Spreading Materials Cost
Mark M., New York
I’d seen someone talk about handling materials expenses by just upping the monthly fee to include a contribution toward materials, avoiding lots of separate administrative stuff with separate orders and such. I realized that I like this idea a lot, and I’ve run it by my students/parents, and there’s wide support for it. A couple of questions about implementation to those who’ve done this sort of thing:
–Students/groups move at different speeds. It doesn’t seem fair to me the charge the same amount per month for a group of 5-6-year-olds who are moving at one pace as for a group of adult moving at another — the slower students/groups will end up paying too much for their materials. How to account for this? Tier this based on age, e.g., one price/month for age a-b, another for age c-d, etc.? That’s the only thing I can think of that’s remotely fair.
–Is such a monthly materials contribution payment in advance for materials or not? If in advance, then it seems that new students would still need to pay for Level 1 before starting, after which they’d be doing monthly contributions in advance of when the next purchases are needed. Which is fine. But then it brings up concern for someone who quits and may resent having paid in for materials that they don’t get to use. It occurs to me to just offer at that point to reimburse some appropriate amount of the recent monthly materials contributions. But just thought I’d bring the issue up to find out how others may have handled this.
Cindy B., Illinois
If the students get a bill each month for x amount of dollars, there is no reason for them to know the breakdown of the amount. The total cost of lessons simply includes those extra costs, so they are invisible. If a student quits in the middle of a month, that’s their choice – I do not reimburse anything, usually.
Mark M., New York
Well, when you start your studio without this policy and then tell everyone you’re thinking about changing it, and they know full well that a set costs what it costs, and they themselves ask, hey, what about how my kid goes more slowly than your adults, then, I think, yes, there is a reason for me to be concerned about the issue. I’m concerned precisely because I was asked about it by more than one of my students’ parents yesterday when I brought the possibility up to everyone.
But that issue aside, obviously if you do this, you somehow arrived at an amount that allows you to feel comfortable that the costs are covered. Can you share what that is and how you arrived at it, in light of both the actual costs of materials and how quickly/slowly your students progress through them?
Laurie Richards, Nebraska
Personally, I would think that approaching materials costs in this way would just open up a can of worms for too many people. I can’t see it being equitable and can’t imagine how I would come up with a monthly amount. People who stay in the program longer go through a lot more materials.
I use Quick Books, and when it is about time to e-mail statements to everyone, I go through my lesson records and see who will be coming up on new materials in the coming month and just add the charge to their statement right then so the material costs are covered in advance. They just give me one check per month for everything. I have a record of exactly what everybody has paid for because I have specific descriptions of all the materials in Quick Books. It works very well for me and doesn’t take much time.
Cindy B., Illinois
Mark, this is going to make you crazy – you and I have opposite learning styles! I’m not detail oriented, to the extent that I don’t even balance my checkbook – I just check online and make sure there’s enough to pay the bills. 1st – It’s perfectly normal for the monthly fee to go up on occasion – just call it inflation. All businesses do this, and they don’t have to explain to their clients about where each dollar goes.
2nd – I figured out what the average piano lesson around here costs, and jacked it up a little bit. Not any detail – not any math – nothing to give you to tell you how I came to the exact price. sorry.
The speed which each lesson experiences is 90% about how consistently they follow my instructions, and 10% about their age/physical/mental abilities. I give every lesson all that they can take – and that’s enough. If a student progresses slowly, they need to. If a student progresses quickly, they need to. They all get what they need, and they all pay me for it.
Winnie B., Colorado
I know some teachers charge a semester/yearly fee at the beginning of the year (you still
need to subtract what is bought, more bookkeeping) but I like the fact that it gives an
advance budget for ordering supplies.
