Hey Fellers and Montroy.

[bikecomedy]

If Fellers or any other distributor is making less than 22% gross margin on the long term I would have to see it to believe it. Walmart considered the one of the best retailers in the world runs around 24% year over year. A quick search shows that some of the finest run institutions run in the 30's http://www.fool.com/investing/gener...nd-target-have-the-worst-gross-profit-ma.aspx You're telling me you think Fellers does 10-15%. Don't agree that they do. However, if you meant net profit is still think it's high.

I use the term differently. Item costs $75 plus freight let's say $10 which is the actual cost I use for an item (COGS). Divided by what I call the gross margin - 45% results in selling price. 85/.55=154.54. The 154.54 is the price you need to sell to make your small business profitable and earn a net profit of 10-8%. To me the gross margin is the percentage used to determine the price I must charge to make a profit. It uses hard inventory cost (COGS) divided by a divisor which is the result of 100 percent and the gross margin percent difference. My number takes into account deduction of returns, allowances for damaged or missing goods and any discounts. These are not normally included in Gross Profit Margin as defined by Accounting Coach. BTW this is using a 3.5 turn rate. Walmart has a reported turn rate of 9. Can't possibly cover expenses and use their gross margin as an example of a distributor imo.

Have I been using the words gross margin the wrong way for years?

Well at the end of the day I understand what you where thinking. Thanks.

 

[CanuckSigns]

You are the biggest douchebag pompous egomaniacal schnook on the forum...this and others. I think you should stick to your dirty little jobs and shut TFU.

You're a very angry little man aren't you.

 

[Gino]

You are the biggest douchebag pompous egomaniacal schnook on the forum...this and others. I think you should stick to your dirty little jobs and shut TFU.

Do yourself a favor and put me on your ignore list..... if it will fit. I'm sure by now, your ignore list is pages long.

:ROFLMAO: Oh...... and call me all the names you want. They really don't bother me anymore than anything else outta your mouth........ :dog42


​

Ya know, I don't know if you're a girl or a guy, but one thing remains for sure...... you have a tiny little fuse.
​

 

[Joe Diaz]

So how exactly would a co-op work? Right now our company uses different distributors, because not one distributor carries everything we need, and some have better prices for certain things etc. My point is, we are a special snowflake and have special needs. LOL. Sign Shop A might want different brands than Sign Shop B. Sign Shop A might want certain colors of vinyl, Sign Shop B might want different colors or just white print materiel . Sign Shop A might need 54 inch media, Sign Shop B might need larger. Sign Shop A might want High Perf, Sign Shop B might want Economy. So on and so forth... and that is just vinyl.

So this Co-op would most likely need a warehouse to store the various types of materials and products, so that when a member needs something they don't have to wait weeks or months, and also if buying from manufacturers, I'm assuming you would need to buy in bulk. So a warehouse is a must. Then they would need to make a catalog and distribute that so that it's members would know what is available. Then they would need to ship or deliver to all it's members. IF you want to grow the membership, you would most likely need people to go on the road and convince others to sign up. You could call these people salesmen or reps. Now normally in a co-op the members would do the work. But how would a group of sign makers from all over the place, travel to one (or a few) warehouse locations to work when they already have busy scheduled as is? So this type of co-op would need employees right? And I'm assuming they wouldn't do the work out of the goodness in their hearts. They would want to be paid right? So do you think that savings from buying direct from the manufacture would be spent running this type of operation? At this point what would be the difference? Why not just call it a distributor? I don't have much experience with co-ops so I guess I'm just trying to figure out how a co-op would even work in this case, and what the benefits would be.

 

[GaSouthpaw]

I should check in more often...

...since I just read through the thread for the first time.
I'm glad Feller's caved, but yeah- as many others have said- what a bad idea.
Thank goodness there are plenty of other suppliers for most of what we sometimes get from them.

 

[Gino]

As mentioned, a Co-Op will not work in these small numbers as to which some of the members have eluded. As Joe explains in fine detail, is what others have already explained, but some people are so H*ll Bent on taking someone out, they can't see the forest for the trees.

If you want to collect some friends and create a buying cartel from a particular distributor, I'm sure they will offer you some additional discount for your volume, but you'll probably have to pay the drop-ship cost to all the various locations.... unless you want to be a local hub and deliver it yourself and charge accordingly, but then there goes the discount you worked so hard to get.

