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CLOSED - Group Buy for Warneke 100 count 'Paulson-Type' Chip Storage Boxes (4 Viewers)

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AWenger said:
Excellent. Thanks for arranging everything.

One minor comment, last week I had revised my box count to 100 from 50 in my first post - Post #27, but I just noticed the spreadsheet in Post #1 shows 50 boxes for me. (I didn't PM you separately to let you know.) I'm happy with 50 boxes or 100. Just let me know. (Although, if I'm at 50, I'd also be happy to accept up to 50 boxes from anyone else who may want to cut back their order.)
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I assume he hasn't updated it in a while since I'm not on the list. (would like 100)
 
AWenger said:
Excellent. Thanks for arranging everything.

One minor comment, last week I had revised my box count to 100 from 50 in my first post - Post #27, but I just noticed the spreadsheet in Post #1 shows 50 boxes for me. (I didn't PM you separately to let you know.) I'm happy with 50 boxes or 100. Just let me know. (Although, if I'm at 50, I'd also be happy to accept up to 50 boxes from anyone else who may want to cut back their order.)
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I got your updated count. We're good! (y) :thumbsup:
 
If anyone missed the order deadline (or who is in the GB but wants more), I have 100 boxes available to sell. Just PM me. Priced at cost--you'll just step into my shoes on the order.
 
I just got the final total from Warneke. There is some good news, and bad news, and I'll be looking for advice on how to proceed.

The good news is that we're getting an additional discount to $0.479 per box.

email2.JPG


The bad news is that we need to commit to an order of 12,500, which is almost 500 boxes above where we are now. Now, there is more bad news... apparently, their production can run with a +/- range of 10%. This could end up being a hell of a lot of boxes that will cost us more - or if it's 10% under, we'd miss our mark for order commitments! See the explanation, below:

email1.JPG


Anyone have any ideas on how to address this? This is a huge swing!

Paging @BGinGA for advice!
 
A $1200 variance on the total order cost is unacceptable (at least to me). They claim that they have no way to predict how efficient their process is, yet they want us to assume all financial risk -- no matter how it pans out.

Citing a production run variance (and planning on invoicing accordingly) is just another way of saying "We actually may not meet the obligations of the contract, and in addition, we may charge you for boxes you didn't order and don't want -- I hope you understand"..... which is also not acceptable (to me, at least).

Is this the first time they have brought up such nonsense?
 
BGinGA said:
A $1200 variance on the total order cost is unacceptable (at least to me).
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It certainly make this a bit more complicated, but it's not actually that out of line for something like this.

But I agree, it would have been nice if they brought this up sooner.
 
BGinGA said:
A $1200 variance on the total order cost is unacceptable (at least to me). They claim that they have no way to predict how efficient their process is, yet they want us to assume all financial risk -- no matter how it pans out.

Citing a production run variance (and planning on invoicing accordingly) is just another way of saying "We actually may not meet the obligations of the contract, and in addition, we may charge you for boxes you didn't order and don't want -- I hope you understand"..... which is also not acceptable (to me, at least).

Is this the first time they have brought up such nonsense?
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RIGHT?

And, actually, that's a 20% range... +/- 10%

I'm assuming it's a margin of error based on scale. It seems that most of the stuff these guys do is retail packaging (lots of razor boxes, etc. in their display case). If they're used to running 300,000-500,000 orders, they probably get that variance down to a few percent. For what I'm sure is a tiny order for them, they just may not know how to plan for it.

I'll be honest - I don't even know how to respond at this point.
 
bentax1978 said:
it's not actually that out of line for something like this.
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Reference?

I've held a lot of positions in past occupations that were responsible for quoting jobs for customers -- either manufacturing parts, cleaning parts, or inspecting parts (so not all service-related). Providing an accurate quote based on costs (including unforeseen variables) is part of the job. If we get it right (or exceed our expectations), we make money. If we fail, we make less money (or perhaps go back to the customer and beg for a break).

