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Forward the client or outsource?

Discussion in 'Sales, Marketing, Pricing Etc.' started by Custom_Grafx, Mar 3, 2011.

  1. Custom_Grafx

    Custom_Grafx Very Active Member

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    When a client asks you for something you don't do inhouse, do you take the job and outsource? or do you refer the client to go direct?

    Just wondering what the general consensus on the matter is.

    One example would be an engraved brass plaque. If you don't know how to make one, or don't have the equipment, I'm sure most signies would know someone who can. Do you get that guy to do it and put on a margin? or send the cust there direct?

    I recently told someone that I often refer clients to people, as I'd rather not be a middle man for things that have a 'high risk' tendency. If something screws up, not only do you not make money... you lose, you miss the deadline, and you look like an idiot.

    This person who I was talking to, told me that I'm an idiot for not taking the job, and putting a margin on it, and making money for doing 'nothing'.

    What do you guys think? Is there a right and wrong? or does it just 'depend on the situation'?
     
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  2. WildWestDesigns

    WildWestDesigns Major Contributor

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    I'm one of those that puts things in the "it depends" heading. If it's high risk for you and you are "on the front lines" with the end customer, I wouldn't do it.

    The only reason that I would try to outsource more is to keep people coming back to me, once they start going to someone else, then you risk them sticking to them, especially if they can do the same stuff(and more) as you. Unless you just really are good at what you do compared to everyone else.
     
  3. jiarby

    jiarby Major Contributor

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    it depends for me..

    Is the customer a PITA? Then refer them.
    Is it a high risk product with "bounce back potential" or potential liability warranty responsibility? Refer them!

    I will keep the customer and sub out jobs like screen printing (coros), rotary engraving (we only laser).... but refer the customer for jobs like a monument or electrical sign.. or a full vehicle wrap. I will do door decals, window perf, and tailgates, but do not want to mess with installing full wraps.
     
  4. MikePro

    MikePro Major Contributor

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    outsource! developing a relationship with your client is half the battle. turning them away from your door is taking a major step backward.
     
  5. Jillbeans

    Jillbeans Major Contributor

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    It depends upon the job.
    Luckily I have three very local friendly competitors who do what I don't (as in electric, trophies, and sandblasted stuff) and they do me the favor of sending people who want the handpainted stuff to me. I do sub out prints.
    What goes around comes around.
    I don't want to look like an *** trying to do something I can't do, or losing money on a job, all for the sake of trying to look good to my customer.
    I am not a one-stop shop.
    Love.....jill
     
  6. Gino

    Gino Premium Subscriber

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    Visit with the very shops you're sending your clients. See if you can work out a deal. If it isn't that hard and has a little chance if things going wrong.... mark it up enough that you can afford to pay for it twice without hurting you. Perhaps just mark it up 50%. Very few go wrong and if and when one does.... you should have enough saved up to do it on your own.

    Turning possible customers away could backfire on you, unless you have a good understanding with those shops so that they are sending work your way.... like in Jill's case.

    You shouldn't pooh-pooh it without trying it first.
     
  7. Marlene

    Marlene Major Contributor

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    outsource. get a good bunch of resources for outsourcing and it's like having an annex to your shop for signs types that you don't do. you set up all the jobs and spec them out and it's like having employees off site doing the work.
     
  8. MikeSTK

    MikeSTK Dawns Vinyl Designs

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    Outsource any job that you would feel comfortable doing if they needed your service, meaning if the customer seems like a decent person.

    I would place this question in the same category as should I hire an employee. Let's face it you are only one person and capable of generating x per hour. Now if x per hour provides you with a lavish lifestyle then let it alone. If not then be precise with the paperwork and take the project. Just state you can get them what they need.

    We have gained a reputation in our main business that customers are confident they just need to place a call and it gets done. Whether I physically perform the work or not they just know it's handled. Naturally you need to be fair and honest, this makes for great relationships and reduces wasted time during the sale process.

    Even if these jobs generated 5K a year, it's money you didn't need to personally generate. IMO
     
  9. Custom_Grafx

    Custom_Grafx Very Active Member

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    Thanks for all the opinions - very valuable insight there.

