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James Stokes
08-30-2008, 2:32 PM
I just did a job for some signs. The original order was for 760 signs at $12 each. I priced them at $12 each strictly because of the quanity. The signs were for a convention that starts this coming Wednesday. They had their supplier ship the material they had on hand to me. (580 pieces) With the rest to follow in time to do the job. They did not get here and will not be here untill Wednesday, the day the convention starts. Therefor they have cancelled me doing the last 180. Here is the question. Since the order is short 25% due to no fault of mine and the price was based on the full quanity I intend to raise the price by 25% to make up for the lower quanity. What do you guys think? Does that sound reasonable to you?

Mike Null
08-30-2008, 2:58 PM
I don't think I would do that. 580 pieces gets my best price and you have nothing invested in material.

Good customer relations is more important here.

David Fairfield
08-30-2008, 3:37 PM
Agree with Mike, I'd apply the golden rule.

Dave

James Stokes
08-30-2008, 4:43 PM
I made some signs for them 2 weeks before, 85 of them less time involved in them and charged $25 per sign. I told them on these the price would be cheaper only because of the quanity. If I had known the quanity would only been the 585 I would have priced them at $15 each. I am not sure what to do.

bob pfohler
08-30-2008, 5:00 PM
I agree, that kind of volume gets my best price. If you LOST money at $12 then you under estimated the job.

Anthony Penchetta
08-30-2008, 6:47 PM
I would honor your original price.

Joe Pelonio
08-30-2008, 6:56 PM
I agree with the others. My maximum price break is at 500+. Whether it's 500 or 3,587 the price each would be the same, especially if they are providing material which is the only real quantity savings for me if I get a deal on a large quantity of material.

James Jaragosky
08-30-2008, 7:46 PM
I agree with the others. My maximum price break is at 500+. Whether it's 500 or 3,587 the price each would be the same, especially if they are providing material which is the only real quantity savings for me if I get a deal on a large quantity of material.

Sounds like you currently have a High volume Repeat costumer. That in it's self has value. The failure of the material supplier was not their fault ether, And out of the two companies involved in this project you were the stand up outfit. That will mean something come the next order. Keep them happy so they keep coming back.
Please post a photo of the job I love to see what others are making.
Jim J.

Larry Bratton
08-30-2008, 7:49 PM
I made some signs for them 2 weeks before, 85 of them less time involved in them and charged $25 per sign. I told them on these the price would be cheaper only because of the quanity. If I had known the quanity would only been the 585 I would have priced them at $15 each. I am not sure what to do.
Wanna keep that customer? Let it slide man,, you'll get it back in the long run. Repeat business is what you want.

Jim Watkins
08-30-2008, 10:29 PM
James,
I have to agree with the others. From the number your talking about, your standing to make quite a bit of scratch. I think you would be doing yourself a favor by keeping the customer happy.

But on another note, and along with the same theme, what is the thought on a deposit? I would think you would be wanting a deposit of some sorts to cover your costs incase the customer flaked. Am I off base in thinking a deposit is something that should be asked for? And what is the thought on how much to ask for?

My thought has been if it is a large order (assuming a non-established customer) to ask for at least 25% of the estimated labor and 100% of material costs(assuming I am supplying the material) up front.

James Stokes
08-31-2008, 7:04 AM
This customer is not that good of a customer. I have fired them before. These jobs are the only thing I have done for them in the last year. The customer is extremely demanding, every project has to have at least a dozen samples and then they drag out the approval process untill the last minute so it is allmost impossible to get the job done on time. If those last blanks had come in I would have had to go down to the wire to get them out in time. When I do their work I have to drop every one else just to get their work out on time.

On deposits if I am supplying material and the job has any value I allways get a 50% deposit. NO EXEPTIONS.

Mike Null
08-31-2008, 8:20 AM
James

In addition to my previous comments I doubt that you can charge them unless you have a contract specifying quantity terms and penalties. Without that their AP dept. will sit on the invoice until they're ready to pay and then pay you for what you did, not what you expected to do.

Scott Shepherd
08-31-2008, 8:48 AM
Chalk it up to a life lesson is my opinion. We all make mistakes, some are little things we never anticipated. It's the "we don't know what we don't know" syndrome. Knowing all of this now probably better prepares you for the next time this type of situation presents itself, where you can have a signed contract, clear pricing structures, etc.

I think I've noted it somewhere before, but I've seen one situation so many times in previous jobs that it really sticks in my brain. People ask you to give them a price for 500 pieces. You give them the price and then they place an order for 10. I learned that trick a long time ago and it's saved me a time or two in the laser business. It makes me be very clear about pricing for quantity discounts when I believe I need to be.

That's one situation, the other is always "If this works out well, there will be 1000's of these for you to do", which is a ploy to get the cost down on that prototype you'll be working on, and it many cases, you'll never hear from or see that person again. If you search them out, you'll find they are having the parts made elsewhere and you never got the chance to even quote them.

Just my experiences (not so much in the laser world, but in manufacturing in general).

Rodne Gold
08-31-2008, 11:39 AM
There is another side , if you scheduled the full amt and turned other jobs away and never , due to your no fault , got the material ...well then I wouldnt be so happy with the customer and perhaps up the price and explain to em that you have lost out....especially as if you say , they are customers who you might not want to deal with anymore due to their continual buggerin' you around.....It's like booking your time for a set period and then cutting the time short.
What I do with such customers is give a FOAD price , either scare em off with a high price and they FO or if they accept the job , there is so much fat built in , its a pleasure to put up with their nonsense.

