the design done? Is it an Illustrator or Photoshop file? A pdf or jpg file? Maybe a ratty sketch on a gin soaked bar napkin? (Art/design billed at 65.00/hour.)

2. Make a quote. Refer to the price list (not included here on the blog). The prices on the list are a little high, you can cut them a bit if you want, use your judgment. They are fair prices as they stand. Calculate a quote including price of printed shirts, films, and screens. Check out the art file, you may have to tweak the art to get decent film to print from it, graphics are $65.00/hour. If you have to do any typesetting, the minimum is $15.00.
Components of unit price are mark up of 50% and print price.
A standard T-Shirt from Fruit of Loom, Jerzees, Hanes etc. will run 1.25 and up, depends on color of shirt and brand. American Apparel cost more, 3.25 and up, they are in great demand with the younger clientele in particular. I usually mark the blank up 50% of it’s cost, then I add the print price from my “Printing only” price list.

Sales tax is 8.75%, so multiply the total at .0875. If they have a resale number on file with us, charge tax on film and screens only, not on shirts. For new customers who have a resale number, they must fill out a resale card with their Seller’s Permit number on it. Charge tax to anyone who does not have a resale number, or the state will charge it back to you! Absolutely no exceptions.

The customer will finance the job with thier downpayment. Once you make the quote, figure out how much the shirts cost so you can ask for a downpayment. I usually pad this. If the shirts cost $275.00 on a job, I always ask for $300.00 up front, for example. Call or email the client back and tell them the price, and the amount of the downpayment. If they like it, schedule a meeting to take their order. Or they can send the check and disk, or even email the art files. If they don’t like the price, they may ask for a lower price. Negotiate if you want, I don’t. Don’t let anyone push you into a snap judgment, you don’t have to do anything you don’t want to. My policy is that my rates are very fair for the level of quality and service I offer, so I do not negotiate after I quote a price.

3. More on closing the sale! Show them the written quote to confirm that is what they want to order. It often changes. Sometimes their art will not be ready for film output, or will have more colors than they said. Take your time to figure out what the art charges will be. Revise the quote to reflect any changes in the job.
Some clients will have a design for both sides, after you quoted for printingon only one side. Or they will cut the quantity in half and expect the same per shirt price. Take your time and calculate the extra charges. Clients may be disappointed if the price goes up when they want a fancy job, be friendly and suggest making it a simpler print.
Make a point of asking for a downpayment, (or a purchase order if it’s a big beaurocracy or corporation). “I’ll need a $600.00 downpayment to produce the job.” Usually they happily hand over the check. If they don’t, fine, everybody finds out in advance: no money, no shirts. Finally, find out when they need the shirts and agree on a due date. Generally, this is a lot of fun because you’re working together on a shirt that you both really want to produce. Don’t start work without a purchase order or a down payment; until you have one of those, you do not have an order.
Remember, the power you have in any deal is to walk away from it. If warning signs or red flags go up, walk. I just did this last week. My intuition told me the down payment check from this poseur would bounce, so I politely declined the job.

4. Producing the job. Order the shirts from San Mar, Apparel Source, Border Bros, Alpha Shirt Sales, or even straight from American Apparel. Check their web sites for wholesale prices, policies etc. Sometimes you want the shirts that day, so you go to Apparel Source if you are in Oakland. Check to see if you need ink for the job, and order it. Check screen supplies too.

If the client gave you the art on disk, get films output. Better yet, output them yourself on your laser printer or ink jet printer. Check http://www.usscreen.com/ for information on outputting film from photoshop or illustrator files. When art is on disk, get 20.00 per film in the down payment to pay for the films if you are sending out for film.
I always staple the shirt and ink invoices to my copy of the quote/work order, so when I get a check, I immediately pay for shirts and ink and misc. supplies, if I haven’t already. Look over the shirts to make sure the order is right. Count them in. Also check the shirt invoice, does it match what you ordered? Best to spot errors up front. Before printing the job, double check even the simplest work order, just to be sure of shirt color, ink color, print placement, quantity, etc. Show a proof shirt to client, or perhaps a color inkjet print of the design so they know how it will look on the shirt.

When outputting films, be sure you know what size the client expects the design to be on the shirt. Often they supply designs not at the size that will work on a shirt! If client wants a PMS color match, be sure to charge $15.00 if they want it exact. Or even 20.00. People can be very literal about color matches.

5. Delivery/Client Pick Up. Here’s the fun part. Getting paid. Give the client a call when the job is done. Tell them the amount of the balance they owe. Best if they pick up (keep the transaction on your turf), but some will want delivery. Occasionally, people will turn into weasels and try to get the shirts without paying, especially when you deliver to their place. I usually smile and start hauling the box away, better yet I go in first without the box and announce I have a C.O.D. Usually, it’s a lot of fun and the client is happy and giddy with their new shirts. Once in awhile, you gotta have brass balls and iron nerves to some degree. The box of shirts is your ace in the hole. Client already gave you a downpayment, they want the box; so they will cough up the balance.

When you get the check, the first thing to do is pay any invoices on the job: Shirts, ink, sales tax, film, screens.



That’s the basic Anatomy of a deal, from your local neighborhood small time wholesale screen printer.

1. Quote/invoice
2. Meet Client/get downpayment
3. Order goods/print
4. Deliver job/get paid/pay invoices.

copyright 2005 Steve Lafler all rights reserved

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