February 29, 2024

You’re the Boss: Can You Make Money on Small Customers?

Case Study

We just published a case study that explores whether Big D Screen Printing can become profitable by taking small orders — even ones for a single T-shirt.

Darren Robbins and a partner started the company in 2007. Mr. Robbins said the two disagreed about the type of customer Big D should pursue. While not opposed to accepting large orders, Mr. Robbins was reluctant to decline any business, no matter how small. His partner saw no point in catering to customers who wanted one or two shirts. The two parted amicably after a year. Mr. Robbins then revamped his prices, effectively removing the penalty that his competitors charged for small orders. He also eliminated set-up charges, and posted his prices online, two moves he hoped would help differentiate Big D.

We asked other business owners what they thought of Big D’s decision to go small. You can read their thoughts and then share your own in the comments section below. Next week, in a followup blog post, we will tell you how things turned out at Big D and Mr. Robbins will respond to your comments.

Carol Adams, owner, TorlyKid, a children’s clothing store: “If a business focuses solely on fewer large accounts, and one of those disappears, the consequences can be devastating. We try to expose as many people as possible to our business, and that exposure can only come by nurturing the smaller clients as well as the large ones.”

Michael Araten, president, K’NEX Brands, a toymaker: “Like Mr. Robbins, Wal-Mart, Zappos, and Amazon.com focused on small customers and transparent pricing, while making it easy for them to get customized products. Small orders pay for the day-to-day. Large orders are incremental profit that leverage Mr. Robbins’ expertise. I’m certain he can have it all.”

John Olson, chief executive, Graystone Industries, a pond and fountain supply business: “The partners should have targeted midsize accounts, handling larger orders when they arose and smaller ones to fill gaps. Mr. Robbins limited himself to a niche within a niche with little upside potential. He can run profitably and perhaps make a nice living but the company won’t be efficient.”

What do you think?

Article source: http://feeds.nytimes.com/click.phdo?i=1800ca9fd21deb979443cead160dca95

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