It can be done..... and is being done. It's called your distributors. Do you really think a manufacturing plant producing millions, if not billions of dollars worth of product want to send to literally millions of customers ?? Of course not, they send to territories and let their dealerships do the hard work of distributing product/supplies, hence the name Distributor/Supplier.

Boycott, banding together, foil hats....... it's all the same. Nothing in today's work field is what was envisioned 40 or even 30 years ago. The stakes have changed drastically as the world continues to get smaller and if ya can't roll with the punches and run your business effectively, get the heck outta the way for those who can...... except for 'player'..... cause he/she's spesha-a-a-al.

 

[royster13]

If Fellers or any other distributor is making less than 22% gross margin on the long term I would have to see it to believe it. Walmart considered the one of the best retailers in the world runs around 24% year over year. A quick search shows that some of the finest run institutions run in the 30's http://www.fool.com/investing/gener...nd-target-have-the-worst-gross-profit-ma.aspx You're telling me you think Fellers does 10-15%. Don't agree that they do. However, if you meant net profit is still think it's high.

There is a huge difference between selling consumer goods and supplies....We both have our opinions, and in the absence of proof I guess all we can do is disagree....

 

[rparsons]

I would think 25%-75% savings by going direct.

We should try an order of popular material, pehaps 54" Orafol 3651 and see what a group buy might yield.

... I figured that our average discount to move a reasonable amount of product would be would be 10% to 15%. Then I thought about financing receivables and bad debts and walked away. If you get stiffed on a roll of vinyl you have to sell ten to be back to even. Not the margins I am comfortable working with.

Why even bother with a co-op and all of the troubles involved. Instant One Media is already selling at wholesale prices on roll #1. It's just as good, if not better than 3651. Check out the site for a free sample.

 

[Biker Scout]

A Co-Op could work rather simply. Especially at first. Yes, there would need to be a warehouse, in a port city. But it would really only need to be staffed by one person most of the time. Their pay would come out of the membership dues, as would the rent and insurance etc. If there is a desire to want to sell brand name products, like Oracal... just know they want a $50k initial buy in of stock just to be able to carry their materials. Which is why places like Grimco and other distributors no longer carry them.

Basically I think the original tenant of the Co-Op would be to offer the highest quality "Core Products" at cost to it's members. Have a tiered price structure, that allows for different levels of pricing based on how much they "Bought Into" when they first signed up. In fact, Platinum Members would get their own price list that differed from Gold, Silver and Bronze. In fact, a gold member would have no access to that price list, nor even know what a Platinum pays pays for their materials, other than steeper discount, and possibly better or free shipping rate... etc. Buy in could start at say, $10k for Platinum membership and scale down from there all the way to a monthly minimum for the smaller shops and individuals.

Some of the core items would obviously be something like bringing over the best banner materials, coro, ACM panels, bulk ink, cast printable vinyl and their laminations including window perfs. Dealing with manufacturers of our favorite materials will also be considered as well. Either in a drop ship scenario or stocking at our warehouse.

Here is a legitimate case scenario that I already know exists. Banner material made from a well known "brand" sells their logs of 103" super smooth scrim 13oz. material for $99 a roll! Buy a pallets worth the price goes down a bit from there. Buy a container's worth it goes down even more. The shipping on the container is negligible at that point, something like $413 port to port. Do the math real quick on that... 150 foot roll, times 103 inches for $99 equals .08¢ a sq. ft. Do you think you can find a way to make a profit on that? (obviously you can get various sizes pre-cut or the Co-Op could invest in a log slitter)

 

[BigfishDM]

Wow what a crazy thread this has become, thought I would chime in on the 3M profitability and he is working off of 12-15% profit margins on a good day. Oracal he makes a little bit more about 15-20% mayyyyybe, he makes his money from thousands of companies buying at low profit margins and upselling all the little knick knacks that go along with the wrap industry. I was one of the biggest 3M distributors if not the biggest on the west coast when Sone Systems was around (now its Lexjet) 3M would run dealer promotions on combo packs of controltac and lam and we would buy hundreds of them and the sales reps would break them apart and sell individually just to make another 5-7%. Frank has done a great job in the wrap industry and if you think he is making 30% profit I would say no way, with all his overhead he is probably closer to 10-12% when its all said and done.

