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The Retail Market: Who's Buying and What to Sell
FORM Magazine
August 1990
By Katherine LeupoldAbout eight years ago, a business acquaintance of John Rachal developed an inventory software package for retailers. Rachal, a distributor sales rep with MBF Corporation's branch office in Alexandria, La., who had linked up with the software developer earlier in his career, designed continuous price tags compatible with the package. Whenever his friend sold the package, he showed clients a portfolio of Rachal's work. Now Rachal sells about 1 million tags per year to several stores nationwide even though the software is no longer sold.
Tag Stock
Tag stocks are manufactured from rope and jute fibers, mechanical wood pulp and various types of wastepaper. In general, they have good tensile and tear strength, durability and moisture resistance. Forms manufacturers and tag manufacturers use different basic sheet sizes, so be prepared to convert paper weights.
Equivalent weight—the weight of a given size paper in terms of another size when the same materials are used—can be determined with this formula:
(Basic Sheet Size x Basic Weight) / Basic sheet size to be converted = Equivalent Weight
For example, 500 sheets of 100# stock using a basic sheet size of 24 x 36 would actually weigh 135# using a basic sheet size of 22½ x 28½, the standard used by manufacturers.The 4-wide tags usually include stock numbers, item numbers and price. Some discount stores print a suggested retail price and their discounted price to show savings. The tags are about 3 inches x 1 inch and are separated by perfs. Some stores place identical tags 2- or 3-wide on each garment and separate them during the selling and inventory process, says Rachal.
Walk into any store and you'll see a variety of tags, including price marking tags and hang tags. Many retailers, including small ones, recently have computerized or may be planning to do so, giving distributors the opportunity to sell continuous price tags. Virtually every product sold requires a hang tag, but many are supplied by manufacturers before the product reaches retailers. Distributors selling to manufacturers with their own outlets or retail stores may be able to design hang tags and price marketing tags.
Other Applications
Distributors also can sell sale price tags in a wide variety of sizes, shapes and colors with advertising copy such as "sale price," "special sale," or "as advertised." Additional retail applications include plastic tags or sticks used by grocery chains, delicatessens and others to identify foods on display. Food processors use plastic tags to show prices and advertisements. These rigid vinyl tags must be laminated with a U.S. Department of Agriculture-approved film and printed with USDA-approved inks. Commercial flower growers and florists use similar tags.Ed Ruppe, vice president of Liberty Press Inc., Rutherfordton, N.C., a distributorship, says jackets for see-through video boxes produced on tag stock are a hot item. Stores looking for ways to distinguish themselves put logos on either side, both sides and/or the spine of their jackets, which remind people where videos should be returned.
Idiosyncrasies of the Retailing World
Tags—like labels and decals—can complement your forms business. Distributors can sell tags to office managers or managers in small stores—the same people who buy invoices, purchase orders and credit slips—or purchasing agents in larger organizations. Selling tags also can lead to forms orders, say distributors.But the retail tag market can be very competitive, depending on the type and size store you serve. "Sales reps should stay in touch with customers and find out their needs—learn about their equipment," says Ruppe. In his region, non-independents are the primary sellers to retailers, so independents should stress service, he says.
As with other nich markets, distributors can benefit from following the retail industry carefully. Within the last few years, retailing has been hit by a string of buyouts and bankruptcies. Retail stores, especially large ones, have been unwilling to take on a lot of debt or to build up stocks, creating a flurry of rush orders for tags, says Ruppe. And, because some stores may not be financially stable, distributors should watch accounts receivable carefully, he says.
Design Considerations
If tags will be computer-generated, get specifications for your clients' equipment. Use samples from your manufacturer to ensure the tags will run properly through printers. Most of Rachal's clients use the same equipment, so there is little danger of using the wrong stock. He often provides clients with blank tags while the custom tags are printed, giving them time to see if the tags work. Find out what types of preprinted information clients want to include on tags. Some retailers print their return policy on the reverse side of price tags, says Rachal, and many will include their logo on the front side. Larger stores often provide camera-ready art. Depending on their budget, stores may print tags in two or three colors. Using reverse type also is a popular way to produce distinctive tags, says Ruppe. Rachal has found that discount stores do not worry as much about their image as larger, more prestigious stores. Better stores are "very, very quality oriented," says Ruppe, and also are more concerned about on-time delivery than price. Choose the stock carefully. Price tags should probably be 150# or 175# since shoppers constantly grab them to check prices, says Don Simpson, owner of Edwards Business Forms & Systems, a distributorship in Clawson, Mich. Some clients prefer coated stock on the side containing preprinted information to present a better image. Coated stock is not recommended for imprinting by computer, however, since ink may smear, says distributors. Ruppe says retailers commonly switch stocks to keep tags looking updated and stylish. Find out how the tags will be attached to the merchandise. Most clothing retailers use tagging guns to attach tags with barbs made from ultra-thin plastic. Another type of plastic barb combines a hook for hanging merchandise such as socks. Specify punched holes to accommodate barbs. Take into account how the tags will be handled so you will use adequate perforations. Simpson says perfs between sets of tags can be lighter than perfs between individual tags separated by sales clerks at the register. Katherine Leupold is an assistant managing editor of FORM magazine.