Rodne Gold
08-31-2008, 11:47 AM
If you are asked to quote on 1000 and get an order for 10 , we charge a very high price for the 10 and when the customer moans , we tell em that when they place the 990 to make up the balance of the 1000 you initially quoted on , you will credit them the difference.
If they walk off in a huff , they never were going to order the 1000 , and lied to you right at word go...a customer you dont want.

James Stokes
08-31-2008, 12:06 PM
One other thing on this job, I never gave them a firm price. It was a"probably about" price. I can not say I will not make money on this job. I will regardless of what I charge. I did have to hire help to get it done which I do not generally do. I had about $100 dollars worth of tape then about $60 dollars in paint. The $2000 dollars I am not making is not really a big deal. I do have to replace my laser tube which is $5000 and I spent about $1800 on power supplies and amplifiers just before this job. I did want to pay all of that from this job which it will do. It will not leave any thing left over which I did want. But I guess you do not get every thing.

Rodne Gold
08-31-2008, 12:10 PM
Then up it to $17.50 and if they squeal , give it to em at $15.50 ......reluctantly........

David Dustin
08-31-2008, 1:32 PM
Well I have yet to do any laser projects so take my advice with a grain of salt (My comments are based on my other business dealings, mainly with lawyers).

I try to spell everything out when I am contracted to do a project.
When asked for a quotation, I provide as detailed as possible.

When invoicing I provide a detailed list of the hours and expenses.
If I went over the original estimate, I choose to either give them a discount (if they are a really good repeat customer) or leave it in the bill.

I have been screwed by clients, particularly when they have requested changes (requiring redoing the animations) and expect the changes to be free. Now I give my legal clients a "letter of engagement" which lays everything out and when payments are due. Most of my lawyer clients like it.

In your case I think you have a point you can discuss, that the price was based on the qty.

Have you had any discussiongs with them?

Michael Kowalczyk
08-31-2008, 2:30 PM
I agree with many of you except that I think something was not taken into consideration. The Client "cancelled" the 180 when they were not delivered in a timely manner. To me that technically voids the quantity discount and it was not James' fault that they were not delivered on time. Although James should have put a deadline of material delivery to accomplish job on time.

Since you did not have to outlay anything for material and you are not stuck with any special inks or stuff, you can also let it go and chalk it up for experience.

I have some customers that say they want 500 units and that they want them delivered in 2 shipments. So I charge them the 250 unit price and if the other 250 are paid for and shipped with in 30 days they get credit for the 500 unit discount level. Like Rodne said many people want to see what your profit margins are by asking for a large quantity quote and then only taking a few to "test the market". Sometimes this is true but many times not so true.

Yes the golden rule would be nice but when they are irresponsible and there are no consequences they will continue to procrastinate.

Maybe next time you should lay out a 25, 100, 250, 500, 1000 price break schedule, set up fee, penalty for taking less than ordered after deposit is made and what ever else you need to cover, so that it is in writing that if they fail to take full delivery the price will be as follows:... plus any additional expenses incurred to meet deadline.

also Rush orders ALWAYS have a premium.

Mitchell Andrus
08-31-2008, 2:45 PM
I ALWAYS quote on a sliding scale starting at a quantity 1.

If you needed a price bump between the Q asked for and the Q actually passed to you, you should have said so up front. Now, you have zero basis for raising the price per piece.

Rodne Gold
08-31-2008, 7:31 PM
I wonder if the Co concerned would have accepted HIM short delivering 25% of the order without a fuss..........

Bill Cunningham
09-02-2008, 9:50 PM
Lifes too short to be bothered with a 'Royal-PITA' customer, regardless of how much money you can make.. When you lay awake at night wondering if their going to accept delivery, throw you some curves, nickle and dime you, pay you on time, or how many phone calls it's going to take to get paid, ..etc..etc.. etc.. it's time to wonder if you 'really' want to be the richest guy in the graveyard... If a customer keeps me awake at night, I don't need or want that customer.

James Stokes
09-02-2008, 10:13 PM
My question does not matter now, I recieved the rest of the material today. They said to go ahead and finish if I can. It will be tight getting the job done but I think I can. I will charge them the $12 each.

Mike Null
09-03-2008, 7:08 AM
Do you mean to say you've put us through all of this for nothing?

James Stokes
09-03-2008, 9:24 AM
Yup shore did.:)

Scott Erwin
09-03-2008, 12:40 PM
I agree with the masses....Sell them at $12 but put this in the back of your gray matter and the next job I would make sure the pricing had an inflation increase...say 20% or better...
A bad customer is still better than no customer...well most of the time.

Glad you got the rest of your material, now you can go back to work and pay off the replacement toys you got !! GOOD 4 U !!

Lon Schleining
09-03-2008, 2:10 PM
You mention this is not a new client and that you're somewhat used to their antics. In the future, just include a clause in your contract indicating different pricing for different quantities. IMHO unless you stipulate this in your contract or get prior approval for a change, you have no basis for upping your prices this late in the game. I would chalk it up to the learning curve and be more careful with wording my contract next time.

James Stokes
09-03-2008, 7:02 PM
With this job there was no contract. Also there was no firm price as stated before. I could bill it and I would get paid for it. Like I said I did basically the same job 2 weeks before and charged them $25 each. As for the customer, it would not bother me not to have them.