Show Notes
Transcript
Welcome to the Custom Apparel Startups podcast, your best source for information, news, tips and tricks to get you off the ground running, and earn success with your custom apparel decorating business. So, get ready to soak up some knowledge!
Now, here are your hosts, Mark and Marc!
Mark S: Hey, everyone! Welcome to episode 27 of the Custom Apparel Startups podcast. This is Mark Stephenson, from ColDesi.
Marc V: And this is Marc Vila, from Colman and Company. Queue the age jokes.
Mark S: Yeah. You know what? I don’t have one, because I don’t think anything happens when you’re 27. Do you remember anything about when you were 27 years old?
Marc V: No. I’m not even sure that I ever was 27.
Mark S: And you can’t prove it, either. Right? The only thing I know for sure is that I had a little bit more hair. I know that for sure.
Marc V: A little.
Mark S: What are we talking about today?
Marc V: Today we are here to talk about you versus the competition, and overcoming objections. I think that this is one of the big things that is spoken about, if you sell equipment. People ask about it on the Custom Apparel Startups Facebook page.
Mark S: All the time.
Marc V: On that group, people always ask about it. People talk about it with us, when buying supplies. It is just something that is a challenge for any business owner.
Mark S: Right. I think especially for people that are in our audience, that might be relatively new or brand new Custom Apparel Startups pros. They just went into business, so they didn’t spend their life in sales and marketing, and realize that everybody goes through this. Every business has the guy down the street that will sell it for cheaper.
Every business has the people that say bad things about your business, so they get the sale.
Marc V: Yeah. First and foremost, in regards to the competition, you never have to be the fastest, the cheapest, the best, the most diverse. You don’t have to be all of those things. You find the things that are right for you and your business, and that’s the market that you have to sell to.
Mark S: Absolutely. You’ve got to know what you’re good at. But first, I want to talk a little bit about some of the folks that I’ve talked to from the Custom Apparel Startups Facebook group, about that idea that “I can’t make any money, because I can’t sell it cheaply enough. I can’t make any money, because the guy down the street is –.” Honestly, it’s always price, what everybody says.
Really, the question is, is the competition – is it real, or is it perceived?
Marc V: The interesting thing about this is that there are really successful apparel decorating businesses and people that, at Colman and Company, we speak to on a daily basis.
Mark S: A lot.
Marc V: They have the mindset, if you’re talking about pricing, where they just say “Uh-uh, honey. I would not sell it for that price!”
Mark S: That’s right! That happens all the time! That was a great impersonation, by the way. I really liked that.
Marc V: “Uh-uh, honey! I would not sell it for that price!” Because we had one customer come in, and we had talked about “How much do you sell this shirt for?” There is a customer talking about that they had competition that would sell it for, say $9. She said “I wouldn’t do it for under $18, but it’s going to be great.”
She had all of her reasons, but that was a perfect example of just why being the cheapest isn’t always the answer, and it doesn’t always matter.
Mark S: If you look at every successful company in the world, not every one of them in the space is the cheapest. For example, Toyota and Chevy, which one is the cheapest? Walmart and Target, which one has the cheapest whatever it is? Milk, which one is the cheapest?
All of those things, price isn’t always the determining factor. What I meant by real or perceived is the difference between just, let’s say you’re in the DTG business. You do custom printed shirts, and there’s a screen printer down the street that advertises shirts for $7, if you buy 50 or more.
Is that competition? I don’t know. Did anyone ever come to you? Did one of your customers come to you yet, or are you talking to people that say “No. I’m going to go buy the screen printed shirts for $7.”?
Marc V: It’s a good point. What I’m getting from you is that you see something, whether it’s an advertisement or a flyer, or a shop sign or whatever it is, and red lights flash in your head, and you say “Oh, no! Competition! How am I going to stay in business, with these prices that they’re offering?”, when you might never run into it.
Mark S: Yeah. You’re assuming the competition. Let’s use commercial embroidery machines, something that ColDesi sells, the Avance brand. There are probably 50 different manufacturers of embroidery machines that call themselves commercial, that say they are for business.
We run into maybe three or four or five max. The rest of the people just don’t really matter. And honestly, whether or not they’re cheaper doesn’t really matter, either.
Marc V: It’s so true. What you need to not do is try to put out fires before they start, in a situation like that. When you see competition or an advertisement, or you hear about something, sometimes the right move is to react. But it’s not necessarily the right move.
You need to -.
Mark S: Stop and think about it a little bit.
Marc V: Make sure that it’s real. Make sure that it’s a real threat to your business, before you turn around and start being concerned about how you’re going to make money, or how you are going to sell shirts for $7.
Mark S: Right. I think the main lesson from that, and we’ll get into more details about dealing with lower-priced competition in a minute, but the main thing that we do and I know Colman and Company does, we don’t try to be the cheapest. We just try to be what our customers need us to be.
What are the advantages, for example, to doing business with you? Marc, let me ask you. What are the advantages? Because honestly, there’s a lot of people that sell thread. You can go to a local sewing center and pick up embroidery supplies. What are the reasons that people do business with you?
Marc V: The reasons why people do business with us, for one, we want to be an approachable business. We want you to be able to chat with us live online, to be able to attend webinars, to be able to just pick up the phone and call us, email us, have direct contact with a sales representative that can be your partner in business.
We make ourselves really available and approachable.