    I personally would have to say I assess and decide on a per job situation, like some of you have mentioned.

    The times I especially forward the customer on, is when I feel they need it very quickly, and on limited budget. Also, combined with that, if it's just a one off laser cut or something.

    Gino, that's very good advice, and very rewarding to do. Since a few years ago, I made it a point to physically visit my suppliers to pick up materials and jobs, chat, see what they're doing, what they're capable of and the such. In doing so, I found myself doing alot of work for them in the long run. The regular visiting turned into sales on its own course, without the intention of that ever being there. They also started doing the same. I send people their way when I know it's something better handled by them, and vice versa. So far, this has worked out well for both of us.

    I think there are 2 sides to it though. In the long term, I like the way my regulars can openly come to me for advice on where to go for odd services. I feel that they appreciate that honesty and reward me with whatever they can when they can. In the short term, yes, I lose a small amount of money if I had taken the job.

    I guess this broadens the scope of the original post to include your ideas on what is more valuable to your business. I'm finding with time, that I'm capable of making more money/work less, by only taking on things which I do inhouse. I'm also finding that the more I develop relationships with those suppliers, the smoother things seem to go, and the more I seem to get from them in return. Not just financially but in job satisfaction.

    Still though, I have to say, there are definitely some types of orders where I do not hesitate to outsource and I'll take the job. Doesn't happen that often, but it still happens.

    Anyway, interesting read from all - good to know how others in the same industry feel about the topic.
     
  10. ova

    ova Member

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    My experience with out sourcing was not too good when we first bought the shop. Since we also do awards, the previous owner was hooked up with a screen print shop. they pretended to do awards and he pretended to do screen printing. They each sold what the other made. There was a trophy display at the screen print place and an assortment of shirts at the trophy shop.

    We tried it and was forever taking mistakes back to get fixed. Wrong color, spelling mistakes, wrong sizes, etc. Found out the other shop was going through a changing of the guards and the shop was in total chaos. We explained to them we wanted out and went our separate ways.

    A couple of months ago we joined a net working group that consists of businesses where no two do the same work. We promote each other. There is a screen printer in this group. I refer him and he does the same for us. This is working out quite well for both of us.

    To me it's almost like the couple of Advertising Agencies we do work for. They pretend to make what we sell them.

    For some, outsourcing might work, but for us, it didn't.

    We go with the Macy's theory in "Christmas on 34th Street". If we can't do it, we refer to others who can.

    Dave
     
  11. MikeSTK

    MikeSTK Dawns Vinyl Designs

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    "I like the way my regulars can openly come to me for advice on where to go for odd services. I feel that they appreciate that honesty and reward me with whatever they can when they can. In the short term, yes, I lose a small amount of money if I had taken the job."

    I will only ever offer positive ideas, that said:

    I guess that adds to the point of taking the work, if they already come there, take the time to explain what they want and chat for a bit then haven't you already completed half the sale? And if they are asking for something you know is wrong don't you offer a solution? Technically they have consumed time you could have been producing something else.

    I like to look at things in extremes to rationalize it. Hypothetically, let's pretend you only work 40 hrs a week. 52 weeks = 2080 hrs.. Let's say you get 3 visits a week and they burn 45 minutes a visit. That ends up costing you 117 hours, that's nearly 3 weeks a year, just gone.

    Well you say maybe you only get one visitor a week, do the math and it still comes to 39 hours, still a week lost. To quote your comment "I lose a small amount of money"......it's a bunch!

    I am not being nasty, or implying it's not pleasant to see them. Seems you already are offering a free service of your most valuable asset.

    Best of Luck!

    PS I am guilty of it all the time, trying to help myself by typing it out.:wink:
     
  12. Custom_Grafx

    Custom_Grafx Very Active Member

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    Thanks Mike yes I see where you're coming from. That can be true in some cases, but most of the time these are once a week - maybe 2 minutes max on the phone or something. Still adds up I know though. It's definitely good to remind ourselves that our time is precious and worth money more often than not.
     
