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Episode 98 – Beat The Competition: Turn Competitors To Partners

May 29, 2019

This Episode

Mark Stephenson & Marc Vila

You Will Learn

  • How to partner with other businesses
  • Where to find potential partners

Resources & Links

Episode 98 – Beat The Competition: Turn Competitors To Partners

Show Notes

After listening to the past two episodes you might find you have a few competitors that are clearly going to be long term struggles for you.

They might have a great formula down for business practice, production, sales, pricing, etc. These competitors might be right in your vertical market or maybe is a market close to yours.

You may sell spirit wear, and they focus on sports uniforms.
You might deal with dance, and they deal with ice skating.
You may sell corporate wear, and they do as well but offer a different decoration method. Screen printing vs embroidery.

Either way, they are here to stay and you might have to go head to head with them on some sales.

What else can you do?

Turn your competitor into a partner

So first why should you? Aren’t they the enemy!?

  • It makes you look like a good company / person
  • If you and your competition are friendly, customers will trust you are a good business / person. “Oh yea… Marco from The Print Shop. Yea i know him, we have worked together on projects…”
  • If you are friendly with Marco, he is less likely to be hostile towards your business. Respect you / your staff / your customers.

People outlast business

  • You never know what will happen with Marco and his business.
  • Maybe he will call you up to sell you his business one day.
  • Maybe he will downsize and ask if you are looking for an employee, he has a great person for you.
  • Maybe his embroidery equipment will die and will outsource to you.

It puts customers #1

  • You want to get 500 shirts with 1 color as cheap as possible. Let me send you over to Jackie’s shop. she can do this fast and cheap.

Competition becomes a friendly challenge vs a war

  • You are like sports competitors that practice and compete, but after the game you can go out to eat together.

What are things you can do together?

Refer business when it should be

  • You don’t have an engraving machine, they do. Send the customer that way

Outsource

  • Customer wants hats, shirts, bags and engraved glass awards
  • You do all the rest. Take the order for the awards. Your new partner sells the award to you at a discounted rate so you can mark it up.

Partner up at events

  • If there is a local event, make one big booth together. Pool resources and agree on the specific products you will show off.
  • If you get leads / sign ups… split them up.

Create an economy of scale

  • Do you both stock the same caps? Order them together and save $$ for qty discounts

Enter a new market together

  • You both have wanted to get into the restaurant uniform business. Partner together to maximize potential
  • This is great if you are both small, and have a large business that’s hard to go up against. Join forces.

How do you get started?

  • Make the first move
  • Call them, email them, visit them
  • Compliment their business
  • Tell them you want to work together
  • Advise you want to join forces to improve each other
  • Have some of your strengths ready to share (especially you researched them and it compliments their weakness)

Attend events

  • Go to events where you competition will be & meet them

Refer them business in an obvious way

  • Call them and say. Hi this is Marc from MM Embroidery. I have a customer here who needs 20 awards made. I’ve been hearing you are the shop to go to. I am going to send him your way, his name is Jose.
  • Once you do this… follow up with another call or email. Tell them you’d like to work on doing this together more often.

Share struggles with them

  • Maybe a huge plant closed down and you know all the apparel businesses are suffering. Come at them with this and say, I’d love to work together on getting our business back up.

We surveyed 100 business owners and 80% are currently doing this. There will be times you get burned and times you make out like a bandit. Keep your guard up while also opening up a friendly relationship. The more you do it, the better you will get.

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 98 of the Custom Apparel Startups podcast. My name is Mark Stephenson, from ColDesi.

Marc V: And this is Marc Vila, from Colman and Company. I usually take a sip of a drink, I noticed, in the beginning. It’s kind of my thing.

Mark S: It’s your thing?

Marc V: I need it. I get a comfortable palate.

Mark S: My thing is that now I have an appropriately decorated CAS cup. I make sure that it’s always facing the camera.

Marc V: Mine, I’m just enjoying it, looking at it.

Mark S: It’s not the scratch on the A. It could be the scratch. So, what’s this one about? This is number three in our series about you versus the competition. This kind of blurs the line with the “versus” part.

Marc V: Yeah. We’ve been talking about beating the competition, and researching them, and what to do if you need to change yourself. There might be something you need to do, to be able to beat them.

But sometimes, taking your competitors and turning them into your partners is actually one of the best things you could do.

Mark S: It’s a great move. We asked this question on the Custom Apparel Startups Facebook group, which I was surprised today. We had a whole roomful of four or five people getting trained on a DTG M2. None of them were on the CAS group.

Marc V: Interesting!

Mark S: It’s disappointing. But one of them listened to the podcast.

Marc V: It’s because you turned off that email that suggested people to come.

Mark S: Yeah, that makes sense.

Marc V: So, after you listened to the past two episodes, – and if you haven’t listened to them, I think it’s important that you do.

Mark S: I do, too.

Marc V: Some of the things that we’re going to do here kind of require some of the knowledge that you’re going to have from the previous two.

Mark S: And the exercises you were supposed to do.

Marc V: And the exercises that you should do. One of the things you did is you researched your competition, and you found a few out there. Then, the next episode, you kind of looked internally, and you realized “Hey, I’ve got these couple competitors. I could do a few things better.”

