August 2008
Ahead of the Pack
How does a distributor really stand out from the crowd? Later hours, same-day turnaround, free samples? We talked to super-competitive distributors to find out how they stay number one in their clients’ minds.
It’s hard enough staying ahead of the competition without any unexpected hiccups. Throw in a bad economy and price wars, and becoming a market leader can seem almost unnatainable. Unless, that is, wearables distributors leverage some of the secrets of ultra-competitive distributors.
In Counselor’s just-released State of the Industry survey, 24% of distributors said “other distributors” are their main source of competition. That’s the second main source of competition distributors have, with Web sites selling promotional products leading slightly at 26 %.
We searched the industry to seek out the smartest business strategies and methods distributors are using today to remain one (or several) steps ahead of their competitors. Read on to find out how you can use them too.
1. Know your client
Want to impress your clients? Get to know them. And not in the “Hey, how you doin’?” sort of way. Distributors who know the details of a client’s business as well as the industry in which they operate can make more informed suggestions about the most appropriate and useful apparel products for their customers.
Start with public information, says Kevin Scharnek, president of 14 West LLC. (asi/197092) Annual reports, news articles, the company’s Web site, press releases and other sources are a great way to get a handle on the issues, strategies and inner workings of your client’s company. Sounds tedious, but the efforts can pay off, Scharnek says. “Most of our clients that we work with, we’re very strategically involved with them,” he says. “We’re looked at as much more than just the ‘T-shirt guys.’”
That’s smart. For clients such as Milwaukee Electric Tool, a power tool manufacturer in Brookfield, WI, getting to know the business helped 14 West figure out more appropriate styles and colors for wearables orders. Recently, for example, Scharnek says he researched the latest gear in camouflage colors and styles since Milwaukee Tool’s clients are fisherman and hunters. For Miller Brewing Co., Scharnek’s team took a look at Hollister, Aeropostale and Abercrombie & Fitch stores to glean new apparel ideas and ways to decorate that style of clothing, since much of Miller’s audience is interested in those brands.
2. Keep it in-house
The best way to make a client’s life easier is to offer a multitude of services under one roof. From art direction to production, that’s what clients can expect from distributorship CSE (Caliendo Savio Enterprises, asi/155807). “We always get the calls, ‘Hey, you know what? We didn’t plan and we need 250 shirts by Friday,’” says Mark Ziskind, the company’s COO, about typical phone calls the company receives. Often, when those calls come in, “It’s Wednesday, and we can do it,” Ziskind says. His company handles the stock and the production and has design suggestions to boot. The one-stop shop makes last-minute orders (a problem endemic to T-shirts and other apparel items) easier to handle.
What’s more, CSE offers additional services outside the bounds of apparel. When a client called and said he had ordered 50,000 phones from China that didn’t have barcodes, CSE offered to put barcode stickers on each of the phones.
Ziskind makes life so easy for clients that he even manages their inventory. Doing so means that clients have “rolling hills of inventory, instead of massive spikes and out of stocks,” he says, so that they’ve always got apparel options at their fingertips. “You never want to have less than 200 in stock and more than 2,000” pieces, he says.
Asking a marketing manager at even the largest of corporations to keep an eye on ad specialty inventory can be onerous and a task that’s easily overlooked with a plateful of responsibilities. Instead, CSE does it for them. That locks in client dependency on the distributor and automatically makes them the first go-to company for reorders. What’s more, with CSE ensconced in the industry’s latest fashion trends watching inventory, a marketer at IBM, say, doesn’t have to keep up on the hottest colors, styles and designs. Instead, she can simply turn to her wearables vendor.
3. Give away the farm
Giving it all away doesn’t mean selling yourself short. Instead, wearables distributors might want to consider a strategy similar to that of Jonathon Buchanan, president of Tiny’s Monograms Inc. “We pick one customer a week and give them their product for free,” Buchanan says.
