Awards & Engraving

January '20

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26 • A&E JANUARY 2020 26 • A&E JANUARY 2020 Your business is unique; your process and the value you bring to your customers is also unique. It's why most people pay about $2.50 retail for a plain white T-shirt, yet Kanye West can sell a similar plain white shirt for $120 (and yes, it sold out). But to be able to best determine your value to your customers, you have to start from a place of knowing your true costs. CALCULATING COSTS IN THE DECORATING WORLD Calculating your true cost in the deco- rating world is sometimes harder than we think, as we can't just take the cost of the widget and call it a day. For example, in sublimation, deter- mining your true costs can be a huge chal- lenge due to a number of factors. First of all, getting supplies like ink and paper require you to rely on the supplier or manufac- turer. Let's face it, the ink manufacturer that is expensive might not be keen on exploring true costs and publishing all the facts. They are not being deceitful, as they are pointing out other factors to look at, which are relevant. But just going with a factor like $.01 per square inch and calling it good might not give you a realistic picture of your true cost. You never want to find out the hard way that your costs are way more than you are charging. I suggest gathering all of the out- side information you receive and use that as a starting point to get a true value of cost. As decorators, we need a formula to come up with our true costs for embel- lishing items and then be able to apply that M aximizing your profit while still being competitive all begins with knowing your true costs. Over the many years I have spent chatting with decorators at trade shows and helping small businesses, I have found that people struggle to set prices because they don't have a good cost basis to rely on. Instead, they go with an average of the competitors or ask others to tell them what to charge. Knowing Your True Costs to Maximize Profit Simple formulas for success Aaron Montgomery has been involved with the garment decorating and per- sonalization industry since 2000 and the digital printing industry since 1997. He is very actively involved in the industry trade shows via speaking, attending and exhibiting for the last 17 years. He also writes articles for the industry magazines and blogs on topics that include marketing, social media, the personalization market, and garment decorating techniques. He is dedi- cated to helping small businesses grow and succeed. You can find Aaron co-hosting the industry's oldest and most listened to Podcast - 2 Regular Guys (www.2regularguys. com). You can also find blogs about a wide range of topics on his own website at THE RISING TIDE OF BUSINESS By Aaron Montgomery

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