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How much to charge per square inch....?

Discussion in 'Vinyl' started by OmniSeeIt Designs, Oct 28, 2018.

  1. unclebun

    unclebun Member

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    And that, folks, is why the internet is killing sign shops. And pretty much any other brick and mortar business. This guy is happy that he only made 6.67 cents per decal because he thinks the appropriate way to retail a commodity product he purchased at wholesale is to just charge for the amount of time it took to order and invoice it. Assuming his wholesaler was charging 20 cents each to arrive at a selling price of 27 cents, he left a minimum of $390 on the table. And at 20 cents, the wholesaler is leaving a lot on the table.

    We do decals like that closer to 45-50 cents each in quantity like that. And we do them in-house.
     
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  2. henryz

    henryz Member

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    So you would have made 700 of these in an hr. Your good.
     

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  3. Gino

    Gino Major Contributor

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    Or a liar. :eek:
     
  4. TimToad

    TimToad Very Active Member

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    $3 each? That's $27 per square foot. What legitimate client has 3,000 locations and did you try to educate or explain that the other quote couldn't have been for a diecut, weeded, taped vinyl product.

    I can see that these might be diecut, but does the vendor who quoted .40 each know this? I think what happened was they found an online decal vendor who could print white on clear and then compared apples to your very expensive oranges.

    FWIW, StickerGiant has these on clear as I just described for .32 each with a two day turnaround.

    I get the part that logistically you didn't feel that you could produce them in the time frame needed. Unless you tried to do the educational part of the process and questioned the validity of the other quote, you did a disservice to yourself and now if that client gets an acceptable decal for that .40 each, they will forever link you with trying to gouge them.
     
  5. TimToad

    TimToad Very Active Member

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    I think you make some really important points for everyone to consider.

    Often when this sort of thing happens to us, the client or potential client is so outraged by the difference between what we quoted and the barely marked up price some unscrupulous or uninformed vendor offered them, they will contact us again and accuse us of trying to gouge them. We once lost a substantial banner order to a local speedy print type business who obviously had taken the roughly $1.00 per square foot price they would pay to a wholesaler and they added less than .25 per square foot. The disruption to the marketplace when this happens ripples through it and has lasting effects on all of us.

    The blurring of the lines between true wholesale only pricing and not factoring in a product's intrinsic value is getting worse and worse.

    We see this mostly with cheap political sign work, decals and banners, all staples of most commercial sign shops.
     
  6. kcollinsdesign

    kcollinsdesign Member

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    Please let me clarify a few things:

    My pricing on commodity products like stickers is based on what it costs me and how much time I have in it. The customer can already get the stickers for what I am paying for them, so if he doesn't like my mark-up (which I am open about), he can order them himself. I can't bring myself to charge my good, honest clients, who trust me, more than what the current market is bearing. I make it a POINT to tell them to look on the internet, and encourage them to evaluate whether they want to buy direct or have me hold their hand. This is a primary service I offer my clients, I want them to get the best deal they can.

    Yes, I can do this in less than an hour. All I have to do is place an order online and specify a ship-to address.

    The underlying issue here is outsourcing vs. in-house production. Nothing here is "killing" sign shops, it's just that the terrain is changing. Installation and maintenance is still a very locally based business. Designing and furnishing signs for local small and medium sized businesses is still viable for a regional sign shop. Developing relationships and supporting the community is the key to success. If I can outsource production and save my client money, that benefits both of us! He/She has more budget for design and marketing, and I have more time to help them with that.
     
  7. TimToad

    TimToad Very Active Member

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    I don't quite understand how a craftsperson goes from selling, designing and building signs and marking up the materials involved anywhere from 1.5-2x and then adding our labor costs and profit expectation but if its a "commodity" product which must be code for projects we just don't want to mess with in-house anymore, all those marked costs get ignored and suddenly we're in the middle man, save the customer maximum money business.

    I'm in the business of making signs and supporting my local economy by keeping as much revenue within it, paying a good wage to our employee(s) and keeping our equipment running as much as possible to maximize our ROI on it, not help our customers divert their revenue to distant vendors.

    For the purposes of this discussion and the decal in the OP's example, there isn't much in the design and marketing budget for this project.

    Utilizing your strategy too much starts devaluing the core value of the materials we offer whether we produce them or outsource them. I happen to believe that a 4'x4" white on clear decal has an intrinsic advertising value of more than .27 and wouldn't hesitate to seek what it is truly worth after calculating the full costs of producing them regardless of whether we did them or outsourced them. Does a restaurant owner come out of the kitchen and offer to have you go back with him and cook your own meal to help you save money? Do you see plumbers having you act as their helper so you can save money?

    Any business needing 3,000 of anything is not some mom and pop single location and this decal is part of a marketing or informational campaign that took some planning to implement. Its value to the organization is high enough that the decal's cost should reflect both that investment of their time but also the ROI they expect to reap from offering and advertising that their locations offer wi-fi.
     
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  8. Gino

    Gino Major Contributor

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    That's some f*cked up thinking.

    Only reason the terrain is changing is in your mind to do so. You evidently believe in customer loyalty. We have some customers for well over 30 years, but we have far more who have no clue what that even means, so they shop based upon price.

    Giving things away is just silly. I'd rather be fishing, if I'm gonna do something for free.
     
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  9. kcollinsdesign

    kcollinsdesign Member

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    Commodity products have substantial fungibility, which means that the prices are determined by the market, and for the most part it doesn't matter who produces them. I have to compare what it costs for me buy a commodity product vs. fabricating it in-house. Too reach the economies of scale large producers have, my equipment and labor investments would be much higher than my expected R.O.I. Therefore, it seems logical to me to leverage the advantages low wholesale prices bring to bear on our local market. I spend more billable time doing design and project management, and less time futilely trying to fabricate something in-house that I can buy cheaper from a large production facility.