Mark S: Do you need to add new products? Do you need to change in some way? Or just do what you’re already doing, better?

Marc V: Yeah. So, now you say “Okay, now I’m putting my best foot forward, to beat the competition. I know about my competition.” Now is your opportunity where you can join with some of your competition, because they’re right in this perfect zone for becoming partners.

Mark S: One of the things that you had talked about was when you’re doing your competitive research, and you find these companies that are doing a good job, they’re doing different things than you are, or they’re doing it in a different niche market than you are, you may occasionally bump up against each other.

But you’re not direct competitors. That’s the perfect kind of opportunity to start to work together, to profit for you both.

Marc V: Yeah. You see an apparel shop. You visit them or you do some research, and you find out they’ve got 30 embroidery machines, and they’ve maybe got a really old little transfer system, and that’s it. They really focus on embroidery, and you’re kind of the opposite.

You’ve got maybe just a single head embroidery machine. You’ve got a direct-to-garment printer and a transfer system, and all this. So, you’re t-shirt heavy, print heavy, and they’re embroidery -heavy. You reach out to them. Why? Why would you want to reach out to them?

Mark S: Why would you want to? For a couple of reasons. The first thing you can do is you might have the opportunity to keep that customer in-house, and outsource. So, you could end keeping the customer, still doing a 50-cap embroidery order in a short period of time, making a little bit of money, and you develop a good relationship with the vendor that you did business with. So, you get to keep the customer.

The other reason is you may have the opportunity to build goodwill with your competitor, by referring that customer over. And they’ll reciprocate, at some point.

Marc V: Yeah, that’s great. Some examples we wrote down; it also might be just want their offering is, what their vertical market is, their niche. You sell spirit wear, and they focus on sports uniforms. So, you might have a little bit of that overlap, but really, you’re selling to the same people. If you partner together and work together, then you could kind of get customers, whether they get a better deal or it’s a better deal for you guys.

Mark S: That’s ideal. If you do bling, like a lot of our customers do, they just do bling. Somebody comes in for the football uniforms. The person that you refer to, they’re never going to get a ProSpangle, to do bling. And you’re not going to set up a dye-sub shop or something like that, in order to do the sports uniforms. So, it’s kind of the perfect relationship.

Marc V: So, you’ve got to find whether it’s the apparel decorating method. These are just talking about kind of those – like a little bit of contrasting competitors, where they’re just different enough for you guys to partner together.

We can talk about partnering up with people who are just like you, even. Some of these will apply to that, too. But we’ll start with the easy ones, the ones that you almost never compete, and you can work together. It’s a very easy relationship to start, you know, as easy as anything can be.

Mark S: Some examples might be what we have, like a lot of the ColDesi customers, they have a direct-to-garment printer or a Digital HeatFX system, which are great for full color short runs. But what happens when you get an order for 2,000 shirts of one color?

What normally happens is somebody comes on the Facebook group and says “Hey, I need some help in fulfilling this order.” There’s a referral. There is that relationship that you’re generating with somebody that could otherwise be a competitor. But now, they’re partners in this deal.

Marc V: It’s really great. It’s going to do a ton of things for you. Can we talk about why you should?

Mark S: Yeah, go through them. Go through why.

Marc V: Okay, we’ll talk about why. We made a bunch of notes. I forgot, when I was writing things out, the most important one, which you pointed out: to get more business!

Mark S: More business! That’s why we do everything, is to get more business.

Marc V: Just like we said in the examples above, when you’re kind of this reciprocal style of business, where you don’t compete against each other, or hardly ever, and you refer people to each other. If their customer is used to buying from you, and they ask for something that they cannot provide, they’re likely to trust their recommendation.

“I give this company thousands of dollars every month, and they can’t do what I want. They said to go to your shop.” They’re going to do that. They’re not going to go on Google and look around. They’re probably just going to take the word of the person they trust.

Mark S: Absolutely. So, you’re really getting that advantage of somebody else’s relationship, that’s now been passed on to you.

Marc V: Yeah, so get more business, build relationships with people, to help get your own network of referral business, and that will just continue to grow. We know from plenty of other podcast episodes that referral is one of the best, for our industry.

Mark S: It is.

Marc V: Some other reasons that are also great reasons -.

Mark S: Also, other than just the money, which is my top three, is the money.

Marc V: Yes! The next one is it makes you look like a good company. It actually does make you a good company and a good person.

Mark S: And we have an example.

Marc V: Okay.

Mark S: We have an example here, I think. That example is the ColDesi relationship with Belquette. Belquette was actually a competitor to ColDesi. They sold DTG printers for years. They were a boutique shop. They produced a great product. We always had admiration for their printers.

At the ownership level, everybody knew each other. They’d get together for lunch like once a month, that kind of thing, to talk about the industry. So, when there came an opportunity to work together more fully, that’s how Belquette became a part of ColDesi.

Because we already had a good relationship. We already had good feelings for each other, so it was just a natural fit. When they were ready to focus on R&D, we were there to help with it.

