It seems like I've seen posts about this in the past but I can't seem to find them now.
I've had a company contact me and wants to guy some of my pieces in quantity. At this point I don't know what those numbers are. Before I give them a call I wanted to get some advise from you pros on whole sale pricing.
When you come up with a pricing scheme have it laid out price for a single item and then for 10 and then 20. This guy may be just trying to get you to give him a lower price and then say I want one to see how it looks but wants to pay you the price each at the 20 scheme. He takes the one and you never see him again.
DIY 4X4 Plasma/Router Table
Hypertherm PM65 Machine Torch
Drag Knife and Scribe
Miller Mig welder
13" metal lathe
Small Mill
Everlast PowerTig 255 EXT
I get calls on this all the time. They want bulk prices and when i ask how many do they consider bulk they say 5 i tell them bulk starts at 100 for me. I also get junk shops wanting to carry my items but they want them at 50% off. They always say well i am gonna buy at least 10 items. I say how much profit do you think is in my product? I tell them that i am not going to let someone make more money off of my product than i am.
Most places will expect to be able to sell your product at 2x what they pay for it....minimum. Don't be afraid to ask them for a several hundred dollar (or better yet several hundred pieces) at least for the first order. This gets rid of the tire kickers, and if they will order that much, you know they are a real business.
Good points all. That is exactly what I don't want to happen. I have done whole sale for some of my small items but they are wanted some bigger stuff. I wasn't sure where I should start a discount.
I get this all the time as well. Good points made above by all. Minimum order ( you have to decide what that is) and make them put up a deposit, that at least covers your material if not more. Balance due on receipt, ONLY if it's not something custom that I can't resell to someone else. If it's custom, 100% due before I get material. You have to watch out for the tire kickers, and I can tell you almost EVERYONE says they will order 50, or 100, or 10,000 but only really need 3, 25, 200 etc right now. They want you to give them the hookup price for the ones they want, and will likely never come back. You are also risking price exposure if you give them a large discount, because they will be reverse engineering your price into a per piece cost on a one off quote as well as a bulk quote.
As far as a discount percentage, I will usually do 5-10% for sheet level quantities, sometimes as much as 15% depending on the parts, the quantities ordered and the material etc, as well as the overall price of the part. It really just comes down to how much time you save by cutting the entire sheet, as well as setting up for secondary operations ONCE, not every time you cut 3 or 5 etc. I have also found, that on items that require fabrication, I can usually save 20-30% on the fab time by basically assembly lining the items, instead of cut one, grind one, tack one, weld it out, grind it off / cleanup, finish it etc. I will run them in batches, depending on shop space required etc. It also helps to keep from getting too bored, as well as tired doing one thing 4,000 times in a row. If I batch them, and see how many I think I can do in say, 8 hours, then I can cut for an hour or two, grind / clean for 20-30 min, fit and tack up and then weld out (some jobs I fit and tack them all, then weld them all, some jobs I fit / tack, then weld before it comes off the table) for a couple hours, finish grind wherever it's easiest, then if needed prep / paint or send to powder etc. Helps keep from getting any one set of muscles too pissed off and not being able to get out of bed the next day. Depending on the customer, as well as their needs and expectations, I will work on them as needed to meet the customers needs. Some people order 6 sheets of something, but only need one sheet right away. I will get one out the door asap, then do one every third day etc until it's done. Same with fab items, I will usually leave plenty of wiggle room on a delivery date, so I can still take care of other stuff as it comes in and keep everyone happy. If nothing else comes in, I cut whats on the board until I get it all done. I rarely go to the shop with nothing on the board these days.
