Lowballers!! Aaarrgh!!!

[brdss]

Being pretty new to large format printing, I have been trying to take the advice given on this site about not worrying about the competition lowballing their pricing and how long term it will not matter if I price things the right way.

Had a customer I had dealt with before want some work done again (a few banners) but asked me if I would price match the competition. I explained to him that with all the different materials, as well as the different printers being used, we can not price match, but try to be as competitive as possible. He then shows me an ad by a semi local shop advertising on Craigslist banners being printed for $4 a sf. I did lower my price to the customer a bit, to $6 a sf., explaining that just because this other guy does not want to stay in business long term does not mean I don't. Now, this customer has been happy with our work, but now I can tell he has doubts about our pricing. ARRGH!!!

A little more research on the sign guy shows he is lowballing everything from banners to car magnets, $50 a set. He posts on here, so I won't say the name of the company, but it peaves me off that a guy that has been doing this for at least 4 years is doing this. I even went as far as dropping him a note asking why he is dropping his shorts trying to get work, with no response.

OK, done venting! lol. Have to get back to work!

 

[bayshorecreations]

We do $4 per sq ft for wholesale work for other printers but for the general public we try and stay around the $8-$10 range.
Have him check and make sure that the competitions price includes hems and grommets and make sure they don't have any surprise "set up" fees or anything.

 

[Redz Signs Inc.]

well mabe he has a low overhead that makes him able to have low prices.. and as far as 4 per sf on banners thats right around what we charge for full color we are at 3.75 per sf . when a roll of banner only cost 100 bucks for 54x 150 and using bulk at 7cents per sf . its kinda hard to justify 6 per sf to a customer. imo 4 is a far price i will dowhole sale roll to roll for 3 per sf. its not that hes lowballing and there are diffrent materials that can cause him to be lower also. but if your customers leary about your price and is tempted to go to the other guy either stick to your guns or lower you price. but the costomer might think that if you match the price you could have been cheaper from the get go and it might **** him off and then he leaves you anyway..

 

[Billct2]

Including design with those prices?

 

[Locals Find!]

I am subbing out the work out less than $2.00 a sq. ft. wholesale to a merchant member on here signs365.

So, I could reasonably sell it for $4 a foot plus layout and make a profit. He might be using banners and magnets as a way to get people in the door and use it as a stepping stone to get a chance to bid on the larger more profitable projects.

He might be doing something similar.

Coro signs, banners, & magnets are commodity items whether you like it or not. You have to price them as such to stay competitive unfortunately.

Edit: I just wanted to add. I don't sell for that price, I am more in line with where your at $6-$8 a square foot. I just wanted to point out that this shop might not be lowballing just loss leading.

 

[TheSnowman]

Yea, anything I print in house (or even have to sub out) is generally around $4 for anything 4X8ish or bigger. I used to get $7 w/o batting an eye, but then we had a lowballer show up and I couldn't sell A THING, so $4 is the standard here, and I feel lucky to get that sometimes.

 

[Circleville Signs]

I'm just blown away at the prices that are being thrown out here....

Digital print/lam on calendared vinyl, retail = $8/sf
Digital print banner = $6/sf

Both include basic layout. If the client starts wanting hard-core design, they get charge $65/hr.

 

[Gino]

You can only listen to so much advice from your friends, s101 members and other professionals.... then you have to listen to your gut.

Sure, it's great to get industry prices, but they are continually going down. Good thing ?? Nope, but you must keep your doors open.... so you have to take a hard look at your business plan and decide if you need to tweak a few things.

Back in the 60's, 70's and into the 80's we were getting around $200. for a 4' x 8' banner. We had a thimble-full of paint two or so hours in time and an oil cloth banner which cost about $25. Granted, back then, no one expected or much even heard of full coverage and very few shops could produce pictorial work, let alone fine-art work. When pictures or logos were required the price went up considerably. Come along the computers and for the few of us smart guys, we kept the pricing right where it was and could do 9 times the amount of work per man per hour. It was another tool and we used it accordingly. So, we made it up in volume. As the cost of these computers started coming down and starting to look easier and easier to produce this work, we had more people started coming into the ranks,thus lowering our standards which were around for years and years. After the computers practically took over the industry, we all had new guidelines to think about.

