# 100% Upfront.



## out da box (May 1, 2007)

I'm getting to the end of my rope.
I've been printing on my own for 6 years. Looking at others in my segment of industry, I work waaaay too hard and am waaay too good to make what I do- gross and net.
Last year we made great strides, but It's still not enough to make up the ground.
I realize a lot has to do with my business practices and marketing/pricing strategy, but still...
I also have an unreasonable time getting paid with too many jobs, most of which take too much time for the money in the beginning.
I want to do 100% pay upfront for EVERYTHING. 
What is the general consensus on implementing this policy?


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## Dan K (Nov 15, 2006)

Hey Ridgely. From the perspective of a customer, I don't think 100% up front is good. If I were purchasing the shirts and heard that I would probably look elsewhere, which in fact I did when I purchased shirts for my previous employer. The reason why, is that I would not feel comfortable dropping a few hundred or thousand dollars anywhere for custom work without some sort of guarantee that I will get what I want, but the 50% deposit I am comfortable with. I think by collecting a 50% deposit up front and the balance when the job is complete you share the money and risk burdens with your customers.

If you do collect a 50% deposit up front, and don't even think of releasing a completed order to a customer until you've collected the balance, you're in good shape and will always get paid (if you won't let them out of your hands until they're paid for). If someone does skip on the other 50% for whatever reason, at least you have the COG covered, maybe even your COG and labor for printing them, and you minimize the risk of them skipping out on the balance payment because you already have 50% of their cash and they have no merch to show for it...

Unfortunately a few bad seeds can ruin terms for everyone. It's probably best to proceed with all of your other customers assuming that they are honest and will pay you when the job is done when you tell them that is what you expect... Everyone should understand the deposit and balance upon completion, so don't worry about asking your reliable customers for balance before you give them the finished order, because they should understand... To use an example I use a lot - do you go to the grocery store, grab a shopping cart full of groceries that nowadays probably costs a couple hundred bucks, and get to walk out of there without paying for it? You have to pay, your customers have to pay you...


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## out da box (May 1, 2007)

Yeah, I know. But with MY customers, it's still a problem with the 50% deposit thing. I get rushed to do the work, then have to track them down to pick it up and pay. And a few manage to leave with the product and I have to track them down for the money.
If you can't pay all the money today, can you pay it all tomorrow or the next day? All my jobs are 24-48 hour turnaround time.


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## Dan K (Nov 15, 2006)

out da box said:


> Yeah, I know. But with MY customers, it's still a problem with the 50% deposit thing.


I think if you have issues getting a 50% deposit, then you will definitely have issues getting a 100% deposit. If you make the 50% down mandatory, and you commit to yourself that you won't give that up, I think you will get your customers to fork it over if they want to do business with you.



out da box said:


> I get rushed to do the work, then have to track them down to pick it up and pay.


Maybe you should go after another client base... It seems like the customers, having placed an order with you, would be waiting, itching to pick it up... Don't let them rush you, establish your turn time and stick to it.



out da box said:


> And a few manage to leave with the product and I have to track them down for the money.


I guess all I can say to that, is don't let it happen... Don't release the product until it's paid for.



out da box said:


> If you can't pay all the money today, can you pay it all tomorrow or the next day?


In many cases, the answer would be yes. Maybe they get a paycheck in the next couple of days between the time they place the order and the time it's done, maybe they already have the money but are nervous about paying you in full for something they don't have...



out da box said:


> All my jobs are 24-48 hour turnaround time.


That turn time is a tough one to hit... Lengthen it to 5, 7, or 10 days, which seems to be industry standard. If you do turn a job out in 1-2 business days, you've fulfilled your commitment, beaten your stated turn time, under-promised and over-delivered... If any issues arise during those 5-10 days such as garment shortages, a 24 hour power outage, you get sick, or whatever, then you have some cushion time...


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## selzler (Apr 4, 2007)

out da box said:


> Yeah, I know. But with MY customers, it's still a problem with the 50% deposit thing. I get rushed to do the work, then have to track them down to pick it up and pay. And a few manage to leave with the product and I have to track them down for the money.
> If you can't pay all the money today, can you pay it all tomorrow or the next day? All my jobs are 24-48 hour turnaround time.