Marc V: It really just goes to show that when you build goodwill with your competition, you don’t know where that’s going to end up. Also, it’s very good for you, out toward your customer, to your customer base.

If you’re friendly with your competition, and somebody comes to you and says “Oh, yeah. I was looking to get these shirts at Marco’s Print Shop down the road,” etc., etc. “I’m not sure. I also wanted to buy this from you.” You go ahead and you turn around, and “Oh, I know Marco. Great guy!”

Mark S: “They do great work.”

Marc V: “They do great work.” And maybe even you’re competing on this. “Yeah, they do great. I do know that Marco doesn’t have a digital garment printer, a DTG printer, like I do. If you’re looking for more colors and art, like this stuff on my wall here, I can do that better. Is that what you want?”

Mark S: That’s a great way to approach it, because you’re not saying “Don’t buy from them.” You’re just saying “They do a great job, just like we do with the competitors to us. Embroidery machines and DTG printers, there’s a lot of good ones out there. Let me explain to you why mine is better.” So, the same thing.

Marc V: And if he goes over to Marco’s shop and says “Oh, yeah. I was over there. I was thinking about doing this. What do you think?” If you guys are friendly, he might just say “Okay, well what do you want? Do you want a single color shirt at a low price? Or do you want the DTG, that’s going to cost you more, but look better?”

Marco will be friendly about that, and more than likely will try to get the business, but not bash you. “Oh, no. You don’t want to buy from them.”

Mark S: That friendly competition is a big deal, because it can really set the tone for your entire market. There are places that you go in different businesses, where if you go in to get your car fixed or to buy a new car specifically, the salesman will just go off on the shop down the street, or this other car brand. It’s a big turnoff, and that kind of builds the culture in the area that you’re in.

Marc V: It makes you a good person. You are, because you’re doing these things. Your customers will notice. Your competition will notice, and it has an overall positive effect on you and your business.

Which leads right into the next one, which is that people outlast businesses, typically.

Mark S: Yeah. For the most part, the people that you deal with that are your competitors now, they may not always be in that business, or in that shop. And you may not always be in the business and in that shop.

Marc V: Well, Belquette, perfect example. A great relationship, from the ownership standpoint. And when the time was right to work together, both businesses changed from a decade ago, when they met. It came to a point where a partnership and working together and all of that, was better.

You never know, talking about Marco, down the road. You never know what’s going to happen with his business. He might call you up and say “Hey, I’m looking to retire and move to Cabo, on the beach. I want to sell my business. Are you interested in taking all of my equipment and my customers?”

Mark S: That’s a good one.

Marc V: Maybe he’s going to downsize, still partly retiring maybe, and says “Hey, I’ve got a great shop employee. I’m downsizing. It’s just going to be me and my wife running it. Are you looking for somebody?” So, you could get that type of referral business.

Mark S: They could hand over entire accounts.

Marc V: Or hand over an account, yeah, and just say “Listen, if you take care of these folks, that’s the best thing. I’m pulling out of the business a little bit.” Or they might all of a sudden get something completely different. They might get a UV printing machine, and all of a sudden, that part of their business skyrockets, and they’re backing off from apparel, a little bit.

They just turn and say to you “Hey, I’ve got this equipment. Do you want to buy this embroidery machine? I’ll send you my embroidery customers. I’m doing great on this UV.”

These are all things that could happen.

Mark S: And have happened.

Marc V: And have happened. Or a piece of his equipment dies, and instead of buying more, he just decides to outsource to you. These are all things.

Mark S: It’s a plus.

Marc V: The people are going to outlast the business, and it’s going to give you an opportunity to make more money.

Mark S: True.

Marc V: The next one down is it puts the customer number one.

Mark S: I really like that, because it’s going to reflect well on your business, and on whoever you partner with. Because like in our group, when somebody asks “Hey, I need to get 54 of these done short term. Can you help?”, then they’re obviously putting their customer first. They’re going to give up some of their profit, in order to fulfill the order properly, instead of just saying no, or sending them onto the internet, to look for somebody random.

Marc V: Exactly. If your customer really needs something – sometimes your customer asks you for something, and they could buy something else. You try to steer them toward that. “Buy this instead, because I can do it, and I can make more money on it, and that’s what I specialize in.” Those are really the answers that you might not say, but that’s what it is.

But if your customer really legitimately needs something that you don’t do, then you put them first. You say “Listen. I’m not the right person to do that. I don’t specialize in making football jerseys. I probably could, but I’m not even sure what could happen. I don’t specialize in that. So-and-so does. We’ve got a good relationship. I would love that business,” or whatever it might be.

Mark S: We do that for customers all the time. We’ll get somebody that calls ColDesi and says “I’ve got a business, and I really need to do 1,000 shirts a day.” “Well, we’re not the people to talk to, not yet. So, go ahead and talk to one of these people. They do a great job.” We would do the same thing. I like that a lot.

Marc V: Really, it just goes back to making the relationship. These three ideas right here; people outlast the business, it makes you a good person and a good company, and putting customers number one; it’s all about the relationship building. And we know that relationships and referrals and everything are so important in our industry.

