Channel Letter Wholesale

Electrical Spotlight: Working With a Channel Letter Wholesaler

Andy Stonehouse is a Denver-based freelance writer who has been covering the automotive industry for more than ten years.

In the not-so-long-ago good old days of the sign business, making channel letters was the height of professional artistry—a serious craft for skilled professionals who lovingly crafted components by hand, turning out one-of-a-kind work at a slow-but-steady pace.

Nowadays, that sort of hands-on work has become more and more infrequent and sign companies struggle with the choice to try to do their own channel letter work in-house or weigh the costs of enlisting the help of a regional or national wholesaler to provide finished letter jobs.

Your decision as an independent sign professional depends on a number of factors, but ultimately it’s usually cost—and your ability to turn a profit—that helps guide the choice to do it yourself, or work with a wholesaler.

Robert Hiller, who runs a Signarama franchise in Tampa, Florida, with his wife Beatriz, admires those folks who still have the time and patience to do channel letter work by hand, but says that smaller companies have to so some serious thinking when making the choice to properly equip themselves, or go with a wholesale fabricator.

“Finding a good channel letter maker these days is not easy– t’s more of an art, and there’s still a few people out there who do it all by hand with a router, notcher and bender,” he says. “If you’re a small shop and you sell a few sets a month, it’s possibly worth it to do it yourself, but if you’re doing 20 or more a month, then it makes sense to go with a wholesaler.” He estimates that less than 20 percent of sign shops in the U.S. still do everything by themselves.

Hiller, whose shop has both a wholesale and retail operation onsite, says that with the exception of a few guys literally doing fabrication out of their basements, setting up a sign shop with even the basic professional-level tools can be prohibitively expensive.

“It’s all a personal preference, but to get the proper equipment can run you up to $200,000, if you want to do it right. A good router is between $40,000 and $120,000, channel notchers are $40,000 and benders are $50,000. You can still do it with a jigsaw and a pattern, but in the time it takes you to do one set, I can do six in the same time,” he says.

Daryl Foreman, VP of national sales with San Angelo, Texas-based Principal LED—a supplier of LED modules and power supplies for channel letters—got his start nearly 40 years ago, making channel letters by hand in a shop, with an apprentice-like training.

Now, with the advent of automated equipment, he says smaller shops have to run the numbers to see if it’s really worth it to do the work themselves, as craftsmanlike as it still may be.

“If you’re a small- to medium-sized shop, you probably can’t afford to buy that equipment as it’s very difficult to be competitive,” Foreman says. “Most small shops are family owned and in addition to their employees, their owners do it to put food on their own tables. If your target market is channel letters, then it’s a good investment, but if not, that equipment is going to be sitting idle while your employees are doing other work.”

As the second-biggest supplier of LED lighting components in the country, Foreman says he works primarily with companies working at the wholesale level, where sheer volume can help produce finished channel letter sets at a much more affordable price.

“We sell our stuff to distributors at a certain price, and they have markups, but we have no control over that,” he says. “Larger wholesalers who use our products come to us and are able to arrange a special price when they buy stuff at a certain volume. That’s why they can sell it for less than a smaller shop.”

A better solution for many sign professionals might be to work with a regional wholesaler like Warren Sciortino, owner of Letter Fab LLC. Sciortino has been in the business for 46 years and decided to set up shop in the relatively remote Colorado mountain community of Crested Butte, a long haul from major centers in Denver and Colorado Springs.

Despite his location, Sciortino says Letter Fab is still able to build and distribute channel letters more quickly and more cheaply than most do-it-yourselfers, with products being shipped to all 50 states, Canada and even the Cayman Islands.

He’s done well enough to open another shop in his native New Orleans, offering the same value proposition a little more easily to sign companies in the south. Much of his business now works directly with sign brokers, who work with customers to fulfill sign jobs but don’t do any of the manufacturing or installation themselves.

“The problem with doing your own stuff—and I did myself, back in 1970, when there was no fax, no computers, no wholesalers—is that nowadays a small company can actually make more money by having someone else do the work, with no overhead,” he says. “A big commercial sign company has all its manufacturing costs plus a bunch of $180,000 crane trucks, will all of the insurance and overhead, and unless you’re making $3 million-$5 million a year, it’s hard to turn a profit. So many people in this business don’t realize until it’s too late that they’re not making money.”

Sciortino cites the example of the Five Guys burger chain—the professional broker handling all of the channel letter work for the company’s 1,000-plus stores works out an apartment office in Salt Lake City and does all of his work through wholesalers like Letter Fab.

“He sends us the drawings, the permitting and information about the local sign companies doing the installs, and we build it to his specs and ship it,” he says. “That’s $28 million a year in business, and they just use a broker.”

Same goes for the work he does with the $6-billion-a-year Pattison Sign Group, he says.

“I can make a Subway sandwich shop sign and ship it to a local sign company for less than they can make it themselves, because of their overhead,” he explains. “We’ve got a fully automated shop, and I can probably turn out 150 to 200 signs a day, even here in Crested Butte—our machines don’t stop. We do everything online, and our signs don’t sit around in the warehouse at all.”