How We Determine our Minimum Orders, Why They’re More Expensive Per Piece, and How We Help
If you have experience working with manufacturers, you will know that the smaller your order is, the more it costs per piece. If you are new to the manufacturing world, the reasons for this pricing difference can be confusing and even frustrating at times. We would like to give you a little peek under the hood and help you understand all of the factors that influence pricing. It’s important that you understand how this process works so you can be informed to help you make better decisions throughout the process. We know how important these decisions are for you and your business so we want to be here to help every step of the way. In this blog, we’ll discuss some of the things that go into our product pricing and how Walker Tape Converting will help you offset some of these costs.
Why does Walker Tape have minimum orders and how are they determined?
To better explain this, let’s first talk about how we purchase tape products. As a custom tape converter, we work with tape suppliers throughout the world such as 3M, tesa®, Shurtape, etc. All of these suppliers have their own minimum orders that we must meet to purchase products from them. Each tape generally has a different minimum order quantity. Most custom tape converters require that their customers purchase the entire minimum order quantity from their suppliers. At Walker Tape we understand that depending on the size of the minimum order from the supplier, most small and even many medium sized businesses won’t be able to place an order that large. Because of this, we only require a minimum order equivalent to one 3” x 360yd roll for tapes we keep in-house. That is the size we convert all of our tapes to before we convert them into finished products, so we are willing to pass this onto our customers as our minimum.
Another factor that goes into minimum orders is whether or not we currently carry the tape you need in-house. We stock a large lineup of some of the best double-sided tapes in the world. We can often find an in-house tape that can be converted to meet your needs. However, If your application is very unique or you have a specific tape you’re wanting to work with that we don’t keep in-house, we have relationships with the largest manufactures in the world and have the resources to find what you are looking for at one of the lowest prices around.. we will work with our many tape suppliers to find what you need. If we will need to purchase a master roll of tape for your product that we don’t currently stock, your minimum order will increase so that we can cover the cost of the master roll with your order. If you are not able to meet those minimums, we are still happy to work with you but there will be extra fees involved. We may also have the option of piggy-backing off of a large order from another customer. We have had several cases where a smaller customer wanted a product that happened to be used by a larger customer. We were able to use a portion of the master roll for the smaller customer and decrease their minimum order significantly. We’re always willing to work with our customers to make sure we can get them the products they need.
Luckily, because of our excellent product lineup, most of our customers use in-house tapes and have more flexibility with their order sizes. At the end of the day, we just have to make sure an order is large enough to make it worth our product and labor costs, while at the same time offering small enough minimums to meet your needs. We are here to partner with you on your products. If you’re not happy, we haven’t done our job.
What is Considered a Small Order?
As a general rule, if you’re placing an order that will require less than one master roll of tape, you can consider that a ‘small order’. That can become a little confusing when it comes to quantity of converted tape. If your finished product is small, you may get 18,000 pieces out of one master roll. A larger product might end up being significantly less than that. This is helpful to keep in mind as there may be times you assume your order is large because of the piece count, but it may still be considered a ‘small’ order because of the overall volume of tape being used. If you have been told by others that your order is too small, you can rest assured that we will give your project the same time and attention we would give any other project. We truly enjoy working with small businesses to come up with solutions that will help them succeed. After all, we were small once too.
How is the Price Per Piece Determined?
A lot goes into determining the cost of your final product. Here is a list of some of the things that may factor into your price:
- Material costs
- Labor to design and coordinate your product
- Working with our vendors to source new tape
- Machine setup as well as product waste involved in the set up
- Custom tooling costs
- Production time
- Machine cleanup after production
All of these costs are combined and divided by the piece count. The reason small orders cost more per piece than large orders is that many of these costs are the same whether we’re producing one piece or ten million pieces. For example, no matter how many pieces we’re making, it takes the same amount of time to set up the machine for production and cleanup after production. So, when all of the costs associated with creating your product are divided by the amount of pieces you order, it makes sense that a smaller order would cost more per piece.
For example, (these are completely made up numbers for example purposes only) let’s make it easy and say it costs $50 to set up a machine for your project. It costs $100 for a yard of tape that makes 100 pieces of your product. It costs $10 to pay the person to run the machine long enough to make 100 pieces. It costs another $50 for machine cleanup. A 100 piece order would cost 57% more per piece than a 1000 piece order because of the fixed costs for the project.
100 piece order
$50 – Machine Setup
+$100 – 1yd of Tape
+$10 – Running the Machine
+$50 – Machine Cleanup
——–
$210 Total Order Cost
÷ 100 pieces
——–
$2.10 per piece
1000 piece order
$50 – Machine Setup
+$1000 – 1yd of Tape
+$100 – Running the Machine
+$50 – Machine Cleanup
——–
$1200 Total Order Cost
÷ 1000 pieces
——–
$1.20 per piece
What Can I Do to Save Money on My Custom Orders?
As you can see in the scenario above, the best way to save money on your custom orders is by placing larger orders. This doesn’t mean you should get more tape than you need. However, planning ahead and ordering for a larger period of time is a great way to save money. We always encourage our customers to buy six months worth of product at one time. That way you save money on set costs and save money internally by spending less time placing orders. If you’re unsure about calculating usage for six months, we are more than willing to assist you. We understand that you may not know exactly how much tape you’ll need for your specific application. We have been doing this long enough that our product experts can walk you through the process of getting realistic estimates. Always remember: larger orders save you money every time. Order more product less often.
How Does Walker Tape Converting Keep Costs Down?
We like to save you money! There are two main ways that we will always save you money when it comes to your converted tape product. First of all, we don’t have a commissioned sales team. Since we save money that other companies would be paying in commissions, we pass those savings onto you. Instead, we have our customers work directly with product experts to ensure you’re getting the most accurate knowledge and being treated as more than just a ‘sale’. Second, we have an onsite team of engineers who build custom machinery. We use the best machines available in the industry and if there’s not a machine that’s as efficient as we would like it to be, we create our own. We have several machines we’ve built in-house that are more efficient and create less waste than anything else on the market. Once again, that’s a savings we pass on to you as the customer.
Because smaller orders can be more expensive, we do everything we can to ensure you’re comfortable with the price of your custom products. We make it a point to create a partnership with each and every customer we work with. We want to be sure we’re producing your products with superior quality while at the same time ensuring we can give you the best prices possible and keep minimums low.
What Should I Do if My Business Can’t Currently Afford the Costs Associated With Creating a Custom Product?
Often we’ll have customers come to us who are just starting a new business or beginning to use tape for a new application. Many times these customers don’t have a very large budget for their first order. One option we suggest for these customers is to start with rolls of a stock product that would work for their application to help them get started. We have over twenty double-sided, specialty, high-performance, versatile stock products in-house. Once they get more into the swing of things we can create a custom product that is more perfectly suited to their needs. Rolls are often a great solution to help people get started because they are less expensive to produce. There aren’t any costs associated with dies, design, etc. and they work for many applications. Once the process is figured out, we can get a more realistic look at usage and any shortcomings in the process we can remedy by creating a custom product.
In the end, we want to make sure all of our customers have the opportunity to get the high quality products they want for their unique applications at the best prices on the market. If you have any questions, head over to our Ask An Expert form now. We are here to help you every step of the way.
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