Mark S: Absolutely.

Marc V: Competition becomes a friendly challenge, versus a war. That’s just always nice. Again, you just said the car industry bad-mouthing people.

Mark S: Yeah. You really don’t want to steal somebody else’s customer. You want to offer somebody all of the benefits that you can, so they will choose you. But that’s different.

Marc V: You don’t want your competition to be so heavy and hateful, that they’re leaving bad reviews on your Facebook page, just to get at you.

Mark S: That can happen.

Marc V: Just to get at you, that they purposely go after your accounts and undercut them. That type of business is just not comfortable. It doesn’t make you happy to go to work.

Mark S: Be nice! And listen, I just want to say, because we did have somebody on the Facebook group survey say that they had been abused badly in a circumstance like this, where they partnered with a company on some jobs. They ended up losing some of their customers to them.

That can definitely happen.

Marc V: Sure.

Mark S: The important thing is that you don’t respond in the negative way that we were just describing. If you are the classy one, it will still hurt, and you’re not going to say great things about this guy, but you could say “Yeah, we did some business years ago. I don’t do that anymore. I partner with this person now. Here’s why.”

Marc V: And I’ll say this, with the example that our good friend left on the Facebook group. If you do anything with people enough times, you’re going to run into the biggest jerks, the most friendly people, the biggest pushovers, the most aggressive people, the nicest. You’re going to run into all of that, because that’s what dealing with humans is.

Mark S: I think I’m all of those things, really.

Marc V: If you have customers, you’re going to have the jerk customer, the friendly customer, the one who refers you a ton of business, the one that you never talk to, that gives you the money and they walk away.

Mark S: Those are the best ones!

Marc V: You’re going to run into all of it, so two things. If you’ve had a bad experience partnering with somebody, you’ve found the jerk first.

Mark S: Right. You got that out of the way. It’s very unlikely you’ll find him again.

Marc V: And if you do a lot of this, you will find another jerk. It’s part of the game. It’s unfortunate, when you run into that.

Mark S: But our estimation is the gain from developing these partnerships far outweighs the potential loss from getting a bad one.

Marc V: Do you have any proof on that? It’s actually the last point in this section.

Mark S: I don’t.

Marc V: You do!

Mark S: No, I don’t. You do!

Marc V: You don’t want to be left out, because when we surveyed, what was the percentage of people?

Mark S: 80%.

Marc V: 80% of people in our industry do this. So, the fact that 80% of people are doing it means that it does work, and most of them are not the jerk. If you’re the only one not doing it, then when all of the business is being shared and partnered and referred and outsourced, you’re sitting alone by yourself, not getting that opportunity.

Mark S: What’s that game where the music plays, and everybody tries to sit down?

Marc V: Musical chairs?

Mark S: Musical chairs. It’s like musical chairs. You do not want to be the one without a seat. If you are in a town, and you don’t have partnerships yet, try to find one. Because if everybody else partners up, and you don’t have a big embroiderer to go to for large orders, or a screen printer; if you’re a big company, you don’t have that small go-to person, because your competitors do.

Marc V: Yep, and you don’t have the opportunity to work with people. You’re working against everybody.

Mark S: Right.

Marc V: Then, the odds of success are down.

Mark S: Let’s give some examples of different ways that they could work with each other.

Marc V: Okay.

Mark S: The first one is – we’ve already talked about these – refer business, when it should be referred. And the obvious ones; if somebody comes in for a trophy and you sell t-shirts, don’t try to outsource that. Right? It just doesn’t make any sense. If it’s a one-time deal, if they want laser engraving, if they want something you don’t do and you will never do, you don’t already have a relationship, then refer it to somebody who does. Find somebody that you can send that customer to.

Marc V: And this is your opportunity, also, when you’re doing this, referring business when it should be referred, this is your opportunity to look for an opportunity. “Should I maybe think about doing the wholesale engraving stuff?”

Mark S: Oh, yeah. Absolutely.

Marc V: You start thinking about these things. Then, it gives you insight into the business, when you’re friendly with somebody who does this.

Mark S: Here’s a good opportunity. That’s a good example. You run a t-shirt shop. You do promotions and logo stuff, and somebody might just assume that you do trophies and plaques. If they come in, and you don’t already have a relationship with somebody, maybe there’s somebody that you’ve heard of.

While the customer is there, if they’re in person, just pick up the phone and call Chuck’s Trophies down the street. Say “Hey, Chuck. This is Bob at Bob’s Custom T-shirts. I’m standing in front of one of my potential customers that needs awards. Are you available? I want to send them down.”

Marc V: That’s beautiful.

Mark S: How are they going to feel about you? They’re going to look for opportunities to “Oh, you know what? I had somebody that was interested in t-shirts. I should have sent them to you.”

Marc V: Yeah. Then, your customer is going to be like “Wow!”

Mark S: They think you’re awesome.

Marc V: “You are awesome! I felt like I was going to drive around all day.”

Mark S: You’re like the Santa on Miracle on 34th Street, sending people to where they can get the toys.

Marc V: Oh, yeah. “Macy’s down the road, they’ve got them in stock.”