Dixie C., Washington
It’s hard to determine how fast a student will progress regardless of age. I have had some 5-yr.-olds go as fast as, say, a 9-yr.-old, for example. I have an adult who is comfortable going at the same rate as a 12 & 14-yr. old who are in her learning team. I have a studio of 54 students & I just keep track of materials purchases & payments in my lesson plan book (haven’t mastered Quickbooks yet). I have 5 columns: Name, Item, Cost, Date Rec’d, Date Pd. It’s pretty easy, albeit an archaic method, to keep an accurate record. Of course, I give parents a heads up when their child begins the last piece of a level, & accept payment for materials upon receipt. But you could request payment ahead as well.
Hilary C., Australia
I always itemise materials – distinct from tuition fees. If I were paying I’d like to know what I was paying for.I definitely work on the KISS principle.
Mark M., New York
The more I think it through the more I tend to agree. It seemed so simple at first, but I think the equity issue is important.
Your idea seems a nice middle ground, making sure that materials costs are specific to the particular materials about to be ordered but added into the monthly payment due.
Of course, if I have to order one set for a private student and pay $10.00 in shipping, vs. if I can order multiple sets at a time for a group and cut the per-person shipping costs, what’s equitable then!? I *so* wish that Simply Music just built shipping into the costs. Much easier for a single, large company to amortize shipping costs in their business model than for all us teachers to deal with them with all our variably-paced students. Especially since we’re passing the costs onto the clients anyway, SM could increase the materials costs to whatever amount they truly saw fit to account for a free shipping policy, and then life would be so much easier for us! Well, I should speak only for myself. Life would be so much easier for me 🙂 But I have to imagine plenty of teachers agreeing with me. And I think this issue really related to my initial question — if I knew for sure that each materials set would cost the same amount whether I order 1 item or 20, I could feel totally great knowing that I could order materials only for just-in-time inventory, passing stable and accurate costs along to the client each time, and that would be that. It’s really the shipping cost variability that leads me to want to combine orders just to get savings there, and consequently to simplify how I coordinate orders for particular students/groups.
I guess to me the only remaining trick is simply something that comes with experience — knowing when’s the best time to actually order, given the 2-4 week lead time between order and delivery and the variability of curriculum and pace from group to group. Again, though, I’m sure that just comes with time.
Sheri R., California
While it’s true that if you only order one foundation kit the $45 you charge the student might not cover the taxes and shipping and handling, when you order more than that and still charge $45 you will end up paying less than $45 each kit. In the end, even if once-in-a-while you have to order only one kit, it all starts to average out you’ll no doubt be ahead.
I try to always order a number of items at once and I guess as your studio grows you will find that you won’t often, if ever, need to order just one item. Even if I only really need one item I can usually order a few other things a bit in advance to offset the shipping and handling so I’m not out anything.
Also, as the teacher body grows in your area and you are in a bind of needing just one thing, sometimes another teacher will have it and you won’t have to order just one item. I’m pretty sure I’ve only ever not had Level 1 when I needed it as you can’t always anticipate new students. (You might want to try to keep a couple in inventory to prevent that problem.) You can usually tell when you’ll need subsequent levels though.
Elaine F., South Carolina
I manage to always order at least 2 items. At Mary K’s advice, I charge $50 for each foundation box and it seems easy for the parents and for me. They pay for the s/h and if it happens that I come out $3 ahead– well that’s just reimbursement for processing cost for me. I tell the parents that I buy the materials from SM and sell them at cost— everyone knows that this takes time and is a real job. I do not say I sell them at the exact same price as I buy them. That’s not necessary and they don’t need to know.
I try to look ahead and order training materials with a student order so that the s/h is all rolled together. I agree with the previous writer, keep it simple.
Robin T., Tennessee
I also charge $50. It typically will cover the cost and I have yet to have anyone raise an eyebrow at it. They get a DVD, CD, and multiple learning tools with it. It’s a value. On the Supplemental Programs, I typically always charge about $10 more for them too. I think the Accomp. Program is now $20, so I charge $30. I have been trying to keep current and order in bulk, but I have had an influx of new students this week and had to put a rush order on some yesterday (thanks to Stacy). Mostly, Level 1 is what I always run out of. But, I figure it all evens out… with the time and everything. I don’t feel like it is taking advantage.
