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Minimum Charges

Discussion in 'Sales, Marketing, Pricing Etc.' started by Zambookajoe, Jan 1, 2010.

  1. Zambookajoe

    Zambookajoe Member

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    Jan 11, 2009
    Ontario Canada
    I want to establish a minimum charge at my shop just curious if others do .

    Im just fed up with smaller jobs. some I dont mind but some are just plain
    stupid and dont want to waste time on them. I know we could debate this
    but say 50$ does that seem fair. Im located in a smaller town so my average job is for 300 - 500 bucks

    just need opinions
     
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  2. BrianKE

    BrianKE Member

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    I implemented a minimum fee and did so just by figuring out the time it takes me to setup the simplest of jobs, cut it, weed it, mask it, apply it and do the billing. For me there is no difference in the time it takes to do a 6" x 6" sign as it does a 24" x 24" sign. Material costs are minimal so at this level your are simply charging for your time.

    For some a minimal charge is implemented to simply cover the costs of doing a sign (as in my case) but I know some that implement a higher minimum charge as their focus is on much larger jobs. So what you charge is based on what it costs you to accomplish the task and how much you want to filter out the small jobs.

    Your minimum charge is obviously going to be much different based on the above as well as on your locale. If in New York City you may have a $100 minimum simply because of your costs of doing business.

    In my experience, I have a number of regular customers that started out by ordering something small. After doing a good job on the small sign they have come back to me for much larger jobs. Had I implemented a large minimum charge I may have never had the opportunity to do the small jobs for those customers that led to the much larger jobs. Point is, be careful how much you limit yourself as you may turn away some very good customers.
     
  3. imagep

    imagep Active Member

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    We dont directly have a minimim charge, but we do have a "base" charge, and that base charge varyies depending on the product.

    By base charge, I mean that in our pricing formula, we start out with a small fee, basically just to cover minimal customer service costs. So like with our "vinyl ready to apply" product, I think we charge something like $10. Thus, if our per square foot charge is $1.44 (its not really that low, I am just using that figure for convienice example), and someone came in wanting a 1 square inch cut vinyl product, they would get hit with the $10 base charge plus the once cent charge for one sq inch of vinyl. If their project was one sq foot, it would be the base charge of $10 plus $1.44 for the vinyl. Of course that does not include any artwork, but the $10 justifies us turning on our equipment, inserting a disk (or pulling up an old repeat job), and sending the job to the cutter.

    Oh, I just checked, our actual base charge for VRTA is $17.75, but you get the point.

    We pretty much do the same thing with screen printing, and all our other products. We have a setup charge for screen printing of $70 per screen, and then we bill each item at what would essentially be the lowest cost bracket that most of our competitiors have (like the 1,000+ bracket). So if someone order a single white tshirt printed in just one location with just one ink color, the cost would be $70 + $3.35 (for the shirt and the print), if someone placed the same order, only for 100 shirts, the cost would be the same $70 setup (base) charge plus $335 for the hundred shirts.

    Many of our screen printing competitors do basically the opposit. They will have a very small setup charge, but then have a whole bunch of little brackets and price the shirt and printing cost depending on how many shirts the customer is getting. Generally, either way, the bottom line price the customer is going to pay will be about the same. The reason I choose to not subsidise our setup cost with a higher print and shirt cost on smaller orders is two fold, first of all, a bracket or matrix system is more complicated than my simple system, the other reason is that in all truthfullness, after the art and customer service work and equipment setup is done, it is no cheaper to print the third shirt than it is the second shirt, or the 100th shirt or the 1000th shirt - its all the same. And pricing using brackets creates some weird anomalies in price, such as if the top of one bracket is 59 pieces and the bottom of the next bracket is 60 pieces, then a customer ordering 60 pieces would end up paying less for his order than a customer ordering 59 pieces - and that makes no sense to either the printer or to the customer.

    We rarely explain our pricing formula to customers though. If you explain your pricing formula they try to use that explaination as a negotiating point and will try to negotiate away the setup/base charge as they will assume that it is just bullshit anyway. In truth, you have to have some type of base charge to compensate for your customer service time, pulling up artwork, sending files, changing rolls or inks, creating the invoice, recieving the payment, placing material orders, and stuff like that.

    Our average invoice is only around $250, largely because we do offset printing and that involves a lot of little orders of business cards and rubber stamps and other small ticket items that we sometimes farm out and really dont make a lot of money on, maybe not even enough to cover the customer service costs. We feel that we have to offer these products, because a lot of our customers who also order bigger ticket items use them, and when the order is from a repeat customer we can make money on the transaction because their orders may include a lot of them, or at least multiple items all purchased at the same time using similar artwork that we already have on file for them, and all invoiced together. But when it is just Joe Schmo coming in wanting to spend an hour talking to us about ordering a box of business cards because he is thinking about going into the lawn cutting business, it is really a loosing proposition to us. I always tell myself that maybe Joe Schmo will also get some car mags and some signs, and some envelopes and letterhead and business forms and invoices, but in reality most of the time Joe Schmo has no money and a week later is back out of business.

    We currently have only one csr, yet we have to sell about $2000 a day worth of work. Thats no big deal if it is one $2000 order, but one csr cant deal with 50 $40 orders in a day. I have considered putting up a big banner on our building something to the effect of: Minimum order of $100 required.
     
