23 replies to this topic

[A G]

Dear Fellow Promotional Product Distributors,

Let me propose we get a list of suppliers whose catalog is ENTIRELY on an "A" (or "P") profit "discount/margin".

HUB PEN always comes to mind on this.

Of course, it would be great if even SET-UP Charges and Additioal Imprint Colors, etc, were ALSO on an "A" code.

Tell us what suppliers deserve an "A" (like Hub). An "AA" or an "AAA" (the last for having EVERYTHING on an "A" - "AA" for suppliers who have at least SOME 'extra charges' on an "A")

[jimknecht]

Milo, my first question would be, what is the last quantity listed on these folks catalogs? There is a world of difference between a vendor offering all columns on an A that has 2500 pieces as the last price break & someone like us that has 1,000,000 pieces as our last break. No one in their right mind is going to sell a 1,000,000 piece order expecting a 50% commission. Seems to me such a list would be pretty worthless without such data. Also, seems to me this data is worthless in that depending on pricing, you could still make more money selling an item on a B or C. IMO, you should be more interested in which vendor gives you the most profit & which vendor has better service than simply highlighting the vendors that simply sell on an A.

[A G]

jimknecht said:

Milo, my first question would be, what is the last quantity listed on these folks catalogs? There is a world of difference between a vendor offering all columns on an A that has 2500 pieces as the last price break & someone like us that has 1,000,000 pieces as our last break. No one in their right mind is going to sell a 1,000,000 piece order expecting a 50% commission. Seems to me such a list would be pretty worthless without such data. Also, seems to me this data is worthless in that depending on pricing, you could still make more money selling an item on a B or C. IMO, you should be more interested in which vendor gives you the most profit & which vendor has better service than simply highlighting the vendors that simply sell on an A.

I won't fight with you on this, Jim. And your point is valid. The one thing, however, that I am trying to emphasize here is this. I have been in this industry almost 30 years. Over the last decade plus I have seen more and more suppliers "become more price competitive" to end users by taking my profit margin away.

As the distributor, and often as the salesperson also, I lose often more money in Suppliers discounting MY PRICE than I do competing against other distributors and salespeople.

When you speak of price, profit and service, Hub Pen is a great example, in my opinion, of a supplier who does all three quite well. Are they perfect? No. But I'll sell from their catalog than many others, in part, because they keep my "sail" bigger.

If I seel an item at 50¢ on a "C", for example, my cost is 30¢, and my gross profit margin is 20¢ each, or $300 cost and $200 profit on an order of 1000 pcs.

However, if a supplier puts the price at 60¢ on an "A", they still receive 30¢ per item. But now I receive 30¢ per item also. And what appears to be a mere 10% commission or discount difference is worth 50% MORE IN PROFIT TO ME!!!

I'd like to recognize those suppliers, who, say yes, up to at least 2500 or 5000 pcs, offers me a 50% discount on their prices! I can always go down. But, in most cases, you can't go up with a customer from prices shown in a catalog.

So, if Dooley offers me a price of 2500 pcs on an "A", but the higher qtys go down, tell me that, Jim!

Price is ONLY relevant, to be sure, in terms of quality, overall service, and speed of delivery (which is one aspect of service). But when a supplier makes my sail (and "sale") 1/3 less profitable for me out of the starting gate, they are reducing the size of my sail, which means I can't go as fast or as far as I could and would otherwise.

You can make X number of sales calls per day, and sell whatever # of them out of that. Lower margins mostly mean less profit for the distributor and salesperson, not less sales.

[A G]

aapromotions said:

Dear Fellow Emotional Product Distributors

I suggest that if you have a lot of time to compile lists, you ain't out sellin' enuf.

That's why I'm asking others to help me on this one!

[darlinme]

Not to bump the subject, but what I hate is I call to check on something and might have a old price list...and they give me a price $.60 on a ® or what ever.....why can't they just tell me what my net is???

[Allan]

Because you could be an end user that got their contact info. I don't mind the math exercise. :)

darlinme said:

Not to bump the subject, but what I hate is I call to check on something and might have a old price list...and they give me a price $.60 on a ® or what ever.....why can't they just tell me what my net is???

[darlinme]

Allan said:

Because you could be an end user that got their contact info. I don't mind the math exercise. :)

ya but I went to high school in "Odessa Texas".....LOL:D
class of '85

[micrguy]

Do you guys actually sell the price that is in supplier catalogs? I can't remember the last time I sold something for the price listed in the catalog. All I do is take my cost and make sure that I get at least a 30% margin when I sell it. It seems like everybody and their brother sells promotional products these days and I have to keep my margins pretty tight. I sell to a lot of credit unions and they get hammered with catalogs, emails and other distributors trying to sell to them. If I tried to sell anything at an "A" that would be the last quote that I do for them.

