Need pricing help

[sneakers]

A sign shop in my area does a lot of signs for companies all over the country. They have a wholesale sign sand blasting company and want to do routered signs for their wholesale and retail customers. I have been offered to do the routing, both 2D and 2.5D signs. The problem I am having is how much to charge. The company does not really know how much to charge their customers so we cannot agree on how much I can charge them. They always are the lowest price company so they usually win all bids. They keep their costs down and are a sucessful company. Now my question to all of you sign professionals. How much do you charge for 2D and 2.5D routered signs by the square foot both retail and if you wholesale to other shops how much do you charge them? If possible where are you located so I can see if the prices vary much by location. I am sure many other people on this forum are interested in this also.
Thank you for your help
Gary

[joe]

That's easy!

Price the work by time and materials. The best way to come up with the hourly rate, is how much you need to charge daily and break that down by the hour.

The biggest challenge is not to get caught in fudging your time with freebee stuff. It won't take but one or two jobs to get a feel for it.

I have set up charge of $85 if they provide the DXF file. It's $150 and up if I have to do the vectors. Then there's a minimum router charge of $100. Most all work fall within the minimum. I don't estimate 3D without seeing the Art.

So to start off you have a $185.00 minimum.

Let us know how you do.

[dakers]

I like Joe's first sentence. In the end it is all about burden rates if you need money. From your post it appears that they probably will do all the files, painting, delivery, pickups, final clean up of routing etc and you will just rout. They could have their people do those things and have higher markups on things they can do themselves.
Hourly rates will insure you always make what you want to make for your burden rate. We would have no problem paying someone $70.00 per hour to rout if they knew what they were doing and had good equipment. Even if we paid $90. per hour wholesale we could mark it up. There can be problems getting locked into square foot pricing as sometimes you may not be happy with outcome.
I think you and them need a period where you can do the routing and go through the learning curves and make adjustments to pricing along the way until you can figure what works for you and them.
We were paying $90. per hour for wholesale routing with a company that had a Gerber Sabre with tool changer, vacuum hold down and 10 hp spindle. We were able to mark everything up a minimum of 35% or more. We were very happy with that price.
I like Joe's statement about minimum charges also.
Right now we are having our routing done by others.
I can ask our graphic designer what they charge and get back with you too.

[sneakers]

Thank you both very much for your time and experience. I took what you both said and added some other info on this site and met with him last night. We checked pricing from other companies that do similiar work and came up with a game plan. We need to be competetive but not give away the store. Joe is right about them doing all the files, finishing and supplying the materials. I do the routing and they do the rest including design and dealing with the customers. We bid on 2 jobs last night and worked out pricing with square foot or hourly rates. I think in these 2 jobs square foot works out better but I see where sometimes it may be better by the hour. I also like the minimum charge for a job as some jobs are not going to be cost effective for me unless we do have minimums. A few jobs will determine that. Again thank you for your help.
Gary

[GlenP]

It is good that you nail it down at the beginning of your venture. If you price too low it is hard to go back and ask for more later. I sometimes have committed to a price and set it for a review meeting after a determined date, say 90 days. That way you can make sure if adjustments are needed they can be addressed and tackled. What ever you do don't go too cheap...your work is worth value and remember all the costs you put up front and the recurring, future costs (updates, maintenence, bits). People can be weird sometimes...if you price too low they can't see the value and may think you make cheap stuff and if your price is too high they call you expensive. But then again I have customers that tell me my price is abit more than the other guy but your product and services are better and thereby worth more. Good luck and make sure you enjoy doing it, life is too short to spend your days doing a job you hate.

[robredick]

Not exactly what you are looking for, but

http://www.estimatesoftware.com/

I downloaded the free version with a free vinyl sign plugin. I have to say that it is fairly good. It isn't really anything that you can not create in Excel, but it is free...

[sailfl]

Joe,

Thanks for sharing you charges. It gave me some thing to think about and a place to start.

[joe]

Your welcome Nils,

We had a potential customer visiting yesterday. He was wanting templates made from 3/4" MDF. These were rather complex files. He had a DXF for us to go by. We could get 8 out of a full sheet of MDF. I gave him a price of $38.50 each. I was sure he'd jump right on that. His first question was "how can we cut the cost?"

You gotta loose some customers!

I did learn something though. He mentioned there wasn't any listing in yellow pages for custom CNC work. There wasn't even a heading for CNC anything. Just think, I could corner the market by getting the yellow pages to offer this listing.

So he's now forgiven for being Cheap.

You know, it's like fishing. Your just sitting there watching the cork and all of a sudden it goes bobbeling and you set the hook. You missed him! He got away. Nothing personal here. You aren't mad at the fish because he got away.

So it is with cheap clients. Life is cruel sometimes.

[sneakers]

I cut the first sign yesterday and it turned out great. Not only the sign but the financial arrangement. This sign came in under the time rule as it was small but detailed. I made 3 times as much based on time than I would have based on size. I beleive this arrangement will work out. Thanks again for all your help and advise.
Gary

[jhicks]

Good for you Gary. So what is your final formula?