Mark S: That’s a big deal, because how many people – raise your hands! I know I can’t see you. How many people have ever needed to just talk to someone on the phone about something, and you go to the website, and there’s no phone number? There’s just no way to accomplish what you want to do.
Marc V: There’s a lot of our competition that you can’t reach over the phone.
Mark S: Right.
Marc V: People get upset on, say software. Software is a big thing that it’s hard to get people on the phone for. It’s just the nature of that business, in general. Every once in a while, we’ll get phone calls, and we’ll talk to somebody and they’re like “I just want to be able to call this company and ask them a question.” I say “I agree, and you can call us all you want. I agree with you, and that’s what we do.”
I can’t control what every other company does, though. I can control what we do. That’s what we try to do. We try to make our prices as competitive as they can be, while still being able to maintain that. We could have nobody available on the phone, and just have a shipping department, and lower our prices. But then, we’d lose all of the support that our customers want from us.
Mark S: That’s really interesting, and we’re going to make you guys go through an exercise in just a minute. But that’s one thing that we strive to do in all of our companies, is just being nice people that you can talk to. That is a huge advantage in the marketplace.
Marc V: That’s one reason that I would say is good for us. And then, we’ve got a diversity of products that we offer. We try not to be just a one trick pony type of company. We’ve got a nice diverse thing, because our customers are diverse companies. They’re no longer just embroiderers or just screen printers. These are apparel decorators.
Mark S: Yeah. You can buy rhinestones from Colman and Company. You can get vinyl. You can get direct-to-garment printer ink.
Marc V: And this is going somewhere, too. It’s not just an advertisement.
Mark S: It is an advertisement, but it’s not just an advertisement.
Marc V: Yeah. This is going somewhere. So, we’ve got that, and then also we are price competitive. We look at prices in the market, and we try to figure out what we can do to offer a better price here. Does that mean we need to buy more of something, manufacture more of something, to bring the price down?
Does it mean that we should switch a brand of product that we sell or that we offer? Does it mean that we should start manufacturing this thing inhouse?
Mark S: Yeah, ourselves, like the bobbins or something like that.
Marc V: There’s all of these things that we have to decide and figure out, in order to get to be all of what we want to be. We want to be approachable. We want to have a diverse group of products. And we want to be able to price competition.
Mark S: Price well, right.
Marc V: All within that. That’s part of what our philosophy is, and how we move forward in business and help people. When somebody talks to us about competition and all of these things, that’s what we have to go back to.
Mark S: Yeah. “You’re talking to us on the phone. We’ve got all this stuff in inventory. I can deliver it to you this afternoon.”
Marc V: I have a story about that. Should I tell a story?
Mark S: You can tell a story about that. Think about, while Marc is telling this great story, -.
Marc V: Listen, then think.
Mark S: Listen, then think. Right. Don’t think about what you’re going to say, while you’re listening. Consider how you can adapt what happened to Colman and Company, to your own business.
Marc V: We sell a vinyl cutting system.
Mark S: The CutNPress.
Marc V: The CutNPress system, and it comes with a cutter, and it comes with vinyl, and it comes with software. It’s a whole package deal. We had somebody call us up, and they were asking a bunch of questions about vinyl t-shirts. They just said “Well, do I need to have a heat press? What does it mean? How does it wash?” All of the things that you ask, while you’re trying to figure it out.
Mark S: The education.
Marc V: We probably spent maybe 12 to 15 minutes on the phone, answering just a lot of questions. They were just batting them down.
Mark S: I’m going to stop you here. 15 minutes on the phone, for somebody at Colman and Company, you can imagine the call volume that comes in. That’s a significant investment of time.
Marc V: Yeah. It’s a good amount of time, but they had a lot of questions. And when we pick up the phone, we’re there to help that customer, if it takes 60 seconds or 15 minutes, or whatever. So, we answered all of these questions about it.
Then, she said “Okay. I’m looking online right now, and I found this company, and I can get all of this for about $200 cheaper.” We already had a special package price that we were giving, with some bonuses and stuff, for like an end of the year special. So, we were kind of at the minimum where we could be. We couldn’t drop our price anymore.
So, we said “Well, okay.” We looked at it. I said “Let’s bring it up. Ask her who it is, and let’s bring it up.” So, we brought it up, and we saw. But then, we started dissecting it down. Then, we said “Ours comes with a whole training package out of the box. Theirs has nothing.”
Mark S: “55 Minutes to Your First T-Shirt.”
Marc V: Yeah. “55 Minutes to Your First T-Shirt.” It’s an hour training on how to get started, and then a bunch of little stuff afterwards. Theirs came with none of that. Theirs came with, it said “printed instructions,” which who knows what that could possibly be. It’s probably the user manuals that came from the manufacturer.
Mark S: For the cutter.
Marc V: Also, no chat, no phone number, no email address even. Just a Contact Us page, with a form. So, we said “You’re on the phone with us now. We’re answering all of your questions. When you called, you didn’t call in a specific sales line. You dialed the phone number that’s in the biggest font on our page, on the top.”
When we answer the phone, we don’t know if it’s going to be a support call or a sales call, or what. We have no idea, but we’re going to answer every single phone call. So, when you have a question about it, for one, you’re going to have less questions, because you’re getting instructions built for you, through video and everything.