So, you are faced with doing top quality work for competitive prices or becoming another busy little schmuck, like so many of these talentless people just pushing buttons and not having much, if anything at all invested.

We chose quality, service and competitive prices. You can't go wrong with that combination. Sure, you turn down the $130. banners and the $50. magnetics sets, but you make it up on other projects which pay well. I'm not going to name names in this thread, but let the narrow little minded business minds get their little prices...... while you seek out and go after the projects they can't touch.

It takes time to create a following, but it suddenly will start snowballing instead of lowballing. That's the difference..... 'balling' is good, I can think of many types which fit in the good column, but just let the narrow minded businesses keep on convincing themselves they are making money while you'll be providing three squares a day for you and your family and your employees.... while the others will be scrambling to put food on the table without anything left over at the end of the week.

​

 

[J Hill Designs]

$8-12 psf here for finished banners

 

[Techman]

well mabe he has a low overhead that makes him able to have low prices.

And is exactly the attitude why our prices are taking a beating. Just because someone can doesn't mean they should.

A real business person knows that technology decreases costs. The idea is to increase profits. Decrease costs does not mean cut prices.

when a roll of banner only cost 100 bucks for 54x 150 and using bulk at 7cents per sf . its kinda hard to justify 6 per sf to a customer.

No it is not. Cost of goods sold has absolutely nothing to do with the total price. We are making custom made items. We are not making production items. We are making one at a time pieces. Selling by the pound using a cost plus time model is pure lunacy.

Why do some refuse to take the cost of their education as a consideration of their prices?

 

[Gino]

And is exactly the attitude why our prices are taking a beating. Just because someone can doesn't mean they should.

A real business person knows that technology decreases costs. The idea is to increase profits. Decrease costs does not mean cut prices.



No it is not. Cost of goods sold has absolutely nothing to do with the total price. We are making custom made items. We are not making production items. We are making one at a time pieces. Selling by the pound using a cost plus time model is pure lunacy.

Why do some refuse to take the cost of their education as a consideration of their prices?

Because probably 90% of the people in this industry today had/has no education on any of this other than reading and writing and they're not even very good at that.

 

[brdss]

Yes, I know there are different materials, different inks, different printers. We use the JV33-160 60" with factory ink and he uses an SP-540v, unknown what ink. Since we are both in the general same area, other costs should be relatively close as we both have a storefront, electric, gas, etc.

Maybe if the guy WAS working out of his house, it wouldn't bug me as mutch! LOL!

As I said, I did discount to the customer a bit (took off a $1 a sf) and while that does not kill me to do so, the thing that really just ticked me off is that I could tell that he now has a little bit of doubt on if I am honest with him, giving him a competitive price, when I do think I was giving him a competitive price. Sort of like it is a "win" for the lowballer in that he is able to plant that seed of doubt.

For those that say it is not lowballing when it costs a $100 a roll and pennies for ink, I do think it is a bit shortsighted. That $20,000.00 printer only has so long a lifespan, the other bills have to be paid, YOU have to be paid, and retirement should not be an afterthought. I think that is why the prices keep going lower and lower. Just trying to fight that urge of "if you can't beat them, join them!" and start posting ads "banners for $3.50 for anyone that mentions he has seen an ad by ********* on Craigslist! " LOL, just joking.


OK, I thought I was done venting! LOL! I know you can't stop the guys that want to give away the store, and that they will eventually price themselves out of business, but it just bites waiting for it to happen!

