What challenges will my carpet binding business face?
Price Wars One of the major pitfalls of this industry is the ease of which people can learn the trade and the relatively low startup costs certainly don’t help, this means unless you completely dominate your market you have to always count pennies and keep your budget as lean as possible because as more and more people see you becoming successful they will try and emulate you and in most cases rather then provide an innovative spin on your services they will just try and undercut your prices. In many cases all around Inventory! Inventory! Inventory! At first glimpse the various binding tapes you will need to stock don’t seem overly expensive or difficult to manage, we felt the same way, $6 for a roll of polyester binding tape doesn’t seem like a big deal compared to what some other industries have to deal with. The problem is when you open the sample books usually provided by the various manufactures out there is the sheer number of colors available. When doing your research remember that a roll of binding tape is referred to as a “gross” this is usually two rolls of the same color each roll measuring around 220’ in length. In many instances you will be faced with stocking upwards of 100-200 different shades and colors and to make matters worse every company uses the most confusing numbering system possible often only vaguely grouping colors and using absurdly high numbers and jumping seemingly at random. We would recommend finding a friend who is into home decorating and fashion trends and having them pick a list of 80-100 colors, while that may seem like a high number many distributors have a order limit of 5 – 10 “gross” and nothing takes the wind out of your small business then getting a customer who insists on the one shade of green you don’t have in stock and you end up paying $80 for a $20 binding job. Offer your customers a wide selection an in many cases they will find an alternate you have in stock. If you are planning on targeting residential customers then we would suggest a large color selection but low inventory on each color, as inventory is expensive and hard to keep track of and many residential customers aren’t in a urgent rush to get there bathroom mat the same day. This way you can build your inventory up slowly with less initial investment. If you are planning on targeting Industrial/Commercial you can usually get away with darker or neutral colors, dark grays, blues and greens seem especially popular, but you will need a large quantity as many of your jobs will be measured in hundreds of feet or even thousands whereas the residential market usually is 50 or less. When you do finally place your initial large order you should also attempt to negotiate a lower price or free shipping.
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