Full Version: Set up charges
From: Vicky (ANDERI) [#15]
12 Apr 2007
To: Stunt Engraver (DGL) [#14] 13 Apr 2007
From: Dave Jones (DAVERJ) [#16]
13 Apr 2007
To: Stunt Engraver (DGL) [#12] 13 Apr 2007
It may depend on the type of customer, or the type of business, but a lot of the time when I give customers an estimate that covers a range, they seem to only hear the low number in the range.
For example if I say something will cost $75-$100 and it ends up costing $100, they often say "but I thought you said it would be $75?"
From: Stunt Engraver (DGL) [#17]
13 Apr 2007
To: Vicky (ANDERI) [#15] 13 Apr 2007
Vicky,
My customer base is comprised mainly of people I've been working with for years. This person was one of that group and I've never had a problem getting paid promptly.
His payments for the last few transactions, were increasingly getting further away from my delivery date. There was a pattern emerging.
I'm a laid back guy. My customers know and appreciate that.
It's when they see my demeanor as a weakness or a reason to move me to the "pay whenever" pile, that I occasionally have to step out of character and let them know I'm not the person to move to the back burner.
With new customers, I get deposits if there are materials to buy and I get paid at the time of delivery.
EDITED: 13 Apr 2007 by DGL
From: Stunt Engraver (DGL) [#18]
13 Apr 2007
To: Dave Jones (DAVERJ) [#16] 13 Apr 2007
It's true; people have selective hearing. :-)
I usually have an exact quote for my work. It's when I come across an unknown, where I have no idea how long a job will take, that I give a price range.
If it's an unknown to me, chances are it's unknown to most engravers and I'm their last hope for getting the job done.
I usually get my price or get out of a tedious task. Either is fine.
From: Vicky (ANDERI) [#19]
13 Apr 2007
To: Stunt Engraver (DGL) [#17] 13 Apr 2007
Maybe I'm just not tough enough. :-$
I find that large-ish corporations don't have an issue with set-up fees, because they're used to them. The individual or smaller companies, though, balk at them. As a result, I've gotten into the habit of working them into the overall price so the customer doesn't realize they're paying for my set-up time.
Deposits are the same deal. Large companies are OK with them. Smaller companies or individuals don't like putting money out up front. They want to see the final product before they pay for it. This is becoming a bit of an issue for me. I can ill-afford to turn away customers right now, but I can't afford to chase down the deadbeats, either. What's a girl to do? :/
From: Stunt Engraver (DGL) [#20]
13 Apr 2007
To: Vicky (ANDERI) [#19] 13 Apr 2007
Building a set up fee into your price is a good idea. You still get your money, and the customer won't feel they're being loaded-up with ala carte charges.
When people balk at a deposit, (when a job requires some fairly expensive materials etc.), that's a red flag that you'll have a tough time getting paid at all.
I wouldn't work too hard at catering to those types.
It's true, that not many people can afford to turn work away, which is exactly the time to stick to your guns!
Years ago, I fell into the trap of thinking when times got tough, I'd get more customers by being less expensive than others.
Guess what? That not only led to poor-paying work, but didn't gain the respect of the customer.
The goal is to make yourself indispensable. You're in demand, you're a professional and just like the bus systems, another customer will be by in 20 minutes.
That's the attitude you want to project.
That's what a girl should do. :-)
From: Harvey only (HARVEY-ONLY) [#21]
13 Apr 2007
To: Vicky (ANDERI) [#19] 13 Apr 2007
We occasionally get a bad response for a deposit but we stick to our guns. It is their job, and it is a guarantee that you get some costs back. Also the people who do not leave a deposit are the ones that will want you to re-do the job because they just had another idea.
It is sort of like refusing checks except from businesses that we know. The very few people that do not have cash or a credit card, and will only pay by check, matches the number of bad checks that we used to get. (Read that as the same people.)
People often forget to pick up items when they did not put half down. They do not want it anymore. Sometimes people do not pick up items that were fully paid for.
