Finding the Market For Screen Printing Caps

Posted on

Surveys show that caps are the 2nd or 3rd largest selling item after shirts. Caps can be an opportunity to increase your screen printing sales and profits. Selling prices vary widely for caps. Some sell for $30, and even the old foam front, mesh back caps that used to sell for $3-$5 now are being marketed as “trucker caps” selling for $15 and $18. These foam fronts cost under $1, and the 5 and 6 panel caps cost $2-$3. So there is plenty of profit potential from caps.

Ask a teenager or college student what they paid for their cap, and you probably will be surprised to hear prices that are much higher than are paid for shirts. The potential for high profit margins makes caps a product to be investigated.

Companies buy caps for many reasons. Hygiene laws require occupations like food handlers and medical product manufacturers to wear caps. Soiled caps get discarded rather than washed. Restaurants have employee turnover and need new caps. Companies like UPS want to project their image, and the local UPS manager has the authority to buy locally. Power, gas and water meter readers need caps so homeowners will not be alarmed by a person in the bushes at the homeowner’s house. A company might provide caps as a morale booster, safety award or advertising bill board. Companies have lots of reasons to buy caps.

The cap market is actually a collection of market segments. The cap an individual will buy for their own use depends primarily on their age. Companies buy based on use. Knowing the buying habits of individuals and companies gives the decorator the opportunity to maximize the selling price and order size.

A Person’s Age

Students typically pay the highest prices. That price could be $12-$30 per cap. However, their parents might only pay $8-$10 for a cap, and the grandparents might only pay $5-$6. So age is the first clue to who pays the highest prices.

Although we recognize people by age, the actual differences are self-esteem and cost. To students, wearing the right fashion or look in a cap is very important. Young people still growing are concerned about their self-esteem. The “right cap” identifies the young person with their peers. Only a 6 panel cap is acceptable for many of these young people. For a youngster on a skate board, however, only a foam front typically worn crooked on their head communicates with friends that he is one of them.

Students frequently get the money to buy the cap from their parents and therefore are less cost conscious about price than parents who have to earn the money before the parents buy a cap. So students will pay more than their parents. Grandparents are the least fashion conscious, and most cost conscious, because they are retired on fixed income and are the least concerned about what others think about how they look.

To find the student cap market, we first need to find what interests students. Their school, team and images that unify students are good places to start. During basketball season a basketball with the name of the team written through the basketball can be very simple and striking image that conveys a clear message. The same approach can be used for all sports. Artwork that students consider “cool” will convert compliant buyers yielding to group norms into compulsive buyers who have to have that cap.

The market segment for the cap can be clearly identified to minimize sales time and cost. The school will have a class president, student athletic association or similar organization that can take pre-paid orders as a fund raiser using a sample decorated cap put on display. The same image can also be offered to older alumni who order the 5 panel cap on a pre-paid basis.

This form of marketing can be extended from a school class or sport to events, tournaments or any occasion that brings students together. In each case, the sale should be to the students with the students’ agent acting as your sales agent in return for compensation.

This method of selling allows using a retail price students will pay. That price can be determined by seeing what students pay at the shopping mall, or by asking them what they have paid. The decorator will yield a much higher selling price by selling direct to students with a discount to the sales agent than by approaching the school administration that does not have funds budgeted for caps and which would solicit three competing bids.

To sell to parents, we again need to find what interests them. That could be golf, fishing, hunting, team sports, patriotism, and a variety of other themes. Using golf as an example, golf caps sold in the pro shop at a public golf course will command a high price with half of that price going to the pro shop as their mark up. The selling price should match the prices being charged currently in the pro shop. The net selling price received by the decorator times the number of caps produced per hour will show this market segment to be more profitable than shirts. Group and tournament sales are the best way to get established at golf courses, because custom decorating that is not in the store inventory will be what the group wants.

A Company’s Use

Companies are not driven by self-esteem, but rather a corporate purpose and cost. The purpose might be part of the entertainment of customers and high priced staff where the corporate image is more important than cost. In most situations the cost is an important consideration, and the decorator may be faced with competing bids.

Marketing to corporations is more complicated than students. First, who makes the buying decision? In a corporation that could be any one of a number of people. The Sales Department may want caps for customers. Human Resources may want caps for a group outing. Production might need to keep hair out of products. Requirements like these might be fulfilled without going to the Purchasing Department.

A purchasing department will be more driven by getting the lowest cost than the other objectives of the requisitioning department. A large company with lots of employees can have numerous potential buyers of caps. So understanding the decision making process is important. Then, once a decorator knows who to talk with, who has to approve the purchase? At each level of approval the caps have to be sold again to finalize an order.

Decorating a sample cap to persuade each person in the approval process is a measured gamble. Buyers frequently cannot visualize the product they are being asked to buy without first seeing one. A decorated sample of exactly what the customer will receive can be a strong “closer” to a sale when the motivation to buy already exists. However, creating art, and going through all the other steps to produce one cap is expensive.

Therefore, decorating samples is probably an unwise business decision, unless you know the sample is being presented to the decision maker(s) and the decorated sample will substantially improve your chances of getting an order. When these conditions do not exist, similar decorating for other customers should be used. Those samples may also serve as endorsements by other companies of the decorator’s capability to produce excellent work for the sales prospect.

So the starting point with corporations is finding out what their plans are, and how caps fit those objectives. Company representatives may have never considered using a cap to meet their objectives. Certainly many products are promoted on caps. Just watch a golf tournament on television and almost every golfer is wearing a cap promoting something. Local businesses can do the same, and get financial aid from their suppliers that provide coop advertising money to have their name or brand on the cap.

Easier is going to companies known to use caps, and then displacing the current supplier. To displace another supplier the offering will have to meet or exceed the conditions of the order. We all think of price as a condition to an order, but often other conditions are more important.

Many corporations are image conscious, and want the image on the cap to match the sign at the entrance to their business, stationary, packaging and sales literature. That means colors must match PMS standards. The font or logo must be a photographic duplicate. If you can meet this condition, and the other supplier cannot, then you have a better offering.

Other conditions can be your proximity to the customer, how fast you deliver, the personality of the sales person, or help you provide to improve the art. To find out what conditions are important to the customer, ask. When sales prospects talk about past purchases they will frequently reveal important conditions that were not met well by another supplier.

After the customer has spoken at length about the execution of prior orders from art preparation to delivery, and you have asked questions about the order, then ask, “and by the way, what did you pay?” If the price was too low, you will have to justify why your price will be higher. If the price meets or exceeds your expectation, then you will know to charge what the other supplier charged, and take the order based on conditions other than price. You want always to leave open the opportunity for higher prices.

Notice that no mention was made of contract decorating. This market segment requires substantial production assets that many shops do not have. Also, contract work usually results in low prices for the decorator and less than optimal pricing for the middleman. Financially you will do better eliminating the middleman and drawing your own conclusions about what price a customer will pay. Contract work can also mean competing with foreign production where labor rates are very low and employee benefits are even less.

Conclusion

When surveying local decorators you will most likely find all the decorators – people with transfer machines, screen printers and embroidery shops – are decorating shirts, but few sell many caps by comparison to shirts. Caps are not as competitively priced as shirts. Decorating a cap is different from a shirt, and there is a learning curve to climb. However, the rewards can be substantial. Caps can be that opportunity you are seeking to make this year a better year than last year.

Leave a Reply

Your email address will not be published. Required fields are marked *