There’s a bunch on our website. There’s webinars that we offer and consistently do. You also can just call and ask. “Hey, I’m not quite sure I understand step four.” We cannot afford to do that, if we sold this package for $200 less. All of that costs.
Mark S: The time and investment.
Marc V: Yeah, the time and the investment. We come with sample pieces to test, and included tools. There’s a lot of little things that are hard to perceive.
So, she’s kind of just “Hmm.” This is the story being relayed to me. I said “What’s she saying?” She was like “Hm,” and just kind of listening. She said “Okay, well let me see,” and she thought about it. Long story short, she purchased it from us, and she just said “I need that. I need to know. This is a business for me. This is real. I need to be able to know that this is going to be taken care of, and that I’m going to be able to do this, and I just can’t guarantee I’m ever going to be able to talk to anybody, if I buy it at that other company.”
So, that’s the story. I think that goes down to kind of two things for us to bring up, how it relates to your business that we’re talking to right now. You need to know why. Why should somebody do business with you?
Mark S: What are the best things about doing business with you and your company?
Marc V: How should somebody answer that?
Mark S: The first thing, it may be you. You may be the biggest advantage to doing business. Honestly, there’s a lot around the story that Marc just said. But the biggest advantage to doing business with Colman and Company is the people on the other end of the phone.
Maybe that’s you. Maybe you think that people will be happier with their purchase, because of something you did or the way that you act, or you answer the phone. Maybe that’s it.
Maybe it’s the pieces and parts that you use, like higher quality blanks. Maybe you’ve got something about that, that you can say “You know, most companies use the least expensive Gildan t-shirt that they can find to do their printing, or do their embroidery or vinyl, or whatever it is. But you know what? I decided that I was going to give my customers a better product. It costs me a little bit more, and it costs you a little bit more, but I promise that you’re going to be happy in the end.”
Marc V: Yeah. I’m sure that you’ve bought shirts from your competition that have shrunk up pretty quick. How many of those shirts have lasted, and not?
Mark S: Where they get that kind of weird out of shape thing, where the shoulder doesn’t fit right anymore.
Marc V: Absolutely. That’s a good point. They get to deal with you. They get you. My response to something like that is “I can’t guarantee what my competition will do. I don’t know them. They may be great. They may not be great. What I can guarantee is the actions that I take. When I sell you garments, when I sell you shirts and hats, I know that I’m going to put a lot of work into all of them. If there’s a mistake, I know I’m going to fix it.”
“I know that I’m going to give you a fair price. I know that I’m going to deliver it on time. I know that if I tell you it’s going to be ready on Thursday, it is. And if it’s not going to be ready on Thursday, I know I’m going to tell you way in advance, to make sure that everything is going to be okay.”
Mark S: And you may actually be your employees, maybe somebody that works for you, for example. At ColDesi, we get comments about our salespeople all the time. Someone will say “Honestly, I talked to Don Copeland, and he knows absolutely everything there is to know about DTG.”
Or “I talked to Tracy, and she is more excited about rhinestones than anyone I’ve ever talked to, and has a lot of great customer stories.” It may be that “I talked to Sean in tech support, and he knows what to do, and he gets me back up and running very quickly.”
So, it could be you and what you personally do, but that extends to if you have a company and you have employees, then it extends to them, as well.
Marc V: Yeah, the staff, the people that you surround yourself with. That’s one thing you could always sell. You can sell about the quality of the product that you’re going to offer.
Mark S: Wait. First of all, I want everybody to pull out a piece of paper and a pen, unless you’re driving. No, if you’re driving, please do that anyway. Pull out a piece of paper and a pen, and I want you to, while we’re talking, to write down at least three great reasons to do business with you.
Marc V: If you are driving, you could use your windshield as like a white board.
Mark S: You could do that! Write it on your hand, whatever you need to do.
Marc V: I think the point of all of this is you should have a short list of two, three things, four things tops, that you can bat off right away, if somebody says “Why should I do business with you?”
Mark S: Yeah. We talked about it being you or your employees. We talked about higher quality blanks, and that’s actually a big deal. You’ll be surprised at how many customers and potential customers will relate to that.
Marc V: You could talk about quality control. “Every single garment that leaves my shop passes through two peoples’ hands. It passes through my hands, the owner’s. I make sure that every single hat looks good. If it’s not good, if it doesn’t meet the quality, we get rid of it, and we make you a new one. If after you get it, if one does slip through the cracks – first, I check it, then my business partner checks it,” or my cousin, or whoever works with me.
“My embroiderer does it, then I do a quality control, then it goes to you. If one does slip through the cracks and something was done incorrectly, then we’re going to replace that, as well. Quality control is huge for us, so getting it to you right the first time, but then also how we’re going to handle it afterwards, if a mistake happens to fall through.”
Mark S: “Which never happens! But if it did.”
Marc V: “That’s how sure we are that it’s going to be good. If you get a bad embroidered shirt, I am going to make you another one, and hand-deliver it to you, as soon as I can.”
Mark S: I love that. That brings up one of my favorite ones, is that local feel to your company. You can buy a custom shirt from Café Press or Zazzle, and you can get it shipped pretty quickly, and it will be pretty good quality. Maybe the local support and service is your main angle.
Maybe it’s just like Marc said. “You know what? I’m going to deliver these shirts myself, and we’re going to go through them one by one, when we’re done. Is anyone else going to do that for you? I’m so concerned that you get the product right, the first time, and that you order the same thing from me next year, that I’m going to deliver these myself, and we’re going to go through them every single time.”