From: Mike (TOOCON) [#22]
14 Apr 2007
To: ALL
This is a most interesting thread and as a newbie I am fortunate indeed that you have bared your souls in dealing with this delima. With your insight and hindsight I hope to avoid some of the wallet wrenching heartaches that you have endured at sometime or other.
But that leads me to a general question to the group.
Given that there is no magical formula for pricing, has anyone at least come up with a generic tick off list that can be enclosed with or included as a customer's purchase order form ?
Would you share it, and invite others to suggest POSITIVE improvements ? It may help us individually and as a group.
Hopefully anything out of the ordinary can then be flagged and accounted for in calculating fair compensation for services rendered.
It might sound like a lame question, but again I'm just a newbie. B-)
From: Harvey only (HARVEY-ONLY) [#23]
14 Apr 2007
To: Mike (TOOCON) [#22] 14 Apr 2007
You need to make a good markup on the materials. If that is 3X or 10X depends on the product. (I have one that is 100X.) Usually the higher priced items have a lower markup, but it should still net you more than the lower priced ones at the higher markup. (Too easy to get trapped with this one.)
On plaques and some awards that usually have a lot of wording, we give 50, 75, or 100 letters in the price. $.22 per letter after that. (Tremendous resistance to $.25, but no resistance at $.22)
On items that get a few lines of engraving usually 1 line is free, each additional line is $4. It used to be $3 and there was no resistance to the change, go figure.
A few items like a 4" heart come with three lines. (They have been added into the price already at the $3 per line.)
Some items that often get sold without engraving, there is no free engraving. Card cases, brass keychains, compacts, and pens are among these items.
If you think I have this all together, you are so wrong. There is still a lot of gut wrenching indecision involved.
From: Dee (DEENA-ONLY) [#24]
14 Apr 2007
To: Mike (TOOCON) [#22] 14 Apr 2007
Mike,
Are you looking for info on how we price or are you looking for the form we use when customer's bring items in?
Dee
From: gt350ed [#25]
14 Apr 2007
To: Vicky (ANDERI) [#19] 15 Apr 2007
I have absolutely no problem doing this based, primarily, on the fact that what we (and you) do is CUSTOM work.
Of all those that come thru our doors, I would say that less than 5% of our transactions are such that we wait to get paid upon delivery.
From your description of large versus small companies, it's my feeling that it's their lack of real world sophistication that cause the smaller fish to balk.
I assure you that if you have a firm policy, posted or otherwise, and stick to your guns, they'll come around. Particularly if your work, products and service are the very best among your competition.
From: Mike (TOOCON) [#26]
14 Apr 2007
To: Dee (DEENA-ONLY) [#24] 15 Apr 2007
Being a newbie, - Yes and Yes. B-)
Actually the question was related to the customer form to be filled in when either the client buys in house and has it serviced (engrave or sublimated) or if the item(s) was purchased elsewhere.
Also would two different forms be appropriate., one for in house purchases and one for customer supplied items ?
If anyone has a sample blank form I would appreciate a copy. We plan to focus on laser engraving and OEM Laser Transfers.
If I get a good response I'll make up a composite model and post if for anyone who may need one to use or as a guide.
Scan it in JPG, PDF, TIF, Doc, XML or TXT formats, my computer will chew on anything. :O)
Thanks for replying Dee.
From: Harvey only (HARVEY-ONLY) [#27]
15 Apr 2007
To: Mike (TOOCON) [#26] 15 Apr 2007
I use a very generic form for items I stock, more for the training of new people to force them to get all of the information. Often we use sticky pads.
As for customer's own forms, I have posted one in Corel format a long time ago. I have a slightly updated one that I will post during the week that is on my office computer. I also believe that Dave Takes posted a full page customer's own form, mine is a half page.
From: ACJ (LADYCUTTER) [#28]
15 Apr 2007
To: ALL
It may be just a matter of semantics, but I have trouble with understanding the difference between setup charges and design charges. I thought setup was getting the total design to fit properly on whatever you are engraving; and design was touching up or creating logos and deciding of placement of text, etc. However, it seems that most setup requires some, if not a lot, of decisions re placement, font size, etc. So does one charge cover all? Or should there still be 2 charges?
