Help with pricing

[robsonr]

I just purchased Mimaki JV3-130 printer, because I wanted to get hands on printing experience and learn the stuff. I already have cutter Graphtec FC7000-160. I need to create some pricing structure and obviously I do not have experience to do it, so I though that I would ask members of this forum for some hints on directions what I need to look into. I would like to get ideas on factors influencing final price. Where do I start when creating a price list for digital print as a new product? Is it a simple dollar per square feet formula, or it is more complex? I hope that I’m not asking too broad questions. I know that I need to ask local sign companies for quotas on a specific print, but that wouldn’t give me idea how the price was calculated. I’m basically hoping with your help to create some simple formula for the price calculation and then adjust its components based on a feedback from local sign companies.


Thank you for sharing your knowledge with me, your help is greatly appreciated.

 

[MatthewTimothy]

cant really tell you what to charge because we dont know your overhead, business 101.

 

[Gino]

You really can find quite a bit of this information by utilizing the 'Search' feature on this site.

You need to take into account all of your costs, overhead hidden costs and come up with a doable number and see how it works. Give it 6 months and if things are great, raise your prices. If you've lost a lot of work, re-evaluate your numbers..... or your quality/ability.

 

[HulkSmash]

not sure how the market is in Canada, but signcraft has an ok pricing structure you can look at.

 

[Kentucky Wraps]

I would think that would be have been a part of the process BEFORE making a large equipment purchase. I don't know...maybe that's not how people do it anymore...but sometimes I'm just baffled reading posts in this forum. I'm not against asking questions...but golly, some just seem to be outright embarrassing. They buy a large piece of equipment, and have NO calculations whatsoever on how it will work in their business. I'm sorry...I'm just in a pissy mood I guess, Tax season and all.

 

[Salmoneye]

How much will the market bear? Everyone talks about formulas and overhead and cost of material and... I find out how much I can charge for the quality of work that I produce. We don't want to be the most expensive necessarily but certainly don't want to be the least. After this I try to cut overhead by purchasing materials wisely, working efficiently... I also try to increase the value of my product through service and good design... This will be the opposite approach to everything else you will read but I thought that I would throw it in. You wouldn't pay 10K more for a Toyota Camry because the dealer paid his employees triple, didn't turn his lights off at night and only opened two days a week.

Sell your sign, and not just your price.

 

[robsonr]

Thank you everybody for their inputs. I followed Coloradosigns' suggestion to try signcraft website and it seems to me a very good starting point. I signed up for their trial and I try to figure out my pricing based on their formulas and then I will play with it a bit and give it a shot.

In terms of my overhead, I don't have any I could think off. I don't have employees, I don't rent a space, I have my shop in the basement of our house. Not sure whether I'm missing some other obvious overhead, but that are the ones I could think off.

 

[BobM]

Any work that you produce has a market value. You should seek to mazimize your return on investment as if you had an overhead unless you want to become known as a lowballer with your customers. It is very difficult to raise prices once you establish them.

Use the search feature here on Signs 101. Your question has been answered many times and in depth. I recall the FRED had a very understandable explination. Find it and use it to teach yourself. Signcraft's pricing guide is good, but until you understand the function of setting prices, following their guide can be an expensive lesson.

 

[SignManiac]

I spent my first eighteen years working from my basement. I was known to be the most expensive sign shop in my area. I saw no reason to work cheaper than the other shops just because my overhead was lower. I really like making obscene money every chance I get. I've always been in business to make money. Your prices should never be lower than everyone elses. Either get what everyone else is getting or get more. This is not a charity profession.

 

[Gino]

Thank you everybody for their inputs. I followed Coloradosigns' suggestion to try signcraft website and it seems to me a very good starting point. I signed up for their trial and I try to figure out my pricing based on their formulas and then I will play with it a bit and give it a shot.

In terms of my overhead, I don't have any I could think off. I don't have employees, I don't rent a space, I have my shop in the basement of our house. Not sure whether I'm missing some other obvious overhead, but that are the ones I could think off.

That's a very poor way of justifying lowballing.

Some day, should you have enough work to demand getting something bigger than your basement.... how will you then tell your customers that everything has gone up in price ??

