Combs presents good estimations for good business.
By Terry Combs
The advantages of subcontracting In many situations, subcontracting offers several advantages over in-house production. These advantages include the following: Subcontracting can reduce your production expenses. Let's assume that you subcontract a job because you question your own ability to produce the job right the first time. You use a printer experienced at that type of job. Now consider the efficiency and minimal reject rates the printer can manage and weigh these against the material waste and time you'll need to match this printer's performance. The math is simple--sometimes it's simply cheaper to subcontract a job than it is to produce it in-house. The trick is to know when. Subcontracting can lock in a profit. When you print a job in-house, do you really know what it costs you? Are you positive you made a profit on the job? If you're like most garment printers, you just hope the price you charge your customer covers your production costs and overhead and leaves you with a little profit. When you subcontract a job, however, you know before you accept the order what the subcontractor will charge you and what you will charge your customer. From the difference between those two figures, subtract a modest sum for shipping, handling, and your overhead. The remainder is your profit. Subcontracting means never having to say no to a customer. Subcontracting will allow you to expand your product lines without spending money on new equipment, spoiled substrate, and wasted ink, or spending a lot of late evenings and long weekends trying to print the unfamiliar products. Any item you can't produce yourself, you can likely get through a subcontractor. Subcontracting allows you to build up sales for a product before you invest in new equipment. A never ending argument in our industry is whether you buy the equipment, then find the customers, or find the customers, then buy the equipment and start producing the product. Subcontracting allows you to find out how much sales you can develop for particular products before you buy the equipment and materials to produce them.
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