Thoughts on Minimum Charge and Minimum Quantity

[John Kleiber]

I did a couple searches regarding "minimum charge" and at least for the aforementioned phrase the last post was back in the summer of 2016.

I decided to share some thoughts I've had of late and in turn ask others the same regarding minimum charge and minimum quantity.

Currently our minimum is $45.00. If a customer walks in with a single knife to have engraved, its $45.00. However, I've also charged $65.00 for other engraving that takes the same amount of time or less, truth be told.

As for quantity, to use stainless cups for example, 25+ get my attention. Less than that, when I figure in setup and the back and forth with emails with the customer, it's just not worth it.

In addition, I have become the company of "No". In other words, there was a time I would engrave everything. However, as I look back, it served as a great exercise in discovering what I did not want to engrave. As a result, I say "No, but thank you, that's something we've done in the past however we primarily focus on (fill in the blank)". In short, saying "No" to unprofitable jobs has translated into "Yes" for the profitable ones.

Setup fee I must admit I have been a little wishy-washy on. Setup of $35.00 usually kicks in on lower qty. However on large quantity orders its baked into the cake. Setup may be mute though with a higher minimum charge.

My thoughts in a nutshell going forward;

Raise the Minimum Charge to $65.00
Institute a minimum qty on more than just cups.
Say "No" even more often.

-John

[Mike Null]

John
I've commented on this on more than one occasion. My minimum price is kind of a moving target as I assess my objectives and capabilities. I have known for some time that I don't want retail business. I am home based and don't want the traffic. My commercial business continues to grow and I think I've grown as much as I want to. I mentioned in an earlier post that I scrapped the idea of a fiber machine because I didn't want the easy gun and knife business I could get with it.
At this point my minimum is $25 and I may go to $30 but some of the business I like to do has a fairly high unit volume but low unit price so I don't want to discourage people who want to try two or three pieces but may need a hundred later on. I've turned away 2 or 3 retail orders this week including one for multiple bench markers. It may be that weeding out customers might serve better than an excessive minimum.
I've also decided that I'm going to fire one long time customer because I have to ask 3 or 4 times for my money. He always pays but I'm tired of the aggravation.

I rarely use set up charges unless I actually have more than a normal amount of set up.

[Joe Pelonio]

My current work is repeats for the same few customer, so no setup involved. This weekend, for example, I'm cutting 2,000 pieces of the same item and already have it set up from the last run. Any time I have to do artwork, other than simple lettering, it's based on the estimated time it will take, at $100/hour. Usually it's between $50-100. I don't discount it for quantity, I just roll it into the price per piece, so next time the price is lower if no changes.

[Robert Bonenfant]

Hey John,

I would say go for it - If there is alot of work in your area than increase your minimum price. Its a business and one of your main goals is probably to make more profit, theirs only so many work hours in the day so you have to get the most out of each hour. I dont even waste time with retail customers anymore - The constant back and forth for a $100 is worthless to me. We do strictly commercial customers only (Bulk items) This works in my area and might not work as well in others. If you find business sales starts to fall scale back your minimum price and advertise a bit and boom no harm done.

Let us know How it Turns out

[John Bronleewe]

Great post and I agree wholeheartedly. Throughout the work week I'm heard saying "You've got to pay me to get off my ." Of course I don't actually say that to customers, but they know that. Mostly because we're not ashamed to charge for our time and we have all sorts of minimums depending on the product and quantity. Saying NO very definitively has been one of the ways I get and have time for the customers I want and need. I've worked for people in the past that say yes to everything and then they wonder why they have no time and their customers have no money. Customers that I even get the feeling I'll regret dealing with? I price them out of being able to work with us. At least then it'll be worth it if they insist on sticking with us. Do good work and pay attention to your customers and you'll be just fine. At least that's what my wife and I have seen with our company.

I don't post often so I'll add that I love this forum and some of the helpful folks here.