But the financial risk to perform is never on the customer, nor can they be expected to accept delivery (and expense) of goods they did not order. Can you imagine ordering 3000 chips from CPC (or china, for that matter), and have them bill you for 3,300 chips instead? Or worse, only deliver 2,700 of the chips you ordered, and expect you to be happy with that?
 
justsomedude said:
RIGHT?

And, actually, that's a 20% range... +/- 10%

I'm assuming it's a margin of error based on scale. It seems that most of the stuff these guys do is retail packaging (lots of razor boxes, etc. in their display case). If they're used to running 300,000-500,000 orders, they probably get that variance down to a few percent. For what I'm sure is a tiny order for them, they just may not know how to plan for it.

I'll be honest - I don't even know how to respond at this point.
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One possible response would be to explain how this presents problems for us, and then back off on your order commitment, telling them that you have to budget for a MAX order 12000, so therefore you are placing an order for 12000 - 10%. They won't like that, since your order is getting smaller, and thus you may get them to commit to a reduced variance.
 
Plus or minus 10 percent is UNBELIEVABLY bad for this type of manufacturing. They need better process control than that.

I would ask them to commit to not-less-than-this-many boxes at this-much each, for a total of not-more-than-this.

If they are used to running jobs in the hundreds of thousands of units, they should have an EXCELLENT idea of how much waste etc. there will be along the way. That should make things BETTER, not worse.

And plus-or-minus even, say, 2 percent on 100,000 units is still 2,000. That's a HUGE number of failures/misfires.


Personally I'd be happy if they gave us the 10,000 price (51.3 cents each) and committed to exactly the number of boxes we ordered.
 
It sounds like the price to us would be, at most 54¢ a box.
  • 47.9¢ a box (for 12,500 boxes)
  • Max over-run of 13,750 boxes
  • Cost split among buyers: (0.479 x 13750)/12,000 boxes sold
Is 54¢ a box a deal breaker for anyone?

Correct my math if wrong.
 
Poker Zombie said:
It sounds like the price to us would be, at most 54¢ a box.
  • 47.9¢ a box (for 12,500 boxes)
  • Max over-run of 13,750 boxes
  • Cost split among buyers: (0.479 x 13750)/12,000 boxes sold
Is 54¢ a box a deal breaker for anyone?

Correct my math if wrong.
Click to expand...

The problem with that is the under-production...

In other words, we each would have to order an additional 10% if we want to guarantee at least the quantity ordered...
 
ChaosRock said:
The problem with that is the under-production...

In other words, we each would have to order an additional 10% if we want to guarantee at least the quantity ordered...
Click to expand...

Which is total bullshit. Would any of you ever accept an order from me, where you wanted 200 labels and I shipped you 180?
 
OK. I'm going to meet him on Thursday to pick up the sample boxes and have told him I need to talk to him.

I'll bring up these concerns at that time.

I'm sorry - but it looks like this is going to get dragged out a bit longer. :/
 
Totally agree - too few is a problem. However, we are already over-ordering to hit 12,500 by ~500 boxes.

What are the odds of the production run being more than 500 short?

Next, we know at one point Andrew was considering ordering extras to sell as a PCF vendor. If this is still in play, that gives us an extra buffer (though it hampers his ability to go "Vendor"). Question is, can we eat a 10% shortage?

By-the-by, I do find this to be a pretty egregious way to do buisness. If I buy 1000 chips and you send me 999, I'm gonna be miffed. If you send me 1100 and bill me an extra 10% I may stiff you - depends on the chips and cost. Send me 100 extra minty Paulsons for 5¢ more per chip, I'll happily PP you and buy you a drink.
 
BGinGA said:
Reference?
Click to expand...

Several manufacturers I purchase custom cable/wire from for work have similar tolerance issues. There have been several times a customer has ordered 2000' of something and we've had to order a little over 2200' to make sure they had at least 2000', knowing there was a strong possibility we'd end up with over 2400'. And this is cable that costs >$5/ft, so we're talking 10k worth of material. Most companies we deal with are closer to 0/+10%, which cuts the variance in half, but sometimes it's unavoidable.

As for the boxes, I agree that +/- 10% seems excessive. Again, I wasn't supporting their terms, just suggesting that it's not the first time I've run into it.
 
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