Or it’s “You know what? I’m doing this job for you, my local high school, because my kid goes to your school, because we go to the same church. I live in your neighborhood. You’re a local plumbing company and you need embroidered shirts. Why wouldn’t you want to deal locally? My toilet is going to break one day.”
You could use that kind of local service thing as one of your three or four.
Marc V: Another could actually be a financial benefit for the customer. Sometimes it is a financial benefit. It doesn’t necessarily mean that you are the cheapest. Maybe for a particular product, you are. Maybe it’s just a matter of you saying “I do direct-to-garment printing. I don’t do screen printing. It’s different. We can talk about that, all of it all day, and I could explain to you the intricacies of that.”
Mark S: Of why it’s different.
Marc V: “What I’m telling you is I don’t charge any setup or art fees or color fees. What we can do is we can design your art, however you want it, and there’s no fee for any of that.” Maybe that’s what you sell. Maybe you do charge a setup fee. I don’t know, but I’m saying maybe that’s one of the things that you have as a reason for people to buy. “I don’t charge any setup fees.”
Mark S: I like that. Or on DTG again, maybe it’s “I’m going to print you one and show you what it looks like, before we print the other 50,” which is a big advantage over screen printing. Maybe you’ll do a free preview sample.
Marc V: Yeah, a free preview sample. You might say “For every ten shirts you buy from me, you get a free embroidered hat.”
Mark S: Which is a great sales technique, too.
Marc V: Whatever it is that you offer, if there is a financial benefit, that you hand-deliver it and there’s no delivery charge. There can be a financial benefit, and talk about that, if it’s something that’s good.
Mark S: That’s money-related. Right. Another one is maybe you have an excellent on-time record, and that if you actually keep track of that, like what is the percentage of missed shipments that Colman and Company makes on average, in a month?
Marc V: Less than one-tenth of 1%, generally speaking.
Mark S: Right. Colman and Company is a big dog in the apparel decorating supply business. They ship out a lot of shipments, and it’s not even a 1% error rate. Maybe that’s you, too. Maybe “Out of the last 50 orders that I made, that I delivered to a customer, zero errors,” or maybe it’s “100% of it was on time.”
You could have one of those little signs in your shop, like they used to for the safety record. “180 days with no injuries.” You could say “Last 57 orders on time or early.” Maybe that’s yours. With that one, it’s great, because not only did you say what you do, and highlighted that, but you kind of made somebody say “Huh. I wonder if the $9 shirt guy can say that.”
Marc V: And with all of that, there’s building in the trust of somebody. They’ve got to believe you. You could talk about that, as well. Maybe you could say “You could talk to any of my customers. We’ve got a great track record.”
Mark S: If you’re in a retail shop, and you sell apparel to somebody in that same plaza, give someone apparel in that same plaza, and then send your customer next door. Say “I’ll tell you what. Just talk to one of my customers. I’ll wait right here. You go next door and talk to Mary.”
Marc V: Yeah. It could be through testimonials, whether they’re written online or on the phone. That’s the other thing. You could tout these things. If you’ve got statistics that you can use, “The last 5,000 shirts that we made, there were two mistakes.” Talk about that. Talk about the on time, how you deliver.
There’s all of these things. These are just examples.
Mark S: You should pick three or four, like Marc said. It doesn’t have to be one of these. Think of your own. It could be you have the prettiest wood floors in your shop. I don’t know what you think an advantage is. And it would be a bonus, if you had a story for each.
For example, like Marc just had a story for the service versus price, the availability versus price. Maybe with your orders, you could say “You know what? All of my orders are on time. As a matter of fact, two weeks ago, I had somebody – they ordered wrong. They ordered their shipment wrong, and they needed it three days before they said they did. Me and my crew, we stayed that night, and we delivered even that one on time!”
That’s a great story. People want to do business with that company.
Marc V: Definitely tell stories about the things that you have, or why you chose to do them. That’s part of that trust that I’ve built up. If you’ve got a real story, where you say “We don’t charge any setup fees for the direct-to-garment printing. The reason why we started to do that, and the philosophy behind it, is that people wanted to do more in their artwork. They were wanting to add more colors. They were wanting to do more with it, but they kept having to stop and hold back, to say ‘I need to keep it under four colors, because I don’t want to pay more fees.’ and they had to stop.”
“With my business, I didn’t want to do that. I just decided on a philosophy of this is what we’re going to do. I’m not going to charge for any colors, any artwork, any setup, because I want my customers to be free to do anything. When we build your t-shirt together, we’re going to do anything you want.”
Mark S: Right. “You’re not going to have to settle.” I love that. That’s great.
Marc V: Yeah. “You’re never going to have to settle. That’s the philosophy behind why I have a no setup fee policy.”
Mark S: I like that a lot.
Marc V: That reminded me of something, when dealing with the competition, beyond just the finding the three reasons. I think that you need to find something that is unique about what you do, and then get your customer to buy into that philosophy first. This way, when they do go to shop around, if they do, when they do go to shop around, it makes it more of a challenge for them to get the same thing.
What I mean by that is you’re a direct-to-garment printer, say for example, and you decide that what you’re going to do is you’re going to sell to this customer, and you’re going to help them do some of the artwork. So, build up 100 colors in the design.
Mark S: Yes.
