deposit on orders

kkrafts58kkrafts58 subscriber Posts: 12
edited March 2007 in Business Planning
 I am doing a proposal, (my first one, I hope I do it right) for a rather large order, What is a customary deposit amount? I mean I can front some money on my own, but everyone always tells me to get a deposit on my orders, which I don`t always do. The total amount of the order will be $13,500, would I ask for 25%, 33%, or 50%? Any help would be appreciated.

Comments

  • CMarkCMark subscriber Posts: 1
    Its different for everyone...my friend who in plumbing collects 20%
    upfront (primarily to buy materials) and then collects 40% when the job is
    "roughed"in and then the remained at the end.

    I collect 50% to start the job and 50% upon delivery.

    I just had this discussion with a wed designer the other day, he and I both
    agreed that placing it in the proposal is necessary and vital to working
    with people who value your service. If they show agnst in the condition of
    payment you may want to beware. Some businesses take full advantage of
    the terms of payment being nondescript.

    Bottom Line- Make it clear and keep your eyes open for flags about who
    your working with and dont ever make reasons as to why you collect the
    amount you chose...its your business not theirs.

    Hope it helps.
  • kkrafts58kkrafts58 subscriber Posts: 12
    It`s a major hospital in my area, so I`m not worried about them not paying me, I just know that taking $6,000 out of my pocket right now would be tough, I can do it, but it would be tough. Also, what about a deadline date for the proposal to expire? They need this order by May 8th, Should I give a deadline, so as I have enough time to complete the project? This is my first major proposal, and I have to admit I am nervous. I no all they can say is no.
  • Wirehead321Wirehead321 subscriber Posts: 0 Member
    I understand, I am doing a proposal for a hospital my self in the proposal I am asking for half and the other half on completion. Take it from experience get funds upfront if possible and always have a downpayment amount in your proposals. That way the question of price is no longer an issue. 
  • kkrafts58kkrafts58 subscriber Posts: 12
    I did remember to put in my deposit amount and the total amount due on delivery, What I didn`t do is find out how much their budget was, or to offer three different price ranges, which I had read about at .htm
    platinum, gold, and silver options, so I had to go back and come up with a lower priced item and amend my first proposal. But, I am learning and enjoying it, even though it can be stressful at times and puts more work on me.
  • Wirehead321Wirehead321 subscriber Posts: 0 Member
    While knowing their budget is important never offer a discount on a job if price has been established. Remember you price keeps you in business. Also you have to learn how to defend you price over a competitor. In most cases if you waffle or seem to fluid on price right away how good can your service be if you don`t defend the services you offer the benefit to the customer and how your .service will ease the pain they in a business sense. remember if they didn`t have a problem they wouldn`t need you. You are in control of price at all times.That`s how you stay in business. Offer one price in writing then if necessary talk lower price if not. Say nothing and get the order.  
  • kkrafts58kkrafts58 subscriber Posts: 12
    Thanks WireHead321, your advice is going to be very helpful for me. I don`t believe that they can get what I`m offering at a lower price. I did resubmit a lesser value item at a lower cost, so that they could stay in budget. What they don`t understand is, even though I am buying at wholesale, and bulk, ordering 1000 items is going to cost shipping on each different item. A $.67 coffee cup with shipping, now costs $1.20, not to mention the 10 items in the coffee cup. Plus the labor to put it all together. This is a major order for me at this time and I don`t want to lose it, even though I know there will be other major orders.
  • conciergeladyconciergelady subscriber Posts: 4
    Well, I charge for materials up front..This way you cover yourself and dont have to take it from your own pocket. If it doesnt work out at least you are not out the money and can resell it later on to someone else. I would hold onto the price that I give if you think its a fair price for both parties. You dont want to be wishy washy. Then they may think that they could even get a lower price or maybe that you dont have the confidence in your products. Esp if you know you they cant get it at a lower price anywhere else. Either they want your product or they dont...you will get other clients after this one so stick to your price. ..I know its scary..but you get what you pay for. Having your own business is scary at times. If you want to throw in an incentive do it on their next order but not on the first order. My 2 cents 
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