  13. Custom_Grafx

    Custom_Grafx Very Active Member

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    Yeah this "pretending" thing is where the trouble can start. The guys here who say they outsource - do you tell your clients you outsource? or do you pretend you do it in house? What are your experiences with either way? I definitely don't like doing the "pretending" thing - did it a couple of times and it was definitely not me - so couldn't keep doing it.
     
  14. PromoGuyTy

    PromoGuyTy Member

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    If you're not outsourcing, you should.

    If you are, and aren't happy with it, you're not doing it right.

    Just my opinion.
     
  15. Custom_Grafx

    Custom_Grafx Very Active Member

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    Thanks for the post - are you happy to outsource anything? Do you have a limit to what you will outsource? I'm guessing from your nick - but do you do promotional items? I can imagine in that game that without outsourcing it would be almost impossible to keep up with the range of products and methods that keep popping up.
     
  16. PromoGuyTy

    PromoGuyTy Member

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    We get prob 1/3 revenue from apparel...1/3 from promo products...1/6 from inhouse large format stuff...and 1/6 from in house paper print.

    Almost all apparel and promo products- outsourced. (2/3 of revenue).

    Obviously, you gotta' have SOME limits on what you outsource.

    I believe you have to have a small stable of trusted suppliers who offer incredible, reliable service...

    Since you risk your reputation on every job, it simply isn't worth it to use a substandard supplier or to outsource something that you straight up don't understand.

    And, oh yeah, if it's not $200+ job...outsourcing is likely not worth the effort.

    (our average ticket is app. $657.00)
     
  17. Peachtree Monuments

    Peachtree Monuments Member

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    Had to jump in on the outsource topic! As a "supplier"... here are some questions to consider BEFORE you outsource: 1.) Is the company WHOLESALE only or do they sell direct? 2.) What is the profit margin? 3.) What is the guarantee?

    At Peachtree City Foamcraft, we are the originator of the foamcore monument sign, our plastic hard coat is proprietary so no-one else can manufacturer the same product in house. It is also the ONLY foam monument independently tested and approved to withstand 180 MPH Winds. We SELL 100% WHOLESALE to the sign industry only, and most of our sign shop clients mark up the product 100%. So, YOU the sign shop gets a quality product to offer your client, you can make money on the deal and also - whenever, we get retail leads (I personally) forward them to sign shops in the area, since we do not sell direct - a way of saying "thank you" and paying it forward.

    No matter how large your sign shop is you can't be a "MASTER" of all trades, so at some point you will have to OUTSOURCE - but the key is looking for a quality vendor that will stand behind the product and make you look good.

    We are here for you, if you are looking to outsource a monument sign - check us out online http://www.foamcraft.info
     
  18. SignsonTime

    SignsonTime Member

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    :thumb:
     
  19. Gino

    Gino Premium Subscriber

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    Outsourcing....... to do or not to do ?? That is the question.

    You guys/gals are getting hung up on words. If you want to pretend you did it and fool your customers.... so be it. Nothing wrong with that.

    I've never told any of our customers that we don't grow the trees for the wood in the MDO boards. I never told anyone that we don't have the big vats of liquid vinyl to cast out the premium stuff. In fact, I've never told a soul we didn't build our own building let alone the machines we use for printing, laminating or anything else. Besides that, I can't take a motor apart anymore in a automobile and put it back together, but I still drive a truck.

    If it's not working for you, it's not because you're feeling like you're lying to your customers. Based upon what I'm reading, you all make too many mistakes in your communications and no one wants to foot the bill while placing blame on each other, thus making your customer feel afraid to deal with someone that can't get anything right.

    We're a wholesaler to many companies and I still have to make sure everything goes right for those customers as well as our regular retail customers. In the 25 years or so of wholesaling, I can count on one hand the projects that didn't work. [Well, maybe a little more, but not much.] Communications is usually the key factor. Every so often you experience a hiccup, but that is rare. So, if you have all these problems, I can only suggest to look closer at your own worksheets or the supplier you're using and try to hone them a little better.
     
  20. Billct2

    Billct2 Major Contributor

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    It depends...some things I have a good source for so I use them, engraving, large foramt printing, electric boxes.
    Some things that I would have liked to continue to do using an outsource have backfired so many times I gave up, like neon.
    Some things I just refer out to businesses I know, like printing.
     
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