To continue from part one of this series, I will now discuss a bit about how I work with my vendors. But first I’d like to back up a bit and talk about the chain.
When it comes to the lab products portion of my business, I am a vendor to my clients and a client to my vendors. I am the middle link in this chain. My clients try to get the best (lowest) price from me, I try to get the best (highest) price from them. My vendors try to get the best (highest) price for their goods and I try to get the best (lowest) price from them. This is how I define the chain.
An order comes in from a client. If it’s something I prefer to do myself then I charge my usual prices for custom made lab products. However if the job is so large or I am too busy to handle the job myself, then I out-lab the job. For some the conventional wisdom is to “make your money shooting, not in handling lab work”. I am suggesting another way of looking at the situation: if it goes through my books, if I am at all responsible for something, then I make money on it or I don’t want to have that responsibility. With this mindset, I can generate several profit centers on each job I accept. The markup on prints, the markup on supplies (tape, glue, seamless, props, etc.) are generally accepted business practices, (and they work great) but I take it one step further.
I work with my vendors to give me a better price than they might otherwise offer. How do I do this? I ask. It’s that simple. I have a 50-50 chance of getting a yes just by asking. I have 0% chance if I don’t ask. So I ask. If nothing else I get to practice my speaking and interpersonal skills. If that doesn’t work I offer to pay by check (this saves the merchant credit card fees). If that doesn’t budge them, I offer to pay in cash. Still no deal? At this point if I trust them, I offer to pay cash at the time of ordering. When I offer this, I really trust my vendor because I’m taking a bigger than normal risk. Hey, no guts, no glory. I usually have a client advance in my pocket when I offer this, so I’m playing with house money. This is one way I mitigate the risk.
There have been numerous times when I have “earned” up to 70% off the vendors usual price. You heard right folks, 70%! For me, no job is too small and no profit is too large. I’m in business to thrive, not survive, and there are times when I don’t hit my profit goals for a job, so it all works out over time. I’ve been lucky in this business and at other times it’s just plain hard work and never quitting on a deal.
In the end my clients are happy (they got what they needed), my vendors are happy (they got what they needed) and I’m happy they’re happy. As the middle link in the chain, it is my single-minded focus that all parties involved in a transaction are satisfied they did business with the right person. And that’s the way it’s worked for me for the past 30 years.