ice
Grumbler
Do you find that profit margins on commercial accounts (hospitals, office buildings, etc.) are much less than individual customers?
commercial accounts
- Thread starter ice
- Start date
<strike>No.</strike>
Depends on what you charge.
Minimal design time, often quantities of identical items and somebody spending somebody else's money.
What's not to like?
Just make sure they plan to pay you in something under 120 days.
Depends on what you charge.
Minimal design time, often quantities of identical items and somebody spending somebody else's money.
What's not to like?
Just make sure they plan to pay you in something under 120 days.
HannaFate
SPFG, Supreme Picture Framing God
That has been the only problem with commercial accounts for me, too: the delay in payment. Otherwise, they are just as profitable as anyone else.
Usually, a large order will be all the same molding, and you can buy in quantity, and get enough of a discount to cover the discount you extend to your customer.
Usually, a large order will be all the same molding, and you can buy in quantity, and get enough of a discount to cover the discount you extend to your customer.
HarryGMCPF
MGF, Master Grumble Framer
Ice,
Love the commercial work. Absolutely no reason why you cannot make it as profitable as the custom work. Just need to make sure you really understand the numbers and how you will gain production efficiencies before you quote a price.
I would agree with the others that making sure you negotiate the payment terms up front is vital.
I'll take that stuff all day long. Then sprinkle a little custom on top... and MMMMMMMM It's all good baby.
Love the commercial work. Absolutely no reason why you cannot make it as profitable as the custom work. Just need to make sure you really understand the numbers and how you will gain production efficiencies before you quote a price.
I would agree with the others that making sure you negotiate the payment terms up front is vital.
I'll take that stuff all day long. Then sprinkle a little custom on top... and MMMMMMMM It's all good baby.
ice
Grumbler
What are the most common commercial business you sell to? How do you go about selling to them. For instance, would a hospital/hotel/office have a particular person dealing with this sort of thing. If so, what would their title be?
Bill Henry-
Brussel Sprout Connoisseur
I have had particularly bad luck with a local hospital.
Department representatives come in with a P.O. assuming that I have an account with the hospital. I don’t.
The first time I naively accepted this P.O., it took them over 120 days to pay.
Now I will only accept a check or a credit card from them. As often as not the credit card is from the employee of the hospital. I just suggest that they haggle with their hospital for reimbursement.
But the work I do for them is just as profitable ‘cause I don’t offer any discounts.
Department representatives come in with a P.O. assuming that I have an account with the hospital. I don’t.
The first time I naively accepted this P.O., it took them over 120 days to pay.
Now I will only accept a check or a credit card from them. As often as not the credit card is from the employee of the hospital. I just suggest that they haggle with their hospital for reimbursement.
But the work I do for them is just as profitable ‘cause I don’t offer any discounts.
The job of acquiring and framing art is usually outsourced to a designer or an art consultant. They are usually the one's that call the shots on the framing.
What they are willing to spend will be influenced by whether you are framing a "collection" or "wall decor".
Last fall I worked with a local art consultant on framing original works for the common areas of a new hospital. I am currently pricing a reframing job for a collection of pieces owned by a national bank. I have worked in the past with local resort hotels in their remodeling (always through a designer).
I think that it is important that a consultant or designer be involved in this, assuming they know what they are doing. They are hired by the client to see that their interests are met. They are also knowledgeable about the framing business and communication with them is relatively easy. They can also help you in getting through the paperwork so you get paid in a timely fashion.
Rob Markoff has written at length on this subject, and the post may still be in the archives. There are many pitfalls and his post enumerates them succinctly.
Making the job profitable involves many aspects of the business that are not included in the retail business world. Knowledge of your client and their paying habits is available...call the CFO.
One of the problems with getting paid is that the gigantic paper company just down the street is probably headquartered in Dallas. (Not that people in Dallas don't pay their bills, but it's hard to stop by the office and ask for a check.)
My best regulars are some of the local banks and credit unions. Oddly, my own bank is not among them. They have most of the same wall decor that they had 25 years ago when I started going there.
And some of my best accounts came about because a good and grateful customer for personal framing turned out to be in a purchasing capacity for a company with money to spend. A few of these have changed companies multiple times and brought me new accounts each time.
Keeping your regulars happy is a good place to start.
My best regulars are some of the local banks and credit unions. Oddly, my own bank is not among them. They have most of the same wall decor that they had 25 years ago when I started going there.
And some of my best accounts came about because a good and grateful customer for personal framing turned out to be in a purchasing capacity for a company with money to spend. A few of these have changed companies multiple times and brought me new accounts each time.
Keeping your regulars happy is a good place to start.
Dave
SPFG, Supreme Picture Framing God
Only downfall I see in working with commercial accounts is qualifying their credit. Nothing wrong with terms of "50% down/50% 30 days" or "Due on receipt". Large customers are used to working with outside contractors on this basis.
Dave Makielski
Dave Makielski