A few days ago I received an email from a machine quilter who wanted some information on two issues. One issue was raising her prices for her machine quilting services and the second issue was what to do about the time and $$ it was costing her to pick up and deliver her customer quilts.
Raising her prices wasn’t hard and she came up with a price change that she was comfortable with. The second issue, about delivering quilts, became a little more complex.
Here is her situation – she lives in a very rural area. Some of her customers will come to her home studio to drop off and pick up quilts, but many, if not most, of her customers drop off their quilts at several different (relatively) local quilt shops. She says the closest quilt shop is an hour’s drive away from her home and other quilt shops are up to another hour’s drive from the first quilt shop. She says she usually goes to these quilt shops once a week, on a specified day, usually arriving about the same time.
We talked a bit about this and came up with some ideas, but she has to decide if, how, and when, she wants to implement them. Over the last few days I have been thinking about all this and I have a few more ideas and would like to share them with you all.
The first thing to do is to determine how many of her customers utilize her delivery services, how many quilts are involved and how much $$ she makes this way.
This sounds simple, but it may take a little time. I recommend that she goes back at least a year and make a chart, table or spreadsheet (on a computer or plain paper) which would include the customer’s name, name of the quilt, date quilt was delivered, name of the quilt shop – have a column for each quilt shop that is on her route, whether the quilt was dropped off, picked up or both at the quilt shop and the total cost of the quilt. The chart /table/ spreadsheet may look like this:
|
Customer Name
|
Quilt Name, Size
|
Date
|
Quilt shop 1
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Quilt Shop 2
|
Cost of Quilt
|
| |
|
|
Pick Up |
Drop Off |
Pick Up |
Drop Off |
|
| Jane Smith |
Log Cabin QS |
January 5
|
x
|
x
|
|
$325
|
| |
|
|
|
|
|
|
After filling in the information for a few months of quilts, she may be able to see a pattern developing. She may be able to determine –
- Which quilt shop has the most, and the least, number of quilts that are being dropped off and/or picked up
- Which quilt shop has the most, or least, amount of $$ for the quilter. (Note: all $$ are paid directly to the quilter.)
Cindy’s note: do not assume that the quilt shop with the most number of quilts has the most amount of $$$. Quilt shop #2 may take in 10 baby quilts for a much lower (total) $$ amount than Quilt shop #1 with only three Queen Size quilts for a much higher (total) $$ amount.
- She may also be able to determine if there is a pattern for the dates, or time of the year, when there are more or less quilts to pick up or deliver. There may be fewer quilts for pickup and delivery during the summer and more in the autumn and before Christmas.
- There may be other information that will become obvious when the details of the quilts and customers are documented.
With this information, the quilter can make some assumptions and some educated choices about what to do. She may:
- Make fewer trips to the quilt shops during “slow” times – according to her documented chart.
- Call ahead to the quilt shop to see if there are any quilts waiting for her to be picked up. If no quilts are waiting, she may not go to that quilt shop on that particular day.
- Start charging a delivery fee for each quilt that is picked up or dropped off at a quilt shop.
During the course of our conversation, she did say that several of her customers do ship their quilts to her. She would then drop off the finished quilt at the quilt shop or ship the finished quilt back to the customer. At this time, she does not have any shipping fees added to her prices to cover return shipping costs.
This quilter is considering adding a fee to cover both the cost of her gas and time, for picking up, delivering or shipping her customer’s quilts. Let’s play with some assumptions and numbers to see if we can determine a reasonable fee for these extra services.
Assumption #1 – Time and Travel – quilt shop #1 is 40 miles from her home studio and takes 1 hour to travel, one way, to this quilt shop. Let’s also assume that she spends an hour at the quilt shop talking with her customers that are waiting for her and with the shop owner and other potential customers. That makes a total of 3 hours – 1 hour to, 1 hour at, and 1 hour back from the quilt shop. Let’s assume she wants to make $20 per hour while she is doing this for a total of $60.
Assumption #2 – Travel Expenses – Let’s also assume that her vehicle gets 20 miles per gallon and that gas is $4 per gallon. She will need 4 gallons of gas for the round trip to the quilt shop – 40 miles x 2 = 80 miles divided by 20 mpg = 4 gallons x $4 per gallon = $16. Let’s also add an extra $4 for the extra wear and tear on the vehicle. (I realize that this may be a very low amount.) This would total $20.
Assumption #3 – Totals – Let’s add the $60 for her time and the $20 for her gas for a total of $80 minimum she should make for this trip to the quilt shop.
Assumption #4 – Number of quilts – Because she took the time to document the number of quilts, on average, she picks up and/or drops off at this quilt shop, she knows that she usually has 5 quilts to either pick up or drop off. If we take the $80 minimum she wants to make and divide it by 5 quilts, it will equal $16. Now we have to determine if $16 is a reasonable amount of $$ to charge for a ONE WAY pick up / delivery fee. Personally, I would round that up to $20, or maybe even $25 (you do have to eat and get something to drink while you are on the road!)
Let’s say the quilter decides on a $20, one way, delivery fee for her customers. That means, if a customer drops off her quilt at the quilt shop and then the quilter delivers it back to the quilt shop for pick up, there will be a total of $40 extra added to the final bill. (You will need to talk to your CPA or tax advisor to determine if state sales tax is applied to this fee and how to track this in your accounting system.)
What about customer reaction? Will there be some upset customers? Yes. Will the customers continue to use this quilter? Probably. Will a few customers decide to take their quilts to another quilter that does not have any delivery fees? Yes – but, these will not be your “best” customers – these customers who are probably looking for the cheapest, most convienient to them, quilter. Remember, this quilter is also raising her prices, so the double whammy of raised prices and a delivery fee would push these “iffy” customers away. That’s all right. That will leave LOTS of room for the GOOD customers who appreciate the work, craftsmanship and artistic vision this quilter brings to their quilts.
There can be some options that the customers can utilize.
- They can ship their quilts to the quilter and they would be billed a delivery fee only.
- The customer could make the drive to and from the quilter’s studio themselves and they pay for their own gas and time. Maybe after doing this a few times, the customer will gladly pay the pick up /delivery fee.
- The customer could ship their quilt to the quilter and then have the quilter ship the completed quilt back to them. If this is an option, I would make sure the return shipping fee is at least the same amount as the delivery fee.
Cindy’s note: I would bet that the return shipping fee, for a completed Queen Size quilt, via USPS Priority Mail, Delivery Confirmation, would be MORE than the delivery fee.
The above are my thoughts and ideas about a pick up / delivery fee for this particular machine quilter. Here are my questions to you – Do you have a business situation similar to this? Do you have a delivery fee? If you do, how much is it and how did you determine this fee? If you don’t have a delivery fee, let us know why.
I would love to hear your thoughts about this issue and this particular situation. Please feel free to post your comments.
Machine Quilting Business 
