Full Version: Ad Specialties
From: Pete (AWARDMASTERS) [#15]
16 Feb 2005
To: LaZerDude (C_BURKE) [#14] 17 Feb 2005
We require full payment upfront with the order. We will make minor exceptions for odds and ends like over/under runs or other things that may come up when we do not have enough information to know what the final charge will be. We have lost sales because of this policy, but not many, and we don't have to sweat cash flow or the hassle of collecting money. Most companies that are willing to order from you are willing to pay you up front. If you are more comfortable with a 50% deposit, I see nothing wrong with that approach.
There will be many different opinions concerning payment, down payments,etc. I, personally, long ago grew tired of collecting money after I had paid for the product. I just do not do it anymore. We always try to treat the customer with respect and provide excellent service and have not really had a problem with many companies about payment.
From: Stunt Engraver (DGL) [#16]
16 Feb 2005
To: Pete (AWARDMASTERS) [#15] 16 Feb 2005
Pete,
If a customer balks about 50% down, for an order of considerable expense, I get VERY suspicious.
Q: If you can't get the 50% up-front, what are your chances of getting anything when the job is finished?
A: Very slim
David "The Stunt Engraver" Lavaneri
DGL Engraving
Port Hueneme, CA
From: Pete (AWARDMASTERS) [#17]
16 Feb 2005
To: Stunt Engraver (DGL) [#16] 16 Feb 2005
I agree. That coupled with the fact that almost all of our business is done on the internet makes the "collect first, produce later" policy a much safer approach.
From: Jim (RETAIL74) [#18]
16 Feb 2005
To: Stunt Engraver (DGL) [#16] 16 Feb 2005
I see no problem asking for a 50% deposit and the balance due upon completion. If I go to a store in almost every other industry I must pay for the things I take up front. That should be the same with awards or promotional products.
Since I sell a lot of finished goods, ie. caps, shirts, and sweatshirts, customers know that they need to pay before they receive finished products. If you have a FIRM payment policy, it should never be an issue.
Every customer that I have gets terms from their credit card company. If their bank will not give them terms, then why should I?
Just an idea...If you have very good customers who take a while for payment. Give them a 2% to 5% discount for pre-payment. It will improve your cash-flow. Cash is King.
Jim
From: Stunt Engraver (DGL) [#19]
16 Feb 2005
To: Jim (RETAIL74) [#18] 17 Feb 2005
Jim,
Makes perfect sense to me. Thank you for the solid words of wisdom.
David "The Stunt Engraver" Lavaneri
DGL Engraving
Port Hueneme, CA
From: LaZerDude (C_BURKE) [#20]
17 Feb 2005
To: ALL
Thanks everyone for your input. It makes sense to me, and seems that it would prevent "those" cash flow problems.
Chuck
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Message 828.22 was deleted
From: Engravin' Dave (DATAKES) [#23]
17 Feb 2005
To: logojohn [#20] 17 Feb 2005
Logojohn,
I have to apologize for my big blunder. I somehow deleted your last post under this heading after reading it. I meant to select reply and I must have selected the delete button.
Fortunately your post was not a long one, but I was replying to add to your valuable comments about about high-volume ad specialty clients.
You indicated that some high-volume clients will place orders in the $20,000 to $100,000 range. I also agree that these are the same customers who have the leverage to demand not only nothing down, but also extended terms. As you said, that is the game they play.
I would have no problem giving high-volume customers zero-down terms, but at the same time, I would make sure to have a signed purchase order from them with detailed terms of the transaction and legal wording which binds payment. When getting into these numbers you really do need to cover yourself.
From: Rallyguy [#24]
17 Feb 2005
To: Engravin' Dave (DATAKES) [#23] 17 Feb 2005
You took the post right out of my fingers Dave.
I was going to mention that we normaly only take cash with order, but a newer niche that we have developed requires terms. Unfortunately the rules of the game are different with every new venture, but the reality and good fortune is that you still have the final word on what the rules are.
My suggestion to anyone considering terms is to always follow your instincts. If it feels wrong, it probably is.
Brian G.
From: LaZerDude (C_BURKE) [#25]
17 Feb 2005
To: ALL
Let me through another question into the mix.
How many people that have ad specialties as a side to their awards business, have been burnt?
Thanks
Chuck
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From: Engravin' Dave (DATAKES) [#27]
17 Feb 2005
To: logojohn [#26] 18 Feb 2005
Logojohn,
I am glad to hear that, I thought I was losing my mind. It all happened so quickly.