As far as retailers that want to buy items and be able to mark them up, I can tell you most places make more money on smaller items than they do with larger items. You can turn a $2 cost part into a $6-8 sale pretty quick, but you can't turn a $750 firepit into a $3000 firepit. Well, you could, but won't sell any. Now, $750 to $850/900, sure. I try to feel them out, and come up with a solution that meets their needs and still makes me good money. I have signed contracts and non disclosure agreements with a few places. I make a few unique to them items, and price them so I make good money, and they can mark them up and still sell them for a fair price, but make money as well. I give them exclusive rights (usually within a 150 mile trade area) and they agree to buy a certain quantity per quarter, with the option to increase or decrease as needed, but they have a quarterly minimum that has to be met every quarter or the agreement is null and void after that. I don't make as much on each item a I would on a job that walked in off the street, however it's pretty much guaranteed revenue, and I don't have to jack with a customer that I have to hold their hand, send 5 proofs and revise a drawing 5 times, convince them to leave once they have paid (yes I KNOW ALL THIS STUFF IS COOL now GO AWAY I am trying to make a living) etc. I can also usually cut their stuff a little at a time, for instance when I have 3/4 of a sheet nested out, and nothing else paying, I would rather fill it up, and cut something for a contract, at a slightly reduced profit, and unload a skeleton into the scrap pile, instead of unloading and re-racking a 1/4 sheet of steel and keeping up with it, and trying to dig it back out when I have a small job come in, reload it, etc. This is also the reason I try to cut when I have a full sheet. If a customer wants the good price and can wait, I cut 1/4" when the sheet is full, or at least 75%, same with 10g, 14g etc. If they are in a hurry, that's another price. Might cut each gauge twice in one week, might go 10 days and not cut one or the other, just depends on what's coming through the door.
I don't know if this helps or not, just how I do it and some of the things I take into consideration.
muzza wrote:Some good advice there Shane, most of which I've found works for me.
Love this one, Gold, and so true.
Shane Warnick wrote: (yes I KNOW ALL THIS STUFF IS COOL now GO AWAY I am trying to make a living)
Shane
Murray
That's funny. I haven't done any business in this game yet, but a few weeks ago I was working with a guy, and when he found out I did cnc cutting, he wanted an entrance sign done for his property.
His main concern was asking if he could be there when the machine cuts it out
Keith.
2500 x 1500 water table
Powermax 1250 & Duramax torch (because of the new $$$$ync system, will buy Thermal Dynamics next)
LinuxCNC
Sheetcam
Alibre Design 3D solid modelling
Coreldraw 2019
I finally had to get a hard ass wooden stool. When I get someone that just won't friggin leave, I put the stool over to the side, and tell them, if you are going to camp out you can ride the stool, but if you can't stay on the stool you have to get out. Most of them take the hint, but a few will sit there getting waffle ass for an hour or two before they cry uncle and give it up.
I will also start grinding, and make them wear this REALLY HOT hood / face shield I have, that has a sweatband that has NEVER been off, much less washed. It smells like kimchi (rotten cabbage and fish heads) and they will usually put it on, but after a few minutes of watching me just grind, and sweating in and smelling that nasty hood / shield, they excuse themselves.
Shane Warnick wrote:I finally had to get a hard ass wooden stool. When I get someone that just won't friggin leave, I put the stool over to the side, and tell them, if you are going to camp out you can ride the stool, but if you can't stay on the stool you have to get out. Most of them take the hint, but a few will sit there getting waffle ass for an hour or two before they cry uncle and give it up.
I will also start grinding, and make them wear this REALLY HOT hood / face shield I have, that has a sweatband that has NEVER been off, much less washed. It smells like kimchi (rotten cabbage and fish heads) and they will usually put it on, but after a few minutes of watching me just grind, and sweating in and smelling that nasty hood / shield, they excuse themselves.
Shane
LOL you are better than me i don't let anyone even come to my shop because its at my house. I have a lot of people that want to just come by and look at what i am doing. I had one guy just show up after i told him i don't let people in my shop
lets just say he wont make that mistake again.
I sell to about 35 stores. Tell them a high number first and see what they say. Wholesaling metal art is tough because of all the work that goes into each piece, but it keeps the money rolling in.
