View Full Version : Is this accepted?... new vendor practices.
03-05-2011, 09:55 PM
With TW only DAYS away...I'm putting the final touches on my booth and organizing everything I need to have a successful show. With all the talk and discussion on bad vendors, taking orders, etc. etc.; I've been thinking ALOT about my companies policies on order taking...so here it is:
M80 Order Policy
M80's order placement practices, for EVERY order, is 50% down at contract signing and the remaining 50% due prior to delivery. Orders placed via credit card will NOT be charged until scheduled work begins on project, unless buyer chooses to pay at signing. Checks will not be cashed until work begins on project. Returned checks will be subject to bank fee's and penalties accordingly. Cash is always accepted. Deposits are non-refundable. All terms and conditions can be negotiated on a client-by-client basis.
I feel this is the best way to do business that protects and works for everybody. As a new vendor at the show, I hope you take the time to stop by our booth and talk about what all we can offer. I know their are SEVERAL new vendors at the show this year, it's a great opportunity to look at new things and meet new people.
Any thoughts, comments and/or ideas are welcome. Since this seems to be a hot topic in our industry, I just wanted to throw this out there for everybody.
See everyone at the show! -Tyler
PS: This info will be up on our website once it launches during the show.
03-06-2011, 03:57 AM
I think the only part that might raise an eyebrow or two is "Deposits are non-refundable." .... generally speaking if a vendor follows through with what is promised and agreed to, then it's not a big deal... but if things go off track and orders are still outstanding weeks before (and in some cases after) season... most folks are going to want to cancel the transaction and get their deposit back.
03-06-2011, 05:13 AM
Nightgore, if that payment arrangement works for you without hurting your business one way or another then run with it.
Dalloween, Alot of time, the material for a job equals upward if not beyond the 50% mark of a deposit, now add in the vendors time and energy only to have a customer back out of a order. Smaller vendors cannot eat those kind of losses. I understand if a order hasnt been started and asking for your deposit back IF its past due.
Speaking of smaller vendors, While I think that everybodys suggestions of different payment options are reasonable, I have to point out that a show like Transworld for example costs upwards to $10,000 with booths, lodging, travel, shipping, advertisement, that all have to be paid up front by that new smaller vendor, add in the fact that same new smaller vendor most likely just dropped every available dollar and many a sleepless night for months into his New product line for that show and is looking forward to his cash sales, and deposits to help them Re-Up on materials and possibly eat something other than bullion cubes for dinner.
If and when BodyBag Entertainment returns to the showfloor, we will be setting our payment options, those that wish to buy from us, will and those do not, wont. No Hard feelings just business. We know what we NEED to do what we do, as do most of the other vendors. If the haunt industry makes it hard for new smaller vendors to attend shows and make sales, we are going to lose out on new and amazing artists and product lines.
03-06-2011, 05:51 AM
Also one thing you may want to look into is the wording..A "deposit" is refundable no matter what you
say around it...I learned this in court...:(
03-06-2011, 06:28 AM
Again I am in the Christmas/Easter business but bottom line and I would have to say this more of a responce to Rob. Before a person gets into business that company/person NEEDS to have enough capitol of their own where they are not reliying on his clients/customers. I see that as a huge problem in this industry. They come in and expect to take deposits and then take that money and go use it to buy their supplies then when something goes wrong weither it be more than anticipated cost, shortage of supplies or back order of supplies whatever the case might be the client it the one to suffer. THIS IS NO WAY TO RUN A BUSINESS. Would Wal-Mart say were going to stock our shelves when everyone puts down deposits so we have the money to stock them? The old saying rings true to the point. IT TAKES MONEY TO MAKE MONEY. Sad but its so very true. Lot's (not all) of Haunt Vendors use the clients money to make money for themselves and the gamble for them is low where the gamble for the buyer is very high. THATS JUST HOW IT IS. Plain and simply and it's clear as black and white.
Tylor I will be the first to commend you on coming here and asking for imput on your new venture it shows me a few things.
1... You want to succeed.
2... You value your potential clients imput.
3... You are aware of the gambles buyers in this Industry are taking.
4... You are aware of the changes that need to be made after years of the" Oh you got screwed to" days
It looks like, if what I am seeing you are offering in your company your policy is not to much to ask for. I think each vendors policy can differ. If your doing websites, print work, audio and voice things then the 50% down and 50% before delivery would work for your company. I will say thoes vendor who are in the market of building animations it still needs to be 50% down and 50% AFTER DELIVERY OF WORKING PRODUCTS.
