Element #3: Inventory Management
Deciding on what merchandise to offer is based first and foremost on the Target Audience. You must appeal to their desires, tastes and income level. Thus you must do your Market Research before making Inventory decisions.
Once you have an idea of what type of merchandise is needed to service the market and event properly, then you will need to make some additional decisions to further narrow down your choices.
It’s a fine line between not having enough and having too much. Both will affect your profit margins.
For example, if you were to sell Leather Bomber Jackets for personalization, at let’s say, an Airshow, you would have to make a major investment in inventory. If the jackets cost $50.00 each, you would spend $500.00 just to have 10 of them on hand. Compare this to caps which average $2.00 (or less) apiece. For the same $500.00 investment, you could purchase 250 caps.
Also factor in the markups. You could easily charge $150.00 or more per finished jacket, for a profit of $100.00 each. It wouldn’t take too many sales to make the event worthwhile. With caps, you should be able to charge at least $20.00 each for a finished cap, for a profit of around $18.00 per cap. But you must sell 6 of them to bring in the same amount of profit as one jacket. Realistically, you can probably sew 6 custom caps in about 90 minutes, which is about the same amount of time invested in the jacket. So what’s the better deal for you? It will depend on the customer and what he/she is willing to pay, and what it is that they desire.
Inventory Selection Criteria
In addition to costs, there are several other things to consider when selecting merchandise to offer at the show as follows:
• It must appeal to the customer.
• Products must be easy to embroider on.
• Merchandise costs must be affordable for you.
• Choose only items that can be liquidated easily.
• Inventory should contribute to your visual display.
Remember that this applies to "stocked inventory". It is a good idea to have samples of other items so that you can take additional orders while at the event. Onsite merchandise is for making a "quick" sale with a high profit margin. Everything else represents your normal product offerings.
Element #4: A Single Pricing System
You must have a simple pricing and selection method available for your customers. A complex pricing structure will slow down and confuse your clients. It’s imperative that you use a flat rate method with no hidden costs for your onsite products.
Example: Caps are $25.00 including front embroidery. Each additional location (back, side, etc.) is an extra $5.00. This applies regardless of the cap style, number of letters, stitch count, etc. It’s quite simple, the customer chooses a cap, design, and lettering, and pays one price: $25.00. Mobile Operations must be quick and simple!!
Rules For a Simple Pricing System
Do not charge by stitch count, number of letters, number of words, etc.
The price should include, embroidery, the garment, and sales tax.
NOTE: Some states do not allow sales tax to be included in a price.
$15.00, $20.00, $25.00 are all good prices, since you only need fives and above for making change. No one dollar bills or loose coins to deal with.
Also, keep in mind that Mobile Embroidery is a Retail Operation, so your prices should reflect that. This means substantial markups.
Element #5: Payment Policies
Mobile is generally retail, so retail payment concepts should apply as follows:
• 100% in advance, cash or credit card
• All sales are final
Occasionally customers forget to come back and pick up their merchandise. By getting paid up front, you won’t be losing money when this happens, or if they change their mind about making a purchase. Of course, it’s a good idea to get their name and at least a phone number, should they forget to come back their pickup their order.
Also, if the customer comes back and announce that they don’t wait any longer for their order, offer to ship the item to them for a nominal fee. The shipping charge should be a flat figure in order to keep things simple. For example, if you are selling baseball caps, you can ship a single cap to almost anywhere in the country for $5.00.
In addition, investigate Credit Card processing machines. Phone lines at many events are quite expensive, so a cellular-based machine is ideal. Many models are available on the market. Another option is a laptop computer with a cellular-based wireless card. This will allow you to use online credit card services.
If all else fails, you can always call in the credit card for authorization, but this is a time-consuming process.
NOTE: People tend to buy more when you accept Credit Cards, as cash limits them to whatever is in their wallet at the time.
Element #6: Sales Tax
Most Mobile Events are retail in nature, thus, Sales Tax is an issue. Most Embroiderers are already equipped to handle this task in their own home state. But what happens when you do an event in another state? Be aware that different States have different rules (and rates) for calculating Sales Tax. Be sure to discuss this issue with the Show Promoter before signing up for the event. You may also have to contact the Department of Revenue for each specific state where you are planning to do a show. Some States will allow you to purchase a one-time Sales Tax license for the event, rather than having to purchase a yearly license, which requires monthly reporting.