Marc V: Build them a really cool piece of artwork. Help them to get that. Say “What if you did the letters in green?”
Mark S: Or a graded green to black kind of thing.
Marc V: Yeah. “Do a gradient, with a stroke outline. It’ll look cool on the lettering. It will make it pop out of the shirt. This is what it could look like.” Maybe you’re doing a consultation, and you’ve got Photoshop up, and you’re just banging the concept out quick with them.
“Yeah, yeah. That’s going to look great!” They want that, now. If they’re going to go to a screen printing shop, somebody is going to have to sell them out of that idea.
Mark S: Yeah. They’re going to have to talk them down to two colors, or something like that.
Marc V: It can work with anything. If you offer rhinestones, and your competition doesn’t, help to convince them that the ladies’ shirts should have a rhinestone outline.
Mark S: Absolutely!
Marc V: If you offer a vinyl product, as well, with your embroidery, say “Hey, listen. We can put in some glitter lettering right here. It will look fantastic!” Now, because you’re doing multiple things, -.
Mark S: It’s kind of a multi-technology. If you have different ways of decorating a product – let’s say you do DTG and embroidery, or you do embroidery and dye sublimation, or you’re doing vinyl and rhinestones. Whatever that combination is, the more variety that you can offer, the less competition you’re going to have.
Marc V: If you have something unique, like we sell neon rhinestuds. It’s a more unique product.
Mark S: They’re very cool.
Marc V: They’re not really easy to find everywhere. So, if you have some of your competition out there that also does rhinestones, they might not know where to get that, the neon studs, for example. They might not. You know that you have a little bit of a unique product. You’re not the only person in the world who sells it, but you know it’s new or unique.
Sell that to your customer. Now they want the neon yellow studs on the black shirt. They think it’s a really cool idea, and if they do go to shop around, it’s going to be harder for them.
Mark S: You’re highlighting your advantages.
Marc V: Yeah, you’re highlighting your advantages over your competition, and it’s harder for your competition to turn around and -.
Mark S: “I can do that for $10 cheaper.”
Marc V: Exactly. It’s a matter of you want to show your customers the advantages that your business has, by offering things that are as unique as they can be.
Mark S: I think that’s good. We talked about, kind of, is the competition real or perceived? We went through some exercises on finding the advantages to doing business with you. I think we should just go right after that lower-priced competition idea though, because that’s it. We see on Facebook, we get people that say “I can’t make any money doing this, because of the competition.”
We’ve decided that it’s probably real. Let’s say there really is a shop that opened up just next door. They do something similar, not quite the same, but you can buy stuff cheap.
I think the first thing that you have to go through, when you’re faced with lower-priced competition that you know is actually competition, is to do what Marc did, when they brought up that other company’s website on the cutter, and looked through everything that’s actually included.
Is the deal actually better? What is the deal, and is it actually better than what you’re offering?
Marc V: Yeah. You have to see, is it like shopping for a car? When you shop for a car, it might be “We have no dealer fee!” on the radio, a ridiculous commercial. I know you’re making money! You’re selling cars to make money, so I don’t know what you’re calling it, but it’s in there.
Mark S: It’s in there somewhere.
Marc V: A company might say that they are going to offer shirts for, say $5. That’s their concept, is $5 shirts. Well, are there fees involved, in addition to that?
Mark S: Is there a $4 a shirt setup and delivery fee?
Marc V: Is there an initial $150 worth of fees, just to print the first shirt?
Mark S: Right. Did they buy t-shirts directly from China, for 50 cents apiece, and they’re white, irregular shirts that are see-through? Is it really cheaper?
Marc V: Yeah. Is it really?
Mark S: Is it a better deal?
Marc V: Yeah. Is it a better deal? Because there’s less expensive, and then there’s cheaper. Is the product a sub-wear quality to yours, is one thing. If that’s the case, then you have to find out if the customer is okay with that. You can discuss that. Find out if that’s the case.
Find out if there are hidden fees involved in this. Find out if there are limitations to the product. Like we talked about before, if you’ve got 16 colors in this design, but their $5 t-shirts are only one color, so if you want to do 16 colors, that $5 t-shirt is now a $14 t-shirt.
Mark S: Which is right where you are.
Marc V: Or you might have been at $12. You might already be better, and not even realize that you’re cheaper than them.
Mark S: Maybe they charge a delivery fee, to make up for the money. Maybe that price group is only available for 14 or 30 days to get the job done. You can order today for this price, but we’re not going to be able to deliver for three and half weeks.
Marc V: It could be all of these things. You have to find out what the deal is behind that. Sometimes, it might just be price shopping your competition, to figure that out.
Mark S: I highly recommend.
Marc V: Call them up. Ask them. Find out what the deal is. Just probe the questions. “What kind of shirt do you use?”
Mark S: Or have a friend call. Some people are uncomfortable with that. You could even order a couple of shirts. Here’s what you may find. You may find that it’s a great shirt, they’re delivering a great product and it’s a great price, but man, the guy was so rude on the phone! You know? Like he barely wanted to talk to me. He hung up really quickly. He’s just a jerk!
Maybe that plays to your advantage, and you could say to a customer “Yep. You know what? They are absolutely cheaper, definitely. Have you talked to them yet?”
Marc V: You could say that in confidence.
Mark S: Absolutely.
