I am moving out of state, some customers products will be cost prohibitive to ship.
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  1. #1
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    Default I am moving out of state, some customers products will be cost prohibitive to ship.

    I have one customer for example who needs 100 pcs of around a dozen parts a few times a year but the parts are fairly heavy and the finish is critical making them a PITA to ship and I suspect the rejection rate would be high from bouncing down the road for 1000 miles in a truck. Anyhow I sold I recently sold my oldest VMC to a guy starting a shop of his own and am thinking of offering this family of parts to him, I hate to give it away as I have special tools, fixtures, programs, offset files, pics of the set ups, tool lists, and every other damn thing required to set up and run these jobs at or around $125 per hour. It would be a good move for him and the customer in my opinion ( we have been making these for 15+ years). What kind of value could a guy put on this, it must be worth something? In the end I imagine I would give it to him rather than throw it away but was thinking something like 10% - 15% of sales to this customer for a few years would be a fair way to go. What do you guys think?

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    There's no denying that this would be a generous thing for you to do for this person and by extension, his family. The only other option is to create a custom shipping container built on and around a standard 40 X 48 pallet and use LTL shipping. Even if you spent a thou or two this one time building it, in the long run it could be worth it. The container would be shipped back to you empty to be re-used.

    Look at it this way. You spend time and money to create fixtures and special tooling and the likes to produce your work, what is wrong with spending equal time and money to ship it if this is now an integral part of the whole job? Nearly any object can be made safe with enough thought and care taken. It may be out of your line of expertise which perhaps makes you uncomfortable, but there are people you could hire or pick the brains of shipping companies.

    I don't know. Do the math. See if it's viable. LTL shipments can be surprisingly reasonable. If not, you can also feel good handing it off to another.

    Dave

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    I would figure out the cost to package and ship it , add to the cost of manufacture and keep the job myself. If that is not possible, you could sell the fixtures and know how, but the customer will not be obligated to use the new vendor, so no guarantee you will see any money beyond that. A percentage of sales is fine, but 15% of zero is zero.

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    Glad you could escape from Cali, where are you headed?

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    Quote Originally Posted by Dualkit View Post
    Glad you could escape from Cali, where are you headed?
    If I remember right he had a good thread on moving to Idaho.

    Back on topic, people ship delicate items every day. I like the idea of the custom pallet/shipping crate. The question seems to be how much packaging/shipping will the client pay for before looking for a local source of these parts?

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    If I had that situation, my primary goal would be to figure out how to ship the parts to the customer. I don't know the specifics (obviously), but it sounds like you would be giving up the revenue from 3-4000 parts per year; if they are heavy and finish-sensitive, they are likely not $2 parts, so this just sounds like a fair amount of money to be turning loose. If the customer values your loyalty as a supplier, they are likely to tolerate some shipping cost increase, but you may feel that you will have to eat some as well. Purpose-built packaging may be the best option.

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    I agree with custom reusable shipping materials. A pallet with boxes and custom foam inserts, may be enough and fairly cheap in the grand skeam of things. If you've been doing them for 15+ years, the customer may be willing to help with the cost in order to keep you making their parts(some people like consistency).

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    Yep, Northern Idaho for sure.
    Where we are going is remote and trucking will be a problem as anything longer than a 28 foot trailer and a short truck just won't fit and most of the trucking outfits passing through are big trailers as they are going through. These parts are not actually delicate, just the grained finish on bare aluminum, as you know you can make cross scratches on it just by handeling it with bare hands. Anyhow we used to have a dozen people working here and we don't any more, she and I will be the crew from here on out. As we get closer to being moved we are thinking 3 day work weeks look better than the 7 we have been doing for while now. It is 68 steps from my back door to the river and 158 steps to go to the shop, fishing is half the walk working is. We have to let go of some of these jobs. As mentioned above, the customer is not obligated to stay with Jon, but he needs his parts and Jon is motivated to make a living so I think it could be a good fit. I have known him 20+ years, he is a good guy, has been machining longer than me and only makes/sells good parts.

