3 Tips to Survive Inflation
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Is inflation affecting your business? Then don’t miss out on this new Apparel Academy episode! Watch as Ricoma CEO, Henry Ma answers all your questions on how to adapt your business model to the current inflation. Learn more about Ricoma embroidery machines here: https://ift.tt/uIDUHNy Facebook Embroidery & Custom Apparel Mastery Group: https://ift.tt/HWVDO0t Join the Ricoma newsletter for educational blogs, videos, and live webinars: https://ift.tt/4kXWp27 To learn more schedule a virtual demo today: https://ift.tt/VtBDl8j Get our latest Ricoma embroidery YouTube videos sent straight to your Facebook Messenger: https://ift.tt/WiBYdwM To learn more about our embroidery machines, visit our website: http://www.ricoma.com 1:22 – Inflation Tip #1: Bulk Orders 2:45 – Inflation Tip #2: Maximize Efficiency 4:52 – Inflation Tip #3: Diversify Tip #1 – Bulk order any materials and supplies whenever possible Especially during inflation, you’ll want to bulk purchase materials and supplies upfront instead of leaving it for later. This is because prices of the same materials and supplies are expected to go up in the future, so it could benefit you to stock up on these items now to have more savings in the long run. However, you’ll want to bulk order on things that you use on a regular basis and that don’t go out of style. For example, embroiderers might want to stock up on needles, backings, threads, or even blank apparel they use daily. Try to avoid stocking up on things that might go out of style very quickly, or things you’re not using very often. Keep in mind, investing in bulk purchasing will require enough cash flow. So, if and when you do have enough cash flow, consider creating wholesale accounts with different suppliers and vendors. That way, you can purchase in bulk, store the items anywhere you can (like a garage or spacious room), and have savings on the road when prices go up. Tip #2 – Maximize your efficiency in other areas in your business While inflation is completely outside of your control, looking at your business process and figuring out how to be more efficient is definitely within your control. If prices are expected to continue to rise, it’s important you look at the bigger picture of your business model and examine areas that could improve your efficiency and maximize margins. For example, think about your production process; can you do things more effectively and efficiently to turn out more orders in less time? Perhaps consider rearranging your workshop or work station so you can find things easily and quickly. Maybe even consider investing more time to master the craft (embroidery, DTG printing, or other apparel method) you’re currently using. Another great way to increase efficiency is to invest in larger or different types of equipment. For example, if you’re working with embroidery, you might consider investing in a multi-head machine to save time and turn out bulk orders faster. And even if you might be getting a slightly less profit margin per piece, you can make it up with volume. However, if your business focuses on other apparel decoration methods, like direct-to-garment, sublimination, or screen printing, investing in additional pieces for the equipment will help you double or triple your capacity. For embroiderers investing in a multi-head machine, consider having a single-head around. This way, you can use your multi-head machine for bulk orders and use your single-head for small orders or samples. That way, you don’t need to turn off multiple heads on your machine to focus on one single order. As a result, the combination of both a multi-head and single-head machine will increase your capacity. This will help you explain to your customers that supplies and material costs have increased, and therefore, you need to take that into consideration in pricing your services. Tip #3 – Diversify your revenue stream with additional services Think about how you’re able to add new revenue streams to your business. It could be by digitizing or designing services (these services are not dependent on raw material input.) Digitizing is a simple skillset you acquire; all you have to do is purchase software to use on your computer. Therefore, there is no additional cost regarding materials or supplies that might be needed to provide this service. Similarly, you can offer design services as an additional value to your customers. These services can also help combat rising prices – for example, if your customer gets upset, you can offer these services for free. This will help them feel they’re getting much more value after paying the increased price. Therefore, you avoid losing your customer and you’ve acquired a strong skillset that could be very profitable for your business. Tip: try to think of other services you could provide that do not depend on any material; instead, just your skillset.
3 Tips to Survive Inflation