What else you can do together, you can outsource together. We’ve used this example a couple of times already in here.

Mark S: It’s a good one.

Marc V: Your customer wants something. They want a bunch of different things. They want hats and shirts and sweaters and awards. You’ve been building this relationship with an award company, so you quote it all. You say “I’ll get all of them done. The awards don’t get done here. It will take me an extra couple of days, but they’ll come in real soon. I’ll get you a great deal.”

You’ve got a relationship with this other business who makes awards. Maybe they give them to you at 20% off.

Mark S: Yeah, whatever it is.

Marc V: You charge the same retail that they would, and you’re making 20%. So, you’ve got a little outsource thing going on.

Mark S: The idea here is that you make a little bit of money, but more importantly, you maintain a proprietary relationship. If you’ve got somebody that comes to you for tons of stuff, to add something small is not a big deal.

Now, if they want something completely different; they want a new car of something like that, then maybe you don’t outsource that, because you can’t maintain that kind of business. But if you have the opportunity to get with somebody in advance, like we’ve got ContractDTG.com, Mark Biletnikoff. He was on the podcast. He just does contract direct-to-garment printing.

Which means, as an example, if I’ve got a DTG business and somebody comes in for a regular order that’s going to be month after month, or maybe it’s a little bit too big, or they want it labelled and packaged in a specific way, I’m not going to do that. I’m going to call Mark, and I’m going to arrange for him to drop-ship, which is a great kind of outsourcing relationship to develop.

Marc V: Also, the outsource one works really well, where you’ve got concerns that you don’t want to send a big customer to that competition. Especially if they do a lot of the same things that you do. So, the outsourcing gives you that opportunity.

There are a hundred different ways you could do that contract type of work. Get it produced and drop-shipped. Just get it delivered to you. You could do some of these things where the profit is very, very small, but the rest of the business you get is worth it, to keep them inhouse. There’s a lot of different ways you could do that.

Mark S: I really like this next one, because I hadn’t thought about it. You mentioned partnering up at events. I think that’s brilliant. Why don’t you walk us through that a little bit?

Marc V: Okay. So, there’s a local event happening. Maybe there’s like a barbecue festival or something like that, a beer and barbecue festival. You start looking and investigating, and you realize that there isn’t any vendors kind of in your space. There’s plenty of people selling food and drinks, but there’s nobody selling apparel.

You say “Great idea!” You do t-shirt printing, and you think of a bunch of ideas; pigs and beer and all of that stuff like that on it. Then, there’s a bling shop down the road, that you’ve discussed with before, maybe you’ve referred business to. They just do rhinestone apparel and things like that.

You partner together. You get one big booth.

Mark S: Split the cost of the booth.

Marc V: Split the cost, so you can make it a bigger event. Maybe instead of a little tiny table, you get a tent. You’ve got a t-shirt printer out there, and a bling machine. You’re selling to two different customers together.

Mark S: Since you have a bigger presence and a wider variety of things, you’re going to get generally more traffic in your booth.

Marc V: You’re not just the tiny, cheap table. You’re the big one.

Mark S: Most importantly, you’ll be able to go take a bathroom break, and leave somebody in the booth. That’s a big deal, especially at a beer festival!

Marc V: When you work together, you capture your own leads in your own way. If there’s a shared list, maybe you’ve got an email signup and you share that list together. You work together. You also agree ahead of time, “Listen. I’m not going to bring any of my glitter heat transfer vinyl stuff, because I want you to get the bling stuff. But you don’t bring any of this stuff, because I’m going to focus on that.”

Mark S: I like that a lot.

Marc V: You guys focus on your own thing, and you build a relationship together.

Mark S: It could be anything. If you’re in the cheer business, maybe there’s somebody that sells pompoms and uniforms, and you sell customization and bling t-shirts. If martial arts is your market, then maybe you sell martial arts fan shirts, and somebody else embroiders gis and belts, or sells equipment.

Whatever that combination is, I think it’s a great idea, because events can be really good for a custom apparel vendor. Being able to partner up, it’s a big deal.

Marc V: When you start splitting the costs on this stuff, it goes down a lot. Because you figure you get one sign printed with both of your logos on it, which costs probably almost the same amount as just getting your sign with just your logo on it.

Mark S: You save money there, yeah.

Marc V: There’s a ton of things you could do. Like you mentioned, the bathroom and lunch break, and all of that stuff, is great. You know that you’ve got somebody who is not just an employee working it.

Mark S: It’s somebody like you.

Marc V: It’s somebody who is super invested in this.

Mark S: Also, I think this economy of scale thing you said, where you might actually share ordering blanks.

Marc V: Yeah, or anything, really. Some of these things that we order, you save a lot of money when you order in bulk. If you can work with somebody that, say you guys carry the same hat in stock, and you always carry it in black. Both of you carry it.

You go ahead and say “Every month, how many do you order a month?” “I order 300.” “Yeah, I order 300.” “Well, the discount is at 800. If we could kind of put this together, we could get 400, and save money.”

Mark S: I love that. Save a buck a hat, or two bucks a hat.