 

[Techman]

People do not ask for the right price because they are afraid. They have no confidence in their skills. They have no faith in their ability to "get it"

They have fear and lack confidence because they have no plan. They have no model to follow so they just wing it and take what is given to them. They depend on a cheaper price to bring them something,, anything to pay the bills.

In the end their fear and lack of confidence and lack business knowledge is creating the price shopping monster we all dread.

 

[Circleville Signs]

The real question is this:

Does your skill set (in this case, probably design ability) outpace that of the "lowballer"?

If not - if you are basically each giving the client identical end products, then there is no reason that the customer should use you - nor any reason that you should be charging more for the end product.

I'm able to charge more because no one else in a 30 mile radius of me can match the design work and creativity of what we give to our clients, even on similar end products. And the clients who understand that how what they end up with looks directly affects their bottom line don't go to anyone else.

 

[CS-SignSupply-TT]

"...OK, I thought I was done venting! LOL! I know you can't stop the guys that want to give away the store, and that they will eventually price themselves out of business, but it just bites waiting for it to happen..." DON'T WAIT for it to happen. Reach out to your customers; grow the relationship beyond simply making signs. The better they know you, the more confidence they will have to recommend you to their colleagues and friends.

 

[GoodPeopleFlags]

It's more than the cost of banner material and ink. There's the time you spend with the customer, design time, hem tape (or sewing), grommets and the time to do those, the use of your machines and your knowledge. Knowledge is alot. Just because I have a frying pan doesn't mean I can work as a chef. And if the frying pan cost $15,000, I would be paying someone else to cook my dinner. (Cuz printers cost alot of money is the point.)

And there's the product the customer gets. He's usually buying something to increase his business. Take yellow pages ads, for example. That runs about... what?... $200 - $400 a month? And they only print those books once - not every month. The money for the ad is for "advertising" - not materials. Advertising is what people buy from us.

 

[brdss]

Actually, I am getting that education right now! School of hard Knocks! I probably burn through three times the material as you guys do (and at least three times the time!), as I do want to deliver a good quality product and will toss out something that I think does not meet those standards. Of course, I knew that going in and have taken it into account before buying my first item (helps that we have been doing regular printing for a LONG time!) so we knew going into it that there would be a steep learning curve. Just did not know how steep! LOL! Just like the regular printing business, there will always be someone doing business cards cheaper than we do it! The advantage we have is we have been in business for so long. Just feels a little weird going after the new business clientele without being able to say "we have been doing signs for years!"


Mostly just posted this thread to let off some steam, knowing the answers already, but it does a body good to go to the roof and yell a little bit!

 

[Craig Sjoquist]

Ouch my prices for window splash is low to low but there are so many shops around here that are low in print or vinyl cut that getting a higher price is well difficult.

Then you hear of $4 psf banners or even less then $7 to me is like "what" how come in over 30 years the price should be half when the costs are triple most likely more.

How come just because it costs you $2 or $3 psf that you think you can make a good profit by adding 100%

I know my cost these days are near 50% of job and have a hard time turning a profit to live on, but then I'm in a area that is probably the lowest for signs in the nation and I'm trying hard to keep prices up and raising.

 

[brdss]

You are right on the money, Tim. We DO have an established customer base, and a loyal following, in our printing business. That will not change.
thank goodness for those good customers! We try not to let them down and try to go that extra mile.

I don't think the guy selling a set of $50 magnets or $4 a sf banners will do that extra mile.

 

[CheapVehicleWrap]

Saw an ad for a long-time local lowballer selling rolls of vinyl today. Good riddance.

While I do put Franks on everything, it's especially flavorful upon Top Ramon.

 

[ucmj22]

The problem with pricing from most shops is that they do a simple material cost plus X% what they dont realize is that the X needs to incorporate overhead for the time it takes to create that product. printer time, and depreciation have to be added in. time to set up, rip, trim, hemm, grommet, all need to be added in. The cost of purchasing and upgrading software and computers should be in there. shops that dont do this may still make money, but they wont like what they are doing and will inevitably put out an inferior product.