What factors are important when choosing a fundraising company?
Choosing what product to sell for your fundraiser is an important decision, but the process doesn’t stop there. Finding a company that will work with you to maximize sales can make a big difference to your success. You’ve probably already learned of several interesting options through ads, mailings, and calls. Start with these companies; by seeking you out they’ve already shown an interest in working with your school. (You can also find information about fundraising companies in the PTO Today Resource Guide Online.)
When you’ve narrowed the field to several possible companies, it’s time to interview the sales representatives by phone or in person. Here are some more questions to ask:
What is the average sell-through rate? (That’s the amount of product usually sold by each seller.) What’s the average purchase made per family? Obviously, the higher these averages, the better.
Is there any direct competition with other schools in the area selling the same product? “Ask if the fundraising company has a different brochure so you’re not selling the same thing,” says Butch Hinze, owner of Quality Wholesale in Carlisle, Pa.
What percentage of the total sales will your group receive? Is payment made when the product is ordered or when it’s received? Are there any additional fees, such as fuel surcharges or shipping fees? Don’t be afraid to comparison shop. “I would suggest to all groups to get a quoted delivered price for a particular item and then shop it with two or three other companies,” says Rip Gettis of Creative Specialties in Toms River, N.J.
Does the company accept late orders? If so, will your group receive the same profit on these? For online sales, will the revenue generated continue past the time of the main sale, and will individual students be credited with these sales?
Will the representative send you product samples? The ability to display or distribute these samples at a PTO meeting is a great sales tool.
In the packing process, are orders scanned for accuracy? Are they hand-packed? Knowing this will help you determine the amount of order checking that’s necessary.
If the company runs out of stock on an item, does it back-order that item or substitute something else?
How is the product distributed? For example, with cookie dough, some companies issue an e-coupon instead of sending the product; this allows the customers to go online, place the order, and have the product delivered directly to them. Packing and delivery processes can vary, depending upon location. “Some companies are local; the rep is a local person who delivers the product themselves and will deliver it anytime that is convenient for the PTO,” says Hinze. “But if the product is packed hundreds of miles away and then shipped by common carrier, the school can’t dictate exactly when it’s delivered. In that case, the school will need more help to sort and bring the product inside.”
How are damaged or unsatisfactory items handled? Some companies replace items at no cost to parent groups. Others will make replacements at one time, and groups have to bear the cost of items later found to be unsatisfactory, Hinze says.
How much time will the sales representative be able to invest in your group?
Can the company provide references? Ask for three references for the fundraising campany and the sales representative you’d be working with. (See “Checking References” below for questions to ask.) If the company is too new to have references, look for the organizations it belongs to, such as the Better Business Bureau or local chamber of commerce.
What can a PTO negotiate in a contract?
Once you’ve chosen a fundraising company, it’s time to work out a contract. This is where you can ask for special considerations. “Everything is negotiable,” says Leslie Marshall, director of fundraising for Interstate Batteries in Dallas.
Ask whether there’s a reward for making an early commitment to the company. “A lot of companies have some type of gift specials or a discount on the invoice for early sign-up,” says Juan Franco, president of AIM Fundraising in Houston.
Ask about special partnerships or promotions your rep can offer. For example, Carol Rampey, president of UnitedScrip in Seneca, S.C., works with a school at which every parent has to bring in two reams of paper each semester. A special promotion from her partnership with Nike allowed her to send a ream of paper with each student’s order. “Every now and then we get freebies we can pass along,” she says.
Loss fees are another possible area of negotiation. Sending home product samples—such as coupon books—is an effective way to generate sales because the product is made more visual and is understood better. Unfortunately, some of the products get lost in the process. You can negotiate the percentage of these “loss fees” with your rep. For example, the fundraising company might accept a 20 percent loss rate; after that, you might agree to pay $2 per coupon book for the replacement fee.
Product delivery fees can really cut into profits. Some distributors offer free freight, so ask your representative, “What program is available that would alleviate our having to pay freight?”
Whether the distribution process is negotiable depends on whether your sales rep distributes her own product, so be sure to ask. For an upcoming sale of bed sheets, Pure Profit Fundraising in Rio Rancho, N.M. agreed to sort the order by student, says president Karen Grandinetti. “Normally, delivery is to bulk pack all the sheets into boxes and deliver those to the school, which breaks down the order. But this school wanted extra beyond that,” Grandinetti says. “We negotiated that I’d break down the order by student. The reason is they were so organized on their end. They gave me every student order correctly.”
The most common area of negotiation involves prizes. Sales representatives are more open to negotiation with schools that have high sales levels. Ask what kind of incentives will be provided to students. You might ask whether the item level for prizes can be lowered, though it’s likely that your group will be asked to share some of the cost of awarding prizes at low sales levels or for a big prize such as a schoolwide party.
What can you expect from your fundraising company representative?
Before, during, and after the fundraiser, you should expect a sales representative who is involved and attentive. You want someone who is excited about the product and who is committed to helping you reach your goals.
The rep should ask how much money you need to raise and how soon you need to do it. She should talk to you about what motivates your families so you can work together to create the most effective fundraiser for your community. However, that could mean a difference of opinion. “Some schools will say ‘This is what we want to do,’ ” Marshall says. “Our duty as a fundraising company, if we feel it’s not in their best interest to do it that way, is to say ‘Our experience is that you will make more money if you do it this way.’ ”
Good communication throughout the process is vital. “A good rep meets with you twice before the kickoff,” says Franco. “Then after that, communication takes place by phone and email right before the kickoff. During the kickoff, there should be communication every two or three days. The rep should tell you how to collect money or turn in orders, should show up with the delivery to help or at least provide good guidelines, and should then follow up to solve any issues after the fundraiser. The rep should make the fundraiser real simple for the group.”
A good sales rep is a natural problem-solver. “Once the sale starts, the rep should be asking how it’s going,” Marshall says. “If the first week is a flop, the fundraising organization should say ‘Let’s throw this into the mix’ or ‘Let’s come with up an idea to gain momentum,’ like having the principal agree to spend the night on the roof if a certain goal is reached.” Concerns should be addressed right away, says John Lavender, president and owner of the fundraising company Lavender’s in Bolton Landing, N.Y. “It could be midnight and I’m responding to a group’s email sent at 11:30.”
When you call or email the references supplied by a fundraising company sales representative, here are some questions to ask.
About the Company:
- Did the fundraising company do what it said it would do?
- How was the quality of the product and its packaging?
- Did the company provide all the needed promotional materials?
- Did it provide extra services such as packing the product by student?
- Were the children’s prizes good?
- Was the company representative able to come and do a live kickoff?
- Was the school group able to raise enough money for what it needed?
About the Representative:
- Did the sales representative conduct business in a professional manner?
- Did the representative respond promptly to your calls and emails?
- Did the sales rep take time to answer all your questions and address any concerns you had?
- Would you work with the same sales representative again?