Clean It Up
UK General Cleaning Forum => General Cleaning Forum => Topic started by: Tim Downer on February 03, 2006, 06:35:31 am
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Morning all
Have now set ourselves up to enter the Office cleaning side of the business.....put one tender in already. They were impressed with the presentation of the tender.....better be, took me two weeks to create the pack. But, will have to wait a week or so for an answer, as they have other tenders to get in.
They were interested in us supplying the janitorial supplies.
I have a very good supplier, so there is no problem there.
What i would like to know, is how much profit do you guys put on the goods before passing onto the client?
10% 25% 40% !?!?!?!?!?
Would be interested in hearing your comments on this, as i am compiling a list of their requirements.
Also, as i am sure you all get discount for bulk, do you give a similar discount to your clients if they would like bulk too??
Thanks peeps
Kind regards
Tim (still trying to get rid of the B after my name!!!)
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Hi Tim
With my janitorial supplies, I divide their charge by five and then multiply by six to get the resale price. Doesn't sound a lot but then I don't have to handle it. It goes straight to the customer - just a paper excercise for me.
Just a word of warning. I hope youi're registered for VAT because you'll have to pay VAT on your supplies but won't be able to charge the customer. Your mark up will then have to be horendous to cover it.
With regards to 'bulk' most suppliers will give better prices 'based upon what you intend to sell over the year'. They will not usually give 'bulk' discounts on individual orders. You may have to renegotiate your prices throughout the year.
Having said all of that, it IS a good source of additional income in the office cleaning sector.
Just an afterthought........................
You will also be able to sell to your customer a list of other stuff that they use - things that we wouldn't normally think about.
These can include :
First aid kits.
Paper cups.
Dishwasher detergent.
Eye wash stations
etc. etc.
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Another thought.................
Depending on who you're using as a supplier the list of 'bolt on' services can grow too.
For instance, I use Cannon Hygiene as my supplier of consumables which gives me the option to offer their other services too................
Sanitary bins
Dust control mats
Washroom services (air fresheners, hand driers etc.)
Pest control
None of these will involve any work for you other than setting up the contract.
Cannon invoice me and run everything. I add my bit on and invoice the Client.
There are other companies who do all of those services, PHS being the obvious one but don't go near Howard Warner.
Shop around - good luck.
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Hi CMS
Thanks for your input there. Yes we are VAT registered and i do agree that not being VAT registered would make a difference to your price / profit.
Regarding bulk orders from my supplier, they give discount on all thier items if you buy in bulk, whether you go in once per year or go in every day.....so was wondering if i should offer a similar package to potential clients?? i.i 5+ cases of toilet rolls = 10% discount per case etc etc!!
However, the idea for first aid kits etc seems like a good idea to me and will think about adding that service for my clients.
I see your web site is back!! Have just spoken to the IT dept. from our sister company and said i would like to get a web site going over the next couple of weeks......so we shall see.
Thanks again
Kind Regards
Tim
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If you can get discounts for individual bulk orders, that's great but I don't see the point in offering the discounts to your Client.
A building will only have so many occupants and they will only go to the toilet a certain number of times.
They will not use the toilet more often because they have bought more toilet rolls!
They will use the same amount spread across they year. It will just mean that you have to wait longer for your next order from them.
AND.you're cutting your margins.
With regards to the web site. Can you really see it?
I am having major problems. I can only see the screen which tells me I have to renew the domain name which I have done, they acknowledge payment etc. etc. but I still can't get in.
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Yes, clicked on your web address at the bottom of your post......"et voila"
Have also entered the address manually and still got there.....
Will bear in mind what you have said about the discount.
Kind Regards
Tim
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Dust control mats and air fresheners are 2 things i've been looking at recently, but i was thinking along the lines of supplying and maintaining these myself, as i thought this would be the most profitable option.
Going via a supplier wasn't something i had considered.
Arthur
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It's so much easier Arthur.
They service everything for you. You just reinvoice with your mark up added on ;D
http://www.cannonhygiene.com
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We run a Janitorial supplies company, and we supply many cleaning companies
in the London area . They just fax their orders over to us and we deliver next
day , they dont ever have to touch the products . Just send the invoice to
the client with a big mark up (example square bin liners £10.50 from us £37 to client)
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It's so much easier Arthur.
They service everything for you. You just reinvoice with your mark up added on ;D
http://www.cannonhygiene.com
Thanks for the info, i think i'll have to look into that option.
Arthur
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:o :o Square bin liners £10.50, sell to customer for £37.00 :o :o
I buy them at under £7 per thousand and cost them into the job. Anyone charging 37 quid for bin liners is having a laugh.
PS, do you want to buy your bin liners from me, I'm sure I can get a healthy discount for a large order and you can still make nearly 100% mark up.
