Optimal Outsourcing: Why Promotional Product Distributors Contract Out Employee Apparel Programs
When it comes to selling employee apparel, promotional product distributors can’t be beat. No one has a better track record of selling large loads of uniforms and gear to a wide variety of companies for years on end. For many, it comes as a surprise to learn that these companies stock little or no gear of their own. Instead, they coordinate shipments from third parties, thereby separating the actual stocking and shipping process from sales coordination. By understanding why and how promotional product distributors do this, you can comprehend one of the greatest secrets to efficiency and success in the employee apparel industry.
Working with Other Warehouses
To obtain all the uniforms and gear they need, promotional product distributors find suppliers and shippers they trust and develop a working relationship with them. This has a number of advantages over providing all these services from the same company, namely:
- Economies of Scale– Because warehouses often hold uniforms and gear for multiple clients, they can profitably keep these items on hand in large quantities. As a result, they’re able to benefit from economies of scale in land, energy, and other resources. They thus pay less money for each unit they stock or ship, leading to lower prices for product distributors and their customers.
- Specialized Skills– Because shippers, warehouses, and promotional product distributors are separate companies providing distinct services, they can each focus on perfecting the specific solution they offer. This allows them to develop specialized knowledge, leading to better results for them and for the final customer.
- Reduced Liabilities– Promotional product distributors don’t own the items they’re selling. This means that they aren’t the ones who incur losses if those items are stolen or damaged prior to shipment. This model thus makes uniform sales considerably less risky.
- Access to Other Services– Besides stocking and shipping, distributors can outsource embroidery, decoration, billing, customer service, and a host of other functions.
In addition to all of these benefits, outsourcing uniform sales helps solve one of the greatest challenges in the employee apparel industry: the need to mix and match. Clients often require uniforms and gear in unpredictable arrangements; for example, one client might want two shirts and an apron, while another will want an apron and protective eyewear. Only by having access to all these items in large quantities can promotional product distributors make sure they’re able to meet this demand. Outsourcing to large warehouses ensures that they do have such access.
Outsourcing uniform stocking and shipping does create challenges of its own. In particular, it makes it less profitable to sell gear in very small quantities. But promotional product distributors can get around this problem by setting minimum volume requirements, as well as by offering discounts on large volume orders.