You don't think people will talk or wonder to themselves why your prices have more than doubled ?? Now you have heat, A/C, electric, rent or mortgage, water, trash removal, insurance, permits and licenses, taxes, grounds maintenance to name a few.

 

[Marlene]

$10 per pound sounds about right

 

[SignManiac]

Not sure whether I'm missing some other obvious overhead, but that are the ones I could think off.

How about food, health insurance, retirement, routine wear and tear on your printer, replacement consumables, possible vacations, additional tools down the road??? There are many more that you will soon discover.

 

[signage]

I spent my first eighteen years working from my basement. I was known to be the most expensive sign shop in my area. I saw no reason to work cheaper than the other shops just because my overhead was lower. I really like making obscene money every chance I get. I've always been in business to make money. Your prices should never be lower than everyone elses. Either get what everyone else is getting or get more. This is not a charity profession.

I have to say this is one of the best post ever!

 

[robsonr]

That's a very poor way of justifying lowballing.

Some day, should you have enough work to demand getting something bigger than your basement.... how will you then tell your customers that everything has gone up in price ??

You don't think people will talk or wonder to themselves why your prices have more than doubled ?? Now you have heat, A/C, electric, rent or mortgage, water, trash removal, insurance, permits and licenses, taxes, grounds maintenance to name a few.

Gino,

That's excellent point. I guess I should think this way, because I'm actually thinking about eventually renting some place and I don't want like you said raise the prices just because of that. Thank you.

You are right I didn't think about A/C, electricity and so on, because I didn't think that those are significant. I take is as a task for me to really calculate those, so I know. Maybe they are low as I think, maybe not. Better to know rather then guess ...

Thank you for great comments ...

 

[robsonr]

Any work that you produce has a market value. You should seek to mazimize your return on investment as if you had an overhead unless you want to become known as a lowballer with your customers. It is very difficult to raise prices once you establish them.

Use the search feature here on Signs 101. Your question has been answered many times and in depth. I recall the FRED had a very understandable explination. Find it and use it to teach yourself. Signcraft's pricing guide is good, but until you understand the function of setting prices, following their guide can be an expensive lesson.

I need to start somewhere. I will create something like a draft and then I start comparing with other available information to make it the way I want and which will give me the highest return on investment as somebody mentioned.

 

[Gino]

Fred..... on one of these threads has a marvelous way for a newbie or an old timer to examine just about everything and evaluate and calculate what you should be charging.

You just have to remember one major item..... are you worth what you'll be charging ??

If you're gonna play in the big arena with other professionals, be prepared to learn some very crucial elements about your business sense, design capabilities, production skills and level of expertize in the areas you intend to compete in with your surrounding competition. Reputation take a long time to build and two things can topple you down to nothing..... bad service or bad prices. Lousy travels in minutes.

 

[robsonr]

I wanted to take a moment and thank you everybody for useful information and suggestions. I checked all Fred's contributions in "Sales, Marketing, Pricing Etc." and I must say that I found tons of useful information there.

Here is the link to Fred's contribution (for those who want to jump right there without search) which talks in detail about pricing structure and how to tackle it.
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[FONT=&quot]http://www.signs101.com/forums/showthread.php?t=62708[/FONT]

 

[CanuckSigns]

Oh boy, another guy in Toronto with a printer in his basement, who doesn't consider having any expenses! There are hundreds if not thousands of people with this same mentality in this area.

The going rate for printed vinyl is barely enough to cover the cost of the vinyl, let alone any thing extra for maintenance or heaven forbid retirement.

We've had a bunch of suppliers come through our shop trying to get us to upgrade our printer, I've told them that when it dies i'm not buying another one, the market is completely ruined in this area by people who don't charge what the product is worth.

Rant over

 

[TyrantDesigner]

I would think that would be have been a part of the process BEFORE making a large equipment purchase. I don't know...maybe that's not how people do it anymore...but sometimes I'm just baffled reading posts in this forum. I'm not against asking questions...but golly, some just seem to be outright embarrassing. They buy a large piece of equipment, and have NO calculations whatsoever on how it will work in their business. I'm sorry...I'm just in a pissy mood I guess, Tax season and all.

+1