Banquet (Discount) Pricing

[JET4]

Ok, I have a question about discounting pricing for certain organizations. I make dog leather and gear for hunting. I, at times, have requests from groups and clubs for donations for raffles and auctions. I got my start from donating leashes and other stuff I made to the retriever club I belonged to. I always did this for free (I wasn't in business then) and always had people asking me to make them something so I know there is some potential there as far as advertising.

What methods to you use to come up with any discount pricing for non profit clubs and organizations. Most of the groups I plan to market to hold raffles and auctions to raise money for their club or organization, so the less they have to pay the better their fund raising will be. I obviously can't donate for free anymore, but would like to give them a little of a break. My benefit would be obviously advertising to a group of my target customer base (hunters and dog handlers).

I know this is a loaded question because of so many variables. My first instinct would be for 1/2 price for most items, but I feel this may be too low. There are a few of my items that absolutely not be discounted very much because they are a pain to make.

Thanks in advance,

JET

[Denise]

Why can't you donate for free anymore? One leash totally donated costs you the same (compared to selling them) as two at half price. You would be giving them less items to sell, but they would have no input into them either. My reasons behind my thinking: They may perceive "If they can give this to us for half price, then they aren't losing money on it so look at how high their markup is!" - not realizing that the "markup" is your wages. So that lowers the worth of the product in their mind. As well, as was said (the words may not be exact by the idea is) by one very well respected saddle maker when asked about giving a discount to a good customer, "I never cut my price, but I may give them something - say a breast collar - extra. They will soon forget the cut in the price of the saddle but they will remember what you did for them every time they use their breast collar." That makes sense to me!

[JLSleather]

Only "donation" I make is every so often I put some key cases or the old "wander bag" into kits and take it to the local boy scout troop. Kids love that they can bash a name on it, lace it together, and USE it.

Never count the cost, I mean, they're dirt cheap to begin with and my only labor is seeing some kids have fun and a sense of accomplishment. Grown men can get their own, I think.

[bruce johnson]

This is something I deal with a lot. I have been on both sides of the fence here - on the board for a non-profit for several years and as a maker who gets donation requests all the time.

As a board member and officer - fundraisers are meant to raise money for operating expenses. We had live auctions, silent auctions, and raffles at a few events throughout the year. Live auction items were full donations with one exception. The only exception there was we sold a gun with an event plaque. The gunshop got the gun for us at cost. No money was paid out for anyhting else. These are showcase kind of items and while some years sold better than others, bring their value and more. Raffle items are usually big ticket items - trips to the NFR with tickets, accomodations, and spending money. The tickets are donated and the accomodations are sponsored, spending money is put up by the organization. Silent auction things were fully donated with a few exceptions. We dealt with one company that specialized in jewelry for auctions. We picked what we wanted to fill in, they had a minimum price. We paid that price only if something sold, and put the opening bids at that minimum. Everything else shipped back with no $ out. As a board we would have not accepted anything with a cost without that sort of arrangement.

As a maker, I pick and choose who I donate to. I can't donate to all that request. The organizations whose members and attendees have supported me get something. Organizations I believe in their work get something. What they get really depends on the event. For one group - a high end item for the live auction, and a few silent auction items. Usually about 600 people there and a lot of attnedees have bought something from me. Other groups I donate large or small items to, it just depends on who and what. It takes money to run most groups and the more they can raise, the better it is for everyone. There are some tax benefits to donations like this, and check with an advisor on that. Sometimes things you can buy at wholesale because of your business status and donated is better and more time efficient than making something too.

Personal benefit auctions are another opportunity. The catastrophic medical expense fundraisers are something I look at. I have been on the other side of that fence without one, and realize now how much they could mean. If anything, these are a great show of community to the affected people and that support is worth a lot. Donating something gets a business name out there more than writing a personal check. For most of the donations, they are things I have on hand. I will make up some things to have in-stock alongside the custom orders. I can just hand them something or tag it for them. Another thing to consider donating is a credit for a custom made item or equivalent credit towards something else. I have done that and it has worked out well. Make it a credit for so many dollars that will pay for the item, then any upgrades they pay for.

The other scenario is making awards. Most all associations have an awards budget if they are giving them, so they expect to pay. I have done it off and on for a long time, and several others here do too. It can be an alright thing. My pricing on that is materials and overhead plus time. If I am doing several of the same pattern and don't need to change lettering, I might discount the time some to keep within their budget but never the other factors. One of these, one of those - there is no economy of time savings and usally full price. The trap I have fallen into before was that I had big awards orders which were nice for cash flow. The downside was I had to refuse some full paying orders at times because I couldn't get them done too.