Substrate pricing

[DSC]

I have heard everything on mark up from cost x 1.65% to cost x 3 .. any input on this would be helpful.. we are setting up our pos.

This is the cost for just the sheet BEFORE anything else happends to it ( vinyl applied, cut to size etc.).. for example.

a sheet of x costs $100, do I charge a) $165, or b) $300

If they are buying a 2'x2' do I charge the x3 price, but if they are getting 5 sheets worth is it a sheet price x 1.65%?

Any input would be greatly appreciated.. Thanks ahead of time.

 

[Salmoneye]

How much will they pay? We don't sell the substrate, we sell the sign.

 

[DSC]

How much will they pay? We don't sell the substrate, we sell the sign.

Understood, but I need to make a basic mark up on materials, PRIOR to what I think you are referring to as the "product value" . I am at step one here..

I don't sell things to different customers based what I think the sign is worth to them....

 

[Malkin]

For me it depends on the value of the substrate.

A $10 sheet I'll go at least 300%, but a $150 sheet I would not be over 200%.
Like you said, this is step one, before any other valuations are considered. Exactly as if I sold a blank sheet to a walk-in customer.

 

[Browner]

I don't sell things to different customers based what I think the sign is worth to them....

You should rethink this strategy. If not, you'll be leaving a lot of money on the table.

 

[DSC]

For me it depends on the value of the substrate.

A $10 sheet I'll go at least 300%, but a $150 sheet I would not be over 200%.
Like you said, this is step one, before any other valuations are considered. Exactly as if I sold a blank sheet to a walk-in customer.

I like your thinking on this.. .. It is close to what I was thinking.. thank you for the feedback on this..

 

[DSC]

You should rethink this strategy. If not, you'll be leaving a lot of money on the table.

Well not only is that unethical, but using that logic you would have a better chance possibly losing jobs thinking someone has more money than they do, instead of getting jobs based on a pre determined pricing structure for what your shop does ..


If they want to pay what your worth great, if they don't, go hit the pavement and find a customer that is willing to pay your price for a good product..

It would be like if you were a plumber and went to a home that costs a million dollars and give them one price, but then go to the family that has the house that cost 200,00 and give them another , lower price..

Just doesn't sound right to me.

 

[royster13]

Well not only is that unethical, but using that logic you would have a better chance possibly losing jobs thinking someone has more money than they do, instead of getting jobs based on a pre determined pricing structure for what your shop does ..


If they want to pay what your worth great, if they don't, go hit the pavement and find a customer that is willing to pay your price for a good product..

It would be like if you were a plumber and went to a home that costs a million dollars and give them one price, but then go to the family that has the house that cost 200,00 and give them another , lower price..

Just doesn't sound right to me.

I guess I must be unethical as I try to price a job on what I think the client will pay.....

 

[tsgstl]

Well not only is that unethical, but using that logic you would have a better chance possibly losing jobs thinking someone has more money than they do, instead of getting jobs based on a pre determined pricing structure for what your shop does ..


If they want to pay what your worth great, if they don't, go hit the pavement and find a customer that is willing to pay your price for a good product..

It would be like if you were a plumber and went to a home that costs a million dollars and give them one price, but then go to the family that has the house that cost 200,00 and give them another , lower price..

Just doesn't sound right to me.

If that's what he meant, I agree with you.

He could of also been saying a customer in California might pay more than a customer in Ohio. Your rent and overhead might be more in one place and not another. That is why over the counter price guides are just that A GUIDE.
I have a 97 price book that has coroplast signs priced equal or even more than I could get in our market. It also depends on whats going on it. Straight cut vinyl is a lot cheaper than a printed 4 color graphic. I always get a feel for what the customer wants before we start talking pricing. If someone calls and says "what do you charge for a 36"x48" sign on X" I know they just called 3 other places before me. I also do something similar to stated above with the higher end stuff. Lexan isn't going to be marked up as much as coro. If a customer wants something on a more expensive material why should your profit go up by x times the difference in the cost of the material.
I try and keep a % cost of goods. If I'm going over that and it is not because of a huge amount of buy and sell items then I raise my prices.

 

[DSC]

If that's what he meant, I agree with you.

He could of also been saying a customer in California might pay more than a customer in Ohio. Your rent and overhead might be more in one place and not another. That is why over the counter price guides are just that A GUIDE.
I have a 97 price book that has coroplast signs priced equal or even more than I could get in our market. It also depends on whats going on it. Straight cut vinyl is a lot cheaper than a printed 4 color graphic. I always get a feel for what the customer wants before we start talking pricing. If someone calls and says "what do you charge for a 36"x48" sign on X" I know they just called 3 other places before me. I also do something similar to stated above with the higher end stuff. Lexan isn't going to be marked up as much as coro. If a customer wants something on a more expensive material why should your profit go up by x times the difference in the cost of the material.
I try and keep a % cost of goods. If I'm going over that and it is not because of a huge amount of buy and sell items then I raise my prices.

OK.. Couple things..

Local market values do play a role in pricing, as well as national FMV. I agree on that.

Depending on your business plan, these are two different pricing models..

I like to "get a feel" for what the customer wants as well, but only for the very, very custom signage.. We create thousands of standard products that are made every day, that can built into an efficient pricing structure for your business model.. Which is what I was using the initial question was for.

