It is hard to succeed in a big tender without careful and on the limit price calculation. But there are times when such calculation is almost impossible … Like for example when client provides not exactly clear image of a bag or backpack and expects quick price calculation for large quantity. On top of that the price needs to be quoted for transport by air.

With no time to produce the sample there is no chance to calculate the cost accurately. The unit cost can only be estimated. Too high estimate results in no business, too low estimate results money loosing production. Make your pick.

With no samples on hand the packaging info like carton dimensions and weight can also only be estimated. May be manageable if only sea shipment is expected. But estimating a bit too little or bit too much can mean big money when it comes to shipping by air …

And then the cost of air shipment itself. With airfreight costs effectively doubling in past month or two and no clear direction for the near future what rate to select for price calculation for goods expected to be shipped in about 3 months time ?

Pricing can be fun …

A while ago I wrote about how I discovered lanyards. When after several years the only lanyard innovations come in a guise of different widths, printing technologies or all sorts of fancy clips and attachments I began to think the lanyard evolution is over. Well, I was wrong. Here is something new:

It looks like this is a lanyard designed to carry something heavy on the neck. At least that is what the padding would suggest. While that may be one of the unintentional benefits of this product, it does not seem to be the point. When you look closer, you see a zipper. When you open the zipper, you can pull out a hood … Who’s idea was this I would like to know .

As a gimmick, this is quite funny. As a promotional product – well, it may not be that bad for the advertiser. The large hood provides quite some area for imprint. But, how often will that large imprint area actually get some exposure ? I would say only if it rains. But now, frankly, will anyone pack this thing as a precaution in case of rain into the back, or carry it on the neck when going out ? I very much doubt so … I would say unless it rains at some outdoor event where these hood lanyards are distributed, the hoods will never be exposed to the public. So all the printable area that actually matters is what is seen on the first picture in this post. Even less than what an ordinary lanyard provides for much lower cost.

So what is wrong with this lanyard ?

It costs more than usual lanyards without any hoods, most of the printable area it offers will never be seen. It offers pretty much zero rain protection. Unfortunately as it is the case with many promotional products and BizGifts these days, this is just a gimmick, and a useless one. If you want to produce a gift item that protects people from wet weather, you better stay with umbrella or if on lower budget with cheap rain poncho.

If on the other hand you want to get peoples’ attention by giving them something silly they will ridicule and talk about, this may be one of those things .

A while ago I made a post It Ain’t Over ‘Til It’s Over and the last thing I expected was that the particular project that inspired me for writing that post will turn it to be a major screw up. Well, almost, lucky me. But well, it ain’t over yet, so I better wait with the standing ovations for myself.

So what has happened ? Well, this time, surprise surprise, the mess up did not come from our supplier but from our customer’s client.

Imagine this:

• You spend several months developing a product

• You receive sort of conditional approval and go ahead

• You reject that conditional approval and ask for either a firm approval

• Client asks you how more time and money would further development cost

• You provide the figures

• Client decides to go ahead with the products as it is and gives you the firm approval and signs the contract

• You go ahead

• When first (big) lot is ready to load into containers and ready to ship you send a batch of samples to client for their promotions preparation work

• And then bang … Client say stop everything, we do not want this “rubbish”, no matter that that “rubbish” is exactly what they have approved and the best the money they are willing to spend can buy

The problem as we found out was that the bosses of the person who gave the approval did not like what they saw. Unfortunately, they only saw the product for the first time after big part of the production was already completed or semi ready …

Very scary situation. Luckily a solution workable to both parties has been found and the project has been re-started without major wounds. Thanks to all the parties involved willing to work it out and go the extra mile.

It ain’t over yet, but at least I can sleep better now.

These are not the easiest times to do business. The world economy is slowing down, some markets are even slipping into the recession. So the last thing one wants to do is to increase to prices to make life for customers even harder than it already is. Unfortunately Murphy’s Laws rule the business and so when we are in a global economic slowdown times we also face cost increases higher then ever. What to do ?

