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orion_joel
10-05-2008, 01:15 AM
Hi All,

As i mentioned in another thread i have been thinking about starting a business doing customized embroidery. The primary business would be custom names and logo's on caps, polo's and really anything else that business may like. The other side that has been on the table is personalized items for retail as well, such as names on towels, and any other possible items.

The idea and the sales speech sounded great, with good profit potential. Doing some of our own market research has turned up that the business to business potential may not be as good as we expected, however the other personalized items may be a good option.

Is there any thoughts, cautions or ideas you could add to this idea? For the investment needed and even on a very low actual return i think there is good potential to make a small sideline income, if not a good actual income. But maybe there is something that i am missing and someone may be able to shed some light.

Steve B
10-05-2008, 05:28 AM
I've thought about that several times myself. If you spend anytime on airplanes - it's hard not to because I think there were usually two or three ads selling this equipment in every airline magazine (I haven't flown in a few years, so I'm talking about the late 90's up to three years ago). It seemed tempting to give it a try. My only concern is that what made it attractive to me (low start up cost and relatively simple operation etc.) would make it attractive to a lot of others also. Because of this, I'm guessing it's a pretty competitive market. But, I never did any market research on it - so this is just my uneducated guess.

orion_joel
10-05-2008, 07:43 AM
That is the big thing that got me, the guy that was selling the idea of this business, claimed low competition, and that the larger companies that do this on a big scale are not interested in smaller short run orders. However from our own research much of the information we have found contradicts this.

While the actual setup is inexpensive the general operation is relatively simple. There is some facets of the business that either require more skill or would need to be outsourced. Which is not to say it makes it hard but it isn't really a buy the machine and start pumping out cold hard cash.

I think the biggest thing for this business is that you have to be really marketing and offer something different. The more marketing the more chance of business i think in the market. Which i believe if you setup in a decent market area and stay to that area and make yourself well known to as much of the business community as possible, you could build some good business relationships.

KristineS
10-05-2008, 09:46 AM
You're in Australia Joel, so things may be different there. One of the companies for which I work is an embroidery supplies company (thread and such) and our parent company supplies embroidered goods to a specific industry.

There are a lot of little Mom and Pop shops doing small and short run orders in America. The cost of entry into the business isn't that steep, so there are a lot of little cottage industries who have a 1 head machine in their basement. The bigger guys generally don't take the smaller orders, but for every bigger guy (70 heads of more) there are a lot of smaller guys.

The other thing to consider is that an embroidery machine is not as easy to use as you might have been told. There's a lot to learn if you want to turn out quality embroidery. Be very careful about what type of machine you buy, and make sure there is some training involved. You also have to figure out things like digitizing, designing, where you're getting your blank garments from, and how you're going to price your work. There are a lot of variables.

lav
10-29-2008, 06:09 AM
and that the larger companies that do this on a big scale are not interested in smaller short run orders.I think for the setup and whats involved the shorter runs arent profitable enough especially when your customers wont understand why the "per item" price is so much higher than the guys who are doing the larger runs. I had a guy try to sell me one as well using the same methods but I did wonder why if there was so much potential werent the big companies offering short runs.

I also think you have been told a fib about there being little competition.

mr.ro
11-11-2008, 02:12 PM
Since I'm somewhat in the promo industry I think you should do great research on your equipment first then demand for what you want to sell. Don't go into this blind.
I cater to the small run orders that big guys won't do, so my depand around my parts is pretty high. If I were you I would go into it because it is an industry that is a you see and you get type of business not a lot of hassle with clients.

orion_joel
11-12-2008, 12:52 AM
mr.ro, i did do this research already, and as you may not have expected, i found some interesting results. It seems that the big guys around my area, although they kind of price themselves out of it do not really care what size run they do. The set-up fees they charge would price them out of most orders under 10, however i am not really sure there is sufficient market available in the area, compared to the number of bigger companies to make it worthwhile.

KarenB
11-16-2008, 03:22 PM
The idea and the sales speech sounded great, with good profit potential. Doing some of our own market research has turned up that the business to business potential may not be as good as we expected, however the other personalized items may be a good option.

Some questions I would ask myself would be:

1) Do I know enough about this business?
2) Am I prepared to fail and walk away if it doesn't work?
3) Is this one of those 'get rich quick schemes' or does it really have potential?
4) Am I in this solely for the money versus being truly convinced that this is what I want to do for the rest of my life?
5) Am I willing to invest the time, the money and the attention to this business (if it grows) that it will require over the long haul?

Karen

orion_joel
11-16-2008, 10:58 PM
Karen that is a good set of questions, which i think i may answer here, if nothing more to give a little insight on my thought pattern.


1. Do I know enough about this business?
I was planning to go into this business with my mother, she has a good idea about much of the product/ideas for products side. While i have a good idea about the operation of a business and financial side of things. So while i know some about this business and she knows some it would together work out.



2. Am I prepared to fail and walk away if it doesn't work?
This is think is the great part of this business, it is not something that you have to look at succeed or fail. At the end of the day the costs to go into the business are quite low, $12K-$15K. Which while is a decent amount of money it is also fairly easy to recover even if it does take 2 or 3 years to do so. (This would be initially a part time business, not walk away from a job and hope this supplies the replacement income)


3. Is this one of those 'get rich quick schemes' or does it really have potential?
I think yes and no. The guy selling the machine, is charging the same price for the machine as most other dealers. The only thing that i find is that the way he is trying to sell it, it does sound like the get rich scheme, however what he is selling is a machine that is worth the investment he is asking. It does have potential however not the potential he was pushing.


4. Am I in this solely for the money versus being truly convinced that this is what I want to do for the rest of my life?
I am in this mostly for the money, however as i said above, i was also considering this as a business for my mother to do, and really she would be doing most of the business, while i would be providing the funding and such, so it would more be a passive income, that from me providing the machine for her to make a income from.


Am I willing to invest the time, the money and the attention to this business (if it grows) that it will require over the long haul?
Absolutely, if the business grew i would commit more money to it and time if that was required. If it came to a point that it was needing more investment for more or better machinery, or time to continue to grow, then there would be a good chance that it would be providing more income then i was earning from other work anyway.