Charging for procurement,any thoughts?

Discussion in 'A+ Certification' started by Mark S, Feb 11, 2007.

  1. Mark S

    Mark S Guest

    I'm trying to sort out a business model for a residential/small business
    pc service. Obviously if the customer has the part in hand there's no
    issue, but what if I have to procure a part for a customer? Do you charge
    a flat fee for this or do you markup the price of part by percentage:eek:r
    maybe whatever time it would actually take you to find and order the
    part/consulting fee?







    Mark S.
    A+ certified since 2003
     
    Mark S, Feb 11, 2007
    #1
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  2. Michael A. Terrell wrote:
    > Mark S wrote:
    >> I'm trying to sort out a business model for a residential/small business
    >> pc service. Obviously if the customer has the part in hand there's no
    >> issue, but what if I have to procure a part for a customer? Do you charge
    >> a flat fee for this or do you markup the price of part by percentage:eek:r
    >> maybe whatever time it would actually take you to find and order the
    >> part/consulting fee?

    >
    >
    > I have worked in electronic service and manufacturing for over 40
    > years. I have always considered it an "Overhead" expense, like
    > insurance, taxes, and rent. You should be able to locate what you need
    > in under a half hour, and most imes in undder five minutes. If not, you
    > need to find new suppliers.
    >
    >

    It generally depends on the customer for me. Home/Individual account
    require a deposit. Plus installation fee. What's your hourly and charge
    accordingly.
    A business usually gets about 15%-20% markup, and installation is part
    of the hourly anyway.

    I will say this though, any parts I procure require a cash deposit (at
    least half),I get a signature on the transaction, the rebates are mine,
    and I make sure the warranty is registered.

    If at all possible I have the customer use his/her credit card to buy
    the part and have it drop shipped. Protects the customer, your not
    fronting cash, and you charge them installation labor.

    (If for some reason they get the idea they want to install it
    themselves, so be it. If they screw it up, they'll be back).

    I don't have a shop, but I do plenty of business from my home.
    When it comes to money, I'm a firm believer in CYA (Cover Your A**).
    I trust no one. Get it in writing.

    --

    The Mön§igñor

    "Sir, I am unaware of any such activity or operation - nor would
    I be disposed to discuss such an operation if it did in
    fact exist, sir."
     
    Mön§igñor ßoddoM, Feb 11, 2007
    #2
    1. Advertising

  3. Michael A. Terrell wrote:
    > Mön§igñor ßoddoM wrote:
    >> Michael A. Terrell wrote:
    >>> Mark S wrote:
    >>>> I'm trying to sort out a business model for a residential/small business
    >>>> pc service. Obviously if the customer has the part in hand there's no
    >>>> issue, but what if I have to procure a part for a customer? Do you charge
    >>>> a flat fee for this or do you markup the price of part by percentage:eek:r
    >>>> maybe whatever time it would actually take you to find and order the
    >>>> part/consulting fee?
    >>>
    >>> I have worked in electronic service and manufacturing for over 40
    >>> years. I have always considered it an "Overhead" expense, like
    >>> insurance, taxes, and rent. You should be able to locate what you need
    >>> in under a half hour, and most imes in undder five minutes. If not, you
    >>> need to find new suppliers.
    >>>
    >>>

    >> It generally depends on the customer for me. Home/Individual account
    >> require a deposit. Plus installation fee. What's your hourly and charge
    >> accordingly.
    >> A business usually gets about 15%-20% markup, and installation is part
    >> of the hourly anyway.
    >>
    >> I will say this though, any parts I procure require a cash deposit (at
    >> least half),I get a signature on the transaction, the rebates are mine,
    >> and I make sure the warranty is registered.
    >>
    >> If at all possible I have the customer use his/her credit card to buy
    >> the part and have it drop shipped. Protects the customer, your not
    >> fronting cash, and you charge them installation labor.
    >>
    >> (If for some reason they get the idea they want to install it
    >> themselves, so be it. If they screw it up, they'll be back).
    >>
    >> I don't have a shop, but I do plenty of business from my home.
    >> When it comes to money, I'm a firm believer in CYA (Cover Your A**).
    >> I trust no one. Get it in writing.

