Inventory Programs vs. iCoStore
Compare Online Company Store Philosophies
Inventory vs. On-Demand
To compare online company stores, you must first understand the fundamental difference in philosophy between the two types of programs.
Inventory programs are the traditional way to run online company stores. Born from paper catalogs and static inventory for 6 months or a year, inventory was the only way to run corporate programs before the internet. A small selection of branded merchandise is chosen, decorated and put on a shelf. Items are loaded into an online catalog and offered to employees, distributors and customers. You prey that you selected items that everyone wants, because if you didn’t, you are stuck with them and are not able to add additional items until they sell. This prohibits new items from getting added to your store. The cost of carrying inventory makes programs fail quickly. See how quickly the costs add up here: Cost of Inventory.
When you compare company store philosophies, on-demand programs have significant advantages over inventory programs. They offer an unlimited selection of apparel, hats and bags in your store with NO RISK. There is no limit to the number of styles, brands, logo options or color offerings, because we don’t purchase the blanks until you order them. We receive, decorate and ship within 2-4 days from our facility. There are no minimum order requirements. There is no downside to on-demand decoration, when done right. Imagine offering a full selection of brands and styles from Nike, Under Armour, Adidas, Carhartt, The North Face, Ogio, Travis Matthew, Spyder and many more with no risk of inventory. This is not possible in a traditional inventory program.
In many cases, inventory is required to run a successful program, however not when it comes to apparel. We warehouse and hold inventory, but only for products where it makes sense, such as drinkware, golf balls and other promotional products that can’t be efficiently decorated in single pieces on-demand.
To be eligible for an iCoStore program, you must purchase a minimum of $100,000 per year.
To compare company stores, see the specifics below.
Traditional (Inventory) Programs
Most promotional products companies don’t want to run stores, but do so to keep your special-order business. They are not set up to run stores and need to use third-party providers for technology, decoration and fulfillment.
We built proprietary technology to operate online company stores, so we seek out company programs. We actually run several programs for our “competitors,” because they don’t want to lose their clients—and they don’t have the ability to run stores themselves.
One tactic to keep customers long term is to build up a large inventory, so when your contract comes due, you will owe significant money to exit the program. You can’t afford to leave, even if you are unhappy with the program and service.
Our philosophy on customer retention is simple: if you are not happy, you should find a new vendor. Our contracts have a 60-day out at any time with no penalty. Your inventory will be minimal (if any at all). In our 15 years, we can count on one hand the number of clients who left because they weren’t happy.
Most items in traditional programs are pre-decorated with your logo, and held in a warehouse. You are financially responsible for them, whether they sell or not. In the end, you will be stuck with odd-sized apparel and items that never sold. Inventory programs just don’t make sense for customers purchasing less than $2M.
We keep inventory to a minimum by producing and decorating all apparel—and many other items—on-demand. Some items (promotional products) may require inventory, but that is a small percentage of the program. Our goal is to keep your inventory light, so you can adjust and refresh your selection frequently.
Traditional contracts are rigid, because there is a lot of inventory at stake and significant financial risk for both parties. Most companies don’t make money on your program for the first 18 months, so they can’t have you leave. In the end, you will own the inventory that didn’t sell, which makes leaving very difficult, even if your contract is up.
Our contract is simple, because inventory is not the central issue. We have easy provisions for how we handle inventory and we keep minimal inventory in stock. We want your program to be a success, so if you ever feel it isn’t working, you can leave without penalty.
Set up & Hosting Charges
Most vendors don’t own the online-store technology, so they rent it and pay for hosting. They also pay to set up the stores and don’t have staff to keep merchandise fresh. Traditional stores are often expensive to set up and have monthly hosting charges.
We built our technology. We own it. We have developers and merchandisers on staff who build and keep your program updated. For this reason, setting up a program is easy and inexpensive. If you purchase over $100,000 per year from iCoStore, there are no hosting charges.
Having enough—but not too much—inventory is the biggest challenge in a traditional store, especially for apparel. It is very expensive to have deep stock in all sizes and colors, so out-of-stock items are common. Most companies use third-party decorators who have minimum-order requirements, so you will need to replenish more inventory than you need.
We have very few, out-of-stock issues with apparel. The only time is when the manufacturer is sold out of a size, and in that case, we remove the item from the store, and replace it with a similar item from our large apparel selection. We also have every size available, often from XS – 6X.
Traditional programs do not provide you with a dedicated account manager unless you spend $100,000+. This means you will work with different people when you call in. Larger programs may have multiple points of contact: one for the store, one for special orders and others for customer service.
Our account managers are assigned to your program and are your single point of contact. They become an extension of your team—learning your brand, demographics, likes and dislikes. They will learn your event calendar and work proactively with you to have solutions ready. Your account manager handles sales for all items that are not offered in the store.
The promotional industry is a commission-based industry. Most companies are commission only, which means they have incentives to sell you as much as they can—especially program inventory—even if you don’t need it.
The iCoStore model is a team model, so our account managers are well compensated and not commissioned. We believe that is in the best interest of our culture and our customers. Our sales team has weekly brainstorming sessions to develop specific solutions for customers. When an account manager is on vacation, others are happy to step in and help. We work very well as a team to make your experience great.
Program Size vs. Volume
To have a successful traditional program with inventory, the volume needs to be $2M+ annually. Apparel will always be limited, due to the number of sizes that need to be in stock. Be prepared to write off at least 10% of the merchandise. If your program is between $100,000 – $1M, your selection will be minimal and your financial liability will be large. Traditional programs just don’t make sense for programs under $2M. See our JIT calculator to better understand the numbers.
