Hot Profits from Your Own Hot Stamping Business

7/16/2013

Custom imprint (hot stamp) match covers, business cards, napkins, pens, key chains, wedding announcements or a thousand other things in your garage print shop. Print virtually any color or design up to about 3" by 5" in size.

Hot stamped impressions are especially nice looking. They can be bold colors or very expensive looking "metallic ink" because they are actually printed with melted plastic!

Hot stamping machines have electrically heated type (blocks of metal with raised letters) holders, type-high foundry type and/or commercially prepared dies. The operator loads the type holder with the appropriate reverse type, logo, illustration or die, and positions it in the machine with set screws.

When the type reaches the desired temperature, pulling a lever causes the hot type to be pressed against a strip from a roll of plastic (mounted on the machine), and a reverse image is "melted" onto the paper or other receiving item held in position by the machine's jaws.

The basic principle is similar to iron-on transfers. You can tell hot stamped materials by the especially vivid colors and slight indentation where the design is applied as opposed top printing (smooth) or embossing (raised).

The rolls of plastic come in a wide variety of colors including many "metallic." The more expensive hot stamping machines are automatic and can turn out thousands of printed items per hour.

However, the hand operated ones can also produce excellent results and some of them are quite efficient. Before making ANY hot stamping machine purchase, check with several different suppliers for equipment AND supplies.

Some companies appear to cater to amateurs who are more likely to buy inferior equipment and supplies at inflated prices. There are some rather significant pricing differences among the suppliers. Manually operated systems start about $2500 and are not difficult learn to use. In less populated areas, hot stamped products may be difficult to sell in sufficient quantity to support a business on their own.

In many cases, this service is added to a business with similar products (printer, engraver, sign or rubber stamp maker), where the additional income from essentially the same customers represents extra profit with very little extra investment.

Marketing hot stamped products can be wholesale, retail, or both. Once you are set up and have practiced the art, you can decide how you will start.

To wholesale, prepare samples (these can be over-runs from previous jobs or especially nice results obtained from your learning process) and price lists. Then call on stationery stores, office suppliers, and printers (who don't offer hot stamping) and inform them of your service.

The fact that you offer "short run" orders (less than 10,000 or so) and fast, local service should interest them. Answer all of their questions and leave your prices and samples.

Note that you should make it easy for your wholesale accounts to sell -- have your price lists show retail prices only. This way, you simply tell your wholesale accounts what their markup is and it is "easy" for their clerks to tell (or show) customers the prices. A mark-up of 40% is suggested, which is about right to encourage your accounts to sell your products. After all, they will help advertise your products and often, sell them on credit -- but you will get paid every month.

Note that is very important to have the same wholesale prices for each of your wholesale accounts. If you want to give better prices to those who buy more, put in price breaks at various volume levels. This way, the one who buys 100 will pay a good deal more than one who buys 1,000 but both were offered the same price -- meaning there was no favoritism.

For retail sales, advertise your service to the public as a customizing service that is fast and specializes in short runs. Most will recognize what a hot stamping service is, but it would not hurt to include a brief description or illustration. Contact businesses in your area (banks, insurance, real estate companies especially).

Hot stamp your own business cards for an example of your work, along with a short rate card (perhaps on the back of your business card), showing some sample prices (a complete list can be typed and copied).

Be sure to inform these businesses how fast you can deliver -- then do it!

Contact several ad specialty suppliers to locate sources for blank match covers, pens, etc. These will have by far, the best prices for volume order items to imprint. Your customers will not have access to these suppliers (or prices), and you can make a profit on the items as well as the hot stamping job.

Also, it is often wise to invest in a few dies --such as the town mascot or state emblem. When you pay for a die, and customer can use it for a stated extra fee -- which would be much less than if they ordered one for their exclusive use.

Remember that you can either produce hot stamped novelties (North High School Key Chains) OR do custom stamping -- like window scrapers with the bank emblem or an individual customer's name in gold on his briefcase.

Your fees for custom work will be considerably higher per imprint due to the amount of work required per item, but it will still be well under what it would cost to send the item off. Check with stores in your area that sell items (or give them away) that could be personalized.

Dies are expensive (about $20 each) and take a few days to order and receive, so having a few on hand can speed things up considerably. A useful tip is to find a printer that still makes "cuts" as a source for your dies --they are much faster and cheaper than sending off a hot stamp supplier. Your newspaper editor may tell you who still does cuts if he can't.

When your customers pay for a die, they are buying the impression or means for imprinting -- not the die itself. If the customer asks about the die (most won't), you can tell him that if he wants the die, it is $25 or so more!

Note that only reason he might want the die is to have another hot stamper use it. The standard procedure is for you to keep the die but not charge that customer for any additional stamping with it.

Most stampers are also very careful not to use the same die for a different customer in the same area, and of course, registered logos can only be used for authorized dealers.

Perhaps the least expensive hot stamping equipment is available from MAGIC (see Sources), however, their equipment may not be more suitable for a commercial operation.

A major consideration is the size of the chase (type holder). The smaller the chase, the fewer jobs you can do. For example, if you chase is only 1" square, you will not be able to do most of the jobs you could do with a larger capacity machine.

Check with as many sources and suppliers as you can. You will probably find that one has the best quality and prices on ribbons; another on equipment. Just because one source has the right equipment does not mean they have the best deals on suppliers!

Before purchasing any machine or supplies, compare prices, warranties, quality and especially the capacity (maximum printing size, number of items per hour) of the hot stamping machine... This business, like all others, has a few "potential problem areas." Here are three to look out for.

  1. Get the copy right. A misspelled word can be extremely expensive: it will cost you money and/or an irate customer. Check and double check wording, spelling and layout. If necessary, have the customer initial the desired copy on the invoice. Keep a copy of the text in front of you (clothes pinned at eye level) while you set up the type; call back if there are any questions.

  2. Undercutting. When you give a wholesale account a price list, your listed or suggested retail price list, your listed or suggested retail price are your professional word that if you do retail, it will be at or above that price. If an account finds out you undercut them, they will drop you like a hot potato.

  3. Customer stealing. Perhaps the height of unethical business conduct is when you steal a customer from your own wholesale account. Hot stamping is one of those services where you can see who the retail customer is and usually where he is located. Some unethical stampers (sign-makers, engravers, etc.) have taken the opportunity to contact these customers direct, telling them they can get a better deal next time by coming direct. Most of them end up paying DEARLY for this unethical error judgement!

The hot stamping business is interesting and rewarding and it goes nicely with several other types of business.

For example, if you are an ad specialty sales person, a small hot stamping set-up in your spare room or garage might bring in considerably more revenue without any additional advertising and very little more sales effort.

A person starting with a this business can also branch out into related products and services -- again, with comparatively little additional investment or effort.

Examples are: magnetic signs, rubber stamps, ad specialties, giftware, button making and sign sales. These are all business that serve essentially the same customers -- and there are many more possibilities that you will undoubtedly discover, or that your customers will suggest!

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