I am moving out of state, some customers products will be cost prohibitive to ship. - Page 2
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  1. #21
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    Give the lead to him. It's only a lead. The customer has no obligation to use him so unless there is a long term contract. Otherwise its valueless. I would try and sell him the fixtures for material cost and would settle for scrap.

  2. #22
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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
    Expand your business enough and sooner or later your clients will be too far away to come by and pick up from your dock. When that happens you cannot expect the customer to accept damage from transit. We ship fancy car parts of awkward shape worldwide, and have to protect them so that when they get there the customer smiles when he takes them out of the box. That meant 350-lb triple-wall custom cartons, thick styrofoam planks and a large table for a hot-wire cutter to trim them to fit the parts using templates. No peanuts, newspaper or other old-time packaging methods; we even superseded expanding foam bags. Yeah it's somewhat expensive, but fairly efficient and the cartons are so nice the customers keep them for holding other stuff. Since they are white with our logo printed really large, it's a perpetual advertisement. And it always gets there even if thrown around in transit.

    Sounds like you want to avoid the whole shipping parts hassle, though, and if you can do that and still make a living it's the holy grail. So good luck, and congrats on escaping CA.

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  4. #23
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    We actually ship all over the world every day but those parts are assembled, blister packed and worth a whole lot more. I am running one of the jobs in question as I am here typing, the machine makes 2 every 14 mins, It takes about 3 mins to grain and box them for the customer to pick up, they are worth 26 bucks each with about 3 bucks in aluminum. It is a good job, but I am not doing 2 better paying jobs because I am working on this one. I would like to make Jon a deal that is good for him but in doing so I would like to have it be more of a hand up than a hand out. I am sure the customer and Jon will get along fine, they are both good easy going people. I just sold him a VMC with a pair of 6" Kurt Doulble lock vises on it but the rest of the tooling he will need to get started will use up most of what he has in cash. That was where I was thinking a percentage of his sales for a while would be a fair way to do this and I had the thought that some of you may have done something of this sort before. As we muttle our way through this move and continue down-sizing I am going to have a few more projects such as this to shed.

  5. #24
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    I think its great you want to pass this on to the person you sold the mill to. I have two ways of looking at this.

    First, the tooling, fixtures, set up sheets, and all associated have been paid for by previous work, correct? So at this point all you loose is the opportunity? You mentioned you have known the guy for a long time. I would recommend saying hey... lets see if you can get this work passed on to you, if the customer is OK with it. Then work out a payment plan, or some form of "royalty" when he does the work.

    My second thought is... if you don't need the money, and it is someone you know and like and think are a good person, pass it on to their benefit. It costs you nothing.

    I recently acquired a product line from an older gentleman. A lot of work upfront, slow sellers, but high dollar parts. He was just happy to see someone take over the product line, and did not charge me anything. He politely asked that if I get up and running that I pass him a few bucks occasionally as I sell them. I am of course more than happy to because of the opportunity that he gave me. And that is (to him) a kid that cold called him because he stopped selling his product.

    Just my thoughts... Best of luck with your move to Idaho, my wife and I are looking to do something similar!

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  7. #25
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    You are correct, it would cost nothing to give it to him, but much of the tooling I could reuse for other projects so it is not just scrap and some of it is modified std tooling I could use as it is. I think the royalty/ % of sales from these parts would be fair to all parties.

    "A lot of work upfront, slow sellers, but high dollar parts"
    I make a good living making exactly that, my best is worth $650. per hour, they take a year to sell, but they sell. You can walk around with $500. worth of them in your shirt pocket so storage isn't too big of an issue.

    I made a post here a while back about what I should do with my stuff when I am done with it because like the Product line you picked up, we will leave something like it with the machines to make it and the building to do it in and the humane society will sell it all for junk. I got a lot of replies and as a result of a couple of them we decided to sell off a bunch and stopped working on a bunch of new projects that could be good money makers but there is only so much of us to go around. In the end we will still have the same problem as to "what to do with our stuff" but there will be a lot less of it.

    Great thoughts,good luck to you and yours as well.
    Thanks
    Mark

  8. #26
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    If I were in your shoes or the guy buying the fixtures I would be happier with a fixed price but paid off as a percentage of sales or as a monthly payment. Rather than a percentage over a fixed time.

    For you its easier for you to decide how much you want for the fixtures and come up with a number. It's cleaner as far as how much he owes you, and you are less likely to wonder "why are sales down this month is he selling some without the commission?" If he has a good month he can pay off a little faster and conversely if he has a bad one and calls to say can I pay you next month instead it's much simpler for your books to just be able to just keep track of the total still owed.

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  10. #27
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    I thought about that, and I guess we could renegotiate if something happens beyone his control such as the demand goes away or something happens to the customer.

  11. #28
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    I would do a one time all in price for the fixtures, tooling and goodwill. Maybe ten percent of one years gross sales for those parts? Figure out any payment schedule that suits you both and then forget about it and go hunting!

  12. #29
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    A few years ago I bought out a shop from a guy who wanted to retire. At the time I only had manual machines. With the machines came all the tooling and support equipment. As part of the deal he also turned over all the work he was doing and introduced me to his customers. He spent the next year training me to produce the 100+ different parts he was making for them. Though it has been good and I have managed to keep this customer base, I have always known it was up to me to perform in order to keep them.


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