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Change You Can See

Chris Bernat is a partner with SourceSubstrates LLC, a firm that markets the Vapor Apparel brand of sublimateable apparel, substrates and specialty fabrics. His duties include product development, sales and consulting services. Previously, Bernat was director of sales for Sawgrass Technologies after serving as business manager of the Sublimation Division and Large Format product manager. Email him at chris@sourcesubstrates.com.

Change you can see: That in a nutshell is what you get as you survey today’s sublimation marketplace. While the inks may be the same and the substrates have not changed much, there is a significant change in who is in the marketplace and what type of perspective and resources they are bringing to it.

For starters, it may be evident that some of the competition has not survived. That’s okay; not the worst thing that could happen. There were plenty of people who should never have entered the sublimation marketplace in the first place. Sublimation has one of the worst rates of abandonment of any decorating technology you will see at an NBM trade show these days. Estimates vary, but between 10 and 25 percent of the businesses that buy a desktop sublimation system never offer sublimated products to their customers. That will change.

But less historical competition is not the only change going on. Replacing some of these companies is a new type of player in the marketplace. Sublimation is a wonderful technology and it attracts smart people. In addition to printers who need customization, it attracts very business-minded people who are seeking digital print technologies for their business plan. You meet these people at NBM Shows as they consider different aspects of the sublimation product solution for their master plan.

These newcomers also look to technology to solve many of the challenges customization can create. Many are going after specific vertical markets or they are focusing on specific products. These people are evaluating a wide array of printer platforms, some of which offer long-term cost advantages over traditional desktop platforms.

Productive platforms

There are a lot of options available when considering different sublimation printers. In general, bigger printers cost more to buy and operate but offer major price advantages on a per-square-foot basis over the life of the printer. In other words, spending more on a printer and in-house skill sets will save money on ink and paper over time.

Welcome to the mezzanine level of the sublimation discipline. Desktop printers typically range in width from 8 1/2" to 17" wide. These printers are good for small items and the businesses focused on customizing them. They are also ideal for mobile businesses, as they’re easy to set up onsite.

But for companies that want to do 500 square feet or more of printing a month, a larger printer may be the difference between profitability and treading water.

Purchasing a desktop printer for sublimation usually means the cost per page will be between $2 and $2.50 per full printed sheet. That is just the cost of ink and paper (not power, rent, employee, FICA, substrate or wastage). The numbers change substantially when looking at ink and paper costs for printers with a carriage width of 42.1" and wider. In this large-format print environment, that same ink and paper can cost $0.40 per square foot—$2 versus $0.40 is significant. The $1.60 difference represents $800 a month in reduced cost of goods sold (COGS) if you do 500 square feet a month of production. 

The new guard is also showing a “buy it once, buy it right” attitude when it comes to all aspects of their product solution. Many people try to limit the amount of money they invest in a heat press. Why people try to “go cheap” on one of the most critical elements in production will continue to be a mystery. The new crop of sublimation professionals look for ways to increase their advantage and equipment is one place this is showing itself.

I recently asked one large apparel distributor why he invested more than $2,000 in small-format heat presses over comparable ones in the $1,200 range. His reply: “I live in a brick house because it’s solid and drive a BMW because it performs. Why would a heat press be any different?” This seasoned veteran of production also grew 30 percent last year, which he credits to buying the right systems.

One platform has emerged as a high-value option that many that anticipate significant production demands are considering. A 44" inkjet printer allows a production team to produce hundreds of square feet of printing per hour (speeds range based on resolution and layout) for, in some cases, less that $10,000 all in. This printer has gained major momentum with apparel-focused sublimation professionals. Since this segment of the market is so competitive and uses a large amount of ink per item, it makes sense that this system would be considered by many entering the business with expectations of 500 sq ft or more of printing per month. 

COGS matter

COGS is a big factor in ensuring profitability. COGS is a financial accounting term that describes the direct costs attributable to the production of goods sold by a company. This includes material and direct labor costs and excludes indirect cost like advertising or R&D. The apparel side of sublimation can be very competitive. It demands maximizing opportunities to create efficiencies. Your COGS is a major part of this.

Technology

Printers are not the only changes. Workflow is changing in today’s marketplace as well. More and more companies are looking to technology to receive orders, enhance graphics with customized areas and simplify the accounting process. Many of the people entering the sublimation marketplace are doing so because of its unique customization capacity. The new people entering the game are focused on simplifying all aspects of the order-taking process. Many people deploying sublimation are specifically interested in customization. 

To enter this business efficiently, these companies are automating virtually all aspects of the paper and workflow. You may be thinking that this is a nice thing to do if you can afford it. But it has a much bigger impact. It eliminates human error, reduces production time, accelerates payments and also makes for a better run organization.

A 2009 Summary Report by the U.S. Gov. Bureau of Labor Statistics concluded that productivity for non-farm businesses increased 6.9 percent in 2009 and unit labor costs went down by 5.9 percent. That means people in all areas of the economy are working to make things simpler. This type of commitment to efficiency will continue for the foreseeable future. 

If you are not trying to figure out ways to adopt some of these automation concepts, you are at risk of becoming less competitive in the marketplace. Automation can save 40 minutes of paperwork per order. On a model of 50 orders a week, that is 33 hours of time (without bathroom breaks, lunch or the phone ringing). Those 33 hours could be better used in other ways. Finding ways to lower costs and be more efficient are a critical aspect of managing a successful sublimation business in today’s market.

No time for games or toys

The new sublimation marketplace includes more options for the end customer. Sublimation is now frequently referenced in retail advertising for clothing and other consumer products. The sublimated apparel explosion in retailers from Dick’s Sporting Goods to Macy’s has elevated the technology’s profile with John Q. Public. It is referenced in snowboard and retailer ads and other consumer portals frequently.

Larger markets expect things to work well and satisfy their need for instant gratification. This means that the sublimators who want this business must provide superior customer support and meet ever increasing customer expectations. There is ample opportunity for those who take this challenge and step up to the larger market. As you look out on the rest of 2010 and 2011, automation should be on your brain. Real operational improvements require technology and a change in mindset on how to process orders.