Question: As A Distributor, How Should I Handle Surcharges?
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A Distributor Asks: Many suppliers now implement a surcharge when using a credit card to pay for purchases. Some of them don’t allow any other type of payment for new clients. What are distributors doing with their clients? If distributors are charging a fee, do they lose the sale or the customer? Or must the gross percentage be increased to cover the expense of the credit card processing?
The quickest way for a supplier to lose our business is if they charge a card fee. It’s not my fault if they aren’t good negotiators and are incurring high processing rates. We apply the same thinking to our customers and absorb the fees as a cost of doing business. It’s not their fault that we like the convenience of being paid sooner rather than later, nor is it their fault if our business is not getting the best rate possible. These high-priced fees are a sign that somebody is or has fallen asleep at the wheel.
President and Owner
PPAI 276409, D2
I only pay by credit card to a new supplier once. If I haven’t got terms set up by the time the second order is placed, I’ll pay it again but insist on setting up net 30 for order No. 3. I do not charge any fee for clients using their cards although I do request a check or get them set up on terms with me as soon as possible. But sometimes they have to use a card based on their departmental rules, so it’s just the cost of doing business.
Scott Cappel, MAS
President and Founder
Sorrento Mesa Promo
PPAI 609965, D1
I usually absorb the fee on both ends. About half of my suppliers charge a fee if they use a credit card. I get points, which probably don’t wash totally, but it helps. If it is a larger amount, over $1,000, it is as cheap to overnight a check, which I do sometimes, especially if the order is timely. If the supplier doesn’t charge a fee I make a nice bonus with my points for paying with a credit card. As for clients, almost all my business is a credit card. If it is over $1,000, I’ll try to get a check, but even on a $4,000 order, the fee is worth it to have my money now rather than have to chase someone down for payment later.
John Bagwell, CAS
PPAI 336431, D2
I have always absorbed the fee. It’s part of the overhead cost of business. I do try to avoid suppliers that charge the fee. Sometimes I’ll add $5 to the set up or a few dollars to the shipping to cover some of that cost. Do the online companies charge a fee? They are my competition.
Primo Promos, LLC
PPAI 284438, D2
A Distributor Asks: To increase our efficiency, we’re looking to create a 10-question form to email clients beforehand, even before the brainstorming begins. I noticed that we are paying a lot of attention to details when many of my clients already have specifics in mind, or are more concerned with the dollar amount. What should we ask?
- What event/purpose will you use these items for?
- Do you already have a theme for the event/purpose?
- What is your ideal budget?
- What is your ideal quantity?
- Do prefer to use your full-color logo or can we use your one-color logo?
- Who is the recipient of the items? (Include an ideal client description.)
Janice R. Means
President, Marketing with JR
Former President, Fully Promoted (EmbroidMe)
- Who is your target market?
- What is your in-hands date?
- Do you have a high-resolution vector logo?
- Do you need artwork design?
- What do you hope to accomplish by giving away this item?
Theresa DeCoursey Zide
PPAI 719572, D1
A Distributor Asks: The industry has gone from advertising specialties to promotional products. What do you think of the more casual terminology “swag” or “merch” to describe our products?
Email answers along with your name, title and company name to firstname.lastname@example.org for possible inclusion in an upcoming issue of PPB magazine.
Renda is an associate editor at PPAI.