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    Quote Originally Posted by kustomizer View Post
    Yep, Northern Idaho for sure.
    Buddy of mine moved right near Sandpoint a few years ago, loves it.

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    My friend Rodger went there about that time and he and his wife are having the time of their lives. Our dealings with the county, dmv, local businesses in Idaho have been like it was when I was a kid here, nothing but friendly, helpfull people every where you go. Nothing like this mess that has grown up around us here, even though this area is still better than 90% of California, it is not what we want for our future so we are moving on out.

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    I should mention that although I do appriciate the suggestions as to how we could keep the work, the fact is we do not really want to. If we have to keep making these parts for a bit until the customer is settled in with a new supplier we will, they have always been Johney on the spot with payment and they come pick up the parts, they are good people. This customer was worth 20k this year, $89 pr hour on the worst job and 156 on the best.
    Last edited by kustomizer; 12-31-2019 at 01:16 PM. Reason: added value

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    It's good you've known the other shop owner for 20 years. Maybe just put the idea to him, and see if he's interested and what he thinks is fair as a buy out?
    I tried to give work to a guy in his garage years ago, that I only knew about 2 years. He was always wanting to find jobs and grow his little shop. Turns out, things went south in a hurry. The saying 'no good deed goes unpunished' comes to mind. YMMV.....

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    Why not keep the job and sub it out to your friend. Keep 10% for yourself and give him the fixtures

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    reject rate with proper packaging should be zero

    If your move lowers your cost of doing business, it could be that you could underwrite part of the shipping

    For all you know you might be 50 percent cheaper than the competition, and with shipping you will still be cheaper.

    Research LTL rates and classes to figure out what your best cost would be.

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    My wife does the books and wants less to do as do I. If I am in the middle and he does screw up I have to do the hand holding, I am a horrible, horrible babysitter.If I sell it to him I am out of it unless he forgets to pay.

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    "reject rate with proper packaging should be zero

    If your move lowers your cost of doing business, it could be that you could underwrite part of the shipping

    For all you know you might be 50 percent cheaper than the competition, and with shipping you will still be cheaper.

    Research LTL rates and classes to figure out what your best cost would be."

    But I still have to stand around and make them, 7 days a week has been our thing for a long time. Once we are moven I plan to find some time to address my PMS ( parked motorcycle syndrome ) My fishing gear is all dusty, there are Elk all over with "shoot me" painted on their forheads, we are going to scale back and giving a guy a hand up is OK, but I am not wanting to make it a hand out.

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    Good luck with your PMS! Please check your PM (private message).

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    Quote Originally Posted by Dualkit View Post
    Glad you could escape from Cali, where are you headed?

    Virginia maybe?

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    I would contact your customer who has been so good to you and your company. Offer to give them all the supporting materials for their work. Let them decide who to continue to provide them the work.

    If they don't want it, put it all in the dumpster or sell it outright to highest bidder and be done with it.

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    Quote Originally Posted by kustomizer View Post
    "reject rate with proper packaging should be zero

    If your move lowers your cost of doing business, it could be that you could underwrite part of the shipping

    For all you know you might be 50 percent cheaper than the competition, and with shipping you will still be cheaper.

    Research LTL rates and classes to figure out what your best cost would be."

    But I still have to stand around and make them, 7 days a week has been our thing for a long time. Once we are moven I plan to find some time to address my PMS ( parked motorcycle syndrome ) My fishing gear is all dusty, there are Elk all over with "shoot me" painted on their forheads, we are going to scale back and giving a guy a hand up is OK, but I am not wanting to make it a hand out.
    Well that is a whole different thing isn't it


    Worry less, fish more if it makes you happy.

    Honestly if you don't need the money, inform the customer. IF you want to give your fixtures etc to a friend, sure, but this becomes entirely someone else's problem.

    The more you get involved the more time you are bound to spend when you are not getting paid.


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