I don't want my over the counter prices to be a guide, I want them to be our standard, for standard signage products. For the more custom items, a conversation prior to pricing is in order.

Your 97 price book is higher due the technological advances in the industry which decreased the production time/labor for signage... You would think the price goes up as does inflation, but not in our case. The last 15 years have been unprecedented in our industry. Thank god it is starting to straighten out a little!

Not sure that I agree about the RTA being cheaper than a printed graphic though.. but that is for another conversation.

I totally agree with you on the cost + % on substrate and COGS, so that being said, maybe you will be the first person to offer up some information that actually pertains to my original question.

What do you think is a good mark up, or what do you use use as a mark up on stock substrates? In general.

 

[tsgstl]

I just got finished with my lunch and I am off to meetings with clients. I will TRY and come up with some percentages because that is the best way to describe it.

How can cut colored vinyl be more than printed? I'm not talking about complicated or time consuming weeding, obviously that is something that you decide when you produce something. But we can wait for another day.

 

[2B]

For me it depends on the value of the substrate.

A $10 sheet I'll go at least 300%, but a $150 sheet I would not be over 200%.
Like you said, this is step one, before any other valuations are considered. Exactly as if I sold a blank sheet to a walk-in customer.

This is basics for ours also, then you take into account if it is a custom size, will there be waste, will what is left be usable, time to do the cutting



regarding the pricing of a finished product you have to have the standard pricing in place.
for example customer walks in with a print ready file says I need this on X substrate. Where the variable pricing comes from is the design time and the quality of material. You wont charge the same for a sign out of cut vinyl as you would as sign with reflective on it. this is were you have to judge what the customer is capable of doing and seeing that the customer's needs are met and in their budget.

 

[DSC]

I just got finished with my lunch and I am off to meetings with clients. I will TRY and come up with some percentages because that is the best way to describe it.

Thank you! I look forward to it. .

 

[tsgstl]

After reading your reply I feel like you would benefit from a program like CyrIous or another type of sign pricing software. I have a feeling you are incorporating substrate pricing into a existing pricing system. Then find what you would want to profit per sq ft of your least expensive substrate. Do the same for higher end material. Then adjust everything in between based on cost of that substrate. See what your market will support on both ends. There is other factors that come in to play, like availability of stock size wise. But that is all the time I have.

Oh and I wasn't saying to only have a guide. I said that is all the over the counter price guides are good for.

 

[Mosh]

Here is what I do now... I know I am going to use on average of 150 sheets of .040 a year so at the first of the year I buy that many, not going to tell what I pay, but it is less than half buying one at a time. Same with Max Metal and PVC, the three main panels I use. So I charge market price for those panels, and what most other shops are paying what I charge. Power of thinking ahead. (BTW I just got my .040 for @ $27.50 a sheet...ooops Sorry I told you)

 

[DSC]

After reading your reply I feel like you would benefit from a program like CyrIous or another type of sign pricing software. I have a feeling you are incorporating substrate pricing into a existing pricing system. Then find what you would want to profit per sq ft of your least expensive substrate. Do the same for higher end material. Then adjust everything in between based on cost of that substrate. See what your market will support on both ends. There is other factors that come in to play, like availability of stock size wise. But that is all the time I have.

Oh and I wasn't saying to only have a guide. I said that is all the over the counter price guides are good for.

Your feeling is right on.. I am setting up SignVox. . Thanks ?

 

[DSC]

Here is what I do now... I know I am going to use on average of 150 sheets of .040 a year so at the first of the year I buy that many, not going to tell what I pay, but it is less than half buying one at a time. Same with Max Metal and PVC, the three main panels I use. So I charge market price for those panels, and what most other shops are paying what I charge. Power of thinking ahead. (BTW I just got my .040 for @ $27.50 a sheet...ooops Sorry I told you)

OOPS.. ha

I still have not received a solid answer for the original question, however you are the closest.. your the winner!

Seems no one wants to give it up maybe..


Thanks Everyone!~

 

[Justin]

I personally would just call around, and see what other people are charging for various things. If you are the only sign/decal/whatever company in the area keep looking further out, 5 miles, 10 miles, etc... then call your various suppliers and get prices on what they charge for x. and see how well it will work for you.. In some cases depending upon your relationship with the customer/area you may be able to make more then what the other places surrounding you are charging because you are in good with the school, town, government, whatever..

You don't want to be too high, or low.. Gotta find that sweet spot(I'm new, so I am trying to do this now).

 

[DSC]

I personally would just call around, and see what other people are charging for various things. If you are the only sign/decal/whatever company in the area keep looking further out, 5 miles, 10 miles, etc... then call your various suppliers and get prices on what they charge for x. and see how well it will work for you.. In some cases depending upon your relationship with the customer/area you may be able to make more then what the other places surrounding you are charging because you are in good with the school, town, government, whatever..

You don't want to be too high, or low.. Gotta find that sweet spot(I'm new, so I am trying to do this now).

I agree, but again you are talking about "product" pricing ... I was looking for a base substrate mark up that was common among everyone.. no one wants to divulge any info though. .I can respect that..

Your strategy is correct if you are just starting out .. It is a widely used strategy.. Good Luck!

 

[royster13]

You might get better replies over on the "dark side"......Premium section....50.00 a year investment will be returned over and over.....