Exact Quantity VS Overage – What Does This Mean?

Overage vs Exact Quantity Pricing Image

In the world of custom binders, you will frequently encounter the terms “exact quantity” vs “overage”. What does that mean, and how does it work?

The SpeedBinder On-Line Order System Is Based On Exact Quantity Pricing

When you order a given quantity of binders (say, 100) from SpeedBinder.com, you will receive at least 100 binders, but no matter how many you receive, you will only be charged for 100. We call that “exact quantity pricing”, and it makes for a simpler and more predictable experience for our customers. You know up front exactly how much you will pay on your order.

What is Overage Pricing?

“Overage” pricing is common in the custom binder industry, and it means that no matter how many binders you order, you will be charged for the final amount produced, even if it is more than you ordered. Generally, “overage” is limited to 10%, so if you order 100, at most, you will receive (and be required to pay for) 110 binders.

We believe that is confusing and, frankly, most customers do not like it. So while overage pricing is common in the custom binder industry, we generally do not use it. We use “exact quantity” pricing instead. That way, our customers know exactly how much their order will cost, up front.

(Really, that only makes sense, right?)

Basics Of Binder Manufacturing

There are multiple steps in the binder manufacturing process, and “spoilage” can occur at any step in the way. In order to make sure we deliver at least the number of binders you ordered, we have to start with extra material to account for that spoilage.

For example, suppose you order some silk screen printed vinyl binders. The steps we use to produce them are:

  1. Unroll the vinyl and cut it into sheets.
  2. Print your graphics on those sheets.
  3. Heat seal the binders.
  4. Install the ring metals.

In order to guarantee you receive the full quantity you ordered, we start with extra material in step one, in anticipation of having some spoilage along the way. Sometimes we get “lucky” and there is little to no spoilage, which means we will end up with extra binders. Sometimes things don’t work out as well and we have few to no extras. But either way, we will ensure you receive at least the quantity you ordered.

Two Ways Of Dealing With Those Extra Binders

At SpeedBinder.com, we consider all that a cost of doing business. That is how we generally handle to extra time and materials associated with the inevitable spoilage in the manufacturing process.

Other companies do it differently. What they do is count how many binders they end up with at the end of an order, and charge you for all of them. The problem we have with that approach is it leaves the customer with uncertainty in how much their total order will cost until production is finished, which can be weeks after the order is placed.

When Overage Pricing Makes Sense

There are situations where overage based pricing makes sense. Generally, if you are using binders as a continuous part of your business, and ordering them at least once or twice a year, having any one order be plus or minus a few percentage points in quantity doesn’t make much difference to your overall process.

And the advantage to overage based pricing is we can give you a small discount on the price if we know we can charge for the extras. Those orders must be custom quoted, and are not available through our on-line ordering system. So while we generally like to work with exact quantity pricing, if you want overage based pricing, let us know. We can certainly accommodate you!

If you have any questions or would like to discuss your custom binder project, we are always here to help you.