location, Location, Location???

[Stagecraft]

We're not a retail sign shop, we do graphic work for a specific market segment that relies on very fast turnaround times at competetive rates.
We're looking at relocating our shop and the choices have come down to two locations...one is across the street from one of our major clients which should make us the "go-to" choice, the other is directly across the street from our major supplier which would allow us to carry less stock on hand.
The square footage, cost and amenities for both locations are about the same.
Which would you choose and why?

 

[Locals Find!]

I would locate myself nearest my supplier. You don't want your business to become too dependent on the one client. You may end up servicing them for the majority of your work and if they relocate, close, or the relationship changes you have built yourself around their whims.

Keep yourself competitive and be closer to the supplier. That is just my opinion.

 

[visual800]

I dont really think it would matter if your good and your reputation is there where your located. competitor or supply house? hmmm supply house for convenicence

 

[Craig Sjoquist]

I would move to the one that would be the most profitable.

Inventory is a big issue indeed, does this location make it easy for your & new customers. ?

Will being that close to major client bring in new clients, more then other location. ?

Those are location questions to me.

 

[boxerbay]

... cannot compute... need more info...

if your going to be near the fast turnaround guy is he going to give you enough work?
hard to say without looking at hard numbers. i would not rely on one client. but if the client is a whale then you have to review your opportunity costs.

if he is a whale bringing in 1 million a year in revenue i would be in a mobile trailer shop in his driveway.

 

[mikefine]

It is an interesting question, but hard to give advice on without knowing the specifics. But I think on general terms, sales rules over production. So I would move closer to the customer. If you are ensured the increased sales and business by doing this, I have a strong suspicion you will figure out a way to make it work.

 

[Stagecraft]

Thanks to all that took the time to reply; some good advice and things to think about. - Boyd

 

[WildWestDesigns]

Moving to either one can have it's advantages, but also their disadvantages. The biggest thing that would make me question about moving close to either one would be, what happens if the relationship changes? Doesn't really matter why it changes, but what happens if it does and not for the better?

It's almost putting all your eggs in one basket. It's just is it going to be a supply basket or a sales basket.

If it was me and not having any other info to go off of, I would probably go on the supply end. Being able to get things quickly and have a good selection, quick turnaround is going to appeal to more customers then being located really convenient to one customer. Customer loyalty is not has big as it once was. Horse industry is the same, we used to have boarders that would rotate through barns every couple of months. I could just see that relationship changing really quickly compared to the rate of change toward a supplier. Not saying it won't/can't happen, but on average I don't think it's going to be as quick unless something really big and bad happens.

 

[rjssigns]

BoxerBay said it best: Opportunity Costs.

No matter what you choose there will always be a cost involved since there are finite resources at your disposal.
Opportunity Cost: the value of the best forgone alternative that was not chosen.

 

[skyhigh]

no brainer.
To use your word....."MAJOR CLIENT"
"Major Clients" usually deal with other vendors/business's, who may find it convenient to pay you a visit while visiting YOUR major client. At least they may notice you.

BIG QUESTION..... If you park your business next door to your customer, just how far away does that make your sign supply company???

 

[Sticky Signs]

Assuming there is a lot of pick-up and delivery with you and the major client, I would probably get closer to them. I moved to a new location back in June that is just off the highway and only a few minutes to downtown. Old clients love the new locations convenience and I've picked up a lot of new clients because of this location too. I think it's better to make things as easy for your clients as possible.

 

[signswi]

Let the math decide for you. Calculate your savings in having lower inventory vs. a projected increase in sales from the client and other clients. Don't forgot to also include potential local new clients near the supply vendor, etc.

I'd be really nervous relocating for just one client. If they're that big of a deal they could also just take whatever it is you do for them in house at some point or they could decide that internet vendor is better or Z new shop undercutting the market is better...

 

[Billct2]

Our major supplier delivers to us daily. So being neera them would be of little use.
I guess being near your major client would have an advantage, but other than being able to gert their orders to them a little quicker & cheaper don't see any other great plus to it.
My main concern in a loaction would be the facility itself, which has the best most
effective space.

 

[TheSnowman]

We started as a home based business, and moved into a downtown retail location five years ago. As far as more customers, I probably do have more...but I sure feel like I used to do a lot more bigger jobs, and now, it feels like everyone stops in for a "birthday banner" and it really ticks me off.

 

[allamericantrade]

My supplier delivers daily for free. Aside of your major client, what other possibilities are in the area? Does the supplier work with the general public? Is a potential customer able to buy some of his own material at the supply house? Factors that may decrease sales. Other sign company vehicles lettered picking up supplies driving by?

There are quite a few factors more than listed to make a decision.

 

[Stagecraft]

Thanks again for all the advice. We signed off today on the property across the street fro our biggest supplier. Some of your comments really did contribute to the decision making process and for that I am truly grateful!
As a bonus, the location we ended up taking has far superior traffic exposure should we ever have to branch out into retail sales. - Boyd

 

[cdiesel]

Man, I absolutely unequivicolly would've chosen next to the client.

 

[qmr55]

Man, I absolutely unequivicolly would've chosen next to the client.

Agreed.

 

[Sticky Signs]

Congrats Boyd. So where's the shop?

 

[Stagecraft]

Hey Sticky!
Sorry but seeing as we play in the same sandbox I'm keeping this kinda' quiet until our grand opening (absolutely no disrespect intended) . - Boyd