Award Pricing Assistance Neded

[Tim Bateson]

I have an opportunity to gain some much needed commercial work, but am a bit stumped at pricing the work.
Situation: A company that sells awards has offered to partner with me. For my sales I’d get to purchase awards at wholesale prices. For their sales, the only cost I have is laser & setup time. All sounds good, right? Well, they need to compute laser services for their customers as part of the cost of award sales.
Now the real problem is they gave me a stack of catalogs with every imaginable award – hundreds of them. Some are simple that could be done in 2-4minutes. Others are so complex it would take hours just to do the setup. So what kind of a comprehensive pricing chart can I quote?
I’m considering 2 charts. The first would be a price per sq inch/mm for the simple or flat awards. The second would be priced higher per sq inch/mm for the more complex awards.

Thoughts, Suggestions?

Change - Oops - Spelled the Thread title wrong.

[Martin Boekers]

Tim, first maybe an obvious ?

aren't you buying awards wholesale already?

Is the group your dealing with a promotional products company looking for one ups or quantities?

It sounds like they might be an ASI distributor reseller, if they are a promotional product marketer make sure that the products that they want you to engrave are laserable as many products that are out there aren't.

I would consider a tiered system depending up complexity and time involve.

Rate them say "a" - "f" with "a" being for simple an less time involved, to "f" being highly complex.

Is your client repesenting other manufacturers? or do they manufacturer and/or import themselves?

I have purchased blanks from ASI resellers for certain items that have been hard to find or more expensive from the awards industry manufactors.

My shop stays busy with the engraving and sign business, so I have shied away from becoming an ASI reseller.

Membership is a few hundred dollars a year and actually not to bad for the access to easy searchable database of products. (thousands!)

Even in this economy there is still a decent market from promotional items.
So you might consider checking ASI out.
Marty

[Tim Bateson]

Martin, I should have said below wholesale and $0 for shipping. Definitely less then I’ve paid to-date.
They do 90-95% of their business with large corporations. They only buy from the manufacturers - no middle men.

I like your idea of a tiered system. The problem will be rating the volume of awards they offer.

Another thought just occurred to me (it happens); I could just base it on a % of the price of the award. As the more complex awards tend to be the priciest, this may simplify the task.

[Joe Pelonio]

I do this with a couple of wholesale customers, and I think yours wants too simple a pricing formula that can end up losing you money. We can pretty much estimate how long it will take for setup and engraving with most items,
but if you don't know how many lines of text, the fonts, and any graphics,
you cannot price it until you have the order. In cases where all are identical except the date and name, you can price once and keep it the same for future jobs of that same piece.

Beyond that though, I make them send me the artwork and at least a catalog page # to look at the award for a price before the job. It's just a quick e-mail and back. If the only way to get the job is a price chart, then pad it a bit to make up for the odd ones that take more time.

[Mike Null]

Tim

The first thing I would consider is how much buying from them really means to you. I would guess that your volume is quite low so the total you'd save would also be quite low.

Second, I would view them as a wholesale account and price my services accordingly. I believe you were on the right track with a per square inch rate which I would discount as much as 50% off my retail rate. But the set-up and art charge are another matter and while I would discount them it would not be a 50% discount by any means.

If you have to set-up all art does that mean you're responsible for mistakes?

Don't forget polishing and re-packaging.

Establish when you will be paid.

[Tim Bateson]

Thanks guys. It's good to know others have a similar arrangement.

I do have low volume for awards, but the pricing is a benefit for those I do need.

The payment schedule is a good point. One I’m going to bring up at our next meeting later this week.

Yes they would prefer to either have one price or a price set for every item – impossible to do. We did agree to the quickie email/phone call for me to lookup an item & quote it. In case this becomes the norm, I’ll record each quote on the catalog pages for future reference.

Also – For most orders, their graphics department will have all text and logos pre-set and emailed to me as a graphic. I toured their facility & the graphics department would be a dream come true. Every imaginable tool, clipart, photo available is just a mouse click away, all on wide screen 36in flat monitors. Sorry I’m drooling. They have worked with some of the Fortune 500 companies on their advertising campaigns, so they are very good at it.

[Dan Hintz]

Instead of tying quotes to page numbers, include the part # on the quote. Nothing says "confusion" like having a new catalog come out every year with a different set of page #s

[Tim Bateson]

Does this sound fair - Keeping in mind I have no award cost or shipping and very minimal setup. They will drop ship them to me, a high quality engravable ready image will me emailed to me, I just engrave, cleanup and deliver to a warehouse - 10minutes away.


$ Per Square Inch
Glass & Acrylic
Single Awards/One-Offs
$0.75
> 5 of Same Award
$0.55
Metal
$1.25
$1.00

[Tim Bateson]

I also plan to discount these stated prices if they provide an ample amount of work to me every month. The discounted prices would kick in after a set number of awards per month.

[Joe Pelonio]

I also plan to discount these stated prices if they provide an ample amount of work to me every month. The discounted prices would kick in after a set number of awards per month.

That's a good idea, they may tell you to expect $3,000/month in orders
but in fact only give 1/3 of that. When your pricing is based on high volume you need that work or your profits will suffer.

[Mike Null]

Tim

Those prices are higher than my retail prices. That's fine if you can get it.

With this account I think you'd all be happier if you established up front what the volume was expected to be in terms of the number of awards. Then set your pricing accordingly.

Talk to them as if they were your partner and try to find a price agreeable to both of you. They are successful and know what engraving should cost. This shouldn't become a cat and mouse game.

They will not be able to quote without knowing what their real cost is.

If you want to give them a 5% volume rebate when they hit a specified level that might be a better approach but I don't think that is really necessary.

[Bill Cunningham]

I'd be wondering why a company with all that equipment and graphics stuff that according to them, sells a load of awards, and does a heap of business, doesn't 'have' a laser already.. If this came to me, I would probably be a 'tad' suspicious.. But then thats just my nature..

[Doug Bergstrom]

I agree with Bill - having done accounts like this in the past it usually heads down one of two roads. They have a short time need or project and it makes sense to outsource rather then buy the equipment or they are testing the market and will use you until there purchase level of service justifies the equipment purchase. We sell awards and the money is made on the award not the engraving. it is a combination of the two that make it worthwhile. i wouldn't laser only, but that is my opinion.

[Mark Winlund]

Pricing is always difficult. Many engravers yearn for a "formula" that makes it all easy. After doing this for 30 years, I can tell you that there is no magic formula. Reasons?

1) misconceptions on what you can do. "Why cant you do a color photo on the laser?

2) That much? You just press a button and out it comes!

3) I just need a few for prototypes....(for free)... when I start production, you'll get all of the work... we'll sell thousands!

4) here's my business card.... just copy the logo from that. It's in the upper left hand corner... can't you see it?

5) Were so big that our accounting department waits 120 days to pay you. If you don't like it, we'll find another engraver.

6) The person that took care of the awards was laid off last week. You will have to requote all of your regular jobs. Oh, and by the way, they have to be approved by all three executive commitees, and they expect a 30% reduction in prices... (this has happened to me several times in the last two months)

7) We made a mistake spelling the names on 4 of the awards. Please redo them (at your expense!)

8) we're going to give certificates to Burger King this year instead of plaques. (actually happened!)


I could come up with more... but it's too depressing. We have seen a huge fall off in business since the "great depression of 2008" started. I am sure glad that the equipment is all paid for. Working out of home now.

Mark

[Frank Corker]

Jeez Mark I have had almost the exact same things happen to me. Sigh