From: Pete (AWARDMASTERS) [#28]
17 Feb 2005
To: LaZerDude (C_BURKE) [#25] 17 Feb 2005
You run the risk of being burnt anytime that you finance large orders for your customer. If you think that being a Fortune 500 company makes it safe, then I ask can you say Enron? Can you say WorldCom?
Each to his own, but I will always forgo the business before I will risk $50,000 on any company reputation. You will not get burned if you keep your hand out of the fire. I would rather get my small $500 to $2500+ plus orders and have them paid for up front.
I have a friend here in Houston that Enron owed about $20000. I say owed because he will never see any of it. Enron was the darling of Houston business. Almost anyone would have trusted them to be good for their debt.
Message 828.29 was deleted
From: Harvey only (HARVEY-ONLY) [#30]
18 Feb 2005
To: Pete (AWARDMASTERS) [#28] 18 Feb 2005
We deal with a Union that is ruled by the state laws. They are not allowed to pay for an item until it is in hand. So far so good.
One company I worked used a 'Factor' I believe it was called. On the big orders they used them. For a percentage, they paid the bill immediately and then were responsible for collecting the bill. If they would not take on that bill, it was too risky for us to do without payment in advance.
From: Liberty [#31]
23 Feb 2005
To: Pete (AWARDMASTERS) [#13] 24 Feb 2005
We used ASI services the first year in the Ad Specialty business. After a year we switched to a competitor to save money. The third year and since we are back with ASI. Their products, overall, are much better. The new ESP Online is great and you won;t have the same problems with outdated materials. With a mouse click we pull up the suppliers catalog pages from ACE so it has saved us filing all of the catalogs for reference. They aren't cheap by any stretch of the imagination but as our sales of Ad Specialties has increased we find it invaluable.
For us as well, promotional products are the top grossing line but the lowest net line due to market pressures but there is still room to stand out with exceptional service.
We've never had a problem getting the deposit up front from all but a few customers. Purchase orders from the governments are standard rule and we follow pretty strict credit policies for those that insist on terms. It's all just good business.
Great topic...
From: Rallyguy [#32]
24 Feb 2005
To: Liberty [#31] 24 Feb 2005
Would you mind telling me if you used Sage in the past, and if so, why it was something you gave up on? ASI's version of ESP is around $4,000 annualy, and you get a similar level of product all for around $500 through Sage.
We are a current ASI distributer, but have been considering switching to Sage. I would love to hear the long and short of why you went back if it will save us time and trouble in our decision making.
Thanks in advance,
Brian Genrich
Rallye Productions
1-800-236-2036
From: Liberty [#33]
24 Feb 2005
To: Rallyguy [#32] 24 Feb 2005
Brian,
My experience with Sage was a while ago, especially where technology is concerned. It was in 2002 that I last looked at Sage products so any comments should be with that taken into consideration.
On a positive note, the folks at Sage were always very helpful yet not at all "pushy." And since it has beena few years, I would recommend that anyone take a good look at all of the options. In fact, I just signed up for another demo of Sage's online product.
In a nutshell, here is why I chose ASI's products. I thought that the overall feel of their products, from the catalogs to the printout from Centerstage, had a far more polished look. The Sage catalogs looked like a quick copy and past job with no flow from page to page and I thought the product scans in the database were rough.
With that said, it is indeed difficult to compare prices. Our ASI package runs just under $4K a year but that gives us four users for the ESP online along with the internet products. It looks like a coparable package with Sage would be about $3K, give or take, and for the difference I thought the overall quality of ASI was worht it.
Now having said that, I am a little bothered that one of our primary suppliers, Norwood, is not including their products in the ASI Logomall. I also think that there are a few players on the fringe that have some neat products. In particular I think Smart Distributors has a good looking web package but a very, very limited supplier and product database.
Wouldn't it be nice to cut and paste the best of all of them into one package...
Mark
Liberty Sportswear & Awards
From: Rallyguy [#34]
24 Feb 2005
To: Liberty [#33] 24 Feb 2005
I guess our company approaches the promotional products differently than most. At this point we use them for jobs we get requests for that we can't manufacture ourselves, or that we can't be as efficient manufacturing. We haven't tried using sales materials from ASI, or pushing the products because we are pretty busy pushing the stuff we manufacture and retail ourselves. It is a nice option to have asi as a backup for what you aren't capable of doing.
The main problem I have with ASI now is that they limit the way you can reference/locate ASI vendors. They want everyone on thier ESP system, and to us, it's not worth 4000 to use the system as a web resource. I think the 500 per year is worth it for what we are getting, but they have just recently changed the way they post information making it more difficult to use their services if you don't have the ESP option. Sage includes the search engine and services as well as a rating system for their $500 annual option. ASI doesn't.
Thanks for the detailed feedback.
Brian G.
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