The Truth Behind Set-up Charges
If you are new to the process of marketing and procurement (the act of obtaining or buying goods and services), or you are just not that familiar with the supply side of our industry, there are likely some things you don’t understand that come along with buying, say, custom printed bottle openers. The price says $2.50, but what is this hidden "set-up" charge? Why are you being charged a “repeat set-up” the next time you order the same thing? Is this just a way for a supplier to get more money out of you? In a word, no.
What is a Set-up Charge?
A set-up charge includes the cost associated with the material or services involved in setting up your custom logo on things like a die, etching plate, screen, or digital file so that it can be used to decorate the item you are purchasing. Because items vary in size and shape, imprint areas (or, the maximum space in which your logo can be placed) are all unique, and you will pay this charge each time you buy a new item.
However, there are exceptions where the item may not change but a new set-up charge does: When decorating clothing, for example, the screen that is created only works for the size of the logo you originally used. If you decided to double the size of your logo, even though it is the same shirt, you will likely pay a new set-up fee.
Imprint methods include—but are not limited to—pad printing, silk screening (screen printing), debossing, sublimation, and laser engraving. A set-up fee for laser engraving, for example, usually means adjusting the laser to the custom size and design of your logo. For pad printing, the set-up includes physically creating a custom screen with your logo.
Why Does One Item have Multiple Set-up Charges?
Well, it depends on the item, but classic silk-screening for example requires a new screen per colour. If your logo is two colours, the t-shirt will be hit once with the blue film, and then hit separately with yellow. The first screen only allows the first colour to be pushed through the screen and onto the shirt. The second screen does not allow ink to pass through the same holes/design as the first one. Thus, the second colour would need to be pushed through a new screen to produce a two-coloured logo.
What is a Screen Charge?
Tomato, tomatoe. A screen charge and a set-up charge essentially mean the same thing, though the term "screen charge" is a more specific explanation of the reason for the charge (i.e. a screen needs to be created, as opposed to say, setting up a laser). All in all, they both mean you are paying to set up a custom design to use to decorate a particular item.
What is a Repeat Set-up Charge?
Repeat set-up charges do not always apply, as depending on the method of decoration, sometime there is no additional cost associated. However, most times, even though you have already created the original screen/film/plate/file, a repeat decoration still requires things like cleaning out colours, setting up a machine and making adjustments, and stopping other lines or production, all of which involves time and money.
In silk-screening, for example, even though a custom film has already been made, it still costs money to use that premade film because the printer needs to set it up on a screen (and the screen is where the colours are run through). A screen is not permanent, it is used hundreds of times in a week, hence there is a still a charge to set up an existing film onto a screen.
Some unprompted advice?
Maximize repeat set-ups, because they are cheaper than a regular set-up. If you have a product that works, keep it around! Changing your bottle opener every 4 months will result in a $50 each time (as opposed to, say, $30). I know it doesn't seem like a lot, but it does add up over time.
Bottle Openers Usually Have a Set-Up Charge, but I Recently Found Some That Don't. Why is that?
Everyone has a different strategy for doing business. It is unlikely that this scenario will happen, but if/when it does, and it is for an item that normally requires a set-up, the cost is most likely just built into the price per unit. Don't be fooled, you likely aren't getting much of a deal.
Does all Customization Involve Set-up Charges?
No, not necessarily. Coasters or aluminum tacker signs, for example, rarely have a set-up charge because of the way they are decorated. Set-up charges (and prices) really all depend on what you are decorating, and the imprint method being used.
How to Avoid Repeat Set-up Charges
Short answer, oftentimes you can't. Unless you only buy coasters, or want to invest thousands of dollars in buying the machinery to decorate this product, but let’s remain realistic.
One way you can at least minimize this cost?
Try to avoid ordering 100 bottle openers 4 times a year. Rather, if you can, buy 400 once a year.
I know I can't tell you how to run your business, but I can at least share with you what we've learned on this side: those repeat charges can really add up, and more quickly than you think, especially if you're doing this for years. And trust me, there's no hidden agenda; it doesn't dramatically help or hinder us either way.
It's important to be aware of the different costs associated with placing a customized order, and the reasons for these costs. Every item and decorating method has a different price and practice, but at least now you may be able to better anticipate these seemingly "hidden" additional costs.
Let us know if you have any questions or comments.
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