Website Closers® presents a dynamic trio of companies taking full advantage of the enormous heat transfer market, which is laying waste to the screen printing industry. Each business is laid out below to better understand how each works:
The primary business is an eCommerce store that sells heat transfer designs direct to consumer, many of whom sell garments online. The store is showing tremendous growth, in line with the booming print-on-demand industry. It has terrific margins on its $100 average order value.
When designs are created using screen printing, actual screens are necessary to print the designs. Special screens are used to create a stencil, and ink is spread over it. The ink will pass through the stencil and print on the t-shirt only in places the stencil allows. With screen printing, you can only use one color at a time. You may need multiple stencils or screens to have a multi-colored design on the shirt. This drastically increases material and labor costs.
Heat Transfers are done differently. Custom prints can be created and applied to almost anything, from t-shirts to tablecloths. Heat Transfers combine heat and pressure to print designs. Their popularity is primarily driven by the fact that one can buy the design and shirt separately and only print when a customer orders. As a result, inventory can be kept at a minimum, and there is no risk of overstocking a product that may not sell as anticipated, freeing up cash flow and lowering the financial barrier to entry.
The primary business uses a simple yet effective three-step process when deciding what products to sell:
- Designs are planned around special events and holidays.
- Weekly research is done, observing what types of t-shirts are trending online.
- The team explores successful items on competitors’ websites.
Product sourcing is mainly from two Chinese factories that only print heat transfers for this company, exclusively. The factory can also manufacture unique appliques like rhinestones, foil, and glitter. They are restricted from selling the artwork to anyone else. In addition, the Chinese factory only produces heat transfers for this company. 100% of fulfillment is executed from the New London, CT warehouse, and sales are consistent throughout the year. Top-selling heat transfer products change regularly based on holidays, events, or trends. Some all-time hero products include t-shirts with political, faith-based, and humorous designs and slogans. The typical customer is US-based and split around 60% female and 40% male. They spend, on average, $100 per order and re-order regularly.
Lead generation for this primary business is achieved through various methods. Facebook and Instagram drive most sales. Many campaigns are based on upcoming events such as Black Friday, Christmas, Valentine’s Day, and St Patrick’s Day. The budget is split based on the season or what management wishes to push. The broad strategy encompasses standard ads, retargeting, videos, carousels of best-selling products, and testimonials. Across the board, the efforts result in a 3 to 4 return on ad spend (ROAS).
Additional marketing comprises PPC advertising. This includes search, brand name, retargeting, and feed campaigns.
The B2B Wholesale business is a heat transfer printer that prints and ships directly to retail store customers. This operation is 100% dropship; subsequently, no inventory is kept. Neon, tie-dye, and one-color collegiate designs are particularly popular. Peak season is between November and June. The majority of printing and delivery to customers happens between December and March. The average customer is split between genders—90% male and 10% female. Retail stores habitually spend between $10,000 and $15,000 in a calendar year. This is a very traditional wholesale business where the same customers re-order year after year.
This wholesale business researches what is trending in the resort apparel industry and creates designs based on that. The company has tremendously loyal, repeat customers with excellent relationships. Many want specific graphics based on their venue. They return due to top-notch quality, expedient fulfillment, and spectacular customer service.
The graphic design agency provides 4 products and services. These are:
- Vectorizing or taking an image and recreating it into a high-quality, printable file.
- Color separations by layers for screen printing.
- Converting a basic sketch into a digital, colorful design.
- Creating original business and mascot logos.
The agency business provides design services, not physical products, and does not maintain inventory. Vectorizing and color separations are the core income services, and the evergreen business experiences little seasonality. 90% of customers are male screen printers using unlimited design services for $499 a month. Some buy one or two designs per month on a pay-per-order basis. Many of the same screen printers use the services continually, and every month one or two new clients join from the meager PPC campaign.
The owner works only 8 to 10 hours weekly across all 3 businesses, liaising with his team. This acquisition opportunity is a real work-from-home business with sophisticated processes and systems in place. The next owner will enjoy working with a group of motivated professionals committed to delivering outstanding results. He or she can take all three businesses to the next level and make them highly profitable.
A buyer requires few special skills. However, they should be operational with good management abilities. Taking care of the people in place will keep everything running smoothly as the business prepares for a 30% revenue increase this year. A moderate understanding of finance and the ability to work with budgets would be helpful
