How poor supply inventory can ruin a business… and how to fix it.

Mario and Carla were a couple with a dream to own a business. He was a mechanic for the past 15 years, worked in various shops but never had passion for the job. I don’t even think he was a car lover, it’s just the job he was able to get out of high school, and it stuck. Carla worked for the local school board, about 10 years of clerical work managing student file transfers.  These jobs paid the bills, but that is just about it.

Then one day it clicked. They both liked apparel and thought it would be fun to own a clothing store. They really didn’t want that though, they more liked the idea of helping people make custom apparel. Carla was always disappointed with their son’s baseball uniforms and Gloria’s (that’s their daughter) softball uniforms were even worse. It seemed like whoever was in charge of making these uniforms didn’t even care about how they came out. As they were watching a game, Mario was talking to the coach. The uniforms came up and the couch explained how they had to use an embroidery shop that was 25 miles away, and the shop was extremely busy and the service was terrible!  Well that was their “Aha moment.”

Now I could go on about their story, talking about the research, confusion and investment, but we are going to jump right to the start of their business. They have an embroidery machine and a dream, unfortunately this is where it gets a little sticky.

The Embroidery Business plan

It was simple.

1. Sell the apparel
2. Get a deposit
3. Order the supplies
4. Complete the order
5. Get final payment
6. Deliver apparel

This plan worked out nicely for a while. They ended up getting more orders than they expected in the first few months! Then they started getting a little backed up, throw in a few rush orders and a bad storm that delayed shipping of supplies and they found more customers complaining than smiling. One bad order lost a reoccurring order of 200 shirts a month. The dream turned into stress and regret. But what happened?

The Trouble with their Apparel Business.

They weren’t prepared. The plan was good but they found themselves ordering cones of thread to fulfill orders so often they were losing money on shipping costs. They ran out of bobbins one Friday because they didn’t have good inventory tracking. Mario and Carla weren’t even a disorganized couple. They kept decent books of invoices and a calendar of when production would run, but the supplies got them in trouble.

The Happy Ending for a Successful Embroidery shop.

So what did they do? They stocked up; they re-invested in themselves and the business. Crunching some numbers and averages they realized it was such a waste of time and money not having at least a couple months’ worth of supplies on hand. Carla also pointed out that having a large selection of thread cones was better than buying each color as needed. Delaying the order, waiting, shipping costs and stress wasn’t worth not keeping all of this in stock. The business also needed a ramp up on tools: extra scissors, tweezers and alike would keep the business running without a hitch. Mario called his customers and explained their issue and the lesson they learned. Luckily he was charming enough to have almost everyone smiling and laughing at the end of each conversation.

So now they have a new plan, and their business runs more efficient. They replenish stock after it depletes, rather than getting stock to fulfill orders. Rush orders aren’t an issue because their machines are always ready to run. A shipment delay almost never causes undue stress.  Mario and Carla were able to make a recovery, but not every business does.

The New Plan

1. Keep popular items and supplies in stock, always.
2. Replenish stock rather than order on-demand.
3. Have common spare tools and parts on hand to prepare for issues.
4. Count inventory of supplies on a regular basis.
5. Sell the apparel
6. Get a deposit
7. Only order supplies if needed
8. Complete the order
9. Get the final payment
10. Deliver the order
11. Track depleted stock to ready for next scheduled supply order

 

What are some other tips you can take to help better organize your embroidery (and any decorated apparel) supplies?

1. Replenish used supply stock rather than ordering on demand.
2. Keep an inventory count of supplies on a regular basis.
3. Avoid the need to rush supply deliveries. It will save you money and stress.
4. Keep popular colors of thread / rhinestones / patch material on hand. (even if only in small quantities)
5. Be prepared for rush orders. If you can do a ‘favor’ for a customer, they will remember you. Just be prepared.
6. Don’t depend on UPS/FEDEX/USPS ground shipping to fulfill orders. Order often, order early or pay for guaranteed shipping to get supplies you need asap.
7. Invest in yourself and your business. Stock up on supplies and tools so you can achieve all of the above. It will save you time, money

If you have any questions about custom apparel supplies and how you can improve your inventory contact us at Colman and Company. One of our supply experts will be happy to help guide your business inventory in the right direction.

www.colmanandcompany.com

800-891-1094