But the freebie is more strategic than it sounds. Buchanan, a former chief in the Navy, has a method to his marketing madness. As a former military man, his freebies are all concentrated within the market segment he wants to target most – the military.
Through a random draw every Wednesday at 2 p.m., Buchanan will give away an order. Of course, his offering has limits. Many of the orders are $24 here, $30 there, since his business tends to focus on smaller sizes. “Our largest order was a $125 giveaway,” he says.
On top of that, the first Friday of June marks Tiny’s Military Appreciation Crawfish Boil in front of the distributor’s store, an annual customer appreciation event. “All military and their families, active and retired, eat for free,” Buchanan says.
It may seem extravagant, but such gestures go a long way in solidifying relationships with current clients and increasing referrals to other military members. Their efforts must be paying off. Sales last year were $165,000 from April through December, Buchanan says. This year he already pulled in $158,000 in the first quarter, much of that military-based.
4. Be flexible
Quick turnaround, custom orders and low minimums are three big revenue drivers and competition beaters for Juan Davis, CEO of Fast Lane Clothing Co. Inc. (asi/53753). With a newly designed and recently opened production facility on site, small and custom orders are entirely doable for Davis, his wife, Lori, and their team. Orders done fast that can’t be sent overseas are a huge part of their business, says Davis, whose company specializes in hospital scrubs, among other apparel items. “You don’t have to bring me a 3,000-piece shirt order for us to make it,” Davis says. An order for 144 shirts is no problem. “One time we did as few as 48 shirts.”
For many distributors, the key to keeping business in their own backyard and out of the hands of big factories in China and elsewhere is in becoming more flexible in the size and types of orders they accept. Sure, everyone would like to get the 10,000-piece order, but as Davis notes, a 70-piece order today can lead to a 7,000-piece order down the road.
5. All access all the time
Plenty of distributors say they’re easily accessible. But, saying and doing are two different things. Having a cell phone isn’t enough. It’s critical for distributors who want to stay ahead of the pack to not only be available but to be able to react to order changes, shipping crises and other concerns on the fly.
That’s important to Dave Holden, president and partner of Sharp Ideas (asi/324550), in Fresno, CA. There’s rarely a day when Holden starts working later than 4:30 a.m. “I grew up on the East Coast,” he says. “I moved here 34 years ago and my internal clock never changed.”
That clock has been good for business. Such early hours mean Holden, now a West Coaster, is available sometimes even before his clients are at work on the East Coast. His partner stays until 6 p.m. Pacific time every day, allowing Holden to often leave the office by 3 p.m. or 4 p.m. to attend community events and business networking meetings.
6. Track the package
For an end-user ordering 600 shirts for a conference three states away, making sure those shirts will arrive on time at the hotel can be stressful. If they don’t arrive, a distributor is all but giving business to their competition. Barb Hendrickson, president of Design Incentives (asi/301431), knows that. That’s why she created “anticipatory service.” It works like this: Once an order is shipped, Hendrickson’s client gets a tracking number for that order as well as an email confirming its delivery status. Most distributors would stop there.
But for Hendrickson, it’s just the beginning. Design Incentives tracks the package to the final location. And it’s not enough to just know it got there. If the shipping locale is a hotel, for example, “We find out where the package is in the hotel and then let the customer know who we spoke to, where the package is physically on site and then copy their event planner or travel company,” she says.
There are too many weekend meetings where knowing that a shipment of shirts arrived at the meeting hotel isn’t good enough. “If the hotel can’t find the package within the hotel it may as well not have gotten there” at all, Hendrickson says.
Design Incentives’ customers also have a cell phone number for Hendrickson or another company rep at all times. Hendrickson says such detailed customer service has kept many of their clients coming back for a decade or more. Most of their business, she says, comes from referrals. “If customers have to ask, ‘Where’s my stuff?’ then we’ve missed a step,” Hendrickson says.
How to Keep ’Em
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Mind the Mistakes
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Betsy Cummings is a senior writer for Wearables.