[jimknecht]

A G said:

If I seel an item at 50¢ on a "C", for example, my cost is 30¢, and my gross profit margin is 20¢ each, or $300 cost and $200 profit on an order of 1000 pcs.

However, if a supplier puts the price at 60¢ on an "A", they still receive 30¢ per item. But now I receive 30¢ per item also. And what appears to be a mere 10% commission or discount difference is worth 50% MORE IN PROFIT TO ME!!!

This is wonderful if you have no competition & can charge your client whatever you wish. Most people aren't in that boat. Now you could say, why shouldn't the vendor list the hgher price with the better discount & let you drop the price if necessary? The reason is, our list prices are shown on MANY industry search engines & MANY distributors allow their enduser clients to pick the vendor. In this situation, the vendor with the lowest LIST price gets the business. Vendors have to set pricing to compete in all different situations. If ONLY net price was ever listed... I would agree with you but since it isn't, I can't agree.

A G said:

I'd like to recognize those suppliers, who, say yes, up to at least 2500 or 5000 pcs, offers me a 50% discount on their prices!

Then I think this thread title is incorrect.

[FindingPromo]

Many suppliers are very aware of both sides of the equation as they build their price list.

* They need to be ensuring they are selling (the net) to distributors at a fair profit, in order to keep their organizations going as ongoing enterprises to support distributors in the long run.

* They need to keep their MSRP's shown as fair and market competitive pricing compared to the selling price of items in the same category from competitive suppliers.

This all the while doing their best to still offer a fair margin via list pricing to their distributor resellers, whatever alphabet soup it's on.

Then from there, there are sometimes some add'l value added benefits that some supplier provide their best customers that continue to return to them for business, in the way of sampling, freight, or other program offers.

[A G]

Quote:
Originally Posted by A G
If I seel an item at 50¢ on a "C", for example, my cost is 30¢, and my gross profit margin is 20¢ each, or $300 cost and $200 profit on an order of 1000 pcs.

However, if a supplier puts the price at 60¢ on an "A", they still receive 30¢ per item. But now I receive 30¢ per item also. And what appears to be a mere 10% commission or discount difference is worth 50% MORE IN PROFIT TO ME!!!

Quote

Jim KnecktThis is wonderful if you have no competition & can charge your client whatever you wish. Most people aren't in that boat. Now you could say, why shouldn't the vendor list the hgher price with the better discount & let you drop the price if necessary? The reason is, our list prices are shown on MANY industry search engines & MANY distributors allow their enduser clients to pick the vendor. In this situation, the vendor with the lowest LIST price gets the business. Vendors have to set pricing to compete in all different situations. If ONLY net price was ever listed... I would agree with you but since it isn't, I can't agree.

Quote:
Originally Posted by A G
I'd like to recognize those suppliers, who, say yes, up to at least 2500 or 5000 pcs, offers me a 50% discount on their prices!

Quote

Jim Knecht Then I think this thread title is incorrect.

Okay, Jim, then DON'T put your name on the list. Let's keep this to suppliers who have ALL columns ONLY on an "A".

Go ahead and argue the merits of prices being on an "A". I subscribe to you that having more suppliers with higher margins is important for the health of this industry.

Let me give you an alternative.

Many suppliers have a downloadable catalog—often (though not always) in a PDF file format. A few list prices online (like Leed's). Suggest List prices, whether on an "A" (="P") or on a "C" (="R"), etc, are usually figured from a "Net" price (the net or actual amount paid by the Distributor).

Why not set things up so one could go to one of two sites or subsites— One where there is the MSRP pricing (usually, somewhere, below an "A"), and an "All A" subsite. The math can be done either easily in spreadsheets, or with formulas from a Supplier's database. One subsite showing the MSRP (ABCDE & whatever), and the other "all 'A'"?

"A" is the "Ideal". Call it that. The "Ideal" catalog and/or price list, or some such thing. Some customers can be referred by a salesperson or distributor to one part of the site, another to another part. Or have completely different websites for the "Ideal". I think this is a matter worth pursuing.

I go back to the fact that "profit" is the wind in the sail. The larger the sail (gross profit), the faster and further the wind (customer demand) can take you.

I find where so many are so ready to "drop their pants" (as it were) on price.

Again, I do not discount anything anyone has said here. In some cases, I have to, and do, "get down & dirty" (that is, get my prices 'closer' to the dirt - "approaching zero"). I try not to go below 30% overall. Sometimes I go below that, if I'm certain of two things— my cost and payment.

However, I don't try to start low.

And, sometimes I lose orders. Other times I get them.

I work at finding the lowest price on quality goods from a reputable and reliable supplier. But, often, more often than not, I like to start out at the "ideal".

[A G]

darlinme said:

Not to bump the subject, but what I hate is I call to check on something and might have a old price list...and they give me a price $.60 on a ® or what ever.....why can't they just tell me what my net is???

