Are you considering a move into the growing employee apparel industry? This market segment shows a lot of growth potential and offers a lot of opportunity to both seasoned and new entrepreneurs alike. There are two different models that you can adopt when you begin your uniform sales business, the do-it-yourself route or an outsourced solution. Let's take a closer look at both types to gain a better understanding of how they each fit into the overall market.
DIY Employee Apparel Sales and Outsourced Services: The Basics
Most uniform companies that offer DIY services will help you to get up and running by working with you to establish your website and ordering systems. This model is great for people who aren't tech savvy and need a bit of assistance with the construction and maintenance of their websites. Many folks shy away from this model because once the initial platform is in place you are on your own. The flip side of the do-it-yourself model is that you pocket all net profits. Typically, in the uniform sales business, you can expect a 5% to 7% profit margin net of all expenses.
Keeping all of the profits does sound exciting, but remember that with this model you will be responsible for the entire process following the initial order. This includes maintaining inventory, providing embroidery and customization services, shipping, invoicing, and of course, customer support. This model is best for owners that like to be hands-on in each step of the process and perform each and every step of the process following the sale.
In contrast, the outsourced solution has a set profit level, usually about 10% that is guaranteed. This model works in almost all situations, even for those business owners who hire a sales rep, as the typical commission rate is 4% which leaves a healthy 6% to the owner. There is also assistance in setting up your business, but it continues after the initial stages. Yes, you have a cap on profits when using the outsourced solution, but you are also engaged in a truly turn-key business. Choose the right partner company and you will not have to pay any fees of any type. No upfront or set-up fees, no ongoing management fees, no fees at all. In a true partnership, you will receive your guaranteed 10% of profit without any fees.
A true outsourced solution will see you receive 10% off of every order while you do nothing. That's right, your partner handles customer care, billing, embroidering, and inventory, while you enjoy a truly hands-off and fully outsourced experience.
No Right or Wrong Answer
Both of these models have strong pros and they each also have a few cons. Many successful players in the employee apparel market segment utilize both. Certain accounts may only want a few uniforms, but they want them on a regular basis. You can outsource this business to your partner without worrying about a minimum order size that is a requirement when working with vendors. Another account may do one or two straightforward bulk orders that you like to handle yourself because of the healthy profit margin. The beauty of the uniform sales industry is that you can use both models depending on which is right for each particular situation.
Whichever route you choose, the employee apparel business is one that offers a nearly unlimited amount of opportunity and probability for success. Whether you are just starting out today, or are expanding your linen and laundry service, you have joined a market segment that provides a lot potential for success and future growth.