Chapter 2
- Part 2 -

Process Comparison

•  Screen printing requires preparation of a silk screen for each color to be printed; digital printing requires no such screens.

•  A screen printing artwork has to be specially prepared with consideration of chokes and traps, half tones, etc. (specialized knowledge). No special art preparation is needed for digital printing; it is WYSIWYG — what you see is what you get.

•  Screen printing requires printing one color at a time. Thus typical garment printing can have one, two or three colors at most. Digital printing uses “process color” or full color, typically has 16 million colors, and is printed on one pass.

•  Screen printing cannot handle intricate designs or color photos; digital printing can handle both.

•  Screen printing requires spot color ink mix or special orders, while digital printing requires no ink preparation.

•  Screen-printed garments have an undesirable hard tactile feel of plastisol; digital prints with water-based ink have a soft feel.

•  Both screen printing and digital printing can print on light-colored garments and dark- colored garments. 

•  For light-colored garments, both methods produce very durable wash-resistant prints. For dark-colored garments, digitally printed garments using today’s technology does not last as long as screen printed garments, but their longevity is commercially acceptable.

•  After screen printing, the ink has to be cleaned out of the system — a messy and labor intensive process. No such clean-up is needed for digital printing.

•  Screen printing requires skilled operator training. Mastering screen printing takes months, if not years. Digital printing is easy to learn.

•  Screen printing cannot handle variable content printing. The digital process allows for different text in each copy.

•  Due to screen preparation and special ink mix, screen printing requires typically a one- week turn-around time. Digital printing can produce finished products within minutes.

•  Screen printing equipment is relatively large, messy, and uses toxic inks — making it unsuitable for a residential setting or for a home-based business. Digital printers are compact, quiet and environmentally friendly, ideal for home-based or commercial use.

Cost Comparison

•  Due to the costs of film and screen preparation and clean-up operations, screen printing requires substantial setup costs per job.  Digital printing has virtually no setup cost.

•  Due to setup costs, screen printing is not suitable for short run jobs of less than 100 pieces, while digital printing can handle micro runs, short runs and production runs.

•  For production runs of more than 500 pieces of simple graphics of one or two colors, screen printing may have a cost advantage. But overall, digital printing is the more economic production method.

•  Digital direct-to-garment printers are price-comparable to low-volume garment screen printing machines with two stations. There is no cost advantage for traditional screen printing equipment. 

•  On a per garment basis, screen printing inks are priced lower than digital printing inks. But the ink cost advantage is more than offset by the costs of screen making, clean-up, longer production lead time and higher labor costs.

Health and Environmental Impact Comparison

•  Garment screen printing is done mostly with plastisol, which has a number of health and environmental issues. Digital printing inks are typically water-based and environmentally friendly.

•  A number of worker health issues exist with screen printing, but not with digital garment printing.

•  The waste-water from the clean-up after screen printing contains PVC and pthalates, and cause significant environmental problems.

           
The only scenario in which screen printing outperforms digital apparel printing in cost is for large production runs of single or two-color simple graphics. But most custom garment decoration jobs are smaller runs. The sweet spot for digital direct-to-garment printing consists of run sizes between 25 and 250 pieces, or up to 500 pieces.

Summary Comparison of Digital Printing and Screen Printing of Garments

Fixed Asset Investment Requirements

The investment in fixed assets needed to achieve a certain level of sales is an important benchmark for an industry or business. A high “sales to fixed-assets ratio” indicates that assets are efficiently utilized to generate sales, or that the superior technology deployed in the business allows a low level of fixed assets to generate a given level of sales. A low ratio is generally an undesirable characteristic that ties up too much capital compared to the sales volume. Dr. Chase’s Ten-Bagger Rule focuses on a highly efficient business and technology whose “sales to fixed-assets ratio” is extraordinarily high.

According to a survey of Specialty Graphic Imaging Association (SGIA), the industry median “sales to fixed-assets ratio” ranged from 2.4 to 1.7 in the 2004 to 2008 period.10 A large component of the specialty graphics industry is garment screen printing. Compared to these statistics, the digital method of garment printing is far more desirable. A setup with one direct-to-garment printer system, costing about $20,000, has a production capacity of up to several hundred thousand dollars per year. That means the potential “sales to fixed-assets ratio” for digital garment printing is 10 or more. It is four to five times more efficient than conventional screen printing in terms of necessary fixed asset requirements.

Next, let’s briefly look at the production economics of digital garment printing. We’ll use a basic white T-shirt printing as an example. A blank T-shirt will sell for $1.25 wholesale. It takes about $.50 of digital ink to print a typical graphic on the shirt, which takes about a minute. Allowing for a labor cost of $.75, a finished printed shirt will have a direct manufacturing cost of about $2.50 to $3.00. The selling price of finished goods depends much on the business model. Obviously sales mainly to end user or retail customers will command higher prices than sales to trades or wholesale, while wholesale will have higher volume.

With no large fixed capital investment, no great economies of scale and no large mandatory overhead costs, new small businesses set up for digital apparel printing can compete effectively with much larger established screen printers. We expect that more and more garment printing will be done in smaller job sizes as digital printing becomes more widely available. The greatest beneficiary of all will be the typical established garment screen printers, who already have steady customer bases. Many garment screen printers today turn down orders of less than 50 or 100. Such small jobs are not worth their time and efforts, with the art and screen preparation and cleanup work. When they add a digital printer, they will no longer need to turn down the small jobs. These will become lucrative incremental business. Moreover, some screen printers have successfully used the flexibility and quick turn-around of digital printers to print proofs, prototypes, pilot runs, and to help clients develop new products.

As of 2007, digital apparel printing accounts for less than 1% of the garment decoration industry in the United States. This low percentage presents a tremendous opportunity for both screen printers and entrepreneurs. We do not know how many printers are sold to entrepreneurs who start garment-printing businesses based on this new technology. But we know that up to 25% of the customers buying digital apparel printers from AnaJet were starting new businesses.

Mass Customization of Apparel

Today, few apparel items are made in the U.S. and Western Europe. Most apparel manufacturing has shifted to lower-wage countries. Many of these garments are decorated with personalized images or custom designs. The digital revolution, which allows “mass customization” to take place in many industries, is finally catching on with garment decoration. With it you can print short runs of 25 shirts for a corporate sales team, or a one-of-a-kind photo shirt for a loved one. On-demand production of customized and personalized apparel is a dominant new fashion trend that will keep growing.

As you will see in subsequent chapters, many screen printers and entrepreneurs are seizing the opportunity. But an even bigger change is taking place in personalized garment decoration, which prints one or just a few custom shirts per order. Such personalized shirts may be printed in a store or even in a kiosk environment, such as Lit'l Desi9s — featured as one of our success stories in Chapter Four. The technology and trend has not escaped the attention of sophisticated investors, as you will see in the following examples.