Marc V: Also, if they are a local shop, with Google reviews or Yelp reviews, look that up. Because again, I say go for all of the low-hanging fruit first. If you hear about a lower price from one of your customers, “Hey, I can get this done for $5 a shirt cheaper,” it’s okay to not answer them immediately, most of the time.
You could say “Okay. I’m getting ready to do something else right now. I have a meeting with a customer. Give me a bit. Can I call you tomorrow at 8:00 AM? Is that fine? Do you have to make the decision before then?” “No.” “Alright. I’ll just call you tomorrow morning.”
Then, go for all the low-hanging fruit first. First, look up and find out, is that deal real? That’s one thing to look at. Then, are there any reviews online? Do they have bad reviews? You can try to give them a call, and see what the experience is like.
Go through all of that, first. This way, you know. When you talk to them, you’ll see. “Is there any of this really easy stuff I was able to find, that I can just combat it with?”
Say “Yeah, I’m familiar with them. Their Google reviews are terrible, for a reason.”
Mark S: Right. “Look them up on Google.” You could also find out, again, like Colman and Company did, you could go down that, when you talk to the customer, you could say to your customer “When I talked to them, they were going to charge a $200 setup fee, and they were going to charge $16 for delivery, and it was going to take them five to six weeks for my order. Are those the same things that you got?”
Or you could just put the question in their mind, and say “What we’re talking about is a 512-color shirt. We’re talking about using this brand of high end t-shirt, and we’re talking about me doing the quality control myself. We’re talking about delivering it in three days. Are those all the same things? Did you talk to them about all of the same things?”
Just kind of put it back on them a little bit, so maybe they’ll think “No, I didn’t actually give them the graphic, so I don’t know how much that’s going to be.”
Marc V: I also recommend, what I like to do is if you’re honest with them about what you want, and what you’re willing to do, then most people will respond very well to that. What I mean specifically is, say “I would like to earn your business. I also want to maintain the quality, and my three things I mentioned about my business. I want to maintain those things for my business. I don’t want to fall below that. But I might be able to work with you on this deal.”
“Have you gotten a quote from them, a physical quote on paper, with a bottom line number? Get that, and I will be happy to look at it with you. If I can do something different or better, I will, but what you need to do is, for your own sake, you’ve got to get a quote. I’m going to prepare a quote for you, with the price that we talked about, in writing.”
Mark S: Apples to apples.
Marc V: “Then, you need to get one from them and compare it, and see what’s different. If you’re willing to share it with me, let’s talk about it together, and then go from there.” But after all of these things, let’s be real here.
Mark S: You might still be more.
Marc V: You might legitimately be more.
Mark S: Is that okay? Is it possible to sell things for more than somebody else?
Marc V: It is. What else is possible is that person at that other shop might have great reviews.
Mark S: They might be nice people.
Marc V: They might be really nice people.
Mark S: You can hate them anyway, though, if you want to. It’s okay.
Marc V: They might deliver for free. They might use the same blank that you use. They might use the same printer and embroidery machine that you use. They live in a much smaller house.
Mark S: Maybe they’re working out of their house, and you have a retail shop.
Marc V: Maybe with the sheer size of their business -.
Mark S: They may be huge.
Marc V: Yeah. They may do a lot of volume, and it’s okay for them to only make a couple of dollars a shirt, because they’ve got the process narrowed down over the 30 years that they’ve been in business, that they know they can be profitable here, and they are willing to do that.
All of that might be true. If that’s the case, you might just have to bow out.
Mark S: You might just say “You know what? Yes, we are more. I’m not sure why. Maybe they’re just a really big company, or maybe that have lower costs, but you and I are on the phone right now. We’ve talked about your job. We’re at $14 a shirt, and they’re at $12 a shirt. Honestly, if you don’t think that doing business with us is worth that $2 a shirt, because that’s all it is. It’s $2 a shirt. Then, I wish you luck, and I hope we get the opportunity to try again next time.
Marc V: Yeah, and be respectful about that. Also, on the flip side of that, sometimes it’s okay to match that lower price. Or maybe you are a little bit higher priced in your market than you want to be. That’s possible, too. All of these things are possible.
It’s not just an easy pie in the sky answer, all of the time. It can get complicated.
Mark S: You know what we haven’t done yet? We haven’t pitched any of our other podcasts. I think this is the exact time to make sure that you’ve listened to Know Your Numbers, Part 1 and 2, because you’ve got to project what that worth of the customer is going to be. Maybe they have a better idea, that this customer isn’t just a one-time deal, but they’re going to order four times a year, and when you keep that in mind, it’s a better deal. So, they can charge them a little bit less, and you haven’t figured that out yet.
Marc V: Yeah. They might know this. They might have done business with this customer before, and they know. “Listen, I can charge this customer a really low price. Why? Because they are no hassle. Their artwork is going to come to me clean.”
Mark S: Yeah. “I never have to do anything else.”
Marc V: “They’re very easy to work with, so I don’t mind that I only make, say 20% versus 30%, or whatever the numbers might be.” You’ve got to figure that out. Know your numbers. You’ve got to know it.
Mark S: Absolutely. It’s a big deal. That’s the difference between in business and not in business.
Marc V: It really is.
Mark S: I’ve got a thing written down here, and I like to talk about it a lot, so I want to do that now.
Marc V: Okay, let’s do it.