    >
    >
    > I wouldn't bother with a business if I had to operate like that. The
    > only time I required deposits was on jobs that required a binding bid,
    > or were over 3000 dollars. I had a line of credit with each of my
    > suppliers, and enough capital in the bank to cover all my expenses for
    > months.
    >
    > My customers would have laughed me out of business with your style of
    > operation. It screams "Fly by night operator" and several other things
    > a business does not want to be known as.
    >
    > I had over 100 public schools, along with a lot of business and
    > churches as regular customers. I got a call, did the work, and submitted
    > a bill. I was paid in under 30 days, because I billed on the 20th of the
    > month, to catch them for most of the work before their next payment
    > cycle. The only jobs that required deposits were on capital improvement
    > contracts that could take over two weeks to complete, and the bids were
    > only valid for 10 days from the date they were hand delivered. My
    > workmanship was the best in the area, my rates were competitive with any
    > legitimate competition, and I had a good warranty on all work, even
    > though I don't recall ever having to do any warranty work for the 15
    > years I was doing field work. My business was well known for its
    > quality, promptness, neatness, and professionalism. I would get service
    > calls at 5:00 AM from a school, and have a repair done before classes
    > started. I had a good inventory of spare parts and loaner equipment.
    > Common items were bought by the box, bag, or bundle to reduce the
    > overall costs. I carried about $20,000 in inventory, but it paid for
    > itself many times over. Doing business on the cheap is a constant fight
    > to survive. If I had a slow month, i could do 90% of my work from
    > current inventory, and replace it when work picked back up. All
    > businesses go through cycles and you have to be prepared to handle the
    > changes.
    >
    >

    Like I said, I don't run a shop. I have no interest in waking up at 5
    AM to do help calls. I don't have inventory or overhead. The less
    paperwork the better.

    I wouldn't do business with the public school system in my area, as it
    has a long history of not paying contracts.

    My day job as an employee of a company that does long term contracts,
    has shown me I really don't want the headaches of dealing with the
    idiots at the top, for any amount of money. Plus I get to eat & travel
    on their dime.

    I'm so glad you were successful. Most of the guys here are just
    starting out. An example is Smackedass and the monitor that he doesn't
    know if he blew up or not. My disclaimer covers that event and doesn't
    have me paying out of pocket for a piece of failed equipment that was
    not my responsibility. (I for one, would not have been using the
    customers monitor on the bench).


    --

    The Mön§igñor

    "Sir, I am unaware of any such activity or operation - nor would
    I be disposed to discuss such an operation if it did in
    fact exist, sir."
     
    Mön§igñor ßoddoM, Feb 11, 2007
    #3
  4. Mark S

    smackedass Guest


    > I'm so glad you were successful. Most of the guys here are just
    > starting out. An example is Smackedass and the monitor that he doesn't
    > know if he blew up or not. My disclaimer covers that event and doesn't
    > have me paying out of pocket for a piece of failed equipment that was not
    > my responsibility. (I for one, would not have been using the customers
    > monitor on the bench).


    Whether I "blew up" the 3 year old monitor or not, I kept the customer, gave
    him a decent credit ($75), have more business than I can handle, and have
    the peace of mind of knowing that I have no need to nickel and dime anybody.
    I have succeeded in accomplishing what I set out to do, that is, run a
    successful business by treating people the way that I myself would like to
    be treated. Heh-hey, whadya know, people keep coming back, my reputation is
    spreading, and some of my competitors have shown signs of public panic.

    I never, ever ad a "procurement fee", or whatever it's called, never ask for
    a deposit for needed parts, or require even a signature.

    However, I do keep the rebates, if there are any.

    sa
     
    smackedass, Feb 11, 2007
    #4
  5. Mark S

    Patrick Q Guest

    "Michael A. Terrell" <> wrote in message
    news:...
    > Mön§igñor ßoddoM wrote:
    >>
    >> Like I said, I don't run a shop. I have no interest in waking up at 5
    >> AM to do help calls. I don't have inventory or overhead. The less
    >> paperwork the better.

    >
    >
    > It WAS my day job, and I made good money so I was more than willing
    > to go an extra step for a good customer. Have you ever heard of "Golden
    > Time"?
    >
    >
    >> I wouldn't do business with the public school system in my area, as it
    >> has a long history of not paying contracts.