Crystal H., Canada
In reference as to a timeframe for ordering and tracking materials, I have just developed a couple of forms. I am in the process of evaluating this new method. I am open to comments, and would appreciate learning how others are tracking their inventory.
I have marked in my teaching guides (about 4 songs from the end) when to request funds for the upcoming home material(s) needed, including an approximate time to introduce the Supplementary programs (ACC, RR, RN, etc.) I allow 2 weeks for payment. Then I have another note in my teaching guide 2 songs later to remind me to order the materials. This allows for a trip to my bank & shipping time, etc. I live in Canada. Unfortunately, materials occasionally get hung up at Customs (no rhyme or reasonable trend noted yet.) In placing an order, I also consider high volume times for SM Head Office (Sept?), and the postal system (Christmas, etc).The extra time allows me to ensure the materials are readily available.
The students pay ahead of time. (I will occasionally include in my order materials which are not paid for, but only for longtime and truly dedicated students and only if we’re a song away from requesting the funds. I keep this to a minimum because the materials cannot be returned to SM Head Office, and I don’t want to tie up my money!)
When the order comes in, I write the student’s name and paid (or not) in pencil. If a student discontinues lessons, then I refund any materials not handed out, and change the penciled title to “stock” for the next student’s need. (I always check my stock before ordering.)
When I first started SM, I was able to somewhat gauge what shipping might cost me after a few shipments. So, I’ve taken the American dollar cost then increased my price to include shipping, GST (Cdn tax!!), currency fluctuations, and customs. Mostly, I just look to order the items are my total cost to keep the price low for the clients. Yes, there are fluctuations in my costs, but I just monitor them. I’ve increased my prices twice in 3½ yrs, but gave letters to parents with 2 months notice, and explained my cost was increasing (poor Cdn dollar, shipping increase, Head Office’s increase, etc.) No one has complained. People know costs increase eventually. I’d like to not to increase more frequently than every 2 or 3 yrs if I can help it…just in empathizing as a fellow consumer.
Here are the “Class Needs” form headers and the “Studio Inventory & Tally” order form headers. Kept in a separate duo tang with my price sheet handy during a lesson, this is more efficient for me, and takes the guess work out. I do have students/parents record my “funds request” inside their lesson notes, although I aim to start using a separate sheet (from the TTP training materials) that could be posted on their fridge!
1. Class Needs form (separate sheet per class, separate line per student per item(s) ordered)
Student Item (invoiced, no gst) Amount total Date Requested Date paid Date Ordered Date Rec’d in stock Date Distributed
2. Studio Inventory & Order Tally form (partial example)
DATE: Current Needs Assigned or Stock Must Order Future Order
1 Fam (Notes/playL)
On a similar topic, I have an envelope handy for any payments received during the day. Once a day, I record all payments in a scribble. I also record payments in my bank deposit book. Eventually I update my Quickbooks (I’m still learning how to make this efficientJ)
Mark M., New York
Thanks to you and all who responded on this topic.
I started by telling people that material cost face value + 10% for shipping and handling, and I think that’s what I’ll stick with, asking for advance payment when I say it’s time for me to order materials, and I’ll keep that done on a group/student basis based on actual progress. I do think that, for the relatively rare times I may have to order only 1 or 2 items, that extra shipping cost will be made up for by my coming out ahead most other times, and I think this will have to do.
I definitely don’t think businesses need to explain their business models to their customers. And yes, fees do go up for certain reasons, and no, businesses don’t have to explain. But all of this is another story from calling something inflation when it’s not, or just taking the attitude that you don’t have to explain something so therefore you won’t, especially when you suspect that if you did explain it that your customers wouldn’t like the explanation. Learning styles or otherwise, I’ve come to believe that this spreading materials costs in even monthly payments isn’t necessarily going to work for me.
Original discussion started December 7, 2009