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We run a Janitorial supplies company, and we supply many cleaning companies
in the London area . They just fax their orders over to us and we deliver next
day , they dont ever have to touch the products . Just send the invoice to
the client with a big mark up (example square bin liners £10.50 from us £37 to client)
You should be wearing a mask and a cape!!!!!
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Hi CMS
why do I need a mask and cape ?
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Dick Turpin wore one and he did the historical equivalent of charging £37 for bin liners!
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It's not me charging £37 it's the cleaning contractors buying them of me that charge that. Have a look how much this forum's owner charges .
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Then please accept my apologies. It's the contractors who should be wearing capes!
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£19.50 on here. That IS a bit pricey. Mine are £9 odd (can't remember the pence) That's what I sell them for.
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The mark up on these products may seem high but what you have to remember
is these cleaning contractors are competing for business in a harsh business
enviroment . Daily office cleaning price's are lower in London than any other part
of the UK.
This is because of the huge amount of cheap imigrant labour, Because of this
the contractors have to work on tiny margins to win new business.Their is one
company I know of that advertise on Google their hourl'y charge is the minimum wage
plus a pound , the pound being their profit their are many others like this that'swhy they all try for a big mark
up on the paper and plastic disposable products.
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The mark up on these products may seem high but what you have to remember
is these cleaning contractors are competing for business in a harsh business
enviroment . Daily office cleaning price's are lower in London than any other part
of the UK.
This is because of the huge amount of cheap imigrant labour, Because of this
the contractors have to work on tiny margins to win new business.Their is one
company I know of that advertise on Google their hourl'y charge is the minimum wage
plus a pound , the pound being their profit their are many others like this that'swhy they all try for a big mark
up on the paper and plastic disposable products.
I used to be Regional Manager for London and the South East for a period of 5 years for a large cleaning organisation. I disagree with what you are saying as I managed a portfolio worth £5m per annum.
You can get good prices in London if you run a good outfit.
Clients aren't as daft as you make out. They know the difference between a good cleaning company and a crap one.
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Hi CMS
I am talking about small cleaning contracts (1 or 2 cleaners 2 hours each per day)
in central London . When they are looking for a daily cleaning service 9 times
out of 10 they will always take the cheapest quote. this is not a guess I
have been operating in central London since 1979 and this is what allways
happens. this is why my company got out of the daily office cleaning business
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Hi CMS
I am talking about small cleaning contracts (1 or 2 cleaners 2 hours each per day)
in central London . When they are looking for a daily cleaning service 9 times
out of 10 they will always take the cheapest quote. this is not a guess I
have been operating in central London since 1979 and this is what allways
happens. this is why my company got out of the daily office cleaning business
Sorry, that is not what always happens. The portfolio I managed was made up of many different types of cleaning, even down to the one cleaner, three days a week stuff.
You can still sell on service if you're good enough.
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Hi CMS
Yes you are correct you can sell on service if you are good enough. But it will
only work 10% of the time .
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Mmmmmm......becoming like another soap on tv!!
I think that we are better than that? Why should we try to provide such a good service.....for it to work in our favour for 10% of the time?
I would like to think that after all the hard work and investment of time......and putting into practice a lot of the suggestions etc put on forums such as this......that the % should be a lot higher!! Say in the region of 70-80%????
What do you think??
I have started up Office cleaning again as of this week, after a break of 3 years.....and i wouldn't be happy with less than 70% success!!
Maybe after a few months i will be prooved wrong.....we will see.
But any way......back to my original question......
How much do you guys place ontop of the purchase price from your supplier??
Regards
Tim
P.S Thanks for your comments above - CMS and D Woods and for CMS's helpful ideas and advice
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A lttle bit off topic, but I saw a brilliant training session for quality standards once. I can't remember the exact figures but it went something like this.....
The delegates were asked the question "When striving for quality, what percentage do you think is acceptable?"
There was a variety of answers but the general consensus was that we should aim for 99%.
Then it went on to tell us what would happen if we all hit only 99%..........
So many thousand people would die each day on an operating table.
So many million letters wouldn't be delivered each day.
So many this and so many that........etc.
It brought it home to us that nothing less than 100% is good enough.
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A cleaning contractor came into our shop today to buy cleaning supplies,as he was choosing the products he wanted I got talking to him.
He told me he had recently quoted for the common areas on a local office block.
He said their was five of them quoting and he went in at £22,000 per year.
He found out that four of the five quotes were between £21,000 and £22,700
per year.
But one quote was for £15,000 per year guess what one they took.
This is why cleaning contractors need to maximise their profits on the extra services they provide such as window and carpet cleaning and the provision
of consumable products such as toilet rolls and bin bags
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I think we should educate our clients out there about the service we can provide......compared to a service they may get compared to those who go in cheap.
I would rather have 10 properly run contracts at the right price.....as apposed to 20 cheap contracts not run properly due to making no money!!
Interesting point from CMS regarding a 100% goal to aim for.......
Regards
Tim