New Biz Needs Help with how to handle selling to retail, ship for them? renting laser

[Laura Lovell]

How much would you charge to store small inventory and handle shipping of items weekly for a company that will basically add my designs and products to their webstore and I will bill them weekly after I ship out the products? I am already charging them for engraving, and the website would charge a shipping and handling fee, but would I just raise the cost of my product price to them for each item or would I add that on somewhere else so it is not taxable somehow? It would cover the cost of my packaging, going to post office and packaging, buying boxes and addressing, labeling, tracking orders and possibly corresponding with customers to verify custom information.

Also what is the best way to charge me to use my brothers laser. It is not his main business, he bought to use to make extra cash on the side and to save himself the money it cost to get his parts he makes engraved with his business logo. I will be using it often for my business, we have thought about a percentage of sales? per item? or per minute? But If I am using laser for 5 mins and I there packing and changing design, I dont want to squabble about it. or set a timer every time I use laser. But I may only need to use the laser for 1 hour total and be in his shop while he is doing other work for a total of 5 hours. What is the most fair way to handle it?

Thanks!

[Kev Williams]

No clue on how much to charge or even why to charge, but as to 'not taxable', ANYTHING you sell to someone that they turn around and sell to someone else is non taxable. Only the end-buyer pays sales tax.

You and your brother need to figure out a fair-to-each-other price-per-hour for using his machine. When you agree on that, then agree on time increments; if you agree on $10 per hour, then 6 minute time blocks would cost you $1...

[John Lifer]

Several things to consider. One, volume. Is this one or 50 boxes a day? And cost of packaging can be considerable. If items are roughly the same size and will fit in a USPS flat rate box (assuming these things are over a pound each) that would be best and easiest way to work. Order boxes for free from the post office (pick up if you can, but you can order free) Add a bit for tape and whatever it costs for internal packaging. (bubble wrap ain't cheap) But simple kraft paper isn't bad. Depends on your product.
If usual shipping weight is under a pound, then adding your own box is going to be way cheaper than priority mail. I would time yourself boxing a few items and see how much you need to add based on your speed and the $ per hour you want to earn.

Rough charge for engraving is dollars per minute of laser time. You and your brother work out fee. Power isn't free, neither was his laser.

Oh, I wouldn't charge anything for storage unless it is covering you up and in your way. And it would be small flat fee.

How are they paying you? Check or CC? If CC, you have a 2 to 5% fee that you lose (maybe more depending on what your CC processor charges) take that into consideration.
And how fast? you bill once a week and they cut you a monthly check? or random when they want to.

And all this is done before tax. the company you are working for must add that in, not you.

[Mark Sipes]

How much would you charge to store small inventory and handle shipping of items weekly for a company that will basically add my designs and products to their webstore and I will bill them weekly after I ship out the products? I am already charging them for engraving, and the website would charge a shipping and handling fee, but would I just raise the cost of my product price to them for each item or would I add that on somewhere else so it is not taxable somehow? It would cover the cost of my packaging, going to post office and packaging, buying boxes and addressing, labeling, tracking orders and possibly corresponding with customers to verify custom information.

Also what is the best way to charge me to use my brothers laser. It is not his main business, he bought to use to make extra cash on the side and to save himself the money it cost to get his parts he makes engraved with his business logo. I will be using it often for my business, we have thought about a percentage of sales? per item? or per minute? But If I am using laser for 5 mins and I there packing and changing design, I dont want to squabble about it. or set a timer every time I use laser. But I may only need to use the laser for 1 hour total and be in his shop while he is doing other work for a total of 5 hours. What is the most fair way to handle it?

Thanks!

Laura I have two customers I have a wholesale agreement with.

One which I have inventory from that I use based on their engraving requirements. I have their UPS account number and bill as a third party. Which means I don't pay for the actual shipping and they get an accurate cost of the shipping. I do bill for my time to Engrave, package and deliver to UPS drop-off box/store. I do not deal with the customer, the "company" handles the taxes, invoicing, customer service, website etc.... You could do a flat rate with this deal based on your time/shipping product/label prep/travel. Or by orders depending on the quantity of each.

The other company I work with also handles the taxes, invoicing, customer service, website etc.... They list my products for a 70/30 profit split. I set the pricing and they handle the rest of the up front costs... website, orders, customer data, invoicing...etc. I file the shipping charge , the cost of shipping and handling, to the customer (it's a wash) I get a check monthly for my product sold, 70% cost + shipping.

Need to get a reseller certificate on file from your state so you are recognized as a wholesaler (tax exempt) for your product purchases, and a copy of those you wholesale to, since they are responsible to collect taxes that are due and reportable.

As for the rental of the laser, you need to ask yourself "is this a business or a hobby??" then proceed from that position. If a business, then complete a "Business Plan" and really look at your market and other potential customers in need for laser work. Don't try to undercut others in the field, you will lose.... If the laser breaks when you are using it are you responsible for repair? $$

Best of luck.