Markup Question

[rydods]

I do a lot of work for a company who owns 67 store locations. The are tossing around the idea of changing their name which means everything!!!! I am currently the only sign company they have on speed dial and have been asked to quote for the new changes (materials only no installation), all in-house decals except the sign faces - 2 per location or 134 at 85" x 85". The wholesale company I use provided me a very reasonable quote for the sizable amount. My question is, with the info provided, what should be my markup on these faces?
Keep in mind they are only tossing around the idea and a reasonable overall cost for them may lead to the deciding factor BUT I'm almost 100% I have no competition on this bid. This particular company accounts for 15-20% of my overall yearly sales. This could be a big one for me. I'd like help ensure the name change but I'd still like to come away with a BIG smile on my face at the end of the day. Thanks!

 

[Christian @ 2CT Media]

We always make sure we never go below a 20% margin AFTER factoring Materials, Labor, Machine time, Incidentals, etc.

 

[AzGene]

Your biggest mistake is assuming you have no competition on this job. Not sure what the dollar amount is here but everyone has a trigger point to where they think "can I get this for less".

 

[ol'phart]

I live by the motto "If i'm going to make nothing I"m going to do nothing". A 40% markup will yield about a 29% profit. If all my jobs ended up that profitable I would be a happy guy. Even though you are outsourcing the product you are still carrying liabilities to your client. You should however work to attract more clients. It's not good to have one customer own that much of your bottom line. I've seen a lot of top quality shops lose it all when there "big" customer goes under....Good Luck.

 

[Doyle]

Your biggest mistake is assuming you have no competition on this job. Not sure what the dollar amount is here but everyone has a trigger point to where they think "can I get this for less".

+1

Don't try to make a killing on product that you aren't even touching, chances are that at least one of your competitors can either produce the order in-house, or are willing to do it for less. This doesn't sound like a creative project, just production so you probably don't have much of an edge over competing bidders. That being said, if it were my project, I typically would mark up the cost of goods by around 50%, plus labor, artwork, delivery etc. If you are truly getting the goods at a wholesale rate, you should be able to mark them up by 50%, but that is just in my market, other areas will be different obviously.

 

[Jillbeans]

Your biggest mistake is assuming you have no competition on this job. Not sure what the dollar amount is here but everyone has a trigger point to where they think "can I get this for less".

Never assume that you are the only one bidding.
Don't screw yourself by any means but in this day and age competition is just a mouse click away. Whether they are comparing apples to apples doesn't really matter, it seems that people only care about price these days.
Love....Jill

 

[rydods]

Thanks everyone for the valuable information. As far as assuming I'm the only bidder, your right...I won't go on just a gut instinct that I'm the only one. I figure this is a great place to ask and get the right plan put together. Thanks again!