Mark S: It’s the price to happy ratio. What you’ll find is that the people that beat you up the most on price, they’ll spend the most time trying to – “Can I get free shipping? Can I get 10 cents off a shirt? Will you do this for free? Will you do that for free?” They’re going to get you down to the smallest possible deal that you’re comfortable making, and they are going to be the biggest pain in the butt.
They’re going to be the people that do that to you every time. They still think that they got ripped off. It’s that price to happy ratio. It’s the people that you introduce yourself, you say what you do, you say why you do it. You give those three or four reasons of doing business with me, and the customer says “Damn it! You know what? I really want to buy shirts from you! What’s the price?” And they say yes.
Those customers are going to come back. They’re going to talk about you more. The customer that tries to weasel you out of every penny, they’re going to do that every time they need to order shirts, all over town. That’s the walk away idea. Like Marc said, sometimes you’ve just got to say “Yes, we are more. If you don’t think it’s worth it, I wish you luck. I hope you’ll try me again.”
Marc V: With things like that, what we say, if we happen to be a little bit more on something, we try to be really honest about it, and say “We have to charge that, to be able to do what we do, and I think we do it awesome. I think you’re going to think we do it awesome.”
Mark S: “You should just buy from us!”
Marc V: Yeah. “We would love to earn your business, but I can’t do shirts for $6.”
Mark S: Now, don’t bring up your car payment or your rent, or anything like that. Don’t do that. But that’s true. “I just can’t do it.”
Marc V: Sometimes, you don’t get that business. Okay, but those hardcore hagglers, generally speaking, – and this is everything I’ve ever sold, ever -.
Mark S: Me, too!
Marc V: Those are generally the folks that turn into the thorn in your side. Then, you’ve got this thing burning in the back of your head, like your cognitive dissonance will not allow you to admit, but you’re like “I’m making $100, to deal with this jerk all the time!”
Mark S: It happens!
Marc V: “It’s no longer worth the $100. I don’t want whatever I was going to spend that $100 on.”
Mark S: Feel free to fire a customer like that, because you’ll make more money letting go of them.
Having said all of this, let’s say that you’ve done all of these things. You’ve got your advantages. You made sure the competition was real, and not just in your head, because you saw an ad. You looked at the actual deal that they were offering, and it’s really a great price, and it’s great competition. But you still can’t get there, to either earn that particular kind of customer or that particular kind of business.
You’ve got to take a look at your business as a whole, and ask, are you selling to the right people or the right market? I’m going to take it back to the embroidery business. A lot of supply companies, like ours, we sell to commercial embroiderers, but we sell mostly to people like with one machine, two machines, four machines, five machines.
If a clothing manufacturer that is running 500 heads, wants to buy backing, that’s not our customer. It’s just not us. We’re not going to be able to compete on price. They’re going to build a factory in Singapore, to do it themselves. They’re going to do all of that stuff.
If somebody wants something from ColDesi, that we can’t handle, like if you want a DTG printer, if you want to be able to print 100 shirts an hour or 500 shirts an hour, or 1,000-2,000 shirts a day, then the DTG printing might not be the right one for you. So, we’re just not going to be able to help.
That’s a customer that’s a good customer, a good potential customer. They’re going to spend money, but it’s not our market. It’s not our potential customer.
You may get to the point where you’re doing all the pricing that you can, but the niche isn’t right.
Marc V: Sometimes you’ve got to change the concept of what you’re selling. For example, what I think of is let’s just say that you are starting to sell embroidered caps. You want to charge $14, and you’re finding out that everyone in town is charging $12. That’s kind of the market price, because there are market prices to things.
You could have a grocery store that will sell $10 a gallon milk, but most people are just going to say “I might other things there. I’m just not going to buy it, on principal. You’re way out there.”
Mark S: That’s too much.
Marc V: So, you might be higher than the market, but that’s where you want to be, to be profitable. You say “I want to make this kind of money, to do this. I’ve made that decision.” You’ve got to think about what can you do, to make it different, then?
You’ve got to, like I mentioned earlier, about making your product different than everybody else’s. You’ve got to think outside the box. I hate even saying that.
Mark S: No, I like it. Think outside the box. I’m actually drawing a box right now, and I’m making a little brain drawing, outside of the box.
Marc V: That’s a terrible brain! But what I mean is we have a customer who only does patches on caps. They make a patch, they embroider it with our patch kit product, and then they heat apply it to a hat. They look really cool.
Mark S: That’s interesting.
Marc V: That’s all they do. “We don’t embroider hats. We used to embroider hats. We don’t anymore.” I said “Why?” He said “These sell like hotcakes!”
Mark S: It’s a great product.
Marc V: He’s like “They look cool.”
Mark S: It’s unique.
Marc V: Yeah, it’s unique. He said “Nobody around does it. We have to charge a little more, because it’s a little more work on these, but people see them, and their friends talk about it, and all these things.” He’s like “We’ve got a great little niche market in our area. We sell this thing locally.”
You’ve got to figure that out, where maybe if you’re selling your custom t-shirts with your DTG printer, maybe you’re the person in town that also offers canvas prints of these things, as well.
Mark S: That’s good.
Marc V: Where other folks might not even be offering that.
Mark S: You can also go and, what I was thinking is more of the niche market. Let’s say you opened up your business specifically to do – because you thought doing embroidered caps, for example, for area baseball teams, was it. You’ve got an in with the Little League and the high school, and things like that.