One factor is the relationship with the customer and nature of his business. If you have a very open relationship with your client based on mutual trust than you can talk openly with your customer and find the solution together and everybody is fine.

It gets more difficult if there is even a slight mistrust or caution between supplier and customer. Client may not believe all you say, even if you are completely honest. Or you may not be willing to disclose all the information to customer worrying client may take an advantage from the extra knowledge.

So how to handle it ?

There are surely many in-between solutions to these market conditions but to generalize there are 2 approaches:

1. To absorb all or as much as possible of the cost increase and keep prices unchanged for clients until the moment clients have chance to revise their price lists.
2. To always copy the cost increases and pass them all on to clients as they occur

What is the better way? Hard to tell. Perhaps considering the cons of these 2 approaches is the way to go.

• If you keep absorbing the cost increases or squeeze your suppliers down to absorb part of it, you are being nice to your client. You are however reducing your margins to unhealthy levels and client often does not even know about that and therefore can’t appreciate it. Then a point comes where the prices have to be brought to reality. When customer sees the new price list, he freaks out and you get all the yelling and shouting for being crazy. That is often the reward for being nice to your client for as long as you can afford it …

• The other option is not much better. You may be asking for less increase (but more often) but you are still bringing bad news. So all you can expect are bad reactions. However this time you bring the bad news more than once so you get that yelling and shouting more often. There is a light at the end of the tunnel here however. One day you get used to that yelling and shouting and one day your client gets used to the regular price increases. None of you gets to like it, but both will get used to it.

Make your pick, I made mine already.

The nature of BizGift business means there is always some sort of trouble on horizon. It is pretty much impossible to have things going smooth. What is possible however is to lower the likelihood of disaster.

First of all – do not be suicidal and do not promise impossible to your customers. It is very tempting to say OK to every request from client in order to secure the deal. But this may and will came to haunt you. Yes, most of the things can be done, but not all can be done within the time and budget constrains of a BizGift project. You will not get paid for your promises for the goods delivered. If you promise and do not deliver, you end up paying !

Make sure you select a reliable supplier. Get references from people you know, use suppliers that you had good experience with previously. If you still do not know, choose a market leader in your area, there is always a reason for someone to become a market leader. Take the pricing into consideration, but do not make your choice solely based on price. At the end, you often get what you are paying for …

Once you select your supplier, make sure you brief them well. Not every supplier can read your mind.

Then when you secure the order remember that is when the real trouble starts. This also when you have no way to back off anymore …

“Murphy’s law is an adage in Western culture that broadly states that things will go wrong in any given situation, if you give them a chance. If there’s more than one possible outcome of a job or task, and one of those outcomes will result in disaster or an undesirable consequence, then somebody will do it that way.” – from Wikipedia

So here are few examples of possible problems:

• While you were closing the deal with your client, someone else beat you and occupied your supplier’s production facility. There is no chance you will make the order on time.

• The moment you place the order, your suppliers apologizes (in the better case) to you for making mistake in calculation and gives you nicely (in the better case) two options – higher price or no production.

• Due to time or technical constrains you concluded the deal with your client without having the final product ready and approved. While fine tuning the product in the preproduction stages of the order you and your supplier realize, that what was ordered actually can’t be done …

• After you place the order your supplier changes the payment terms, take it or leave it. The new conditions are either impossible for you to comply with due to your cash flow or simply too risky to accept.

• You loose your cool during a routine meeting with your supplier, and the supplier simply walks away. You get dumped …

• You conclude the deal, you are ready to place the order with your supplier. Then you find out the supplier closed down the business.

This is in no way exhausting list of possible trouble. The closest you get to the complete list would be by checking out the Murphy’s laws. So watch out, do not let Murphy to mess with your BizGift project.

Photo: www.murphys-laws.com

Today was a pretty good day. For past few months we worked hard to win a project that, to describe it mildly, is huge. I mean huge huge. And today was the day we learned we have won it. Sounds like a reason for celebration, time to get out and down several cold ones. So what the hell am I doing here, writing this post ?

