Rethinking my business approach. Better to make items to order or keep Inventory?

[Basikboy]

I have been running a custom t-shirt business for almost 5 years now and we currently custom print every shirt to order to keep our overhead down. I have a vendor that can supply me with the blank tees the very next business day allowing me to print on demand. In doing so however we run into other problems I wouldn't have If I just outsourced the printing in bulk (no one offs as it's too expensive) and did everything myself. Right now we have periodic quality issues with the printing that wouldn't happen if these were large print runs instead of 1 offs, issues with employees when we have to hire seasonal help for the busier times, overhead of having a shop, machinery, payroll, etc. I know they say your employees will never work and care as much as you do but It's tough to accept as I want to give my customers the absolute best. I was totally against carrying Inventory in the past but the more I think about it now the more I am thinking this wouldn't be so bad but I am scared to pull the trigger. I have close to 250 t-shirt designs now and I can assuredly pick at least 100 of my better sellers and just have these printed in the most popular sizes i sell and inventory that. If i did that I can get rid of my current overhead and I can actually house the inventory in my house and just package and ship from home. However, most shirt designs i have are very pop culture driven and only sell when the iron is hot so to speak. When I am printing these in house I can easily just post a new design I am not sure on and print if I sell, if I am outsourcing i maybe stuck holding a good amount of dead stock.

Any thoughts feedback on this is much appreciated. I really don't want to do a half and half type deal so please suggest one or the other if you could. Thank you all in advance.

[shrinkme]

You probably already know this, but inventory is a balancing act between having an asset that's depreciating and creating lost opportunities, and customer service levels. I have always valued my customers over most everything else which has created opportunities to sell at higher prices. But I can also understand keeping inventory low so as to avoid excessive financing. So my advice is to decide where you want your customer service level to be and stock accordingly. You can probably live with something less than 100%.

[Basikboy]

Thank you for the feedback shrinkme.

[Basikboy]

Anyone else have any input as far as carrying inventory as opposed to creating on demand?

[Fulcrum]

I'd say stock high selling designs (within reason) and make the low volume items as you currently do.

[stevenfies]

I worked at a company that did screen printing as a manager for two years, and we faced the exact same issue with our online stores. Here's my take:

The best long-term solution is to invest in a DTG machine. This will allow you to print one-offs with ease, without needing to print film, burn screens, setup a manual or auto, and get the registration set right every time (which is just horribly inefficient if you're doing samples/one-offs). Even if you stock the screens (which might make sense if it was a more limited number of designs being reordered regularly), you'll still have to setup the job each time just to print one shirt, which isn't profitable unless you have huge margins.

Until you have a DTG machine, or if you don't like that idea, what you might consider doing is stocking very small inventory at first, and then expanding once you feel comfortable guesstimating how much demand there is (for each design, on an ongoing basis). Sometimes we'd do runs of 12-24 shirts for example, stacked heavily in the most popular sizes, so we didn't have to setup the machines as often.

Even if you wind up carrying some extra inventory nobody buys, you may very well still come out ahead. Having 5-10 shirts that don't sell might only cost you $10-15, whereas every time your employees setup a job you're paying them by the hour to do so. If you do 10x setups for 10 shirts, you might very well be blowing $50-100 in labor and overhead.

At least if you wind up with some extra shirts, you can always sell them cheap to a liquidator (we did this sometimes) meaning it's not a complete loss, or fire-sale them on your website (or offer to existing customers for 40-50% off as a special). Surely you can find ways to get some/most of them bought, and meanwhile conserve labor.

[Basikboy]

I worked at a company that did screen printing as a manager for two years, and we faced the exact same issue with our online stores. Here's my take:

The best long-term solution is to invest in a DTG machine. This will allow you to print one-offs with ease, without needing to print film, burn screens, setup a manual or auto, and get the registration set right every time (which is just horribly inefficient if you're doing samples/one-offs). Even if you stock the screens (which might make sense if it was a more limited number of designs being reordered regularly), you'll still have to setup the job each time just to print one shirt, which isn't profitable unless you have huge margins.

Until you have a DTG machine, or if you don't like that idea, what you might consider doing is stocking very small inventory at first, and then expanding once you feel comfortable guesstimating how much demand there is (for each design, on an ongoing basis). Sometimes we'd do runs of 12-24 shirts for example, stacked heavily in the most popular sizes, so we didn't have to setup the machines as often.

Even if you wind up carrying some extra inventory nobody buys, you may very well still come out ahead. Having 5-10 shirts that don't sell might only cost you $10-15, whereas every time your employees setup a job you're paying them by the hour to do so. If you do 10x setups for 10 shirts, you might very well be blowing $50-100 in labor and overhead.

At least if you wind up with some extra shirts, you can always sell them cheap to a liquidator (we did this sometimes) meaning it's not a complete loss, or fire-sale them on your website (or offer to existing customers for 40-50% off as a special). Surely you can find ways to get some/most of them bought, and meanwhile conserve labor.

Thank you for the great feedback Steven! Unfortunately I am not a big fan of DTG printing. It doesn't hold up well after washes. Also, majority of my designs are 1 color so setup with our registration system is seconds really. I can print 3-5 tees if not more in the amount of time a DTG shirt needs to be printed even more when considering pretreating and curing.

I am not against carrying Inventory as long as it is not a crazy amount. I think 12-24 pcs like you said makes sense. We make a real good profit now the way we run but I am finding it harder and harder to get employees in that care about the quality and procedures as much as I do. I know that this is probably with most businesses but If I can find another way of conducting business that would eliminate this I may choose to go that route. It gets harder each year to get seasonal people in that I can rely on and most times they are looking for upwards of $15. to simply package shirts into bags for shipping! It's getting old but I am scared to pull the plug and revamp our business approach.

[Fulcrum]

We make a real good profit now the way we run but I am finding it harder and harder to get employees in that care about the quality and procedures as much as I do. I know that this is probably with most businesses but If I can find another way of conducting business that would eliminate this I may choose to go that route. It gets harder each year to get seasonal people in that I can rely on and most times they are looking for upwards of $15. to simply package shirts into bags for shipping!

If you were to find a good employee, would you pay him/her $15 per hour? How about $20? 30? If you want quality employees you will need to pay more.

On the other hand, I'm not sure where this $15/hour starting wage came from. In my area, students are being told to expect high wage/salary jobs fresh out of college/university. Others have been brainwashed into only taking the perfect job rather than any job when starting out. I even had one person go so far as to tell me that he would only do the work outlined specifically in the interview (no sweeping floors, cleaning machines, maintenance, and if he wanted a beer at lunch he'd have a beer at lunch).