Anyone deliver? Need thoughts on offering this.
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  1. #1
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    Default Anyone deliver? Need thoughts on offering this.

    First off I'm a fab/welding shop, not a machine shop.

    I'm thinking about expanding in a few directions but my latest thought is to offer delivery to jobsites/customer locations.

    F-350 with a rack...nothing more than that.

    Questions:

    How much to charge for delivery?

    Is insurance horribly expensive (getting quotes soon so I'll find out)?

    Any other thoughts, experiences? Was it worth it from a business standpoint?

    Thanks

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    All of my customers are local and either they pick up or I deliver. I usually deliver at the end of the day on my way home.

    I find it incredibly valuable to put myself in the customer's shop. If you're there often enough you start to get to know certain people.

    The guy in shipping/receiving who tells me "We got some castings in yesterday so you should be getting a PO to machine them soon."

    The guy in assembly who tells me "The parts you made were kinda tight this time." I make a mental note for next time. Better check the print. I didn't know those two parts went together.

    The Plant Mgr who calls me over. "Hey, while your here could you take a look at this and let me know if you can make/modify for us?"

    Etc.

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    hourly rate + a mileage charge? rate applies there and back. Or save yourself the overhead, ,outsource and mark it up. I guess it depends on how busy you are and if you've got extra labour. If you're out driving you're not fabricating which is the core business

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    Quote Originally Posted by Mcgyver View Post
    hourly rate + a mileage charge? rate applies there and back. Or save yourself the overhead, ,outsource and mark it up. I guess it depends on how busy you are and if you've got extra labour. If you're out driving you're not fabricating which is the core business
    Odd IMO you would think like that, but I guess depends on your business? When I worked in die shops we delivered all of our stuff, and picked up repair work. Heat treat was picked up by heat treat company and delivered 2-3 times a week. Material was delivered to us with the exception of "hot" jobs where we might go pick up.

    IMO, and I am not a business guy, is it would be bad form to add a separate line item for delivery (except long distance). Just maybe take a customer by customer approach and say, hey I can deliver this order when it is done....

    my two cents

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    Quote Originally Posted by Mcgyver View Post
    hourly rate + a mileage charge? rate applies there and back. Or save yourself the overhead, ,outsource and mark it up. I guess it depends on how busy you are and if you've got extra labour. If you're out driving you're not fabricating which is the core business
    If you are out cold calling to get business, you are also not fabricating. Keeping old customers happy and getting new work also keeps you in business.

    Paul

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    Almost everyone I know picks up and delivers within say 60miles around the shops location, some further. Most shops have a delivery and gofer guy that does these things. Exceptions would be bigger heavy stuff that needs flat deck, rigging and DOT bs. But if a guy can lift it, it gets delivered.
    I never charged anything for it I just try to time it so it doesn't wreck my schedule too much, I don't know how others work it out in their quote or just eat it.

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    Quote Originally Posted by paul39 View Post
    If you are out cold calling to get business, you are also not fabricating. Keeping old customers happy and getting new work also keeps you in business.

    Paul

    I'm not fabricating, I leave that to those who know how

    100% agree on keeping customers happy, but you also have to know what your core business is. We're already chasing too many lines of business (products, OEM supply, design build, general fab), adding being a good delivery service to the mix imo isn't a good idea. Unless I have excess labour, I don't want to do it and would rather outsource it (that's a general statement, there's times and situations we do do it). Either way its chargeable - you don't drill and tap extra holes for free just because you're good guys, right? Same with delivery, I'm not putting a guy on the road with a truck for hours for free. Mind you, our stuff tends to be bigger and further away so its maybe a slightly different mindset. i.e. its not running a part around the corner in your car.

    ....but you have to charge for time and use of equipment and a basic tenet of business is stick to your knitting. When in doubt, evaluate situations based on first principals like that....at the same time I get happy customers is also a first principal which I guess is why I'm not saying we never do it. Its not expected of us, but if you're in a market where everyone offers it, you need an approach that works with that.

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    Quote Originally Posted by SND View Post
    Almost everyone I know picks up and delivers within say 60miles around the shops location, some further. Most shops have a delivery and gofer guy that does these things. Exceptions would be bigger heavy stuff that needs flat deck, rigging and DOT bs. But if a guy can lift it, it gets delivered.
    I never charged anything for it I just try to time it so it doesn't wreck my schedule too much, I don't know how others work it out in their quote or just eat it.
    Yep. We deliver everything. Agree with above, it is important to make contact with customers, it keeps you on their mind. I dont charge for it, its part of the deal. I do have to admit it hurts a bit when its a small $100 job, but the $100 jobs help bring you the bigger jobs. Customers have to know we are here for them. To solve their issues, make their life easier. Send PO, parts show up at your door, on time.

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    Depends on how you do the books. We do service calls and occasionally deliver. Service calls get a separate travel charge on top of the on-site hourly rate for every hour on the road and delivery will often get the same charge, unless the sales rep. worked a deal with them.