Well, one thing I have learned is, that it simply ain’t over ’til it’s over. The moment client gives you the order is where everything begins, not where everything ends. Trying to win the order is a game. It is serious game but still only a game. You do not win it, you loose nothing, except maybe your pride. But once you win the order you are in trouble ! And if the order is big, you are in trouble for next several months. The more you are aware of this, the better for you.

So when it will be over? I always tell my staff, that we can only consider any project to be successfully over when all the goods are in customers’ hands on time, in good condition, money is in our account and after that another 4 months have passed and we have no claims for any refunds. Then it is over and we may be right to mentally move on.

If all goes wrong you loose much more than what you would gain if all goes right. That is a simple math. Maximum you can make (in financial terms) is the profit margin you work with. But there is no maximum to what you can loose …

It is important that all parties involved in the project understand this. One of the reasons we ran into troubles in the past was, that our suppliers considered things done the moment they received the order from us …

How I know this ? Well, I was on the loosing end several times. Luckily the crisis management every time managed to limit the damages to bearable levels and more importantly, I was lucky to be dealing with customers who were part of the solution and not part of the problem. But that may not always be the case.

So, today the troubles began

P.S. I am not the only one who says It Ain’t Over ‘Til It’s Over, here is the other fella, Lenny Kravitz. But he has totally different reason (video inside the article)

It looks like mugs have been around as a BizGift forever. While many other promotional products come and go, mugs, quite like the pens, seem to be always in. The shapes, the colors, the designs may change, but the mugs are always around. Why is that ?

• First of all they are relatively cheap to make. The cost depends on the material (porcelain, stoneware, ceramics), the material grade, the print design, the print technology, the packaging (if any) and the quantity of mugs ordered. But it is safe to say that mugs are one of the lower budget business gifts.

• They provide large area for branding. Whether it is just a simple logo or all around photo imprint, the branding on the mug is visible. Many people keep their mugs on their office desk where others see it.

• The mugs are useful and practical gift and people usually like getting them. Mug is a gift that makes many people happy.

• Although the mugs are relatively cheap, they do not (or should not) look cheap if well made. They are a decent gift by themselves, but also a nice part of a gift set, like for example the one pictured below.

• The mugs are also mass marketing medium. Look at all the coffee brands around the world and check out the coffee shops that serve their coffee. All the coffee is served in mugs or cups bearing the said coffee brand.

How are they branded ?

The big orders are usually branded right at source in the mug factory. The most common method are the decals applied on the mug and then fired in the oven.

For smaller orders suppliers usually pick the mugs from their stock and depending on the size of the order, design of the mug and type of logo choose either the decal method, pad printing or even silkscreen.

So what to watch out for when ordering mug as a promotional product ?

• First of all, unless you are prepared to pay big money for your mugs, you need to be ready to accept, that what you get at the end may be a bit different from the sample you approved. The tooling used for ceramic mugs production usually last only one production and have to be remade every time. This may cause some differences in shape or size from order to order. The body colour of the mug may vary too. And not only from production to production but also within the same production lot. The final colour is affected by the temperature in the oven. And the higher up on the rack the mug is, the higher the temperature. Simple physics.

• Some people like to have mugs that have more than one colour. Example is the mug with spoon on the picture in this post. Outside the mug is white, inside blue. There are also designs where let’s say bottom half of mug is one color, the upper half another. This is done by dipping the mug into the ink. Try to dip anything into some liquid and see if you can manage to keep the same line every time … If you can than you have every right to complain if the 2 colour mugs you receive from your supplier do not have the perfect border between the 2 colours . Otherwise give your supplier some break .

• When you are choosing your mug, think about what you plan to print on it. Those all around prints are done on decals that are applied on the mug and fired. Only some shapes of mugs are suitable for that … Take a piece of paper and try to wrap it around the ice cream cone to see what I mean.