Also, how do you handle the people that say, “how much would it cost to engrave ….” This usually happens to me when I am telling some one about what I do and I almost always quote way too low. Recently I was talking to someone and he asked how much to engrave a 8 x 10 photo on glass. I probably should have said $200. Instead I said “$80-100 but don’t hold me to that because I would need to see the photo.” I was very unhappy with this response!
Do any of you waiver like this??
From: Laser Image (LASER_IMAGE) [#29]
15 Apr 2007
To: ACJ (LADYCUTTER) [#28] 15 Apr 2007
My standard reply to a question like that is "I'll have to see the image before I can even give you a ballpark estimate. That is too important of a (fill in the blank) for me to give you a wild guess".
If they press me for an answer I'll sometimes revert to a response I had when I was a financial advisor... "let's say you called your doctor up and told him you didn't feel well and wanted to know what he would prescribe to make you feel better", "he would ask you to come in to his office for a visit so he could gather enough information to make a proper diagnosis, wouldn't he/she?". "I know this is slightly different, but I still need all of the information to give you a proper estimate".
Works almost all of the time - the only time it doesn't work is when someone is just fishing for something to talk about and have no intention of actually having you do any work. So either way you win.
Gary
From: ACJ (LADYCUTTER) [#30]
15 Apr 2007
To: Laser Image (LASER_IMAGE) [#29] 15 Apr 2007
From: logojohn [#31]
16 Apr 2007
To: ACJ (LADYCUTTER) [#28] 16 Apr 2007
A setup charge to us has always meant physically setting up a jig to hold difficult items since they have to be tigtly clamped on the rotary and care is needed not to scratch or dent them.
Sometimes even if it is straight forward it takes time to raise the bridge, install clamps or vice, figure positioning and testing with a plex overlay on customer items.
It might rarely apply to laser items if special postioning or care was needed for placement.
The setup charge is applied once for each time the order is done but only once per like items.
Our digitizing or art charges are for the artwork prep or re-tracing logos.
It is a one time charge and is not charged to use it again later.
The basic layout prep is not charged separately as it is included in the per letter or logo run charge. On rare occasions if they are trying to match an exact layout or something complex we may add it as an art charge.
From: PenMan [#32]
16 Apr 2007
To: ALL
I've been reading this thread and so far there are not really any specifics so, I would like an example of how you price.
Let's take a simple wood plaque for example. How would you price it including laser engraving? Let's say the plaque costs you $4.00 wholesale (yeah, it's a small plaque). The customer wants it laser engraved with text only, no graphics. Simple job. What do you consider in pricing and what would your final price be? I'll even provide the text. "yada yada yada club recognizes its team captain Joe Bob for his outstanding yada yada yada 2007". I'm trying to find out how most people mark up the product, how much they charge to set up or design the text, and how much they charge to engrave it. I know that adding a logo or graphics can really change things but for a simple text only job, how would you price it?
From: Harvey only (HARVEY-ONLY) [#33]
16 Apr 2007
To: PenMan [#32] 16 Apr 2007
Like all estimates, even that one is a tough one.
That being said, I used to try to figure out how much to charge by laser time, and it almost always came out below my rotary engraving charge.
What I do now is mark up the board at least 3X. Calculate $0.22 per letter, (trying not to let the customer see what I am doing), and almost always come up with a fair price that the customer and I can agree on.
If it is very few letters you may have to add about $10 just to cover the setup of the piece in the laser and the layout, at $2 per minute. (Basically a 100 letter minimum letter charge, works every time, and does not cost me money to do the job.)
From: Ed (EBERTRAND) [#34]
16 Apr 2007
To: PenMan [#32] 16 Apr 2007
$27.15
Plaque $4.00
Shipping .545
Landed Cost $4.545 x 70% Mark Up = Board Selling Price $15.15
+ $12.00 for laser.
Ed
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