Which option would you give him?

[Trey Tull]

I had someone ask me this and I gave them my answer but I am curious how you would handle it.

A company contacts you and wants a quote for engraving some widget. They want 20,000 widgets, for you to source the widgets and deliver the finished product to them. You have done your due diligence and the company is real, not just some dude wanting plates and cups for his birthday. The widgets cannot be used by anyone else and they wouldn't make good fire kindling. Oh yea, the widgets alone are going to be north of $50,000. Engraving time would be around 420hrs alone and delivery time is 1 month.

Given those parameters, the total bill is going to be pretty steep, so which one of the four below would you choose and why?

1. Do you, in your quote, state that payment in full has to be made before work will begin?
2. Do you wait for them to ask for payment terms?
3. Do you give them normal net 30 or 60?
4. Other

I told him that given those parameters, I would go with option 1. I don't have an extra $50k+ to tie up in materials, for one job. Lord help us both if something went south with the deal....that would stink!

[Patrick Gardner]

Out of those options, #1 is the only safe bet. You might could suggest 1/2 up front, 1/2 on delivery. If that is doable.

[Grant Carson]

Option 1 would be nice, but that's putting all of the risk on them. I doubt most companies would be ok with this. I would split the cost into two buckets; the materials, and the service. I assume you're a service oriented company, not a sourcing company. You're only sourcing the blanks to help them out. I would require the full cost of materials upfront. For the remaining balance, I would do your normal payment terms. This way, the risk is shared. They're not going to just leave $50k worth of material at your place. But at the same time, this requires you to do your job before they give you the money for the service. This makes the most sense to me, and is the most common way of handling these situations in my experience.

[Bill George]

I get a lot of those, 99% of the time all they want is a price they have no intention of having you do the work. Have them send you widget to look at and do a trial job before I priced anything out. Grant has posted the right way.

[Gary Hair]

I get a lot of those, 99% of the time all they want is a price they have no intention of having you do the work. Have them send you widget to look at and do a trial job before I priced anything out. Grant has posted the right way.

Or they want a quote for 20,000 widgets and then expect that price on their first order of 100 and the assurance that the other 19,900 will be ordered immediately after the first order...

I would ask for 100% of the material cost and 50% of the labor cost up front. At least if they flake on the final payment you would only be out time and not money. Oh, and the final payment would be due prior to shipment or pickup of parts.

[Trey Tull]

These are all great points guys. I will show him this thread or pass along the info. My experience is limited but his experience is even more limited. I knew some of you more experienced guys would have some great advice. If anyone else has anything else to add, please feel free.

[Gary Hair]

Let me know if I can help if you get this Trey, I'm not too far from you so logistics would be pretty simple.

[Kev Williams]

for those working 40 hours a week, which would include your machine I suspect- 420 hours of machine time alone is 10-1/2 weeks! Cut it in half and you're up to 80 hours a week, and your still not going to make the 4 week due date by 9 days or so...

In the 53 years I've watched and been a part of this business, NEVER has a company requested we spend our money buying their parts to engrave. For one thing, it's ALWAYS cheaper for the end user to buy direct because the 3rd party has to mark up the price....

I don't think this is a scam, what it sounds like to me is simple price-checking. This company is likely going to buy their own widgets and the equipment to engrave them, but the budget department wants a cost analysis first to see if the extra machinery and manpower is economically viable. I've been thru this scenario before, but the companies were up-front about it...

[Mike Null]

I had a 5000 piece deal where I purchased the materials and did the engraving on my tab--but they were a regular customer and I didn't think twice. On your deal they'd have to come up with at least the material money.

[Gary Hair]

40 hours per week? are you down to half days Kev?

for those working 40 hours a week, which would include your machine I suspect- 420 hours of machine time alone is 10-1/2 weeks! Cut it in half and you're up to 80 hours a week, and your still not going to make the 4 week due date by 9 days or so...

In the 53 years I've watched and been a part of this business, NEVER has a company requested we spend our money buying their parts to engrave. For one thing, it's ALWAYS cheaper for the end user to buy direct because the 3rd party has to mark up the price....

I don't think this is a scam, what it sounds like to me is simple price-checking. This company is likely going to buy their own widgets and the equipment to engrave them, but the budget department wants a cost analysis first to see if the extra machinery and manpower is economically viable. I've been thru this scenario before, but the companies were up-front about it...

[Trey Tull]

40hrs a week is funny.....good one Kev.

[John Lifer]

Yep, price shopping or just don't have any idea what they are doing. Walk don't run. Just say'n. Or get 100% up front.
And make sure you specify YOUR processing time and the delivery time - from RECEIPT of the Parts. Not from yesterday.....

[Robert Engel]

Option 1 is not feasible. You can't demand payment for something not done yet.

They should buy the widgets and send them to you for engraving.

If they won't do that the best you can hope for is a deposit that covers materials. But 10-15% is pretty common which probably won't cover it.

Or you do what a lot of businesses do - borrow the money against a line of credit.

[Mike Null]

In the engraving business it is not uncommon to demand payment in advance of doing the job.

[Bert Kemp]

Kev's 40 hour week is Monday and most of Tuesday