• Try to avoid having the mugs shipped by air. First of all, they are heavy and the freight may cost you several times more than the mug itself. Second – mugs tend to break. And the chance of them breaking is much higher when they fly then when they go on the ground. Here I am talking about bulk shipments. If you have the mugs individually boxed, they are usually well protected and should survive mailing by post or courier without to many injuries.

Enjoy your cup of coffee or tea !

I mentioned in the What are the BizGifts? post that not all BizGifts have to be branded. That is still true, even few weeks on . So should you brand or should not you brand ?

Do not worry, you do not have to feel like Hamlet, it all comes down to few points.

• What is the purpose of the business gift or promotional product ?

• What kind of gift you have in mind ?

Rule of a thumb is that for any project aimed at increasing your brand awareness you should brand the promotional products that you are making. At the end it is your brand that you want to spread around.

It is a bit different with the “gifts with purchase” that motivate people to choose your product instead of competitors’ from the store shelf. Here it is important that the gift is attractive enough for people to want it. If the branding fits well on the product, than brand at all means. But if you feel that it would look disturbing or devalue the gift, either minimize the size of your logo or do not brand the gift at all. Not everyone wants to wear T-shirt with huge Durex logo all over the chest .
Another different case would be corporate gifts for your business partners or employees. First you choose carefully the gift. You do not want to send out wrong message. Here people usually choose more valuable items. The quantities are not huge and you do not want to look cheap … Once you have the product in mind, think how would placing your logo affect the product. Some fancy products are well suited for corporate branding directly on the product, but some are not and your own branding may actually destroy the product in the eyes of the receiver. The people who get those gifts will get more from others too. They may want to pass some of them on to their family members or friends instead of keeping them. Your branding may spoil that for them. If you feel that your brand would not do too well on the business gift, create an additional packaging that will bear your brand, make use of a gift card inserted inside the package or simply do not brand at all and pass your message to your business partners in person.

One of the common problems that promotional products suppliers often encounter are unreasonable demands and expectations from clients. Do not get me wrong here, most of the suppliers will go all the way and beyond to satisfy the client. But if they find the client too troublesome and unreasonable, they will not hesitate to dump him once the project is finished (or even before).

The promotional product business is very specific and from manufacturing and service point of view much more demanding than let’s say supplying to a wholesaler or a retail chain. And add to this already complicated business an unreasonable client and you have a recipe for disaster.

The problem for a new buyer may be not really knowing the logistical, technological and budget limits. Supplier needs to explain. Here is one example:

Client:

I need a simple custom made accessory bag in a colour matching my product with 2 colours logo printed on it. I need 3,000 pieces in 25 days latest. I have only USD1.00 budget per piece.

Supplier:

We can do it in 25 days.
but

• only to produce the material in colour matching your product takes 30 days

• the minimum run of the special material is equivalent to 5,000 pieces of your bag

but

• we can buy similar but not exactly matching colour material from the market

• we can make approval sample with your logo in 3 days and email you the image for approval

• if approved immediately the goods can be ready within 20 days from today

• we can deliver to you in 25 days from today using courier shipment

but

• only the courier costs over a dollar a piece making your budget not workable. the best we can within your time frame is $1.50.

• to meet your budget $1.00 we would need at least 60 days

Now the buyer has 3 options:

1. to accept what the supplier is telling him and either go ahead under these conditions or scrap the project
2. to challenge the supplier trying to get what he needs no matter what the supplier says
3. to place the order and then begin to give the supplier hard time

You will not be probably surprised if I recommend the option 1) . In this situation it is the most sensible thing to do. But if the buyer chooses to go ahead, he should follow the rules and trust his supplier. In case of time wise tight project flexibility from both parties is necessary.

