I recently started a custom apparel company targeted at competitive
swimmers. Certainly a small market, but for my first business
venture, I'm sticking close to home (I'm a swim coach). We are
working to sell to specialized swimming retailers, of which there are
about 50 in the country that I am aware of. I am having issues with
pricing and profit that I could use some help with.
I would like to spend the next 6 months building clientele who will
purchase our products on a regular basis (possibily every quarter).
With enough regular clients that I can schedule, I will be able to
combine production projects to receive per-unit price breaks (printing
200 shirts at once costs less per shirt than printing just 100).
As of right now, my sales prices are set only a fraction above my cost
of sales to offset some fixed expenses (web hosting, artists fees,
etc.) I was compelled to do this because the MSRP's I set are just
above a 100% markup of the product. The retailers I have spoken with
all agreed that they need to purchase on a 50% margin, or that then
need to markup 100% on their costs.
With thoughts of better profits down the road, I set my MSRP's just
above the 100% margin so that once they are buying and reselling my
products, I can raise the price of new styles and keep my MSRP's
within reason without crossing over the 50% margin rule (or just
beyond it).
Under this scenario, my profits depend largely upon production-volume
to reduce expenses. Because I do not want to price myself out of
business, I think it is prudent to find ways to reduce production
costs for even limited volume orders. Increases in sales price will
come with time. I was thinking of looking to produce in either Mexico
or possibly Asia. Although I have a goal of selling 400 items a
month, I think 200 items a month is more reasonable as we are getting
started.
Questions: How to I find, or where should I look to find screen
printing companies might help me reduce my production costs. No US
based screen company that I have found can offer substantial savings
over who I am currently working with. I am not opposed to looking
overseas, but I want to maintain a sense of quality control.
I also don't want the cost of shipping or any import taxes to negate
the benefits of cheaper productions. What guidelines can you offer? |