    For us, Our "business" is in the shop. We're happy to go where we need to go, but we have to charge for it because it's abnormal. The charge isn't just a fee, it covers gas, insurance, vehicle wear-n-tear, and idle time that a technician is sitting there watching the miles go by.

    Now if your business IS going to where the work is, I wouldn't do a travel charge, but I WOULD make sure that your normal rates are covering vehicle expenses and idle time.

    Ultimately the customer is paying for your time behind the wheel one way or the other. They don't care about that, they care about "hidden fees" and thinking they are double paying for stuff. If they know you are not normally on the road, but will gladly do it, a travel charge is not an issue.

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    This may sound like a dumb or obvious suggestion, but make sure you always prepare a delivery receipt to bring with you to be signed and dated by the recipient. I've delivered things to small business as well as large businesses where you're just dropping off at a distribution warehouse and, in my experience, some companies have a tendency to lose things. I'm on the Mexican border so it's very common here for items to be received on the US side at a warehouse which exists solely to ship to a plant just across the border. Very normal to get a call from someone in the purchasing department asking where that thing they ordered is (when you delivered and invoiced two weeks ago).

    It may sound a bit absurd but I take a picture of the box or pallet upon delivery to send along with the delivery receipt just so I can show the person quickly in an email what the item looks like so the warehouse workers can locate it.

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    Small fry here but I pick up and deliver, I chat with the guys in production that are ultimately giving me the order thru purchasing, I meet with the project managers about upcoming potential work, I bring in donuts once in a while. I told them I'm building a bigger shop and they gave me all the pex, pipe fittings and trench drains to put in the infloor heat system/drainage that was leftover material from their jobs. Got a call Monday about them giving me all their Lawson parts bins that I can use. I'm sole source for them so I build the delivery service into the price of the job.

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    I think offering a delivery service that came with a fee would not go over well. When I was in So Cal it was common for metal finishing services to offer free pick-up and delivery two times a week and I was 70 miles away from the heat treater and plater I used. (different businesses). Pretty sure if you were closer they would come by more often.

    I don't even have a customer in my same state now, but back in Cali when I was playing Dualkit all local customers, of which I had a half dozen or so that were all within 50 miles got free delivery.
    I usually sent my salesman, but if he was tied up I sent the least skilled shop hand. Most of the time they would come back with another order.

    Charging for delivery as a means to make a profit, instead of a courtesy to customers just won't fly. If you charge a price to compensate for your time and some profit thrown in most customers will decide to send the lowest paid shop help to take the company truck or van and pick it up themselves.

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    Quote Originally Posted by jm7905 View Post
    This may sound like a dumb or obvious suggestion, but make sure you always prepare a delivery receipt to bring with you to be signed and dated by the recipient. I've delivered things to small business as well as large businesses where you're just dropping off at a distribution warehouse and, in my experience, some companies have a tendency to lose things. I'm on the Mexican border so it's very common here for items to be received on the US side at a warehouse which exists solely to ship to a plant just across the border. Very normal to get a call from someone in the purchasing department asking where that thing they ordered is (when you delivered and invoiced two weeks ago).

    It may sound a bit absurd but I take a picture of the box or pallet upon delivery to send along with the delivery receipt just so I can show the person quickly in an email what the item looks like so the warehouse workers can locate it.
    Not dumb at all! I worked at a big place where we had 3 separate buildings, with only one of them that did receiving, then they would run one of our trucks to the other locations to drop off stuff. They routinely "lost" stuff. Like big pallets of material, a roughly 3' sq box that had about $4k worth of product in it, etc... no apparent rhyme or reason, just carelessness I suppose...

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    I personally deliver everything to one particular local customer, since with them, if it's not there on time, it would potentially block up large and expensive dependency chains. I don't explicitly charge for this, but I consider it when quoting their jobs. Sadly, their Receiving is a ways away from the buildings housing the engineers that use the parts, otherwise I would be able to network, bring donuts, etc.

    Otherwise, I ship everything even if it's only going across town, since delivering to, say, Pioneer Square in Seattle is a 1.5 hour traffic-fighting odyssey that makes me cranky for the rest of the day.

    Regards.

    Mike

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    Thanks for the replies.

    To clarify a bit, I would offer delivery as a part of an expansion plan.

    Currently I do A: Complex and weird stuff for one company. B: I have my own products. C: I have a few other really good customers.

    3 employees plus me.

    The above takes up my time, but I want to expand into "simple" (nothing is easy I know) and higher volume stuff for construction companies/ maintenance departments/physical plant operations, etc. I would offer deliveries as a part of this.

    I would ease into hiring for this...both the delivery and processing if necessary.

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    We deliver most of our stuff for free. Whether on our truck, or UPS/Truck Freight.
    Usually the freight cost/time is really not that big of an expense over the cost of the product.

    Now - there are some times when I'm stuck delivering $300 or whatnot - but only a 45 minute round trip.
    I don't like that, but in the big picture, it's minimal.

