Friday, November 16, 2007

Anatomy of a Deal

Here is the inside dope -- the chronology of a deal in the T Shirt custom screen printing business. I note up front that I always want a win-win deal, where all parties get satisfaction and value; I mention "win-win" here because this piece is rather hard nosed in tone. That's the reality in business, you have to be tough, resourceful and detail oriented.

Although this piece describes a wholesale T Shirt deal, the ideas could be applied to many small business scenarios. I wrote this almost three years back, so bits may be slightly out of date.

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.)

  1. Make a quote. Refer to the price list. 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. If art is supplied on disk, tell them you may have to tweak their file to get film, 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.

California 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.

GET A DOWNPAYMENT. The customer will finance the job. Once you make the quote, figure out how much the shirts cost so you can ask for a downpayment. 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.

  1. Process the order. 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 printing on 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 closing the sale. Ask for a downpayment, or a purchase order if it’s a big agency 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 would bounce, so I politely declined the job.

  1. 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 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.

  1. 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. 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.

  1. Quote/invoice

  2. Meet Client/get downpayment

  3. Order goods/print

  4. Deliver job/get paid/pay invoices.

1 comment:

Anonymous said...

Steve Lafler:

I love you blog(s) but cannot reach you on the telephone. I do busines with Cinder Block, Merch Direct, Bravado and many others

David Tattersall
Revenue Cycle Management
New Orleans, LA
877-726-0100 US Central Time