chargeing for materials

[sofadoc]

Sofadoc and Kodydog, I think it is interesting how people in different locations can have very different expectations on how they are charged. 

Occasionally, a transplanted northerner will move to town. They are usually a bit more skeptical at first. But they soon adapt to a much less suspicious lifestyle.
I'm not saying that we're all just a bunch of honest, easy-going "good ole boys" here in Texas. We've got our share of unscrupulous mechanics and contractors for sure. But in a town of around 25,000 it doesn't take "word of mouth" very long to get around.

I can't remember ever having a customer question the ingredients of an upholstery job (other than seat foam).

[Mike]

I just lump it into one price
my cost on materials
and I figure my time to do it  labor rate and come up  the cost to the customer.
Oviusly  the labor is the meat of the matter. If my customers saw what inwas paying for materials and how much was for me they would think there paying  way to much.  

[Mojo]

Your all going to think I am completely nuts but on my invoice I list one price which is the total price.

I do not separate out labor, materials or anything else. I list one price........period. I have never once had a customer ever ask about labor costs, materials or anything else. I do not want to have to start explaining my material and labor costs to customers so I purposely leave them out. The more info you provide on a bill, the more customers will want to nit pick your costs.

BUT....... I have a worksheet I use in the shop and know every single dime a job costs. My customers could careless what a snap, velcro or anything else costs. All they care about is the final price.

Chris

[baileyuph]

Ok, I read there are different ways to do things, maybe I can add a question for further clarification for those who do finite management of cost:

The question is, you have a lot of stock on hand already and buy more.  What price then do you charge for those items?

You can quickly see what the accounting problem could lead to;  for example I used 50 yards of white thread, the rest of an old stock (20 yards) and some white thread off the newest stock purchased at a higher price (which was 30 yards)?

This is happening because the times we are in prices are rapidly going up on supplies.  This isn't a unique problem to our business either.  Hotess Cup Cakes just files a second bankruptcy during the last three years, both which were as a result of ingredient prices for their products going up.  If they had bumped up the prices on products equal to their cost increases, one would think the results would have been better for them.  But, that makes your head hurt when thinking about an assembly line of cup cakes and all of a sudden there is an increase in the ingredients. ::)

There is more to the marketing program than I have presented but you get the drift.

Doyle

[mike802]

Doyle:  What you are referring to, in accounting  is called L.I.F.O and F.I.F.O, "last in first out" or "first in first out" it is a method to take care of changing prices on inventory, it does not matter which method is used, only that the same method is used all the time once one has been decided upon.  In my business, I usually can afford to run out completely, or very close to, before I reorder, thus. making the changing of prices not really a big deal as far as the accounting and charging for goes.

[byhammerandhand]

Classic accounting:
LIFO  last in first out - charge @ the current rate, regardless of the original cost
FIFO  first in first out - charge @ the original purchase price
FISH first in, still here   - just gotta find it, I know there was some left

[kodydog]

Ok Doyle lets say you buy 20 bolts of fabric at $10 a yard. Over a year you sell all but 3 bolts and so you order 20 more bolts. Only this time its $15 a yard. Do you now raise the price of your leftover fabric. OR do you discount it to move it? OR do you call your supplier monthly and ask for the latest price and raise it accordingly, knowing someday you will have to reorder at the higher price?

[baileyuph]

You try to get the prevailing price.  Whether you do or not depends on the market.

Many in business try to hold prices down to keep their volume.  The grocery business today is in trouble due to their cost rising but can't raise their prices accordingly.  The consumers are refusing to pay higher or unable to pay higher prices.    You  know the outcome, yes they are trimming stores and no one knows where it will stop.

Doyle

[bobbin]

LIFO.

I studied business in college (among other things, lol), in particular retail buying.  The object of the game when buying merchandise for a store is to factor the necessity of mark downs into the equation when you apportion your "open to buy" to the various departments you're required to stock. 

So, when you buy in new stock you already know how much you may mark down the "old" (remaining) stock while still making money on it.  You apply the same formula to the new stuff, meaning you've already built in the necessity of a mark down on it before you pay for it!  But it's tough to go wrong when you're dealing with zipper chain, buckrum, drapery lining/interlining, batting, and deck padding!  You won't need many mark downs on that stuff.

All of this is why I am not really very interested in stocking anything more than very basic notions and materials.  I have not yet established accounts with fabric suppliers but when/if I do it will be for cut yardage only.  NO way will I risk purchasing anything more than specified yardage for a job because predicting a customer's wishes is aiming at a moving target. 

[Mojo]

Classic accounting:

FIFO  first in first out - charge @ the original purchase price

Don't ya'll wish that gas stations did this ?   ;D

Chris

[Mike]

mike do you give the customer a estimate and then the final invoiced bill when your done?
me I have to give them the final price to start, so lik ekody i just have a general price for everything. fabric and foam or stainless parts  and number of sippers or amount of vinyl sheets. for the material cost plus X for insedentals. then add my time i figure for the job and there the contract price . bor a cover say Ive coem to know if its say 10 yards i can multiple 10 yards times X amount of dollarsa to get a quick figure.

[rustyeod]

I use quickbooks and it works well for me.  I do an itemized estimate (for me) to get my price but then I transfer that price to my customers estimate which tells him or her what I am providing and a final price.  Only once have I been asked for a labor and parts breakdown and I provided it.   

[Grebo]

I do it the same way you do bobbin for the same reason, huge variety of work.
From embroidering a jacket back, cushions, custom bedding, boat cushions, boat covers & all sorts of strange repairs.  ::)
I itemise everything. I buy my 'batting' I think you call it (we call it dacron) by the kg, so I make a wild guess at the cost of that. Stuff I buy by the metre thats how I charge it out + my mark up of course.
I don't have a problem with customers wanting to reuse items as I just explain the extra time it takes to make it possible. Unpick/clean whatever. 
I am running a program called Instant Admin, which allows me to create my own price list, It's a right PITA to get everything in there but now it's been running a few years I just have to go through with price changes.
It's limited in that I have no stock control or purchase orders. But I can record purchase totals & record what I have bought as notes.

Suzi

[bobbin]

I love that we have members in all corners of the world.  I particularly enjoy reading expressions and terminology that is "foreign" to me. 

"Batting" has a certain connotation for me... it bats out a cushion, and adds loft and "fill" to a cushion.  Insulation for houses is commonly referred to as "bats" in my neck of the woods. 

"Dacron" connotes sailcloth to me; esp. the foldable tape used on the edges of sails.  "Dacron" also tells me instantly that it's polyester. 

Funny how terms change from place to place, huh?

[Grebo]

Yeh, gets confusing sometimes,   ??? you lot talk about welting ! I am still not sure if thats piping or binding  ;D

Suzi