Combs presents good estimations for good business.
By Terry Combs
Finding reliable subcontractors I never had trouble finding subcontractors. I had working arrangements with local sign painters, offset printers, and even screen printers. We swapped jobs and agreed to keep our sticky mitts off each other's customers. Another prime source for subcontractors is the ads in trade magazines, such as those in the classified section of Screen Printing. I'm a big believer in clipping any ad that looks even remotely interesting. Someday you may need to find someone who can screen print Frisbees. You never know. Sooner or later, you'll also deal with the huge network of ad specialty manufacturers, but that's another article. It's very worthwhile to be on good terms with the local ad-specialty dealers, even if you lose an order to them from time to time. I swapped favors with them, and it paid off well over the years. The only advice I can give you is that when you play in their playground with their ball, you play by their rules.
|Fig. 6: Production Time Data Table|
|1 color||2 color||3 color||4 color||5 color||6 color|
|To use this table, under each color category number, record the number of pieces printed and the total minutes required to print the job. Repeat this exercise for at least ten jobs. Do not include setup and breakdown times, but include all the time between the first good print off the dryer and completion of the final print. Add up the times and the number of pieces printed for each column. Then divide the total time by the total number of pieces to get the average time per garment for that number of colors printed.|
Check points for subcontracting When deciding whether or not to subcontract, it is important to determine whether or not the job is appropriate for this option. I have found that the jobs I subcontracted fell into three categories: New products Initially we subcontracted flags, silk scarves, towels, and mouse pads. As sales increased, we started printing towels and mouse pads in-house, the rest we always subcontracted. New techniques We always subcontracted complex multi-color designs on nylon jackets and until we built up a demand, we subcontracted process-color designs. New equipment How many athletic teams must you print for regularly before it makes sense to by your own numbering press? Wouldn't it be logical to subcontract your embroidery orders until you build up enough embroidery business to warrant buying an embroidery machine. While you're subcontracting such orders, you are also learning the terminology and how to price these unfamiliar jobs. Finally, before you decide whether or not to subcontract any job, consider the following issues: Can you buy it cheaper than you can make it? Before you answer this question, do a reality check. I don't mean cheaper than you can make it if every step in production works out as planned, I mean cheaper than you can make it assuming that you screw up the job as often as you normally do. Don't let the fog of optimism obscure your view of reality. Can you find subcontractors who are honest, reliable, and provide products of good quality on time? When you accept an order that you know you will subcontract, get a substantial deposit up front. When you place the order with the subcontractor you are committed. Your customer may back out, but usually you can't. How do you price products you are subcontracting? Your first option is to ask the manufacturers. They should know what a job with your specifications would sell for. I have used markups that range from 30-100%. If you can't get at least a 30% markup, the job usually isn't worth doing. I have talked to screen printers who feel that since they didn't produce the product themselves, they should use a lower markup, often 10% or less. At that rate, it's highly unlikely that they're covering their own costs. Conclusion I can't tell you what the right decision about subcontracting is for your business, but I found that subcontracted orders were a profitable sideline for mine. After all, ad-specialty people make a very good living and they subcontract everything they sell.
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