Shane and it's good Luck Tylor! Shane
03-06-2011, 06:57 AM
Shane I agree with you that a company should be able to bankroll their business, BUT this is not the case with a large majority of smaller vendors in this industry, the majority of which are Haunters with a Love of the Industry, thinking that they can bring something to the table to improve the industry by their Experience in the industry.
This is something that could be eliminated by securing a small business loan for the most part, unfortunately a large percentage of the business world doesnt see Halloween or Haunted Houses as business.....
If We wait for every new vendor to be financially stable enough to take a risk of being in the industry, we will be running short on new vendors.
Another thing is imagine you are a new vendor, and you just Invested $10,000 to attend a show to show the industry what youre made of, right off the bat you have to sell $10,000.00 worth of product just to break even, thats fine if you are selling $10,000 animatronics or the latest in CGI special effects but for the average prop guy, thats alot of product.
Now Imagine having a large portion of the customers walking up to your booth and telling you, wow thats a great product line, it would look great in our Haunt BUT we dont do business with first year vendors.
on a final note, Remember the vendors that started the 50/50 rule so many years ago are now some of the biggest vendors in the industry. But at one point they were just like any new small vendor starting out back then.
03-06-2011, 06:59 AM
And Shane.... LOL at the WALMART reference........
03-06-2011, 07:49 AM
:) Ok I will throw K-Mart in too! LOL Shane and it's what a day! Shane
03-06-2011, 11:27 AM
Thanks everybody SO MUCH for the input!
As for the "deposit" note...I would LOVE to be able to refund money entirely in-case something came up, however, I do have people to pay. I'm not the only one in this company, the 50% down covers their payroll. So, if something did happen, I would have to ask my wed designer or audio mixer for their paycheck BACK to give back to the buyer. To me, regardless of what happens, time is money. My guys put time into something and should be paid for it.
There are other ways to handle this and like the policy says, everything is negotiable on a buyer-to-buyer basis. Depending on delivery timelines, the deposits may be able to be returned. We will not process and credit cards or checks until we START work, NOT at time of order. So we'll send out emails and call to inform that the order is being processed. This allows room to breathe just in case something does pop-up. I think this works best for everybody!
Thank you all! Be sure to stop by out booth at the show! -Tyler
03-06-2011, 01:43 PM
Out of all the industries I have businesses in, Haunted house owners have been the only ones we had to set up little collections war rooms for every November. I know a lot of companys no longer offer some services because they have had similar experiences over years and years. There are some stand up people but less than half I would say.
There are so many buyers that are new, on a tight budget but appear to be a corporate buyer and I would seriously cover your butt with payment. Even really big names seem to order something and expect someone else is going to pay somehow and that other person or group didn't know that. Having to demand pre payment sort of means that the customer is not paying higher fees because everything was financed and insured for them. You can pay for those add on ticket items but, when really asked the customers will want the lower price. You should do that for the next guy! Not them.
Like Rob illustrates full on wholesale might be twice the price of materials and minor labor. You still end up short on being compenated for all the sales time and performance labor. To have all the bell and whistles would be twice of the wholesale price or at least another third. Things change when the customer is more than a few hours drive away.
If you buy a TV set at Walmart that is not in stock, guess what, the order doesn't get placed until the cash register sings. All the stuff on the shelves has been provided by the vendors hoping for payment and sale of the item 6 months to a year down the line. Most products are not purchased outright by Walmart to sell it in kind, it is all on consignment from governments of developing nations. They are happy for the opportunity to invest in Walmart as some day years from now they might focus on feeding their populations. Most business losses end up being a full 12% per year due to shipping damage, theft and returns no matter what the company or product is. If you are doing less than that, you get a cost savings star.
If the criteria for Transworld would be that the vendors also had to qualify beyond buying a booth and tending to it like they have proven they have cargo trailers full of products ready to deliver as soon as orders were placed, or proven that operators are standing by or proven that there are 100 employees standing on the line waiting for this order and it will be made and shipped before you get home from the show. There might not be any vendors at all. Maybe 2 or 3 operate that way.
Somehow I have never been able to get a refund on my shop rent or electric bill or phone bill. When I put gas in the tank of the circus truck it goes away somehow. The problem with the small vendor is that rent and real expenses is really where the deposit goes and not into materials. Then there is a wld float of the next deposit covers the next materials and there is a lag time on how long it takes for checks to clear. That's the real reason lots of restaurants are closed on monday, because the checks don't clear from the busy weekend until Tuesday to buy more food.
