From: LifesGr8 (Original Message) Sent: 11/15/2002 3:04 PM
Fellow P4P'r Monte Jensen and I have been emailing back and forth regarding a proposal template that I gave him for proposing mutiple-units. I thought I would pass on something that has worked for me and decided I might as well send it to everyone while I was at it.
Say the proposal is for say 30 units, 500,000/mo. on a 60 month obligation and the proposal needs to be quoted as an all inclusive (equipment, service, and supplies) CPC. I will presuppose a 10% increase in copy volume/year and build it into the program. As you all well know, the higher the monthly volume, the lower the equipment prtion of the CPC because the equipment cost is being spread out over more copies. So in the above example, 500K x 60 months should be 30 million copies over the term of the contract. My proposal gets written for 610,667/mo. (36,640,000/60 months) spreading my equipment cost out by 6,640,000 more copies than the competition. For this to work, you have to work for a company that is willing to carry forward unused copies until the end of the contract. The customer will also be "pre-paying" for copies in the early months in exchange for avoiding massive overages in the latter months. My proposals read "All unused copies can be carried forward until the completion of the contract which is 60 months."
There are ways for competition to combat this but in a bid situation, all the details are usually not divulged and usually the decision boils down to who had the lowest CPC. In one example, my CPC went from $.02973/copy to $.02611/copy without giving up any additional Gross Profit. That $.00362/copy difference is HUGE in a proposal like this.
This may be stating the obvious to some of you but I hope there are others that will be helped.
Original Post