    >
    >
    > I NEVER had a problem with a late payment from any school, public or
    > private. In one emergency, they prepaid for the equipment, because they
    > had let the bid expire without replying. I make them prepay, simply to
    > make sure they didn't pull the stunt, again. Either prepay, or wait
    > till I could prepare a new bid which would be at least 5% higher,
    > because the OEM was raising the wholesale price the next day. It turned
    > out that they needed the equipment installed and working by 7:00 PM for
    > a school play, so they paid and everything was ready, on time.
    >
    >
    >> My day job as an employee of a company that does long term contracts,
    >> has shown me I really don't want the headaches of dealing with the
    >> idiots at the top, for any amount of money. Plus I get to eat & travel
    >> on their dime.

    >
    >
    > That cuts out the biggest base of potential customers, by not being
    > available when they need you.
    >
    >
    >> I'm so glad you were successful. Most of the guys here are just
    >> starting out. An example is Smackedass and the monitor that he doesn't
    >> know if he blew up or not. My disclaimer covers that event and doesn't
    >> have me paying out of pocket for a piece of failed equipment that was
    >> not my responsibility. (I for one, would not have been using the
    >> customers monitor on the bench).

    >
    >
    > How do you know that it failed on his bench, instead of the
    > customer's desk?
    >
    >
    > --
    > Service to my country? Been there, Done that, and I've got my DD214 to
    > prove it.
    > Member of DAV #85.
    >
    > Michael A. Terrell
    > Central Florida


    On a bit of a different subject, but still in the same vein.....

    How do you handle it when your competition bashes you on their websites with
    "customer quotes" like....

    "Company XYZ" had no clue how to fix the problem, you guys did it for free."

    "I took my computer to Company XYZ and they couldn't fix it, but you guys
    did at a very reasonable rate."

    If they were general comments, I wouldn't care.... BUT, When they name me by
    name, I get a bit pissy.

    Thanks!

    Pat
     
    Patrick Q, Feb 12, 2007
    #5
  6. Mark S

    Patrick Q Guest

    "Patrick Q" <> wrote in message
    news:tsVzh.1189402$084.300925@attbi_s22...
    >
    > "Michael A. Terrell" <> wrote in message
    > news:...
    >> Mön§igñor ßoddoM wrote:
    >>>
    >>> Like I said, I don't run a shop. I have no interest in waking up at 5
    >>> AM to do help calls. I don't have inventory or overhead. The less
    >>> paperwork the better.

    >>
    >>
    >> It WAS my day job, and I made good money so I was more than willing
    >> to go an extra step for a good customer. Have you ever heard of "Golden
    >> Time"?
    >>
    >>
    >>> I wouldn't do business with the public school system in my area, as it
    >>> has a long history of not paying contracts.

    >>
    >>
    >> I NEVER had a problem with a late payment from any school, public or
    >> private. In one emergency, they prepaid for the equipment, because they
    >> had let the bid expire without replying. I make them prepay, simply to
    >> make sure they didn't pull the stunt, again. Either prepay, or wait
    >> till I could prepare a new bid which would be at least 5% higher,
    >> because the OEM was raising the wholesale price the next day. It turned
    >> out that they needed the equipment installed and working by 7:00 PM for
    >> a school play, so they paid and everything was ready, on time.
    >>
    >>
    >>> My day job as an employee of a company that does long term contracts,
    >>> has shown me I really don't want the headaches of dealing with the
    >>> idiots at the top, for any amount of money. Plus I get to eat & travel
    >>> on their dime.

    >>
    >>
    >> That cuts out the biggest base of potential customers, by not being
    >> available when they need you.
    >>
    >>
    >>> I'm so glad you were successful. Most of the guys here are just
    >>> starting out. An example is Smackedass and the monitor that he doesn't
    >>> know if he blew up or not. My disclaimer covers that event and doesn't
    >>> have me paying out of pocket for a piece of failed equipment that was
    >>> not my responsibility. (I for one, would not have been using the
    >>> customers monitor on the bench).