Marc V: It’s really great to be able to do this. It can be tricky, but if you find the right person and the right business, and you guys really hone in on everything you buy, it might not just be blanks. It could be anything within your business.

Mark S: What I really like about that, too, is that we’re always getting requests on the group, on “Hey, does anybody buy Richardson Caps wholesale, or Under Armour wholesale?” Maybe the other person or you have a relatively exclusive or hard to get dealership for a particular product.

So, if your partner company is looking for a specific kind of hoodie that Alpha Broder doesn’t carry, but SanMar does, if you have a SanMar account, you can help them out, and vice versa.

So, you’re getting kind of a group effect on sourcing, too.

Marc V: Most everybody that you’re going to buy from probably is not going to prefer that you do this, that you take advantage of [inaudible 28:02].

Mark S: Yeah, we don’t care about that.

Marc V: But it really is a good idea. Again, this is not just blanks and apparel, and stuff like that. It could be copy paper.

Mark S: Post-it notes.

Marc V: Post-it notes. It could be things that you go to like Costco and Sam’s Club for. You both kind of have some employees, and you buy coffee at the local grocery store, and different things like that; cups and stuff. Well, “Hey, why don’t we go to Costco? We’ll split the bill, and we’ll both buy those things.” There’s a lot of things you can do.

Mark S: Then you end up rooming together, and it gets a little uncomfortable when you wake up.

Marc V: Yeah. You get a really long ethernet cable, and you plug your computer in.

Mark S: You start stealing cable. Alright, I think that’s enough of that!

I like, also, the idea of entering a new market together, although I think this is actually a little bit trickier.

Marc V: Yeah, sure.

Mark S: For example, if you both identify that there’s a big new business coming into town, like a restaurant chain is just coming into town, or a manufacturer is moving in. And you don’t feel  like your business is big enough, or you have a wide enough selection to go after them. You can partner up with another company, to go do that.

Marc V: And this, again, it can be tricky. You want to be creative and protective of your business at the same time, while going after this. One thing you could do is you could, say it’s a big business coming into town. You’ve researched them. You know they do bling and they do uniforms.

You do uniforms. Your potential partner does bling. You go, you meet with them. “Listen, we work together all the time. When you’re going to order bling, go here. When you’re going to order uniforms, go here.”

Mark S: “These are our specialties.”

Marc V: “This is how we do it. We partner together, so we can help you out. If I’m coming to visit you to help size up some employees, we’ll share the sizes together, to make sure everyone is set up.” There’s a lot of things you could do like that.

Mark S: I really like that idea, as long as you’re careful, like you said. Make sure you know the people that you’re working with, there’s less overlap than more, and you stay in communication.

Marc V: And everything that we have to do here, you are working with another business. You’re working with the competition. You’re working with another human, so you want to be careful about who you’re working with. Trust them enough, but not too much.

Mark S: Damn humans!

So, how do you get started doing this?

Marc V: Okay. The first thing you do is you make the first move. It’s just like if you’re dating. When you’re young and you’re dating, and you see the person that you’d like to go to the drive-in movie with.

Mark S: Sure.

Marc V: Maybe go to the malt shop.

Mark S: Marc Vila is using archaic examples, specifically for me.

Marc V: But you make the first move. You say hello. You visit their store, and introduce yourself. You introduce yourself with really good intentions, when you’re doing this. “Hi. My name is so-and-so. I run this shop. I see you do this. We’re both in the same business. I want us to have a friendly business relationship. I know we’re competition, but maybe one day we can do something that will help us both.”

Mark S: Yeah. “I just wanted you to know me.”

Marc V: “I wanted you to know me, and I wanted you to know I’m coming at you with a hand to shake.”

Mark S: Yes. I really think that it’s important that you’ve done that competitive analysis first here, because these are people that you’ve already identified. You know what they do. It’s not like you’re wandering into a shop, going “Hey, I do small volume full color t-shirts. What do you do?” And you’re leaning on their direct-to-garment printer. That’s really not a good plan.

Marc V: It’s true. What are some things you do, during this relationship? For one, just like you would do in the dating scene, when you’re trying to get somebody to go to a dance with you, you compliment them. You compliment their shop, though, their business.

“Hey, I found you online. When I searched you on Google, 4.7 stars, 40 reviews. Awesome!”

Mark S: “Congratulations! That’s great! I want to be like you!”

Marc V: “That means you’re doing a good job. The shop in here is beautiful. Who did your floors? I’m thinking about re-doing mine.” You could just compliment them. It makes people feel good, to be complimented. If it’s genuine and real, they’re going to appreciate it.

Mark S: No fake compliments. If they do crappy embroidery, do not compliment the quality of their embroidery.

Marc V: Because they know it sucks.

Mark S: Yeah, they know. They know it’s bad. But you can find something to open up the conversation.

Marc V: Yeah. Let them know that you have intentions of working together on something. I think that’s important to plant that seed.

Mark S: I like this to be really specific. For example, let’s say that you just bought a Digital HeatFX 8432 and a heat press, and you’re setting up to do your custom t-shirt business. You’ve listened to 91 of our podcasts, and you realize that as soon as you start talking to people about custom t-shirts, they’re going to ask you about embroidery and embroidered caps.