There are a few haunts that can be trusted and can write a check right now. They are few and far between and should be recognized perhaps. I make the mistake of giving everyone the same bare bones prices at what it costs. I have not had the nerve to charge more for having to finance someone elses shaky plan and end up making less or having losses. Collecting wasn't in the original price, nor was waiting for checks to clear. And even those with the benefit of having lots in their budget eventually get tight.
Walmart is also charging a retail price and the money collected sits in bank accounts for a few weeks playing the stock market before it goes to the vendors or pay employees. Small businesses may have to pay day labor right now or people quit and it amounts to paying right now. I've always found that clever how losers get paid now and good people get paid later. Sometimes much later.
There is no way to bankroll a massive inventory without the intrest taking more out of operating costs. Perhaps the customers need to make sure they really have money on hand? I've done it both ways and asking for a deposit lets you know where they are up front. Can't or won't? Sorry. Sometimes you do bankroll the whole thing but you can't all the time. The checks just don't cash fast enough. The banks are also playing the stock market for a couple days and then say your check is now okay and available.
Still the money that was lost is not magic. It comes from somewhere. Even if it is a "write off" you still somehow had to make that money to write it off.
03-06-2011, 06:24 PM
Thanks for the feedback. I think one of the factors that prevents vendors from bringing "truckloads" of products to walk away with is how "custom" this
industry is at times. I don't think any haunt wants to have something that another haunt a mile away has, then it all becomes bland. So, really, it would
be impossible for a vendor to bring large stocks of products to the show, they'd just be out lots of money and time.
I think people forget the time it takes to create products...and yes, you PAY for time. One of our guys at our haunt also runs his own business as an electrician...he charges around $125 JUST TO LEAVE SHOP regardless of any work is done. Why? Because that time that could be spent working on
something else generating cash.
Time is money...custom works can't keep stock...etc. etc. With my company, it IS impossible to keep anything "stock" since EVERYTHING we do is custom and made-to-order and buyer expectations. Maybe this would be something for us to look at in the future! -Tyler
03-06-2011, 09:57 PM
Another reason not to stock things is because many raw materials have a shelf life. You have things in stock and 3 months later when it is needed it is crap. SO this adds yet another lead time. If you look at an automotive garage, there are usually cars sitting, some waiting for the parts money, some for the parts to arrive, some to be diagnosed, some for the right part to come a second or third time, some to be paid for and many times the total repair time is less than 3 hours.
But then you install a new looking part that has been stored in Mexico for 8 years and start all over. Same goes with haunt materials, the best quality is with fresh materials, not a discount deal or overstock from somewhere that is 4 years old.
Everything must be a fresh kill. I don't want to buy anything made out of some elastomeric that is already 2 years old either.
03-06-2011, 11:16 PM
Nightgore, I respect your decision to have a booth at TW. However, I hope you also understand that I could not buy from you with the no return of deposit clause. I am sure you are reputable, but what would stop a less than reputable company from setting up a booth, getting all the deposit money and they saying "oops"?
03-06-2011, 11:27 PM
I fully understand...which is also why I say the policy is negotiable on a job-by-job basis.
Hopefully, the "head hunting" for bad vendors going on in our industry won't stop buyers from exploring new vendors. Obviously, we're NOT like these "faulty/shady vendors", it just takes a leap of faith from the buyer to find great vendors to work with. Like I mentioned, the deposits BARELY cover payroll...this was the decision behind that clause.
Orders placed with check and/or credit cards won't be charged or deposited until work BEGINS on the project. This allows a sort-of "lead time" to refund any deposits if needed.
We're trying to go way out of our way to make the buyer experience with M80 as pleasing and "painless" as possible. Hopefully, you'll rethink not working with us! See you at the show. -Tyler
03-07-2011, 08:20 AM
Alot of good ideas here.
The problem is getting ALL vendors to agree to an "exact industry policy". Rules if you may.
This may be coming from left field, but at least it can get the wheels turning in our brains to come up with a policy.
If you want to be a vendor in this industry I think you should sign and agree to these terms, and have a third party somehow enforce it.
How? not sure. Maybe have a 3rd party BUYER who buys for all of us. So when this third party buys it,
all of us are behind him and the vendors know it.
Also, when I get a builder to build a house they agree to penalties for each day they are late. I did do this with one vendor which I will not men tion, and it was on time with no hassles.
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