Kym,

Try the "finger method" to help you figure out prices. It works One of Two ways?

A fist (no fingers up) = A = P = 50% Distributor Gross Profit Margin
1 Finger up = B = Q = 45% Distributor Gross Profit Margin
2 Fingers up = C = R = 45% Distributor Gross Profit Margin
3 Fingers up = D = S = 45% Distributor Gross Profit Margin
4 Fingers up = E = T = 45% Distributor Gross Profit Margin
5 Fingers up = F = U = 45% Distributor Gross Profit Margin
6 Fingers up (two hands) = G = V = 45% Distributor Gross Profit Margin
7 Fingers up (two hands) = H = W = 45% Distributor Gross Profit Margin
8 Fingers up (two hands) = I = X = 45% Distributor Gross Profit Margin
9 Fingers up (two hands) = J = Y = 45% Distributor Gross Profit Margin
10 Fingers up (two hands) = K = Z = 45% Distributor Gross Profit Margin

If I want to take a price that is NOT "Ideal" (on an 'A' or a 'P'), then I count from 'A' or 'P' to the Letter Discount Code given for an individual price. If it is on an 'S', for example, that's three (3) fingers up. I take 10% of the price (example - 79¢ on an 'S', I round up to 8¢, and add 8¢, or, in this case, 3 x 8 = 24¢ to the 79¢, which = $1.03.

If I am just trying to remember how much an 'S' code is (either considering my discount from the price ?OR? what my cost is), I multiply each finger, NOW, by just 5%. In this case, an 'S' (which is the same as a 'D') discount is 3 fingers x 5% or 15% off of 50% = 35%.

Inversely, my cost for an 'S' (or 'D') discount is 50% + 3 x 5% or 50% + 15% = 65%.

If that helps you, whether you are from Odessa, Ohio, Ottawa, or Oman, then there's something you can count on?you HAND!

Trust me, there have been times when I'm looking at a "less than ideal" price with a customer in front of me, but he or she doesn't see the price I am quoting from. Down under the table, on on my sides, I'll sometimes be using my fingers to figure "ideal" pricing, or something closer to it. Other times, I'll mentally view fingers in my head to help me figure something, or help me to remember what a letter discount code represents. Its worked for me for a good many years!

[A G]

darlinme said:

Not to bump the subject, but what I hate is I call to check on something and might have a old price list...and they give me a price $.60 on a ® or what ever.....why can't they just tell me what my net is???

Also, 'Darlin(you)',

Often, when a supplier quotes a price, a customer is standing or sitting near by. Sometimes even across a room I can pick out some of what the person on the other end of the line is saying to a person in the room. So, you don't want them to hear your net cost figure!

A supplier of mine NOT in this industry, but in a closely related one, who has long done custom work for me ALWAYS has and does quote every price with a 50% margin built into it. And, for those interested, I have ALWAYS made that, PLUS some with a particular client ? and I ALWAYS beat the competition, because this supplier, which has been in business, literally, since near Civil War times, is very competitive at what they do.

Even with digital technology, they can make a custom item cheaper than others using digital on-demand capabilies! And I can sell it, and do it for less than most all others! (But remember, the number of competitors one has, sometimes, are a very small handful, in many situations (not all, to be sure)!

[twistededge]

A G said:

Try the "finger method" to help you figure out prices. It works One of Two ways?

A fist (no fingers up) = A = P = 50% Distributor Gross Profit Margin
1 Finger up = B = Q = 45% Distributor Gross Profit Margin
2 Fingers up = C = R = 45% Distributor Gross Profit Margin
3 Fingers up = D = S = 45% Distributor Gross Profit Margin
4 Fingers up = E = T = 45% Distributor Gross Profit Margin
5 Fingers up = F = U = 45% Distributor Gross Profit Margin
6 Fingers up (two hands) = G = V = 45% Distributor Gross Profit Margin
7 Fingers up (two hands) = H = W = 45% Distributor Gross Profit Margin
8 Fingers up (two hands) = I = X = 45% Distributor Gross Profit Margin
9 Fingers up (two hands) = J = Y = 45% Distributor Gross Profit Margin
10 Fingers up (two hands) = K = Z = 45% Distributor Gross Profit Margin

I want your fingers! LOL! :D

[royster13]

I want the booze he has been drinking......lol...

[twistededge]

After 10 fingers everything looks great! (Of liquor, that is... :D)

Dang we need some new smilies...

[Chris Miller]

aapromotions said:

Dear Fellow Emotional Product Distributors

HAHAHAHAH! You've put a smile on my face today. Thanks :)

[A G]

I was processing catalogs today, and came across TEAMWORK APPAREL

ASI# 90673
PPAI# 228450
UPIC# TEAMW230

Their entire catalog is on an 'A' (or 'P') discount