What About Pick Up and Delivery Fees

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

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.

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About Cindy Roth
Mother of 3, Grandmother of 11 and quilting forever!

8 Responses to What About Pick Up and Delivery Fees

  1. Julianne says:

    I do return ship to out of town quilters and I charge $15.00 per box. If they have 5 small quilts and I can get them in one box then it is $15.00.

    I will do pick up and delivery for some clients at no charge, they for whatever reason no longer drive. Other clients will meet me in town they call and we schedule a time and place to meet. These pick up or deliveries are done when I would be out running errands any way and take little if any additional time. I consider it part of my customer service. It does not take away from my quilting time and takes no longer than what it would if the client came to my studio ( probably takes less time ) I do them as needed but if you had more clients with a need for this service I would only do it say..twice a month.

    When a new client calls me about my quilting I tell them.. You can drop off your top here at my studio, if that is not convenient then I am available…. to meet you….. at this time… I try to give them options if I can. Like I said I consider it part of my customer service I am not the least expensive machine quilter in my area, I think my prices are in line with other machine quilters in my area with similar years experience. It is the customer service and our individual quilting style that sets us apart from each other.

  2. H Davis says:

    We get the majority of our business from a single store about 30 minutes from us. We pick up and deliver about twice a week. We don’t meet customers there they just drop off and pick up their quilt. Many of the quilts from the store are from the quilting classes they provide and recommend us for the quilting. We don’t charge any fee for picking up and dropping off. However, the store is in the nearest large town where we have to go anyway for the usual errands so these are not additional trips for us.

    We get the next most substantial fraction of our business from folks that come to our house with their quilt. These folks are either closer to us than the store or want to talk to us about their quilt; something the store customers don’t get to do.

    The smallest part of our business is from the internet. These folks ship us their quilts and we mail them back charging actual cost for the shipping, usually via USPS Priority mail with delivery confirmation. The delivery confirmation allows some tracking if the package goes missing. We don’t usually charge for the box because we reuse many of the boxes that come in and don’t have to buy many. Yes, we’re loosing money on the shipping part considering all the labor but the post office is on the way to town so the travel time and gas isn’t and additional expense.

    As for the quilter described in Cindy’s original post, I’d say she’s doing about as good as she can given the circumstances.

    Once she’s decided to do any pick ups from a local shop that day is pretty much shot so the best thing to do is squeeze as many away from home business errands (and even personal errands) as possible into that day.

    Since these customers haven’t chosen to mail their quilts to her we might conclude they are price sensitive. Not all customers are. We’ve had a few come from a distance (about an hour) a few times but when they found out we would mail the quilts they have switched to doing business by mail. Once they get to know you and don’t need a lot of hand holding this is easier.

    In our particular case we’re near the state border with NJ where we have a cluster of customers. If they pick up their quilts in PA where we live they have to pay the PA sales tax. If we mail it they don’t pay any sales tax. This just about offsets the return shipping cost. Might this apply to Cindy’s quilter?

    You might have an open studio day to encourage customer to come to your house to “see how it’s done”. You’d be amazed by what your customers don’t know about the process. This is a chance to educate them about how to prepare their quilt and get them familiar with where you are.

    Women travel in packs. Yes, it’s true. Yes, I’m a guy. We seldom get a single woman dropping off a quilt. They come in pairs up to a van full. Those coming from a distance team up especially if one of them has been to our house before. The others ride along to learn the way or to check you out before committing their own quilt.

    These groups usually have a “leader”. If you can get the leader on board to come to your house you’ve got the rest of them.

    Check with the local quilt guilds or any kind of quilting group because all these ladies know each other and are more inclined to come to your studio if their friends are coming also. Get one, get several.

    We also encourage customers to bring and pick up the quilts of their friends if the friend agrees of course. This usually necessitates waiting for the absent customer to pay by mail. We’ve had no problems with this. We don’t take credit cards and have never had a bad check in 11 years. A few have been a little late…. but usually because they’ve forgotten the bill in the excitement of receiving the finished quilt.

    There may be a way to provide some additional benefit to the customers that send their quilts directly to you. I confess I can’t think of much off hand but something like quicker turn around, free batting for smaller quilts (from your batting remnants) or…??? Something that costs you little or nothing but that the customer puts some value on. We offer free batting to regular customers for very small quilts. If we have a remnant large enough; it’s free. For really good customers we’ll give them the remnants (long strips up to about 28″ wide) for them to piece. If they’re comfortable with using pieced batting (we are) they can get $10 to $20 of batting for free. We’re up to our ears in remnant batting and love to get rid of it even though we know it’s costing us some batting sales. It creates a lot of good will.

    I think Cindy’s quilter will have to feel out her customers and decide if they would accept a delivery charge or if some other strategy would be better. How many would bolt if it were added? Where would they go? If there are other quilters in the area it might be difficult to add such an explicit charge if others aren’t charging it.

    She might be able to recover the delivery cost by incorporating it into her general pricing structure. It sounds like nearly all her business comes through these several stores so raising prices for everyone wouldn’t penalize many customers that are paying to mail their quilts to her.

