It Takes An Open Mind To Grow A Business: Merging trends in rental, direct sales and promotional products

Sometime during the early 1980s, it was suggested that selling custom printed baseball caps would be a good additional moneymaker for uniform companies. The program was pitched to the uniform rental laundries. Those firms that considered themselves solely uniform rental compani, not retailers, scoffed at the idea. But a few saw the potential and went for it. Their profits soared. Eventually, the idea caught on with others. Thus, a new beginning in direct sales had emerged from within the sanctuary of the uniform rental market. Change brought new opportunities.

Today, there are about 450 independent uniform rental companies operating and about five national ones. More than half have embraced direct sales. It has even been rumored that the largest uniform rental company will open uniform stores across the country.

The demand to rent uniforms is declining, but the direct sale of uniforms continues to grow. Many employers have instructed their employees to purchase their own uniforms and take them home and wash them. This has even been seen as a practice in certain hospitals. In fact, hospitals have been given federal approval to allow the surgical staff to purchase and wash their own uniform excluding the actual surgical caps and gowns.

In contrast, demand on the direct sale uniform side has expanded. Apparel for direct uniform sales now includes not only the occupational clothing but also everyday fashion items, such as polo shirts and dress slacks, or a pinpoint oxford dress shirt with a tie and often a blazer. Also, the top name brand suppliers in these categories are continually introducing ladies apparel that coordinates with the mens apparel. All this, by definition, is called a uniform, and because of this, many more companies are now seeking to be providers.

A long-time direct seller is the uniform dealer. The uniform dealer has traditionally provided professional uniforms for police officers, firefighters, nurses, doctors and occupational work uniforms. These firms maintain both retail stores and outside sales representatives. Now, these companies can provide customers with anything from a printed coffee mug or a custom embroidered blazer to an electrical fire-retardant OSHA-approved shirt. For the owner/operator of these dealerships, change has brought with it opportunity.

The promotional products industry is another well-organized and focused direct seller of uniforms. These are the companies who can provide you with just about anything you desire with your company name on it. The number of products available is somewhere around 140,000, with certain types of uniform items as the latest additions to their vast offerings.

What is most interesting is how the business pricing models differ for each of these providers, with respect to their own supplier wholesale base. For example, years ago, the uniform rental industry adopted a volume price discount. This allowed a large volume uniform rental company an additional discount off the wholesale list price from apparel manufacturers. The discount was based upon total annual purchases. The program remains today with many leading uniform manufacturers.

The practice has also been adopted by many of the name brand fashion apparel companies that supply this industry as well. However, there remains some uniform and apparel manufactures that choose not to offer such a program, or, if so, only to a few select customers.

About 30 years ago, the first known buying group was formed to capture the volume discounts for the smaller uniform rental companies. The combining of volume resulted in the same opportunities afforded to the individual larger companies. Some of the largest uniform manufacturers in the world were quick to support the effort.

According to Allan Fowler, President of Universal Purchasing Association (UPA), the buying group concept provided great opportunities to a uniform rental company. The direct sales retailer however was excluded as, with some buying groups, companieshad to meet a specific annual volume to qualify for membership.

A buying group was needed for the uniform dealers and distributors, Fowler says. That is the reason I formed UPA. It provides equal opportunity to those who were turned away elsewhere. The program has opened up opportunities to hundreds of companies across the country.

The promotional products industry, which now has established a foothold into the uniform and apparel market, uses a discount program set for all distributors. The retail price is published in each suppliers catalog, where the pricing is quantity reflective with the discount to the distributor. The distributors discounts are revealed through codes only they know. This allows the distributor to display the catalog to the customer and the distributors price is not revealed. This approach has proved successful, as reported with annual sales topping $16.5 billion in recent years.

UPA has been adding suppliers of promotional products to its buying group program for the past three years. This year, the focus has been accelerated. A buying group is an enterprise for better pricing and must strive to make available the product and services its members need to compete, grow and profit, says Fowler.

Most promotional products distributors share the same price for products. However, that institution is seeing change. UPA has brought its price discount program to the promotional products distributors. According to Fowler, these are discounts off the wholesale price, not the retail. They have encountered those who scoffed at the idea, but Fowler says, Those who understand the realities join. These are the companies that know that an advantage over the competition remains an advantage.

You must take into consideration the existence of tens of thousands of providers among the uniform rental facilities, uniform shops, specialized dealers and promotional product distributors. Everyone is competing for the same business, and everyone, in essence, is offering the same printed ball caps. It certainly becomes necessary to maintain an open mind toward any given opportunity. To scoff at any idea could be very expensive, even to the most experienced.