    >>
    >>
    >> How do you know that it failed on his bench, instead of the
    >> customer's desk?
    >>
    >>
    >> --
    >> Service to my country? Been there, Done that, and I've got my DD214 to
    >> prove it.
    >> Member of DAV #85.
    >>
    >> Michael A. Terrell
    >> Central Florida

    >
    > On a bit of a different subject, but still in the same vein.....
    >
    > How do you handle it when your competition bashes you on their websites
    > with "customer quotes" like....
    >
    > "Company XYZ" had no clue how to fix the problem, you guys did it for
    > free."
    >
    > "I took my computer to Company XYZ and they couldn't fix it, but you guys
    > did at a very reasonable rate."
    >
    > If they were general comments, I wouldn't care.... BUT, When they name me
    > by name, I get a bit pissy.
    >
    > Thanks!
    >
    > Pat
    >
    >
    >



    I also posted this under "Competition Heats Up...." Please reply there.

    Thanks!

    Pat
     
    Patrick Q, Feb 12, 2007
    #6
  7. Mark S

    Patrick Q Guest

    "Michael A. Terrell" <> wrote in message
    news:...
    > Patrick Q wrote:
    >>
    >> On a bit of a different subject, but still in the same vein.....
    >>
    >> How do you handle it when your competition bashes you on their websites
    >> with
    >> "customer quotes" like....
    >>
    >> "Company XYZ" had no clue how to fix the problem, you guys did it for
    >> free."
    >>
    >> "I took my computer to Company XYZ and they couldn't fix it, but you guys
    >> did at a very reasonable rate."
    >>
    >> If they were general comments, I wouldn't care.... BUT, When they name me
    >> by
    >> name, I get a bit pissy.
    >>
    >> Thanks!
    >>
    >> Pat

    >
    >
    > Step 1: I would have someone call and ask if they could provide
    > information to contact the persons who made the "testimonials" so they
    > can verify them. When they refuse, put up a simple statement that they
    > refuse to prove any of their claims, and that any reputable business
    > does not have to resort to dirty tricks to get customers. Point out,
    > politely, that it a last chance to stay in business, that if they were
    > doing well, they wouldn't have to care about any competitor.
    >
    >
    > Step 2: Offer a 10% discount on work for any one who presents a copy
    > of their bill from that company, when you provide repair services. Scan
    > it, gray out the customer's name and put it on your website with a bill
    > written on one of your work orders to show what it would have cost, and
    > that you explain what you did. A list of parts, with prices, and a list
    > of services looks a lot better than, "Fxed yr brken bx", $200.
    >
    > If you design your own work order, a list of check boxes to show the
    > things you do on every job looks good, with a row of check marks to show
    > what you've done. A second row with N/A at the top to check the items
    > that didn't apply to that job is even better. A second group to mark
    > off cables, keyboard, mouse, and a few blank lines lets you keep track
    > of what was with that job, as well. I tell people I don't wand to see
    > anything but their computer, unless they think an item is defective. I
    > have hundreds of spare power cords, mice, keyboards and monitors, so I
    > don't need theirs in my way.
    >
    > I designed a triplicate NCR (carbonless) paper forms for a service
    > company, years ago. It was twice the size of those used by any other
    > similar business, but it had a claim check and job ticket on the edge,
    > in case something had to go to the shop, or was dropped off by the
    > customer. There was 25 lines to itemize the parts, 15 lines of space to
    > describe the labor or for comments like, "Item damaged on right front
    > corner when customer dropped off set.". Sure, you spend a few more
    > seconds filling it out but it shows a well organized business, which
    > meant you paid attention to what you were doing. We got a lot of
    > positive comments from customers, and laughed at by competitors who used
    > those 25 cent restaurant receipt books, but our business went up, to the
    > point we added a second location. It is difficult these days to build
    > customer loyalty, because most people have come to accept that most
    > places just don't give a damn. Because of this, they look for "Deals"
    > but it can be done.
    >
    > Step 3: If it gets really bad, contact your state's "Department of
    > Business Regulation" and report them for fraud, as long as you are sure
    > you have nothing to lose.
    >
    >
    >
    > --
    > Service to my country? Been there, Done that, and I've got my DD214 to
    > prove it.
    > Member of DAV #85.
    >
    > Michael A. Terrell
    > Central Florida



    Much appreciated, THANKS!
    Pat
     
    Patrick Q, Feb 13, 2007
    #7
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