Work Smarter and Increase Profits Selling Your Branded T-Shirts Online!
Are you paying twice the shipping costs on your t-shirts: once from your screen printer to your fulfillment company, then again to the customer?
Think you can lower fulfillment costs by doing it yourself? You could end up spending too much on shipping, supplies, and shipping systems!
Hard time keeping up with inventory? If you are constantly running out of popular t-shirts or have too many slow sellers on hand, you need help managing your supplies.
Leap-3PL handles t-shirt fulfillment for some of the most recognized brands in the world. Our clients succeed because we have the tools and the know-how that allow these companies to make smarter decisions about their businesses. We have worked with t-shirt companies that once struggled to make a buck, and now make hundreds of thousands – even millions – a year. When you know which mistakes to avoid, you can improve the way you fulfill orders and satisfy customers. Leap-3PL can do this for you.
Here are some common mistakes we’ve seen our clients and prospective clients make:
1) Spending an extra $0.14 to $0.27 per shirt to ship inventory directly to the business or fulfillment company to sell online.
Whether you are shipping a box or pallet of Gildan or American Apparel shirts, you know they’re heavy. That means more shipping costs. If you have a 40 lb. box of 72 shirts, it may costs you $20 to ship, that’s $0.27 per shirt of lost profit. If you are shipping 1000 shirts, that $270 lost! In some cases if you are shipping under 20 boxes, they are shipped separately. More than that, perhaps, may be sent on a pallet. That will lower the cost some, but it would still bring it down to $0.14 per shirt in shipping costs — money you lose.
Resolution: We help our clients save this money by working with a local screen printer close to our facilities. We don’t make money on the shirts, and our clients work directly with them. We’ve done the work on our end vetting out great providers that will deliver them direct to our facility for free.
2) Businesses say, “It’s cheaper if we handle our own t-shirt fulfillment.”
Have you run out of room in your apartment or house trying to fulfill orders, or have you already invested in a commercial space? You may quickly discover when you start making infrastructure investments in office/warehouse space, employees, insurance, and shipping gear/systems, that the cost of handling your own fulfillment is high. Often these are fixed costs versus variable ones as compared to outsourcing to a fulfillment company that does t-shirt fulfillment. So, when your fixed expenses go up, you instinctively think, “We’ve got to sell more to pay for all the stuff or monthly expenses.”
To keep things simple, let’s say on a monthly basis you spend money on the following (not including your time/cost of shirts) doing it yourself:
- $500 for small office
- $1000 for a part-time employee working 20 hours a week (including payroll taxes)
- $250 in shipping supplies
- $100 in power bills
- $50 for insurance
That’s $1900 per month. If you have 500 orders per month, that’s $3.80 per order – your cost – to ship out your own t-shirts. Let’s say you have a bad month and only sold 250 orders the next month, your cost then becomes $7.10 per order – ouch! Your profit is now disappearing on those orders.
Resolution: By outsourcing your fulfillment to Leap-3PL, your cost lands around $2.10 to $2.80 compared to your $3.80 in this example. Also, there’s no employees to manage, no lease to get locked into, and no time buying shipping supplies. We have clients making millions working from home!
With outsourcing, your costs become variable. Sell fewer t-shirts one month, and you only pay for the activity. Have less product on hand this month, and you pay less in storage. You are billed by what inventory is actually there – there is no fixed cost.
On the flipside, what if your business grows like crazy? We’re scalable – you’re not. We have had some clients normally ship out 30-50 orders per day and all of a sudden, their brand was featured on TV or they introduced a new product. Next thing you know, 1000 orders per day come in for a week! If you handled fulfillment yourself, how many family members and college buddies would you need to help you to handle that? Certainly, you’re not going to hire employees for a blip on the radar on unsustainable order volume.
3) Backorders or Slow Moving Product Keeping You Awake at Night?
Do you have trouble remembering which customer has the oldest backorder? It gets confusing unless you have the right systems.
Does your current fulfillment provider provide you with threshold alerts to communicate that it’s time to order more of a certain product based on your sales volume? Those systems are not cheap for good WMS (warehouse management system). It can take up to 2-3 weeks to get more t-shirts and you always want to avoid of selling out of an item or overselling and causing backorders.
Products that don’t sell are money on the shelf that will eat up your cashflow. How do you know what you have on hand as it compares to what’s selling?
Resolution: Our fulfillment online software will help you manage the inventory and trends. We can set up and send you threshold alerts [link to that screen shot] based on your sales volume to give you time to order more of a product. We also have a report that does an analysis [put a link to a screen shot of that report] over a 12-month period to show you what’s moving and what’s not. As far as backorders, if they occur our system remembers chronologically the oldest customer. When new product arrives, the system will generate orders for the oldest customers first to fill the backorders. After that has happened, it will allow the inventory to be releases for new orders.