    In any event the costs of this particular travel are a business expense and the easiest way to account for it is to take the mileage deduction. Even meals I believe would be deductible since you are away from your usual work location. Check with your tax guru of course.

    If she doesn’t have a web site; get one. It doesn’t have to be fancy but make it informative and show your pricing clearly. Don’t have a complicated pricing scheme, customers can’t figure it out even if you can. They want to know the price before they commit. If they find you through your web site they are likely to deal with you by mail even if they are reasonably close to you or one of your stores.

    The second issue Cindy raised was about raising prices.

    I think most quilters under price themselves. They don’t consider all the time they put into the job for which they are not charging the customer. The also don’t consider that they have to pay for their machine over some reasonable time. For example, if you’ve paid $15000 for your machine and use it for 10 years at which time it will be worth $5000 (I’m making the numbers easy) you have to get back $10000 over 10 years, or $1000/year just to pay for your machine. If you do 100 quilts a year you have to add $10/quilt above what you charge for everything else.

    Are you accounting for the electricity you use, the phone bills, depreciating a fraction of the house (this probably isn’t a good idea, the bookkeeping is horrendous), time ordering supplies and paying bills, time talking to customers in person, via e-mail or over the phone. It really adds up.

    The local auto dealer isn’t charging you $80/hour because that’s what they pay their help. They’re covering all the other costs of doing business. In this case about 4 times his direct labor costs.

    After being on the Gammill list for a while I have a lot of sympathy for those quilters in rural areas. Life is tough out there. This is something we haven’t had to deal with here on the densely populated east coast. We have as many people in my county as all of North Dakota. Good luck to those of you in the sparsely populated mountain west. I suggest if you find any solutions to the problems posed by Cindy’s post to share them widely.

  3. Customers pay all shipping fees. I package the quilt and take it to the post office, determine the cost of postage and add it to the billing which I enclose in the package with the quilt. Then I seal it with shipping tape and mail it off. If a person wants a quilt quilted it is up to them to get it to me.

  4. Quilts By Amanda says:

    I am not in business, yet, but I have been considering all the fees I am going to charge and have watched your DVD and others.

    I live in a development where you can have a business at home as long as you aren’t bringing in a lot of traffic. With this said, to keep my neighbors happy (and for safety reasons), I decided that I am not going to meet people in my own home. I am choosing 3 to 4 quilt shops in different directions from my home to meet people. They are all 20 or more miles away. Since this is my own decision, I’m not going to charge extra to begin with. I am going to keep track of how often the shops are used, would it be better to be at the shops on a sepcific day of the month for a several hour period of time instead of random, and if there is a better place that is closer (like the coffee shop in my hometown) to meet people at.

    I am looking forward to reading what others do.

    Amanda

  5. Merline says:

    Hi, when I work with a long distance customer who ships to me, I always add shipping and handling to the final cost. I determine the actual postage/shipping, (including insurance, and delivery confirmation) add the cost of a new box, (purchased at office max or staples as the box they ship to me in generally is not large enough for the completed quilt) and round up to the nearest $5. There are sizes and shapes that are less expensive to ship, so I get the box of the dimensions that are best suited, size and shape for the least money to ship. I live pretty close to the PO, but if they prefer UPS I also add some for my time and mileage to drive there, again rounding up to the nearest $5.

    Most of my customers are local, and the quilt shops, and other places we choose to meet are close enough that I don’t charge extra, but my base charge for “set-up” takes that time into account. So, now that I have written that, the drive to the PO or to UPS should be covered in that same fee of pick-up/deliver from and to the quilt shop. . . hmmm ?!?

    Merline
    The Cottonyard
    Eugene, Oregon

  6. Bobbie Jo Fort says:

    I do not charge a pick up or delivery fee. I am raising my 4 young grandsons. They are ages 4-9. They are not comfortable children to be around. My studio is the living room of our home. Not every one is a “kid” person. I always offer my customers the option to meet at the nearest town which is 10 miles from me. Some take me up on it, most dont. But it is an option for them. I feel very blessed to be able to do this job from my home so i can be HERE to take care of these children. If i need to make a trip into “town” to meet someone, i normally plan it in advance for a weekend or a time when the kids are in school and will plan other errands as well, so dont feel i NEED an extra charge for it.

    I do have customers that i ship to and from, they pay for shipping to me and a $10 fee for return shipping as a general rule. I usually ship USPS priority mail and have been happy with the service and can normally ship for that amount and get free postal carrier pick up.

    Im interested in any other opinions and practices for these types of services.

    In Pieces,

    Bobbie Jo
    Nolting 24
    Mother of 4 grandmother of 10 grandsons!

    • Cindy Roth says:

      Hi Bobbie Jo,

      You have my utmost respect and admiration! Raising four grandsons AND running your machine quilting business. You win an award for that!

      Cindy Roth

      • Bobbie Jo Fort says:

        Thank you Cindy, its the hardest thing ive ever done! Ill take that award! Thanks for being so sharing, i appreciate you.

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