How do you calculate rush charges?

[SoggyWinter]

I'm relatively new to the printing world at 5 years and have yet to charge a rush fee because we position as being the fastest and most expensive print factory. However, I'm in a situation where we've had to pull out all of the stops to print about 200 short run text books around 1.5" thick spiral bound, 35000 color impressions, hand collate tabs into them, and produce and hand cut a few thousand laminated cards in a few days. The customer has indicated that a rush fee is justified and they will happily pay it. The job is around $20k US charging my list price. Does a 25% rush fee seem normal? How do you calculate rush fees?

 

[Magnus59]

It depends on whether you are charging a rush fee to deter customers from sending you rush jobs, or if it's to cover additional costs.
If it's a deterrent, then 25% sounds quite reasonable, but if it is to cover costs, you should calculate how much overtime pay you had to pay, plus any extra time taken to lift other jobs and re-schedule. Calculate these extra costs and add your usual margin.

 

[gordo]

It depends on whether you are charging a rush fee to deter customers from sending you rush jobs, or if it's to cover additional costs.
If it's a deterrent, then 25% sounds quite reasonable, but if it is to cover costs, you should calculate how much overtime pay you had to pay, plus any extra time taken to lift other jobs and re-schedule. Calculate these extra costs and add your usual margin.

And the costs associated with any jobs you had to bump off to get the rush one through.

 

[ReproElectroProspero]

If your customer is happy paying an extra $5,000, then why turn it down? depending on your relationship with the customer, might be wise to apply the 25% rush fee, give bill for $25k, then if they balk, tell them you're giving them a discount on the rush fee for being such a good customer and knock it down to $2.5k or something based on your actual costs

 

[SoggyWinter]

Thanks. This is a very good customer relationship and the third time they have stated there should be rush fees for challenging fast turn jobs like this.

 

[rcreveli]

I worked with an index tab provider and they had standard turn of 7 business days. The rate increased X% each day short of standard. When you hit next day service the cost was double.