    Years ago, you had to go to a Signmaker to get a sign. Few people had the requisite design skills and the years of dedicated training it took to hand letter and decorate a painted sign. Now days you can go online, use the site's tools to layout your sign, push a button and it shows up in the mail. This is what I mean by a terrain shift. The rules have changed, but the opportunity to make money still exists, albeit in a different form.
     
  10. unclebun

    unclebun Member

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    That all sounds fine to you perhaps, but the fact remains: you left money on the table. And that's bad business. You might believe you are doing a great deed for everyone, but you're wrong. When you sell a product for your wholesale cost plus an hour of labor for taking the order, you have done yourself wrong by not making the money you should be as a businessman. When products are sold wholesale, the wholesale price is calculated so that you can make money by charging twice or three times what the wholesaler charges. This is supposed to allow for you to pay for a building to work from, energy to run your business, salaries for you and your employees, etc. Selling for only a few cents over the wholesale price actually makes the wholesaler hurt, because it causes an overall pressure to lower the wholesale price. They actually depend on retailers selling for proper prices, so that as their production costs rise they have room to raise the wholesale prices. So you do the wholesaler wrong by undercharging.

    In addition, the premise of only charging an hour's labor doesn't account for the fact that you aren't necessarily placing an order like this every hour. The money you make on what should be plum jobs like this is the money that carries you through slow times, allows for expansion, pays for your kids to go to college, etc.
     
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  11. Gino

    Gino Major Contributor

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    You again...... ?? What more silliness can you add to this thread ??

    You sound like someone that does not like to work, but wants to just push buttons all day. Make a few bucks, as you have zero overhead, thus making everything a 'KILL' for you.

    What you described as nowadays customers is rare..... quite rare. Most people come to a professional to receive professional help and input. End result being.... a professional sign/job. Those doing it online are just like you...... looking for a cheap way out.

    Your terrain shift is more like a crack in the clay soil.


    :pops_blinking:
     
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  12. Johnny Best

    Johnny Best Very Active Member

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    Sticker Mule is $949 for 3,000.
     
  13. equippaint

    equippaint Very Active Member

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    Bet they don't do the job on their Chinese plotter in their garage though. That'd be one miserable job with the wrong equipment.
     
  14. JBurton

    JBurton Signtologist

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    Just had to tell a customer that even though I could try to compete with another quote he had on 15k 2"x2.75" outdoor rated decals, I would not put myself out there. I had managed a price in the range of a nickel per sq/in (I had never priced per square inch until yesterday, just to compare to his other quote) but he emailed me over specs on the competition using temporary calendared material at a cost of $.018 . I second guessed this, because surely he did not mean 1 penny and 8 tenths for every sq/in, but that was accurate.
    My 5 cents per inch was on prismatic 3m with cast 3m laminate... and I thought that was incredible...
     
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  15. AF

    AF Active Member

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    Just move on to a live one. The guy got a crazy good price and decided to shop it. I wouldn’t waste time with people like that.
     
  16. JBurton

    JBurton Signtologist

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    Well I think I did some good. They have a mess of actual signs to get redone, this was a small part of the acquisition/conversion regulatory part where they will have to put their emergency contact info on all 15,000 pipeline markers. I think you could buy the markers and a truck to drive them into the ground, cheaper than you can pay people to put stickers on these things every 1/4 mile...
    In any case I produced him samples rapidly and developed a good relationship, so here's hoping I can get some real signage out of it.
     
  17. TimToad

    TimToad Very Active Member

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    This.
     
  18. Kerning

    Kerning Member

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    Why don't you just not offer doing the stickers and focus on jobs that can't be bought online? Your not going to loose a good customer by making them buy some small decals online once and a while. I'd rather focus on more profitable tasks.... or waste time on S101
     
  19. TimToad

    TimToad Very Active Member

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    We already do. The overwhelming majority of our revenue is derived from doing signs that are made in and stay in our community. Its a huge percentage of our total revenue but that's not really the point that unclebun, myself and several others are making.

    His last post sums up the quandary so perfectly and fully, its hard to argue against its core principles.

    Its not a matter or whether or not any of us should be outsourcing or not, that's a given for most of us. Its whether or not we're willing to disrupt the entire concept and practice of what buying something wholesale and marking it up appropriately to its fully considered value means.

    I'm not in the trading money business. Otherwise, I'd call myself a sign broker instead of a signmaker. Will I turn around a wholesale job and barely mark it up for a really good cause or client who is also ordering other inhouse produced signs and graphics, sure. But its the rare exception, not the rule.

    I guarantee that once someone has a shop full of equipment and any employees to manage, you look at them and those machines sitting idle while I just gave StickerMyAss my credit card info for a job that doesn't keep my machines running or my employee busy. That means I have to work that much harder to find and competitively bid on the kinds of jobs that will do those things. All the while, I'm bidding against some real geniuses out there who not only don't mind being in the race to the bottom, they are intent and serious about winning it.

    We do thousands and thousands worth of business card, flyer and other printed materials outsourcing every year. A set of 4:4, full color business cards on 16 point stock with UV or matte coating. 1,000 cost us about $25.00. We sell them for $96.00 plus tax. Even for sets that we do no revisions or changes to. If we spend a few minutes updating information or altering the layout, we add an art charge. If you want to sell them for $30.00, be my guest. NOBODY ever complains to us that they can get them for $28 from VistaPrint or wherever and we have dozens and dozens of regular customers who know they can go order themselves online for that much less.
     
  20. Kerning

    Kerning Member

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    I like sign brokering. Higher return on time invested.
     
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