    My wife use'ta drive the truck, and at times - that was a full time job. Deliver what she could in the 'burban, the rest went on the dually flatbed.
    I'd guess that she has put more miles on our old '99 dually than I have. I can recall one day loading it up with 5 skids. Only 4 fit on the deck, so one was double stacked. I don't know if any 2 lifts went the same place either. Of course those weren't all "deliveries" as many of those stops were platers, grinders, or whatnot.

    She has moved on in her life and is hoping to never have to doo that aggin, but occasionally she will. (VERY occasionally)
    At one time she referred to herself as "Queen of the Ratchet Straps". Our newer truck has a juice tranny too - to make it easier for her. Now I wish I had a gear drive aggin! She does deliveries in the 'Burban somewhat frequently yet tho.

    Since she's not helping as much anymore, I doo let customers pick up on their truck more as it's best for me to be here if possible. And not sure that I want to get into stuffing an employee in a +10K# GVW truck. (Needs med card) It would be different if it was every day, but ....


    ----------------

    Think Snow Eh!
    Ox

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    Are you trying to create a delivery service?

    Or do you want to charge for delivery of parts that you are making..
    If that's the case.. good luck..

    I myself have never gotten paid for delivery.. Though I did get my
    helper person some cash for picking up an emergency fix a while back,
    though it was like pulling teeth (He's SO cheap, and his truck is ugly,
    Its an Avalanche, but he's a good dude)...

    If I had a dollar for every odd or strange pickup and drop off I've made,
    I'd probably have a few dollars in my pocket.. The Kmart parking lot was
    always good, did that last year at 9pm on Christmas Eve. I've met the
    owners wife at the 'Cash and Carry'. Bank parking lot. Even Sunday morning
    while they were at the gym.

    "Start driving NOW, and call me in 19 minutes.." *Ring* "Drive exactly 2 more
    miles and pull over".. Perfect rendezvous.

    My helper person happens to live right next to a purchasing agent of a customer
    of mine that they may or may not be related to.. That makes deliveries REALLY EASY.

    The easiest.. The guy that is less than a half mile down the street from the shop..
    UPS shows up at his shop at 2:10. the material is in the chuck in my lathe at 2:15.
    Parts delivered at 2:40. His customer up and running by 3:30.. Its kind of fun.

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    I think you just have to decide if it works for your business to deliver to begin with. If it does, then figure out how to get compensated for it, whether by the sales part of the delivery or if you roll it into your shop rate on the quote.

    I prefer to deliver if I can as it puts me in front of the customers. I for sure have multiplied my business with a customer from being there. I thought about having my Dad deliver, but to be honest most of the time I think it just works out better if I am the one in their shop.

    I also know that for a couple guys it is a bonus for them that I will deliver it and I think that it is one more thing that keeps me on the first to call list. My biggest customer supplies material for most of their jobs and I even go pick it up. They are 20 min away, so not a big deal for me, but could be for them to have to get it to me.

    I don't have any extra insurance, so I am gambling that it will all be OK.

    Oh, I did almost get burned on the lost parts thing last week. I have been too informal and hadn't been getting parts signed for. I got a call a few days after a delivery and they said they couldn't find some of them. I couldn't prove on paper that I had delivered them, so I ended up running new ones. They found the original ones as I was delivering the new ones. Thankfully the PA offered to buy the new ones, but I will be having all my stuff signed for now. Cheap lesson.

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    Quote Originally Posted by Booze Daily View Post
    All of my customers are local and either they pick up or I deliver. I usually deliver at the end of the day on my way home.

    I find it incredibly valuable to put myself in the customer's shop. If you're there often enough you start to get to know certain people.

    The guy in shipping/receiving who tells me "We got some castings in yesterday so you should be getting a PO to machine them soon."

    The guy in assembly who tells me "The parts you made were kinda tight this time." I make a mental note for next time. Better check the print. I didn't know those two parts went together.

    The Plant Mgr who calls me over. "Hey, while your here could you take a look at this and let me know if you can make/modify for us?"

    Etc.
    Yes, yes, yes--absolutely the best kind of networking. Getting into your customers shops--as opposed to visiting
    the office with some sales literature--gives you lots of inside information. It can be a regular thing with existing
    customers but even with new customers I'll often ask for a tour of the shop--most people are receptive to the idea
    and when you're walking through the shop you can point out things that you can do. I've picked up more than one
    job that way...

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    Not only do I pick up and deliver, I actually talk to employees, admin section and owners.

    I get a lot of additional work as they ask if I can other things. I also ensure that they get what they want. A few times the owner has said he wanted "X" and the guys working the job have said they need "X + Y" and I end up talking to the owner to get work out additional details.

    I have a great relationship with shop guys and owner, both sides have been to my shop for pick up or drop and we talk through many details I would not have if I didn't work with them.

    I considerate somewhat of a partnership. I do great work for them and make life and they keep me in business. I don't kiss ass, I am professional.

    As for charging, I don't list the delivery/pick up charge. I do include it in the pricing. It makes it easier for a few of the places I do work for. Some may say it is not good practice, but it is what works for my little shop.

    Find what works for you, it will make a significant difference especially with fabrication.

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