I have gone to 100% up front about 3 months now. After explaining to my customer that to many order and when its done some people take up to 4 weeks to pick it up. And it ties up my money for to long and I lose money because of it. I have a friend that has raised his prices by 10% and if they pay up front he gives a 10% discount and he said the people love the discount and pay up front with no questions.


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## billm75 (Feb 15, 2007)

selzler said:


> I have gone to 100% up front about 3 months now. After explaining to my customer that to many order and when its done some people take up to 4 weeks to pick it up. And it ties up my money for to long and I lose money because of it. I have a friend that has raised his prices by 10% and if they pay up front he gives a 10% discount and he said the people love the discount and pay up front with no questions.


 
Now that's an idea I can get behind. I like that alot


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## Dan K (Nov 15, 2006)

selzler said:


> I have a friend that has raised his prices by 10% and if they pay up front he gives a 10% discount and he said the people love the discount and pay up front with no questions.


Agreed, that is a great idea... 

On the thing with the customers not picking up for weeks, that happened to us a couple times too, which is frustrating as all get out because those are the same customers who probably call you all day long a day into it asking if their order is done. After the second time it happened we put a clause in our terms stating that financing charges will apply on orders not picked up within 10 business days after completion. Today is the first time I had to enforce it, I sent out an invoice for the third time, this time with a 3% charge added to it and said that it would be removed if they paid by 3pm, that another 3% would be tacked on on 2/17, and they paid me within an hour...


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## out da box (May 1, 2007)

It's not a problem getting the 50% deposit, it's a problem getting the last half after the work is done. Plus the turnaround time. I like the 10% discount for upfront pay. I gotta get paid every time on time in 09.


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## pukingdeserthobo (Jun 3, 2008)

selzler said:


> I have gone to 100% up front about 3 months now. After explaining to my customer that to many order and when its done some people take up to 4 weeks to pick it up. And it ties up my money for to long and I lose money because of it. I have a friend that has raised his prices by 10% and if they pay up front he gives a 10% discount and he said the people love the discount and pay up front with no questions.


wow i think i might do that i just raised my price to day thanks. my turn around is 10 working day but useless it doesn't take that long, i wouldn't put up with customers like that i would tell them we aren't a storage company


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## out da box (May 1, 2007)

99% of my problems and frustration is my customer base. Need to do more firing and find better clients. New post, how to gross 250k in 09.


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## ambitious (Oct 29, 2007)

out da box said:


> 99% of my problems and frustration is my customer base. Need to do more firing and find better clients. New post, how to gross 250k in 09.


250K this year as a goal sounds pretty good, That's what im aiming for but NET.


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## zoiko (Oct 21, 2007)

I am kinda in the same way... I am restructuring as we speak. I used to drive up to los angeles, (that is where my clients are based) ...I used to collect a 50% deposit. Then I would pick up the shirts and come back print and take back in a few days (6-7) days.

Most of the time they were busy and forgot to get the money out of the bank, I would have to wait and return a few hrs later for the money. Then on returning the items they would not have the money ready.

My solution I think, will be what I am going to start. I set up paypal while I work on my website. I will charge 50% ... take pics as the work is being done in stages. Then send a pic as the work is complete and ask for the rest before shipping. I hope this helps .

If anyone has other info on how you guys do it with paypal please let me know. Thanks


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## InterStreme (Feb 9, 2008)

We've also been debating on whether or not to go to 100% payment up front. Currently, we ask for 50% deposit and 50% upon delivery (which we will change). The second 50% payment will now be required upon completion of the order instead of upon delivery. We're doing this for all of the reasons you guys stated above...customers don't pick up orders, they disappear, or they _convenietly_ forget. 

About a month ago we completed an order for a local restaurant. The shirts were dropped off. The customer said they loved them. They have not paid yet and two days ago I saw one of their employees walking to their car wearing one of the shirts. The customer won't answer the phone or return my messages. It really burns me up!

I absolutely love to make shirts but sometimes the lack of payment is extremely discouraging.


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## out da box (May 1, 2007)

Ambitious, 250k net!!!!! Are you serious? Now I'm really hot. Wednesday is a good firing day.... let me see who can I fire tomorrow! Find me some customers who don't mind paying.


