A Distributor Asks: Before I refund my customer for a mistake I made, is there anything else I can tell my customer? I gave them the wrong imprint color on bags, and they’re demanding a full refund. Understandably, the supplier refuses to offer any credit or resolution.

I love fixing mistakes like that. [I give a] full refund and let them keep the goods. Some of my 20-plus year clients have been “saved” that way, and some of my 20-plus year clients came to me that way after other distributors thought it was better to not make those clients whole.

Royce Schmidt
Owner, Glacierwind Specialties
Montrose, British Colombia, Canada
PPAI 756354, D1

Get the bags back if they are insisting on a full refund. If they balk at returning them, ask why would they want to keep them if they are wrong? If they already used the bags, offer a substantial discount, because they were obviously not that bad.

Susan Hysen
Client Success Executive, Summit Group
Silver Spring, Maryland
PPAI 364377, D10

A Distributor Asks: For all the independent distributor owners, is there a rule of thumb of how many support/customer service people a company should have in relation to the number of orders per month? I’ve been working in this industry for over 20 years with some “strong” sales numbers, and I’ve been running very lean with just me and one support assistant.

In my opinion, a single person can process between 600 orders per year on average while also doing sales, accounting and all the other things. It depends a lot on how efficient your process is. Beyond that, help would be needed, and it is worth it to have someone. Affordability comes from your average order value. Six hundred orders averaging $50 is a lot different than 600 at $2,000.

Mike Goebel
President, Proforma One Marketing
Missoula, Montana
PPAI 587673, D2

I believe I’ve heard, and my past 20 years would demonstrate, that the average order size in our industry is about $750. (It was much higher, about $2,500, in my Silicon Valley days with a large company and lots of support.) Average industry margin is 35% to 40%, so average profit per order is $250 to $300. If your goal as an independent, working alone, is to write at least 50 orders per month, that’s $35,000 to $40,000 ($500,000 a year in sales) or $12,000 to $15,000 per month in gross income. Half of that is salary expense, the other half is for admin expenses and retained earnings.

John Grantham
Owner, JLB Promotions
Lacey, Washington
PPAI 792007, D1

If your object is to sell the business down the road, then build it up. But if you just like making money, work on the larger accounts and assign the smaller stuff to the staff. They will run the whole thing while you sell, vacation and take in the majority of the profits.

Roy Getzoff
Owner, Cynsational
Weston, Florida
PPAI 531159, D2

A Distributor Asks: A problem client wants to see the supplier’s invoice. What should I do?

Tell them “No.” Plain and simple. They are buying from you, not your supplier. Never let a customer dictate/negotiate your margins. There are plenty of fish in this sea!

Rudy Rico
Owner, RAR Designs
Menifee, California
PPAI 680768, D1

You could say, “Hmm … I’ve never been asked that before. What on my invoice is going to help solve our issue? You realize I do make a profit off of the goods I sold you, correct?” This is going to start a never-ending question of everything you do in the future. If they insist, I would show them and then say we can’t do business anymore. They need to have some skin in the game. Just think of what they would ask for next.

Lesli Herbert Covell
Owner, Proforma Extraordinary Promotions
Richmond, Texas
PPAI 533771, D1

A Distributor Asks: A good client asked me to update his logo. After a 30-minute chat, I sent him the design costs of $189, and he flipped out. He got very upset and refused to pay. Since then, they’ve ordered from me twice. Recently, his wife asked if I could do them a “favor” and design the logo for free even though I dropped the price to $149. I don’t want to lose a good client over this. Any advice?

Artwork is always touchy. It’s an extra step, but a quote up front, stating a minimum charge for logo creation, could avoid this pitfall. I’m guessing there are different versions of the logo for various processes, so there’s that, too.

Leanne Schillinger
Account Executive, American Solutions for Business
Great Falls, Montana
PPAI 701094, D1

Are you willing to lose this client over $150? See what price he thinks is fair, and it can’t be $25, as that’s not a fair price. Then over the next several jobs, tack on $5-$10-$20 to set up, graphics fees and shipping for their other projects. Make him feel like he won and got a deal while still paying you a fair price.

Mike Ferretti
Owner, Ferretti Marketing Solutions
Huntersville, North Carolina
PPAI 718784, D1

Let her know that you’ll do it because her business means a lot to you and average it in over the next few orders. Customer acquisition cost is real, so it’s cheaper to maintain a good customer relationship than having to go out and get a new one. Think about how you can get ahead of these things with them in the future by averaging it into orders, or maybe offer two hours of free design time for them each year. I’d make it a habit to figure in a surcharge for design on every order to gain back a little bit each order.  

Jamie Caldwell
CEO, UBU Brands
Stuart, Florida
PPAI 786807, D3