So, you can say “Listen. I just set up a really small custom t-shirt business in town. I know I’m going to have people come ask about embroidery from me. I’m looking for a great person to send them to.”

Marc V: Yeah. You can find out. They might turn around and say “Yeah. I offer wholesale. I’ve done that in the past. I would do it again.” They might say “Yeah. I get t-shirts all the time.” They might even say “I’ve done the wholesale thing. I want to steer clear of it. But a referral business, I would love to. Back and forth, that would be great.”

You should have your strengths ready to share. And because you’ve researched them ahead of time, you kind of know their weaknesses. So, you’re going to play on strengths that you know are their weaknesses, so immediately, they are excited to hear this. It becomes like serendipitous, where it’s like “I know. I don’t have that equipment. I’m so glad you came by.”

Mark S: A good example, if you’re in the printing business, and you see another t-shirt shop or a screen printing shop, and in big red letters right on the front, and in the bottom of every email, it says “48 piece minimum,” you know what their weakness is. They’re sick of telling people no.

So, what you’re going to do is you’re going to walk in and say “Man, I love your website. I love everything about what you guys do. I see that you discourage small orders. I’m in the small order business, so let’s talk about how we might be able to work that out.”

Marc V: Yeah. 100%, when this happens, when you make the first move, just like when you were dating, somebody is going to say no. Somebody might be a jerk.

Mark S: I’m going to cry.

Marc V: That’s going to happen.

Mark S: I’m having a flashback. You’re going to have to give me a minute.

Marc V: It’s fine. More than likely, they’re going to be cool. The first person might be the jerk. If you do it to 20, you’re definitely going to run into somebody who’s rude about it.

Mark S: We’ve done the math. 97.5% of the people that we deal with, with Colman and Company and ColDesi, are awesome.

Marc V: Yeah, are very cool people.

Mark S: 2.5%, we could send them cash in the mail, and they would complain about it.

Marc V: Yes, 100%.

Mark S: So, you may run into one of those people. No problem. Just pick up your card where you dropped it, and move on.

Marc V: And remember that 80% of the people do this now, that we’ve surveyed.

Mark S: Yeah, yeah. Successfully!

Marc V: Successfully do this. So, if you go to ten places, chances are eight of them are going to be open to this idea. It’s not going to happen immediately with this stuff, either. You’re planting seeds at this point in time.

It’s very similar to selling. If you’re going and introducing yourself to local businesses, and saying “Hey, I do t-shirts. If you need anything, call me up,” you’re probably not going to get “Oh, yeah! I need some right now.”

This isn’t going to happen with this, either. You’re looking to build a relationship. Really, what you’re hunting for is – you’re not hunting for them to say yes to you, and immediately want to do stuff with you. You’re hunting for the perfect partners.

Mark S: That’s a good way to put it.

Marc V: So, this is for you, too. When you meet them, if they’re really warm, friendly, open to it, they do a good job, all the research points to yes, then that’s who you’re looking for. If you walk in and somebody says yes right away, and you notice that they seem like they’re kind of in shambles, maybe you’re not going to accept the yes.

Mark S: I like that. I feel like you said yes enough that I’m going to download the Magic Eightball app. “Signs are promising!”

Marc V: “It’s decidedly so.” “Doubtful.”

Attending events is another way to do this.

Mark S: We actually do that. When we go to trade shows, if we see somebody in another booth that’s selling something cool or interesting, that might fit into a niche that we’re not in, we’ll go up and introduce ourselves. “We do these things. I love what you’re doing. Why don’t you give me the tour, and maybe we can work together.”

Marc V: Yep. You go to, like if there’s a little farmer’s market thing, you go down there and you see that there’s a shop that sells custom made bags, and it looks interesting, you’re going to this event just to meet them. You have some business cards with you.

“Hey, I do this. More competition? Maybe, maybe not, but I’m looking to maybe develop a relationship.”

Mark S: I’ve gotten both customers and partners doing just that.

Marc V: You actually said this before, but after you’ve done the first step, and you’ve got somebody to refer to – because you’ve done the research. Hopefully, you’ve already met them. Refer them business in a crazy super obvious way, like you said. You call them up. They’re there. You get them on the phone. Make sure they know who you are.

“Remember? We met at that barbecue event, when I was there.”

Mark S: “Remember how I said that I was going to send you business?”

Marc V: That’s actually great, too.

Mark S: And it’s the same thing with email. You get an email request for a product. You don’t sell it, so maybe you do a joint email reply, and say “Hey, Joe. I just want to introduce my customer Mary to you. She’s looking for something I don’t handle. I thought you would be great.”

There’s no way they’re not going to appreciate that.

Marc V: Well, the jerk will appreciate nothing, because you could literally just send them the cash, and they would be mad.

Mark S: They’ll be like “Thanks! Send me all of your customers!” They’re in Jersey.

Marc V: Probably. Then, after you do this, after you refer them the business, I always think it’s important to follow up with them, to find out kind of how it went.

Mark S: Yeah. “Was that a good customer for me to send over?”