JIT programs make sense at any size, due to the flexibility and hybrid nature of on-demand production, inventory and bulk buy. You get the best of both worlds with iCoStore. If you purchase over $100,000 per year in promotional products and apparel, you are a candidate for an iCoStore program. Our small programs typically offer a better merchandise selection than most Fortune 500 programs. Imagine having a fully customized program with no inventory liability!
The setup and appearance of traditional stores are standard and built from templates. Colors and images can be customized, but many things are rigid and can’t be changed. Most distributors are renting the technology from store providers and have little flexibility to make changes.
Because we built the technology and own it, we have full access to update the look and feel of your store. We can build and customize your categories, checkout pages, static pages and much more.
Because traditional inventory is pre-decorated, most distributors don’t decorate in-house. They typically rely on third-party decorators. Those decorators have minimums and sometimes other jobs take priority over your job, so you are not always the priority.
iCoStore decorates in-house. We have invested in the best equipment and have experienced professionals who embroider, laser etch, screen print, DTG print, heat seal and large format print. There are no minimums for items decorated in-house (which is typically over 75% of items sold in programs).
Merchandise selection in traditional programs is limited due to the cost of carrying inventory. Unless you have a multi-million dollar spend, your selection will be small. You will also be limited on the colors you can choose and the number of logos you can offer.
Our apparel and bag selection is unlimited because everything is produced as ordered. You can load hundreds of styles and colors onto your store with no risk. We are integrated with our vendors, so we pull from their inventory daily. We offer a full selection of men’s and ladies’ apparel, including most name brands (Nike, Under Amour, The North Face, Ogio, Callaway, Cutter & Buck, Travis Matthew, Adidas, Carhartt, etc.), plus many price-point brands. Offer as much or as little as you want.
Traditional programs limit your logo options. If you want to offer two different logos on your merchandise, you are doubling your inventory. Programs with multiple logos either have tons of inventory, or a very small selection.
iCoStore was built to work with programs that have multiple logos. We are able to offer not only all of your logos on JIT products, but users can select where to put the logo on many items (within your brand guidelines). We have a several programs that have over 50 logos and a couple with more than 100 logos! You can add a second logo to a shirt and even personalize the shirt itself. We decorate each item as ordered, with no minimums.
Merchandising a traditional program is stressful, because if you choose something that doesn’t sell, you will need to buy it back. New items can only be added when old items sell out. Finding the right balance of products and keeping up with trends is difficult and time intensive.
Selecting products for an iCoStore program is fun, because there is no risk and you can offer an unlimited number of items. Our merchandisers are always adding new brands and styles to our database. We can update your store monthly with new items. You don’t need to worry about getting stuck with bad merchandise. Your selection with iCoStore is virtual until you order it, so we only produce what is ordered.
Traditional programs offer standard shipping options.
iCoStore builds custom-shipping solutions into every program. Some stores just need standard shipping, but others need to batch multiple orders and ship to one location, or split billing between the company and the buyer, or ship everything on the company’s shipping account. All of these options are easily configurable within our stores. We work closely with you to figure out the best solution to save you money. We ship FedEx, UPS, USPS and LTL, domestically and internationally.
Traditional programs typically offer standard payment methods like PO and credit cards. Some higher-end programs offer more robust custom solutions.
We offer multiple payment methods, including credit card, P-cards, points, gift cards, promotional codes, POs, cost centers and coop funds.
Most programs offer basic reporting. But if you need custom reports, they are expensive or not possible, because the software is rented and their stores are not integrated into their accounting system.
iCoStore has a 24/7 administrative portal (Client Portal) that allows you to run reports for sales, inventory, product history and much more. You also have the ability to add/edit users, add points, control budgets, approve orders, etc. The Client Portal is a one-stop administrative portal that gives you the capabilities and information you need to run a successful program. If you need custom reports, we can build them and add them to the portal.
The majority of traditional programs are set up for mobile ordering, but many still are not.
Our stores have been optimized for phones, and we currently receive over 33% of our orders on mobile.
Most traditional programs offer different tier options. Their basic program may be inexpensive, but most companies need more features, which means you pay extra for them. Hosting and setup can be expensive.
With iCoStore, every feature is included for every customer. You will not pay extra for features you don’t use. (See our Store Features).
Most companies outsource all decoration and only act as a middleman. In some cases, they also use a third-party fulfillment center and never actually see or touch the products in your program.
Call us control freaks, but we want to decorate, touch and inspect everything that gets shipped to our customers. Controlling our decoration gives us significant advantages for quality, speed and flexibility. Without it, JIT production is impossible. Currently, we embroider, laser etch, screen print, large format print, heat seal and DTG print in-house. This makes up over 75% of program merchandise.
Most companies rent online-store technology from third parties. They are typically good stores, but there is little integration with their accounting system, so they re-key orders, which is costly and slow. Customizing features is often expensive and slow.
At our core, we are a technology company. We built our technology in-house, which means we can customize features, make changes and resolve issues quickly. Our stores, ERP system, production, decoration and shipping are all integrated.
When pricing items for inventory, traditional companies must include warehouse costs, double shipping and account for the cost of your inventory.
ICoStore’s pricing is very competitive. Our in-house JIT production system keeps costs down. Our volume gives us significant discounts with vendors. You might think producing one item at a time is more expensive…but you would be surprised!
Promotional companies can range from home-based businesses to companies in large industrial buildings, and everything in between. Most companies that run programs under $1M are small offices (or homes) with little to no warehouse space. To run a traditional program, they outsource decoration, warehousing, fulfillment and technology to third parties. They have very little control.
Yes, we are control freaks, but we have learned over the years that if we don’t control everything, then we have excuses as to why something didn’t get done. By controlling all aspects of our programs in-house, we don’t get to make excuses. We have our technology, decoration, warehouse and fulfillment all under one roof. This enables us to run all programs the right way.