Pricing in Hard Times

[Billct2]

I was listening to a story about luxury good suppliers (a market supposedly immune to price points) like Versace and Chanel lowering their prices across the board in respose to slow sales.
After following many threads on pricing for years I wonder if anyone will
be lowering their prices in order to get work. (Of course the reverse can be true also, raising prices during hot markets.)

1.Yes My Prices Respond to Market Conditions

2.No My Price is the Same No matter the Economy

 

[OldPaint]

i been in this since 86 full time. and have seen a steady DECLINE in prices)))))))) 1st the vinyl jockies, took it down to get people used to lower prices or having them say to ya, "cant you do it for less?"
how many other trades GET THAT? none.
then the advent of the printer crowd, most cant draw, have no idea of SINGAGE, and use the MCDONALDS business model for sales. LOW LOW PRICES, HIGH VOLUME to keep the machine running. i got em here doin BANNERS for $2-3 a sq ft to the public.
to answer with you 2 choices..iam a NUMBER 2)))))

 

[WILLIAMS]

#2

just had a similiar talk with a few different contractors about this. most say they're still quoting the same. they haven't started lowballing just to get work.

 

[Just Another Sign Guy]

at this point what i am seeing is that clients are purchasing more affordable solutions...instead of monuments and such i am seeing window graphics, banners and the like. the profit margins are still the same the dollars are just smaller...it is going to be interesting...in my experience i have made more money in rough times as most business people will advertise more aggressively but i my gutt tells me this time is going to be different than anything i have seeen thus far in my working career.

 

[Replicator]

#2

 

[RebeckaR]

My prices will remain the same.

A good portion of my business, especially at this time of year, is the decorative vinyl for walls and tiles and such. We'll be emphasizing to the customer the savings by making their own gifts, have even designed some smaller items for gifts under $10. The profit margin is the same, but customer feels like they are getting more for their $1.98.

 

[BRUSHMARKS]

i guess we are kinda both ways on this situation we set our bids/quotes as we normanly would but if slow in the shop or for a bigger job will drop our prices some to compete with other shops on a bid. obv aslong as we will still see enough of a profit off the job.

 

[weaselboogie]

Good thread, I've wondered this myself.

 

[ndemond]

at this point what i am seeing is that clients are purchasing more affordable solutions...instead of monuments and such i am seeing window graphics, banners and the like. the profit margins are still the same the dollars are just smaller...it is going to be interesting...in my experience i have made more money in rough times as most business people will advertise more aggressively but i my gutt tells me this time is going to be different than anything i have seeen thus far in my working career.

We tend to see this trend also, and I am in complete agreement as this will be different from other "lean" times.

Last week a Mid-West restaurant chain that has had 5 billboards with us through-out the area cut it down to one board. Having billboards rented in this kind of economy is key for us as it is a guaranteed monthly cash flow. On the up side some local business who we have been after for months are wanting to advertise on billboards now.



Nancy

 

[WILLIAMS]

i once had a landscape contractor (customer) tell me his pricing strategy depended on what bills he had going on that week. (yes, he's still in biz)

 

[Kenny]

So, come January 1st, when suppliers "adjust" material pricing, you keep your pricing the same?

 

[wes70]

Actually, my prices will be going up at the end of this month instead of January.

Reason: All of my suppliers (Canadian) have sent me notices that supplies will be going up 15 - 20%, because of the "volatility of the Canadian dollar".

 

[Jillbeans]

Mine, too, Weston.
Everything I buy has increased in price, therefore I need to charge even more money.
Love....Jill

 

[Shovelhead]

I haven't seen any "pain".....as busy as ever.

 

[slammedxonair]

there was a huge price increase in steel over the summer which basically killed alot of my metal work business because prices went up by 60 % in 3 months, that is when i started pushing alot more of the vinyl banners and other things. well needless to say i went to get a steel quote the other day for the first time in a couple months and i was shocked how cheep it was! all i have to say is im stocking up lol i havent seen steel prices this low in well over a year. as for vinyl i should probably stock up on some basic popular colors before the new year

 

[coyote]

We haven't lowered our prices due to the economy-but I totally agree with OP-we get so much less for work than we were getting in the '80s, yet are paying tons more for materials, supplies, rent and utilities etc.

Having said that, we don't lower our prices, we just offer a less expensive alternative and that seems to be acceptable to our customers. If not, they can waste shoe leather on looking for better pricing. Most of them don't have the time and trust us to not rip them off.

carol

 

[Fred Weiss]

#1 but very selectively. I'm a strong believer that it's easier to close sales if you are busy. So when a job comes across my desk that I really want and can do very efficiently and is of a nice size ... in short, a plum job, then I will be more aggressive in my pricing.

 

[TheSnowman]

Due to the fact that our government is about to slap us w/ a 700 Billion dollar loan to the guys that shouldn't need it in the first place, we'd better all NOT BE LOWERING PRICES!

I'm not sayin' it's not needed, cause it is...but every manager or big decision manager on any of those boards at any of those company's needs to either be heavily evaluated, or fired.

 

[binki]

Why not raise prices? If you raise your prices 20% that is pure profit and if you loose less than that amount of business they you are ahead, no?

As an example, If a unit of work costs you $1 and you sell for $2 and you raise your price to $3, a 50% increase in price and 100% increase in profit, you can loose 2/3 of your business and still make the same amount of profit.

 

[Doyle]

#1 but very selectively. I'm a strong believer that it's easier to close sales if you are busy. So when a job comes across my desk that I really want and can do very efficiently and is of a nice size ... in short, a plum job, then I will be more aggressive in my pricing.

Agreed 100%. When I get slow, and I need the work, I will be a little more aggressive with my pricing. No I don't cut my prices by 25%, but there is a noticeable difference, and I feel that shop workload DOES have an effect on pricing.

Many people won't admit to it here on the forums, but I bet they do the same thing as well. If you have NO work, and cashflow is tight, you are going to do what you have to do to keep work coming in the door, even if it means only making 80-90% of your busy-time margins on a job.

If I am SLAMMED busy, my prices are a little higher on EVERYTHING across the board, why would this not be the opposite when I have NO WORK????