Marc V: Yeah. Say “Hey, I sent somebody. How did that go for you? Did that work out?” I referred some business to a friend of mine, and that’s exactly what I did. Then, I sent him a Facebook message. We’re Facebook friends. I sent him a Facebook message like five days later. “Hey, did that work out?”

“Yes! I did the job. Super nice lady. We’re going to do some more jobs together. Thanks so much!”

Mark S: Right. Was that a massage?

Marc V: Yes.

Mark S: Okay.

Marc V: It’s a handyman, actually. I think I actually gave an example about that before. It’s great. Then also, if they say “No, that did not work out.” “Alright. I want to refer you the right business. What wasn’t right about it?” “They only wanted ten. I have a minimum of 48.” “I know now. The next one’s coming.”

Mark S: “Making a note.”

Marc V: You can also, in this conversation, you share struggles with them, and why you’re looking to partner up. An example is like a big huge business closed down in your city, and they were buying lots of custom apparel. All of the shops kind of suffered from this.

Mark S: It happens.

Marc V: So, you go there, “Listen. Business is slower for me. It’s slower for someone else. It’s probably a little slower for you. I’m just looking to shake hands, meet, and hopefully we can work on something together.”

Mark S: “To boost it back up.”

Marc V: “To help boost business, and get some more,” whatever it might be. And then, that’s where all of the other things come into play, whether you outsource or refer to each other, or go to events, or whatever it might be.

Mark S: I was listening to a podcast on my way to work this morning. It was about pay-per-click advertising. These two guys that run the podcast are Google ads consultants, and they were talking about exactly the same thing.

They were talking about somebody that they knew vaguely, that was in the business in the same town, who lost their job at an ad agency, because one of the big companies closed down that they were servicing.

It was like “Okay. What can we do together?” And both of them ended up with good business from it, because they talked about each one of their strengths, and they were able to kind of exchange ideas and clients, and move forward. So, it’s a plus.

Marc V: I think this stuff is great. They’re definitely not going to be all wins, you know. This is just like selling, in a way, where you’re probably going to have to talk to five different places, to get one. The relationships are going to come and go. They might send you a ton of referral business in the first six months, and it weans off, for whatever reason.

Maybe they’re going after a different niche market, and that niche market really doesn’t have the need for what you sell, so there’s nothing to refer. So, it’s going to change. Relationships are going to develop, and you’re going to find those ones that really last. You’re going to tally up a lot of orders, a lot of money.

You’re going to learn a lot, too.

Mark S: Yeah. Even if it’s not an extra $100,000 a month, still, you’re going to have a relationship with competitors. You’re going to have a chance to talk to new customers. You’re going to be able to talk about the industry, and strategize.

It’s so much better if you can develop these kind of referral relationships, whether it’s in your neighborhood or not. You’re going to be better as a person, and your business is going to be better and stronger, because there’s more variety there.

Marc V: It reminds me of something. When I was a young man, I sold auto parts for many years.

Mark S: It feels like 2016.

Marc V: I sold auto parts for many years, and I had become friends, through a relationship, through a guy who worked at a different brand of auto parts store. Really, because we would sometimes call, “Hey, do you have this in stock? I’ve got somebody who needs it.” Because we were trying to take care of the customer.

This guy’s car is broken down. “Oh, my gosh. Where am I going to get this?”

Mark S: “He’s in my parking lot.”

Marc V: Yeah. “Let me call up. I’ll call up my friend.” Another thing that we would do is we would also give each other warnings about stuff. “By the way, I wanted to let you, two of our stores have been hit already. There’s people coming, they look like this, and they’ve got stolen credit card, and they’re buying expensive parts.”

Mark S: Gotcha. Good one.

Marc V: “Watch out, if you see them. Just be careful. I don’t want you guys to lose the money. Three of our stores have already lost $1,000 worth of stuff.” You could have different things like that.

“Hey, just to let you know. I heard from so-and-so that this restaurant is going to be closing down. We both do business with them. I’m giving you kind of fair warning.”

Mark S: Or there’s a customer who skipped out on paying for a t-shirt order. It would be amazing if they could literally not order t-shirts anywhere else in town.

Marc V: Yeah, or “If they come to you, be careful.”

Mark S: Absolutely. “Get cash up front.”

Marc V: Exactly.

Mark S: Okay. I think this is a good idea. Really, episode 98, Turn Competition into Partners.

Marc V: Yes, and the more you do it, the better you’ll get at it, which is another great thing. So, keep it going! What’s next? Are we going to do another “beat the competition” after this one?

Mark S: I think we’re on the edge with the topic. We were debating whether or not to do an episode on destroying the competition.

Marc V: Physically.

Mark S: Physically destroying, attacking the competition with tactics and everything. We’ll see. If not, I’m sure there will be something fascinating and educational and entertaining coming.

Marc V: Sounds good! Thanks so much, Mark.

Mark S: Thank you, Mr. Vila. Alright, everybody! Thanks for listening. This has been Mark Stephenson, from ColDesi.

Marc V: And Marc Vila, from Colman and Company.

Mark S: You guys have a great business, partnering with your competition!

Marc V: There you go!

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