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## sunnydayz (Jun 22, 2007)

I myself used to do the whole deposit thing, but it got to complicated on getting paid. People would order, pay the deposit, and then leave their order till they felt like they were ready to pay and pick it up. It really is a pain, as it was money out of my pocket to print their orders, and it was money just sitting there waiting till they were ready. One day I decided I wasnt going to do that anymore, and get complete payment up front. I have not had any problems with doing this, and actually have a better quality client because of it. If you go to say costco or the mall, you have to pay for your merchandise when you buy it, to me its no different on ordering shirts or whatever they are having printed. If they want me to print their items, they pay up front. It works great for me since I implemented it, and I dont have to store a bunch of stuff waiting for customers to pick it up. I really did not lose any customers because of this, as they were happy to have me printing their items, and completely understood once I explained it.


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## out da box (May 1, 2007)

Yep BobbieLee, I agree. I think the 100% upfront will bring me better clients and get rid of a lot of bad ones. It's settled, that's my new policy.
Had a big client of mine's send a BIG check for full payment back in December and the shirts aren't due until April. The cheaper the customer, the more of a PITA they are.


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## pukingdeserthobo (Jun 3, 2008)

true u can loss the bad customers that way asking for the 100% down.


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## zoiko (Oct 21, 2007)

Yes maybe getting 100% up front would be nice, But in my area They would want to see a sample. Not a problem, But then how many days will they sit on my press waiting for approval???. 
What I may do is ask 50% deposit for work to get started, 50% when done and show proof (pics) Or an option of 10% discount if paid in full. The sample well I will have to work on that. How do you guys handle printed samples??? ... Thanks


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## sunnydayz (Jun 22, 2007)

I guess that is what makes it easy for me as I do dtg printing. So I dont have any setup expenses. Its pretty easy for me to print a sample, have it approved, collect payment and print the job  This might not be so realistic for screen printing though.


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## stix (Feb 3, 2008)

Well I'm a firm believer in setting policies and sticking to them. The customer is trying to save money and your trying to make money. Your in the drivers seat when you do good work, offer great service at a fair price. Offer a discount plan that rewards good customers and fire the bad ones. 80/20 Rule... 80% of your business with come from the top 20% of your clients. Feed them.


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## zoiko (Oct 21, 2007)

Well said stix..... I will implement the plan.


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## selzler (Apr 4, 2007)

zoiko said:


> Yes maybe getting 100% up front would be nice, But in my area They would want to see a sample. Not a problem, But then how many days will they sit on my press waiting for approval???.
> What I may do is ask 50% deposit for work to get started, 50% when done and show proof (pics) Or an option of 10% discount if paid in full. The sample well I will have to work on that. How do you guys handle printed samples??? ... Thanks


 If I do a sample they pay for item and printing of the one item and artwork. I have found the the people that want a sample are never happy with the work anyone does and I really don't care if I lose that order. I don't have the time to let my printing come to a stand still waiting for them to come in and ok the sample. So if I print a sample they will also have to pay for a setup charge for me to do the order.


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## zoiko (Oct 21, 2007)

I agree with you selzler... I would also charge for art work design time,screen set-up and film charges, But my problem is I only have 1 press... In the future I see getting a 2nd press ...an auto and use my manual press for samples if they ask for them.... I would also not deal with the situation but if a customer wants to do a good size order for a brand they are trying to start I see that it is fair for them to see what they are buying... 

Maybe it would work for contract printing only, for retail and orders of 24 shirts and such maybe not a good idea.


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## out da box (May 1, 2007)

Sampling every job is a problem. Maybe if I still had a manual.
On another note, the customer who spurred my current tirade finally broke down and paid me in full for the flyers I'm doing for him- up front. 
It's either pay upfront- especially for rush jobs- or go somewhere else.


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## stix (Feb 3, 2008)

A client asked me to do a sample because he wanted to see how it would turn out. I charged the guy 60 bucks for one shirt. He supplied the print ready file and I paid 16 shipped. Using a automatic.. I would charge 200 bucks for a sample! The client would either change their mind or pay it.


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## Bougie (Jul 12, 2005)

How about getting rid of the worst 10% of customers (more or less). A small percentage of your customers give you most of your problems, so get rid of those and let your competitors have fun with them 

Feel free to set up the conditions and prices that would make you happy. You don't have to always suck up to the customers. You can demand things from them too. You can learn more about marketing and compete on things other than just price.

