Full Version: Ad Specialties
From: John (ICTJOHN) [#8]
16 Feb 2005
To: LaZerDude (C_BURKE) [#3] 16 Feb 2005
From: Engravin' Dave (DATAKES) [#9]
16 Feb 2005
To: logojohn [#7] 16 Feb 2005
Logojohn,
You have made some very good points. If you don't have some cash to start with, I guarantee you will have some cash flow challenges. When sales are really good, cash flow becomes an even bigger monster.
I have mastered the use of my credit card grace period to hedge off these cash flow issues. I pay it off each month, but use the full grace period to allow me time to collect the outstanding invoice balances.
I would differ on one point in that promotional products are worth the time it takes to source out the items customers inquire about. I believe it is worth hiring an hourly-wage employee to market and cater specifically to that business. This would resolve the problem of the amount of time it takes to source out this products and prepare quotes.
While I do not co-mingle my business finances, my promotional product profits would be enough to pay for my rent, utilities and laser payment, with some left over. In my opinion, that is worthwhile.
From: LaZerDude (C_BURKE) [#10]
16 Feb 2005
To: Engravin' Dave (DATAKES) [#6] 16 Feb 2005
David, thanks to you and everyone that has responded. I tried to post a seperate thank you without using the "reply" button, but it did not seem to work. Any idea how I can do that?
Thanks
Chuck
From: Harvey only (HARVEY-ONLY) [#11]
16 Feb 2005
To: LaZerDude (C_BURKE) [#10] 16 Feb 2005
If you mean to post a new thread, click on the 'Post New' just below the heading of the folder.
If you mean to post 'To All' just click on the button 'Recent Visitors' when you have already clicked on 'Reply'. Then allow the default 'ALL' to remain.
ÂÂÂÂÂ
EDITED: 16 Feb 2005 by HARVEY-ONLY
Message 828.12 was deleted
From: Pete (AWARDMASTERS) [#13]
16 Feb 2005
To: LaZerDude (C_BURKE) [#1] 16 Feb 2005
Just to throw in my thoughts:
PMDM is great at the price (free), but still has only about 15 to 20% of the items that SAGE or ASI list, and I do not believe that they offer supplier ratings (which we find very useful).
I prefer SAGE partially because they treat me fairly and are not always trying to shove their products down my throat like ASI.
As far as cash flow problems, I seldom have difficulty getting a company to pay up front via credit card. Even the large firms are issuing cards to most managers now. There is usually a limit (most commonly $2500 per order), but that is not a big problem. However, it may be why we do not get too many orders over $2500. Not to worry, we get a lot of the $500 to $2500 kind, and we seldom see our customer - 95% of our sales are on the web.
Our gross sales for promotional products is a little more than our awards business, but the profit margin on the awards is considerably better. Still with average profits of 30 to 50%, the promotional products are not to be taken lightly.
Promotional Products and Ad Specialties can be an excellent compliment to most award businesses - go for it.
From: LaZerDude (C_BURKE) [#14]
16 Feb 2005
To: Pete (AWARDMASTERS) [#13] 16 Feb 2005
Pete,
Thank for your input. I have a question however for everyone.
There is much talk about cash flow. When I was in Washington, I spoke with an associate of mine that is in the ad specialty business, and he mentioned it as well.
In my previous life in the upholstery business, we did not take a job without a 50% deposit to cover costs. NO EXCEPTION! Then balance upon completion.
Does the same concept not hold true in Ad specialties? Or in The Awards and engraving business?
Thanks
Chuck
Pacific ( I don't know what to call i now )
Maui
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
Message 828.26 was deleted
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.
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