[Kev Williams]

Most of my customers are businesses, and while I could charge more, I charge what I'm comfortable with. My minimum? I quote purely on time estimates, plus material if there's any involved. I routinely charge $8 to laser etch names on knife blades. Why not more? I can do a single knife while on my way upstairs to make a cup of coffee, takes 5 minutes or less-- $8 in 5 minutes is $96 an hour with absolutely no overhead involved. If there's 6 knives, I may charge $6 each, and be all done in about 12 minutes-- that works out to $180 an hour. I'm fine with that. And that's my 'street' jobs. Businesses I'm a bit pricier with. I could charge more for my street jobs, but really, I don't have to- It's rare that a street customer doesn't pay me MORE than I asked for

[Ross Moshinsky]

Setting minimum pricing and quantities is very subjective.
There are various factors that go into establishing policy. Home based companies have enormous advantages when it comes to the risk associated with running a business. Businesses that are operated by part time, semi retired or pensioners also have the ability to pick and choose jobs and set pricing according to their needs. Independence is a wonderful thing. No competition or limited competition also allows for a take it or leave it posture,
Businesses that must pay rent, insurance etc, might have to eat crow and take jobs that are less profitable or attractive in order to meet their monthly expenses. Competition can also play a big role in setting the policy in more populated areas.
Thus in conclusion:
Do what you can and enjoy it if you can be aggressive in your pricing and selective in jobs that you accept. Not everyone is in the same boat.

[Tim Bateson]

Agree that prices are somewhat subjective. For me it depends if I really want the job, difficulty, quantity. Even the mood I'm in. I love when someone calls and all I get is: "How much to engrave something?". Engraving something? Just a bit vague for a quote. That person usually gets quoted a higher cost. I do have guidelines I work from, but my pricing does vary from customer to customer. Mostly because I am in the service industry not retail. Nearly every job is just a bit different than the previous. So quoting a per hour $, or a square inch $, or a per letter $, doesn't make much sense for my business. I charge by the job & like I said, nearly every job is different.

I too have raised and lowered my minimum charges. Depends how busy I am & if I want the job. I've quoted outrageous prices on jobs I didn't really want and got the job anyway. I've quoted minimal prices and lost jobs because it was too much. I use to get upset when loosing a client. Not any more. My shop is nearly always backed up, so I can afford to be picky about my customers and what I charge.

[kyle bonnell]

My main business is plumbing. I have customers who I love and get along great with and I will give breaks to. Others are just a pain to deal with because of they want things done now and think I wait around all day for them to call me when their plumbing breaks. I've raised my pricing in this business on materials versus the labor rate. It seems to go over better with the client. As for people who take forever to pay. I think of them as slow pay = no pay so I end up not doing work for them in the future.

Since I've gotten my laser geared up I've got to think on how I will charge people and this thread has gotten me to think more on that subject.

[Bill Stearns]

Hey All
It’s always interesting reading ‘bout how you all establish which projects you’ll take-on, and those you won’t! (and, your reasons why.)


As a one-man retail/walk-in business my need for sales, all these years, has lead me to take-on just ‘bout anything ‘n everything I felt I could handle.(from a single gift-item to hundreds of the same item.) After ten years, I’m finally at a point where I’m reassessing ‘n redefining the “maximum quantity” of orders I’ll accept: based loosely on the amount of stress, or imposition, a customer, or project, imposes upon me.


Which means, as discussed above, I’m slowly, but surely, learning to say “No”. Best of all, I’m no longer gettin’ shook-up, if I find I’m losing a customer here, or there! (Especially those with stress-causing deadlines ‘n an obvious disregard for my need to turn a profit, or those who don’t pay on time.)


Guess I’m finally realizing, that while sales ‘n profits still drive the engine, my running a less stressful, less demanding, business is equally important, if not more so! And, that turning ‘way business, now ‘n then, well ... the world doesn’t come to a screeching halt! - Bill