Question: Over and Above
Q A DISTRIBUTOR ASKS: How do others handle the issue of overs on orders? Is there an industry standard for the percentage of overs? Plastic bags seem to be the highest. Do you charge your customers for the overs and deliver them along with the order or keep them as samples? How do I best manage this?
A I would encourage you to educate your clients on this issue. Our industry has a standard over/under run policy of up to 10 percent. That means you can receive up to 10 percent more or less than what you ordered and you will be billed according to what you receive. To avoid problems, make sure you tell each new client about it at your first meeting. Let them know that they will be billed according to what they actually receive. Also, make sure it is on the contract you send to your customers for every single order. That way, they acknowledge the terms every time they sign the contract agreeing to the details of the order. Trust me, you’ll need to remind them of it when they get their first bill. Eventually, it will become a non-issue for you and for your clients.
I would also encourage you to find an industry supplier near you who will take you on a tour of their facility. Your regional industry organization may have organized tours that you can join. Once you see the production of an order, it is easier to understand why there are over/under runs. My first tour was of the Sabina plant in Florida while there for an industry show. Watching the process of imprinting a mug made me realize how hard it must be to get it right every time. And when you add a second imprint color, the complexity of the process really multiplies. (This will also help you understand the color location tolerance levels that suppliers have.) During our tour, there was a loud crash that came from the oven. I’m not sure if even overruns were enough to replace what had broken.
Make sure to keep one overrun for yourself (deducting that from the total charged to your customer) so you can use it at local events, trade-show booths, in discussions with clients and in other places to help gain new business. Deliver the rest to your client—you’ll be billing them for it.
Explain to your client that overs are an industry standard. Ninety-nine percent of them understand. If not, tell them to return the difference and you will credit them. Very rarely will clients take you up on this offer.
Weinbergers Classic Print
The issue of receiving overs has been a thorn in my side as a distributor for as long as I have been in business. It is common in the printing industry and the promotional products business, and can range from five to 10 percent. The general idea seems to be that the supplier runs some extra items so that the quality control department may pull defective products. Since it would be costly for the supplier to set up again if the order is short, this seems to make sense.
I had one supplier that consistently ran 10 percent over on every order. I was concerned that the company was using that tactic as a money maker. The sales rep later admitted that all orders from his company are shipped out at 10-percent overrun. I was uncomfortable with this, so I no longer use that supplier. I currently include a disclaimer in all order confirmations that the order is subject to five percent plus or minus. I rarely get push-back from a client.
Generally, I don’t bill the client for extras unless it is a very expensive item or there are a large number of overruns. I do show it on the invoice as “no charge” and make sure the client knows he received extra product. If the order comes in under the amount ordered, I issue a credit.
One thing to keep in mind is that underages may be more of an issue than overages. I had a customer that had 135 people coming to an event. When her order came in two short, it was a major problem.
You can always submit an order and request that the supplier ship the exact quantity. In some cases, there is an upcharge for that service.
In my experience, this is an issue that rarely occurs. The two cases I have had with overruns were both handled the same way. The suppliers charged me for the amount I had ordered, and my clients received the overages at no charge. In both cases the suppliers were comfortable with the solution, and our customers really appreciated the gesture. Apparently, everyone likes to get something that’s free, especially when it’s decorated with their logo.
DAVID J. HAWES, MAS+
It seems the “standard” can run anywhere from five to 12 percent. We work most often with suppliers that ship the exact amount without a surcharge. For those that ship over (we have never experienced an underage), we add to our P.O., “No overship … undership OK.” That seems to help and there is no extra charge.
We also include this on all of our quotes and invoices: “All orders are subject to overruns or underruns of five to 10 percent. Exact quantity orders not available. Overrun and underrun discrepancies will be charged/credited to your account at time of shipment.”
We handle overs on a case-by-case basis depending on the client, quantity and cost. (By the way, pens are right up there with plastic bags.)
SUZAN BOLSKI, MAS
Chief Executive Officer
Anything Goes Promotions, Inc.
Terry Ramsay is associate editor of PPB.