You’re doing that, and then you find that those hats are selling for like $8, because somebody has got a contract with Little League, and they can get a better price, and all of this stuff. So, maybe you work with the local fishing supplies store, and you do nothing but fishing caps. Maybe you do more custom. Maybe you do corporate caps, or you do patches on caps.
You’ve gone in with the intent of serving this market, and it’s just not working profitably for you. So, find a better one to hunt in.
Marc V: There’s tons of them. Not all of the things are just going to be easy, in the first place that you get to. What happens with some folks is they think that the Little League is going to be perfect for them. It ends up not being.
Then, they’re like “Oh, I’ve got another idea,” and that one’s failed. Now, all of a sudden, “I’m just not going to do this.”
Mark S: They want to sell their embroidery machine.
Marc V: Yeah. My motivational thing is “Don’t give up yet! You’re supposed to have failed, those first two times! You’re supposed to have!” It’s the same thing with if somebody is a salesperson, or when you’re selling. It’s the same concept. You’re going to talk to three people, and you should expect those three people to tell you no. That’s part of the game.
When you’re thinking of these niche markets, if the one you’ve got in the first place doesn’t work out, that’s perfectly fine, because you’re just like almost every other person who has ever opened any business ever. Find another one.
Mark S: Hey! I just want to say that I went to school for philosophy. Enough said.
I love this idea that you start in one market, and it just doesn’t work as well, or it doesn’t work profitably. Or maybe you are doing those baseball caps for Little League and things like that, but you’re not making enough money it. That’s the perfect time. You’ve got some income coming in, to go and explore those other higher-priced markets.
For example, maybe you’ve got a rhinestone machine. There are people that do wholesale rhinestone transfers online, and that’s all they do, is make those transfers. Maybe you try that, and you can’t compete, because it’s easy to ship and it’s a national business. So now, you start making the shirts.
Or maybe you can’t get into the cheer market or the dance market that you wanted to, so try baseball mom. Try doing rhinestone decals that you can put on, for bumper stickers.
Marc V: That’s what was going through my head, just when you said that, is making custom stickers. We have customers that only make embroidery patches. We have people that only make stickers. We have people that only do patches on caps.
Mark S: We’ve got people that only do glitter and ProSpangle cheer ribbons. That specific!
Marc V: There’s really some great specifics out there, and they keep really busy. We have a customer that only makes tote bags, and that’s it. If your problem is that you can’t compete in the market that you’re in, or you don’t want to compete at those prices, if that’s the real market price, which is what we’ve already determined -.
Mark S: Right. You’re going to make sure that’s true.
Marc V: Yeah. Then, you start looking for other niches that you can get into.
Mark S: And make the money you want.
Marc V: Never stop looking for that stuff. They’re there. They’re definitely there, but you’ve got to keep looking for them.
Mark S: You know what? I think we got kind of a slow start to this podcast, because it’s 27 again. No one knows what happens at 27. But we’re ending up pretty good! Almost 28. I think 28 is going to be a good year.
Marc V: I was never 27. Did you know that?
Mark S: Yeah. You mentioned that earlier.
Marc V: I was 26.
Mark S: And then you were 28?
Marc V: No. I went to 30! I don’t know why.
Mark S: About 10 minutes ago, I think I was about 27.
So, what have we talked about? We talked about you versus the competition, and whether or it’s real or perceived. We talked about finding the advantages to doing business with you and your company, and having a story for each one of those, if you can.
We talked about a lot of ways to deal with and address lower-priced competition, which you should play that part over and over again, if you have the idea that everyone sells cheaper than you.
We also recommended that you look at whether or not you are selling into the right market. I know you got your embroidery machine, because you want to do pillows and horse blankets. But maybe custom polos are the way to go.
Take a look at that. Survey the market. Try to find something that will make you money.
Marc V: I think the homework to go home with, what you should do after this one – what I would have already done is, if you don’t have it already, take the three reasons why somebody should do business with you, if they just ask. If somebody just says “Oh, cool. You sell t-shirts. Why should I buy from you?”
Mark S: Yeah. “I can get them anywhere.”
Marc V: Just give them three good reasons. And we didn’t even tackle one thing. Maybe one of those reasons is because I’m the cheapest in town.
Mark S: Oh! I didn’t even think of that!
Marc V: That might be you.
Mark S: You know why I would never think of that? Because if I were the cheapest in town, I would immediately raise my prices.
Marc V: But that could be you. That is another successful business model that could be out there. But find the three reasons why they are. In my opinion, it shouldn’t be because you’re the cheapest in town, unless you’ve got an awesome system to make that happen. It should be because you’re the best.
Tell these people what three things you’re the best at, and why it’s going to be great for you to sell t-shirts that way, or whatever it is, and you’ll have a successful business.
Mark S: I love this episode! Do me a favor and do Marc a favor, everybody out there, and share this podcast with people that you know. Anybody that’s got a small business, they don’t have to be in the custom t-shirt business. Download it, share it.
We’re on iTunes. They can listen to it online. You can hit the little Share button on the website, send it over Facebook. The more people that listen to this, I think the more people that will do better in business.
Marc V: Great! I feel good about today. I’m ready to move on to some new awesome things.
Mark S: Me, too. Thanks for listening, everybody! We appreciate it.
Marc V: Very good. This is Marc Vila, with Colman and Company.
Mark S: And Mark Stephenson, from ColDesi. You guys have a good business!
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