 

[Biker Scout]

Why even bother with a co-op and all of the troubles involved. Instant One Media is already selling at wholesale prices on roll #1. It's just as good, if not better than 3651. Check out the site for a free sample.

Yeah they are... but they have yet to offer cast film, and a window perf. They would then be my preferred vendor if they brought in those items as well. But think about it this way... they are still marking it up and making a profit. A Co-Op wouldn't have to mark up as much as they do, if at all.

 

[BigfishDM]

A Co-Op could work rather simply. Especially at first. Yes, there would need to be a warehouse, in a port city. But it would really only need to be staffed by one person most of the time. Their pay would come out of the membership dues, as would the rent and insurance etc. If there is a desire to want to sell brand name products, like Oracal... just know they want a $50k initial buy in of stock just to be able to carry their materials. Which is why places like Grimco and other distributors no longer carry them.

Basically I think the original tenant of the Co-Op would be to offer the highest quality "Core Products" at cost to it's members. Have a tiered price structure, that allows for different levels of pricing based on how much they "Bought Into" when they first signed up. In fact, Platinum Members would get their own price list that differed from Gold, Silver and Bronze. In fact, a gold member would have no access to that price list, nor even know what a Platinum pays pays for their materials, other than steeper discount, and possibly better or free shipping rate... etc. Buy in could start at say, $10k for Platinum membership and scale down from there all the way to a monthly minimum for the smaller shops and individuals.

Some of the core items would obviously be something like bringing over the best banner materials, coro, ACM panels, bulk ink, cast printable vinyl and their laminations including window perfs. Dealing with manufacturers of our favorite materials will also be considered as well. Either in a drop ship scenario or stocking at our warehouse.

Here is a legitimate case scenario that I already know exists. Banner material made from a well known "brand" sells their logs of 103" super smooth scrim 13oz. material for $99 a roll! Buy a pallets worth the price goes down a bit from there. Buy a container's worth it goes down even more. The shipping on the container is negligible at that point, something like $413 port to port. Do the math real quick on that... 150 foot roll, times 103 inches for $99 equals .08¢ a sq. ft. Do you think you can find a way to make a profit on that? (obviously you can get various sizes pre-cut or the Co-Op could invest in a log slitter)

I could do this no problem, except for CAST vinyl you cant get that overseas. I would love to do a co-op with Signs101!!!

 

[BigfishDM]

Yeah they are... but they have yet to offer cast film, and a window perf. They would then be my preferred vendor if they brought in those items as well. But think about it this way... they are still marking it up and making a profit. A Co-Op wouldn't have to mark up as much as they do, if at all.

You cannot get cast over seas

 

[Biker Scout]

Isn't Germany also considered overseas? :Big Laugh

 

[BigfishDM]

Isn't Germany also considered overseas? :Big Laugh

Lol yes you got me there, I meant to say you cant get cast from China

 

[FatCat]

Lol yes you got me there, I meant to say you cant get cast from China

Hey Josh, do you guys still only have the warehouse on the West Coast, or have you expanded over East as well?

 

[BigfishDM]

Hey Josh, do you guys still only have the warehouse on the West Coast, or have you expanded over East as well?

I have product in Chicago but not everything yet. I can send you over what I have in Chicago no problem.

 

[FatCat]

I have product in Chicago but not everything yet. I can send you over what I have in Chicago no problem.

Yes, please do! Love your laminates and that retractible matte banner material you offer. I think you also have some of the best pricing I've seen on the Sihl 3686 paper. I would also use your banner if it can ship out of Chicago...

 

[HulkSmash]

Thank - you fellers for doing what's right. I'd also like to thank everyone who contributed to the thread. There's power in numbers. I think this was handled as respectful as possible.


For everyone else who tried to take this thread in another direction and destroy it - you have some serious issues, and way too much time on your hands.

 

[Biker Scout]

I was actually really surprised that it took until page 7 for the name calling to start.

 

[Gino]

I was actually really surprised that it took until page 7 for the name calling to start.

Incidentally, it was already going to town on page #5.


I guess after the problem was fixed, some of the village idiots needed to start taking it out on each other to soak up their valuable time...... albeit it being a one-sided slug-fest.