Pricing: Is the Glass Half Empty or Half Full?

[rockz12]

Ive seen this in a few different posts on pricing and they way jobs are charged. I want to get an idea of how different vendors are charging their customers and the reasons for it.... I see the glass half full and would like your professional opinion on the matter. This is not an ad I would ever run and is an example of how some vendors are undercharging.

Scenario:
A customer comes in and sees a sign for adhesive vinyl you promoted @ $5 a square foot.

• His job is 16"x100"
• He does not want any seams or tiling.
• He only wants 1
• You only have a roll of 54" media in your shop
• You charge $5.00 per sq. ft. for this product
• He wants a full color Digital Print
• Ad says there are no minimums required

You say no problem, let me give you a quick number on the job...

Half Empty
Lets see 16x100 = 1600 / 144 = 11.11 x $5sq. = $55.55
That will be $55.55 sir, I will have it ready for you tomorrow.
Vinyl: 1.00 sq
Lam: .50 sq
Ink: .25 sq
$65.62 is used in materials / Lost $10.07!

Half Full
Lets see 54 x 100 = 5400 / 144 = 37.5 x $5 = $187.50
That will be $187.50 sir, I will have it ready for you tomorrow.
Vinyl: 1.00 sq
Lam: .50 sq
Ink: .25 sq
$65.62 is used in materials / Profit of 121.88!

This is an example of why charging a square foot price based on the artwork provided is a bad idea....

 

[Flame]

Poor example. If you run into that kind of issue, simply add on. And charge a minimum of 10x the cost of your materials for most vinyls.

I do some jobs by the job, some by the square foot. Depends on the material. But atleast my prices are consistent.

 

[Replicator]

Customer always pays for wasted material, even if I can use it somewhere else later . . . !

 

[Billct2]

I don't advertise like that, never have, never will.

 

[Bogie]

I'd take it, and be happy. Why?

The other space gets filled with bumper stickers, magnets, or other jobs. All you gotta do is do a little math, and nest your jobs. Win/win.

If you don't have anything else in the works, ask the guy how much a rush job is worth to him...

 

[rcook99]

Maybe I am missing something but I would consider ordering a smaller roll of vinyl. If he needs them yesterday, print on the 54" and charge him for the wasted vinyl. As Bogie stated you can also group another job on the left over space.

 

[B Snyder]

In your hypothetical scenario there is no mention of turn around time. The $5/sf price could be for a standard 1 week turnaround time and in that case you could gang the print with another job.

Your material calculation is incorrect because you're assuming ink is covering the entire 54"x100" area.

 

[rockz12]

Ink is part of the price whether it is used or not.

 

[TheSnowman]

I include everything as part of the price if I use the whole thing or not. EXCEPT maybe transfer tape. Depends if it's a tiny 15" roll, or a 54"

 

[B Snyder]

Ink is part of the price whether it is used or not.

You said "$65.62 is used in materials" and this is incorrect.

 

[Samm]

For me, it comes off the roll, it gets charged.

 

[jiarby]

I went to a bbq restaurant yesterday. They advertised 3.59/lb beef brisket.

I ordered 1/2 lb. My bill should have been $1.80. Instead , they told me that the only brisket they have weighs 3 pounds, so my 1/2#sammich is going to cost $10.77.
Is my plate half full or half empty??

In your example you say:

You only have a roll of 54" media in your shop
You charge $5.00 per sq. ft. for this product
Ad says there are no minimums required

Well... which is it??

Sounds like you have a 54" wide minimum which is a contradiction of your advertising.

So for YOU the glass is not half full, nor half empty... It is COMPLETELY empty because the customer is going to leave your shop.

You have two choices:

1. Stock various width rolls (I stock 24", 38", 64")
2. Gang up your jobs to minimize waste
3. Set a 54" minimum.

But you CANT say no minimum, and then charge a minimum.

Are you so slow that you can't gang up another job to print at the same time?

Additionally...
Vinyl $1/ft, Lam 50¢/ft, Ink 25¢/ft... Your material costs are $1.75/ft? No wonder you are losing money!
3651 is 28¢, 210 is 30¢, Ink avgs 30¢. 88¢/ft.

The catch is that a HUGE shop isn't buying vinyl at retail from Fellers like us small taters. That buy pallets of materials and have forklifts to unload trucks. They buy hundreds of rolls at a time. Consequently they pay less than you do. Their costs are lower. They can sell stuff at 99¢/ft and still make money. You cant. Get over it!

If your competition is undercutting you then you better figure out how... are they working for free and will quickly go broke. Do they have a competitive advantage over you by having better equipment and they stock a larger variety of materials? Do they have a pricing advantage because they are better at purchasing than you are. Are they more efficient than you are?

 

[juan45215]

I agree with jiarby. If you say no min then you have to sell him what he asked for. Nobody is going to pay $132 for your scrap vinyl.

 

[rockz12]

This is not an ad I would ever run and is an example of how some vendors are undercharging.

Relax, Im not arguing with anyone or telling them what to do.. This is an example of how charging strictly on a sq. ft. basis can hurt you.Each job should be quoted individually. Even if you had a 24" roll you are still wasting 8"x100". You can look at it two ways another $30.00 or I don't really care.

 

[Jackpine]

Yes, exactly. A good win/win situation.

I'd take it, and be happy. Why?

The other space gets filled with bumper stickers, magnets, or other jobs. All you gotta do is do a little math, and nest your jobs. Win/win.

If you don't have anything else in the works, ask the guy how much a rush job is worth to him...