Option 2) is OK too, but only if there is time. Negotiating to and fro takes time and that is one asset that neither side has in the situation described above. At the end the client may be able to work out what he wants and get the supplier to say “OK, I can do exactly what you need in 25 days from today…” But by that time several days will have passed and “25 days from today” is no longer workable … This happens a lot, trust me …

Option 3) is the best way to get dumped by the supplier. After seeing the picture of the sample client may reject the material as it is not close enough in colour, or he gets too picky on logo details, or demands to receive the actual sample. All this while the clock is ticking and the deadline not moving. The supplier may bite his tongue and oblige telling himself “this is the last time I deal with this ****“, or he may crack and walk out of the project right away …

I touched already this topic little bit in the BizGifts and Chinese New Year Part 2 post last week, but that was the Holiday Special . The wrong timing wrecks many promotional product and business gifts projects all the year round, so let’s have a look at this project timing issue and get some “How To” hints .

There are many different factors that affect the timeline of a BizGifts project. To simplify this rather complex matter I created a BizGift Project Timeframe matrix:

• A – Normal Season / Regular Product

This is the best situation for you and your supplier. You pick up a ready in stock product from your local supplier’s catalog, supply him with proper artwork and depending on the quantity and the capacity of your supplier’s printing facilities you can have your branded merchandise between 7 – 14 days. There are many companies that these days offer shipping in 3-5 days. VIP services with only few hours to complete your order are also no longer rare (depends on where you live of course ).

• B – Peak Season / Regular Product

Here we are still talking about the products from your local supplier’s catalog. But … during the peak seasons it is more likely some items may be out of stock and depending where exactly the replenishment is it may take from few days to over a month to arrive. The other issue during peak seasons are the printing capacities. Even if the printers run for 24 hours you may still have to wait quite few days for your turn. It has to be said that the reputable and experienced suppliers are well stocked up for the peak seasons and have many contingency plans in hand, but if you do not want to end up disappointed, better order what you need before the peak season hits the fan . The production leadtimes may easily double or triple when compared to normal days and the available selection of products may be shrinking every day …

• C – Normal Season / Tailor Made Product

Not everybody is satisfied with a regular product. Some people may still like a product from a catalog, but would like to have at least its colours customized to match their products or brands. Others may want nothing from any local catalog and have their own idea. That may require either an extensive sourcing by the supplier (or by the client himself if he is capable and brave enough) or some serious design and development work, or both … You need time to source or time to develop, time to produce your approval samples, time to ship and receive them, time to comment on them, alter them, remake them, ship them again. You may approve the first sample you receive, but you may also keep commenting and remaking several times adding weeks and months to your timing. Once you are happy with sample, the production can start. If all goes well (and this can be BIG IF sometimes), your goods will be ready as planned and can ship. Ship across the globe usually … It is very difficult to give accurate number of days or weeks or months tailor made project may take, but here is an example or reasonably OK going project:

- Brief to your supplier, beginning of the process
- Initial offers from your supplier – 1-2 weeks
- Sample making – 1-8 weeks (depends on if you are customizing an existing product or developing brand new one)
- Sample shipping – 3-7 days (if mail or couriers work OK)
- Approval process – minutes to weeks (depends on customer )
- Production – usually 30 – 90 days (depends on products, quantity)
- Shipping – 4-7 weeks sea, 3-10 days by air (depends on from where to where)

• D – Peak Season / Tailor Made Product

In case of Tailor Made Products the Peak Season applies to the peak season at the point of manufacturing and shipping. The timing in general would be very similar to C scenario with an important exception of production and shipping. If you production for your project falls into the peak season and you unlucky to be a latecomer, you may face 1-3 months longer production times than normal. This may in many cases totally kill your project. To have products planned for Christmas marketing push shipped out of factory in January does not make too much sense …

The other danger during the peak seasons is shipping – shipping capacities. Shipping space is hard to come by and the higher bidder usually wins. So you may either face much higher logistical cost than you expected, or few days or even weeks in the queue for the next available vessel or flight.

When you are thinking about what product to make, think hard about how much time you have ! Tailor made products are great way to go but do require planning well in advance !

To explain what is a peak season in detail takes at least an entire post as it depends on many factors and varies from product to product. I will return to this topic very soon. Stay tuned !