Value Added Service Pricing Policy
Tel: 0800 975 0960 Fax: 01844 213674  Ontime Systems Limited Registered in Cardiff 1954802	Time Based Business Model When famously asked by a client "How much profit should I make?" an Accountant replied "As much as you can!" This was all very well but did not answer the real underlying question which of course is governed by market forces and the uniqueness of the product / service being offered. Much has been written about the hiatus price levels associated with new products with higher profit levels while demand is strong. But what about everyday mundane products that we all need and take for granted? Generally everyday products are supplied by a multitude of manufacturers each claiming superior or slightly different advantages over rivals that do much the same job. Branded goods tend to retain greater value especially in the world of fashion and consumer durables. However, in the business to business world harsh reality takes hold as corporate buyers are all looking to increase their bottom line company profits. A reader will already have grasped the message expressed by Oscar Wilde all those years ago where the lowest price does not necessarily mean the greatest value. IBM latched onto this theme in the early days of the Personal Computer by saying to prospective customers that "No one got fired for buying an IBM computer". This may not be the case anymore. Banks like 45% The banking system has a great deal to do with the success of business and in the case of business to business enterprises likely to be watching their client accounts with marked interest. A Director of our business looked into the attitude of Banks towards assessing their clients and found that in the market sector of business machines and services they expected to see a ratio of about 45% gross profit against turnover. (Any business with a borrowing requirement needs to keep this very much in mind!) Fortunately, Ontime Systems Limited has no borrowing needs and can be, therefore, a little more flexible in attitude toward gross profit. Never the less this benchmark is probably a good guide as to best business practice. Pragmatic Pricing At Ontime Systems we have developed a model whereby we assess the profit required from each item of equipment and service against the time it takes us to progress any order or add extra value. We pretty much know our overhead costs and how many labour hours we have available to do business. Thereby, we know how much profit we need to achieve per hour to cover these and the capital investment returns necessary to sustain the business. Thus smaller consumable items like ink ribbons attract a larger mark-up simply because a small easy order like this will take about 15-20 minutes to process whereas larger items may be reduced from their list price because our involvement cost is less than the recommended margin. Multiple order are also discounted for the same reasons and customers using this web site should enquire about these arrangements. (We operate special e-mail linked pages for special orders that attract better discounts.) Where we become involved in site installation we again apply this model for costing. The administration costs are deducted from a project's likely profitability and the remaining margin is used to contribute to the installation and support labour costs. This does not necessarily mean we are cheaper than other suppliers just that we have a secure basis on which to do business. We make no apology for writing at this length as we believe discerning customers will value knowing about our business philosophy and gain greater confidence in placing their business with us. In return we will look after them diligently and hope to help them and their own business enterprises succeed.
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