Jay Abraham (the marketing guru) tells a story about a dentist who really hated the typical way that dentists did business (dentists have a high suicide rate). So he made some radical changes. He decided to only do business with customers who are pleasant to deal with. He also demanded that each one refer to him two customers like themselves. He only took customers by referral. He also decided to do all the dental work for each customer in one visit instead of many visits. And new customers have to have tea with him and become a friend. Now he's much happier and making much more money.

I became self employed because I HATE working for other people. I set up working conditions for myself that are enjoyable and convenient for me. I'm not going to be a slave to anyone or to any lifestyle that makes me miserable. I'm done being miserable and letting other people make me miserable, forever. Being your own boss is probably more about freedom that anything else, the freedom to live life in a way that makes you happy.


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## TshirtGuru (Jul 9, 2008)

Out da Box...We started out giving the 50% deposit & 50% remainder, when we first started business. I "thought" this was the industry standard. And it still is in some parts of the country, but many shops have moved away from it. 

After giving 50% deposit options for the first 5-6 months, we had enough of it and went completely 100% full up front ever since. None of our customers complain about it and they know the rules. As said before, this gets rid of the bad apples. Do yourself a favor and receive payment upfront.


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## Screenanator (Feb 14, 2007)

Out Da Box....never do business with the state.....you'll really be fuming...we have contracts with the state of California....begining feburary we are gonna get IOU's...not checks...but IOU's....some banks wont even take them.....LOL.....we do the 10% discount and 50% deposit unless it's a school or government entity...they can't do 50% on a PO system.


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## sjidohair (Apr 9, 2008)

I charge, 100% up front, they approve the artwork when done, if it is mine, if they bring theres in it is, what it is.
IF i do a sample they pay full price for the sample, if i change their artwork, they pay for my time to change it, and produce another sample that they pay full price for.
NO problems yet..
Sandy JO


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## catejohn (Jul 13, 2008)

$250k is my hopes also


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## TshirtGuru (Jul 9, 2008)

I will have to double my 2008 sales to get at 250k. 2009 for us hasn't been that great of a start because people want things for free now.


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## out da box (May 1, 2007)

It's a lotta ground to make up considering how slow things are right now. At least January was better than December. 
On a side note, I just saw a big article and full page picture of a couple watching the inauguration in my local paper.... guess what? They both had on one of my Obama t-shirts! That's the second time I've seen some of my Obama shirts in the paper. Makes you feel good to see your work on the big stage.
Money can't buy your freedom or peace of mind.


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## wormil (Jan 7, 2008)

Ronnie is right, big companies that use PO's can't do the 50/50 thing anyway but with them you want to make sure the person ordering already has a PO# and it's best to establish a relationship with their AR department. Nothing wrong with calling to make sure a PO# is valid, I've had people fake them. Everyone else needs to be cash upfront. If they want credit that is what credit cards are for and they still have a safety mechanism if they don't like the shirts.


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## jiarby (Feb 8, 2007)

most people expect to pay, buy you may have to ASK FOR IT. 

At my store I add up their bill and hand it to them and say "Your bill is $xxx.xx" 
They AWAYS say "Uh, do I have to pay now?"
I day "Yep... If you don't pay, we won't make it"

If it is over 1K then they can pay 50% now, and the balance when the product is picked up. 

No one leaves with product that has not paid.


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## Dragr (Jan 11, 2009)

I think it's all in how you pitch it. If you tell your customers to pay upfront because you doubt their ability to pay, they'll go elsewhere. If you tell them, on the other hand, that they need to pay you so that the two of you can get the business end out of the way so you can together create a great product, then that MIIIIIIGHT work. 

If your quality speaks and is heard by your market, then just say the terms are what they are - take it or leave it. That's what I do with my photography, and while yeah I could probably make a bit more if I haggled, I'm 10x happier this way. Some customers are too taxing to do business with.

Try it out with a certain type of job, first. Say on orders over a certain amount, it needs to be a certain percentage of prepay. Testing the waters won't confuse your customer base (like you would if you jumped in 100%, found out it was wrong, then went back to the old way), and you can be as flexible as you need to be.

$.02


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