  4. animenick65

    animenick65 Very Active Member

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    We have a $20 minimum charge, which I think is reasonable. There are of course rare exceptions to this. A sign shop is a place of organization, planning, and accuracy. It takes the skill of 2-3 people to translate the customers needs to an invoice thats detailed enough to provide the designer with enough info to design to spec and the production guy to know whats what and to use substrate appropriately. Don't see many $20 jobs.
     
  5. TheSnowman

    TheSnowman Major Contributor

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    I use "Minimum Charge" to every customer that isn't looking like a big job. I generally just have a $25, but if it's shaping up to be really teadious weeding, or a customer that I can tell I'm just going to be tired of dealing with soon, I will bump it to $50 or higher if needed so that I'm sure I'm covering myself.

    Oh, and they even complain about the $25 every time that is mentioned...so whatever you make it, you'll get the same reactions.
     
  6. Gino

    Gino Premium Subscriber

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    Get whatever you think you can get without upsetting a potential client.... then add $50. to it and make that your 'Minimum Charge'.

    Post it somewhere so you can always point to it so it doesn't appear as if you're pulling numbers out of the air.

    Make it high enough so you can always make money on the people that come in for a $15. order and then waste 1/2 hour of your time telling you how the other shop was cheaper, but couldn't do it fast enough for them.​
     
  7. JimJenson

    JimJenson Active Member

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    Because you have a minimum, it doesn't mean you have to stick to it. Use it as a tool, enforcement is optional.
     
  8. royster13

    royster13 Very Active Member

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    Most of us here are in "business" not in a "hobby".....If someone wants to buy something that is not worth your while send them to one of those folks on the "other" forum......Do not be afraid to **** someone off....Frees up your time to look after clients who are really worthwhile to you....
     
  9. Jillbeans

    Jillbeans Major Contributor

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    I have had a $25 minimum for over 10 years and I do my best to stick to it.
    It does help to keep the Peeing Calvin types away from me and at the flea market.
    Love....Jill
     
  10. Patrick46

    Patrick46 Member

    I've been considering posting a minimum charge sign in my shop too...

    but sometimes truck drivers will just want their 'personal' name, written very small, just below their window. So I'll pull out the tiny quill, and zap it out in 5 minutes. a quick $20 pizza money I call it :)

    but now if you want somma that nasty vinyl???......$$$$$$$$!!!!!!!
     
  11. ProWraps

    ProWraps Very Active Member

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    San Francisco, CA
    everything takes at least an hour to do. from the time you answer the phone, to the set up, to the job, to the customer walking away. thats why our minimum is our hourly rate + materals. $75 + X. 99.9% of the time, if its a job that triggers our minimum rate, i send them to fast signs.
     
  12. Checkers

    Checkers Very Active Member

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    I figure my hourly rate for a minimum charge. So, if your hourly rate is $65 an hour, that should be your minimum charge.

    A while back, I timed myself to see how long it would take to make one of the simplest of signs - a real estate sign. Without interruptions or distractions, I believe it took about 20 minutes. This time did not include "chatting" with the client to see what he wants - color, content, etc; paperwork, invoicing which, with a new client, is a process that can easily add another 40 minutes to the project.

    Remember, even if it's just a simple decal, you still have a few dollars invested in vinyl & tape, added to the time "spent" above.

    Checkers
     
  13. Monsterkidz

    Monsterkidz Member

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    $50 dollar shop minimum here. It's not always black and white. Sometimes we will break our own rule for a good client or a special situation. But having it posted keeps the ball in our court for some of the cheapskate P.I.A.s that walk in.
     
  14. scarface

    scarface Guest

    I'm with Jill, the past year or so I've done a $25 minimum charge and it seems to keep smaller jobs profitable.

    I try my best to stick to it, every once and a while i'll bend it some but not alot.
     
  15. mark in tx

    mark in tx Very Active Member

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    The only minimum charge I have ever worried about is for cut vinyl.
    $20.00
    Keeps out the "Sticker" customers.
     
  16. J Hill Designs

    J Hill Designs Major Contributor

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    $65 minimum as a rule of thumb here - sometimes I will drop it depending on the job, but most PITA small jobs start at $65
     
  17. ABPGraphics

    ABPGraphics Active Member

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    :thumb::thumb:
     
  18. Joe Diaz

    Joe Diaz Very Active Member

    We have a $40 minimum charge here, for many of the reasons listed above. Like BrianKE brought up, I think if we lived in a bigger city our minimum would be much higher because of the cost to do business in those areas.


    We have our minimum advertised everywhere in our shop and it's one of the first things we bring up along with down payments and the such. Most of the time, it saves us a lengthy conversation about someone's project when they only want to spend $20... and if we aren't careful a conversation about a $20 project can burn up $20 worth of time.
     
  19. signgal

    signgal Very Active Member

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    For what it's worth... ours is $35. Not only does it help with your time but those type of people usually expect you to drop everything to there "little" job right then. Weeds those customers out right away.
     
  20. Pat Whatley

    Pat Whatley Major Contributor

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    Ours is $25 but about the only time I have to enforce it is when it's somebody wanting cut vinyl. The minimum eliminated the constant barrage of people wanting "swap meet" stickers.
     
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