Impressions - October/November 2023 - 34

Focus on decorating higher-end
blanks, like this Nike polo, in
order to make the most out of
your markups. Photo courtesy of
StitchMine Custom Embroidery
uct possible, " Corsano says. " What people forget is the lion's share
of profit comes from the markup on the blank. If you have people
running equipment, your most important goal is to produce as much
revenue off those machines per hour as possible. "
By way of an example, Corsano says, " If I buy a $2 beanie and
cialist World Emblem (worldemblem.com), which operates over 3,500
embroidery heads in six locations around the world. " The trick is in the
scheduling and deciding what jobs to run on which machines to meet
the customers' delivery deadlines. For us that is a never-ending pursuit. "
No. 3: Include ALL costs
in Your Pricing
A key component to being profitable is ensuring revenue exceeds costs.
A common goof is not including everything when calculating prices. Are
you leaving out tasks or services you should be charging for?
The price list for Dubow Textile, for example, has long been a work
in progress, but Dubow now has it down to an art. " We've learned from
our mistakes over the past 33 years, and we've developed a price guide
that accounts for the time it takes to accomplish each task, because as a
contractor, what we are really selling is time, " Dubow says.
According to Dubow, his company's price " grid, " as he calls it, is based
on quantity. It begins at 4,000 stitches to account for every type of job.
If the job is a polo shirt that's hard to handle, it gets an add-on charge.
If the design includes metallic thread, that gets added on. The company
also charges extra for additional colorways, thread changes and the task
of sorting bulk shipments. A custom-built proprietary software platform
helps handle the many variables involved.
" There's no question there is a percentage of decorators who aren't
clear on how to cost their services, and they end up under-costing, "
Carr says. " One area is indirect labor. This is the people who receive and
count the garments, the maintenance staff, the purchasing department
and the office staff. None of them are touching the embroidery work
themselves, but they constitute costs. "
" There are a lot of reasons why shops aren't profitable, " agrees Atkinson.
" One is embroiderers are not factoring in the company car payments or
employee cell phone bills or their Google ad spend. All overhead needs
to be included in your assessment. "
Atkinson adds: " When you discuss this with them and ask, 'Who are
you using as a bookkeeper?' They tell you they are doing it themselves
because they don't have the time or money to pay someone, but they
don't know why they are not profitable or where their money is going. "
No. 4: Focus on High-End Goods
" Always try to embroider on the most expensive, highest-end prodP.34
ImpressionsMagazine.com
Oct./Nov. 2023
You're only making money when your machines
are running, so do everything you can to keep
them busy! Photo courtesy of StitchMine
Custom Embroidery
mark it up to $3 and embroider 12, I make $12. If I embroider a
$20 North Face vest and mark it up $10, I make $120. When you
compare the revenue for those two jobs, I've taken my profit from
$12 to $120 on the blanks alone. "
Along these same lines, Corsano says, " If I could print and embellish
only $50 blanks, I could go on a 10 percent gross margin and make
more money than I could on a $2 item at 50 percent gross margin.
You still have to produce what the customer needs, but anything you
can do to sell a higher-end blank is the way to go. "
Finally, Corsano says. " In terms of maximizing profitability, the
last thing you want to do is a second or third location because you
get only one markup on the blank. The goal is to have orders you
can get on and off that machine as quickly as possible because each
time you load a new set of goods, you get that margin.
" Whenever you are taking up machine time with the same garment,
you are making the same gross margin on the embroidery, but
you are not making the same gross margin dollars. Always keep in
mind that doing an analysis of gross margin percentage is equally
as important as gross margin in dollars. "
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Impressions - October/November 2023

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