Cleaning & Maintenance Management Online

Letters To The Editor

March 7, 2012

Editor''s note:

A recent discussion on the Cleaning & Maintenance Management Online Bulletin Board centered around what to charge for consumables at a new account. The conversation about offering a fair price to the customer while remaining profitable follows below.

Posted by:
TJ
1/16/2012

I''ve gotten some great advice on here, so here are a couple more questions. I just landed a new account, and the client wants me to give him a price on supplying consumables.

What would be a fair markup?

Also, what supplier has the best pricing?

I am located in New Jersey.

Thanks in advance.


Responses:
Mike Kelley
1/17/2012

I don''t know what you spend on consumables, but the Building Service Contractors Association International (BSCAI) rolled out a purchasing program last year to its members that has worked really well for us both in terms of pricing and service.

I suggest you go to the BSCAI website and check out the Purchase Advantage Program.


Ken Galo
1/17/2012

TJ, Markup average is 15 percent to 25 percent depending on volume.

Double think paying membership dues to the BSCAI to get a discount on butt wipes; it may not washout in the end.


Mike Kelley
1/17/2012

Hi Ken, I guess it depends what your volumes are.

We''re a smaller company, so our monthly orders are not huge.

But, with what we saved versus buying from local supply houses, we covered our BSCAI membership by the second order.

The notion of being part of a larger buying group is pretty much how many industries around the world operate.

As a smaller company, we don''t have access to the type of discounts that the big guys get when they purchase their "butt-wipes."

If we don''t get some sort of a pricing break, it''s hard to make money re-selling product.

Using the Purchase Advantage Program definitely helps our margins.

We also continue to use the local supply houses that provide quality service and good advice on products and equipment.


Joseph Russell
1/17/2012

I would suggest that you get about 25 percent on all consumables.

And, add to your order that prices will be reviewed every quarter or six months, just in case prices — especially paper — go through the roof again.

A lot can happen with those things.

If it starts working against you, you''ll be dissatisfied with the entire contract.


TJ
1/18/2012

Thanks for the info.

I was going to do around 15 percent to 20 percent markup.

Do you charge monthly or as product is needed?


Joseph Russell
1/18/2012

Add it as a second line to your monthly invoice.

There is no sense in covering yourself up with paper or making your customer process more checks.