How do you price your HDU signs?

[tuck]

Routing HDU signs has been my bread and butter since I became a BotHead, about 4 years ago. I am not a "sign company" per say. I make my living making signs for smaller sign co.'s that don't have a CNC and need my services. I have to allow room in my pricing for their mark-up, so I guess you could call me "wholesale".

Over time, I have seen the price of HDU sheets climb steadily. Here in Georgia, the cheapest you can get a 4'x8'x 1.50" sheet is around $300.00 including tax. Up until now, my practice has been to tell customers (sign shops), "You buy and bring me the HDU, and I'll cut your signs for X amount." This has worked well, but it has some draw backs. If someone needs a small sign, say a 2'x3', for instance, and I don't have any drop laying around the shop, I tell them to go buy a sheet and then of course they don't want to shell out $300.00 for a sheet to get one small sign from, and I lose the job. It goes without saying that I have come to the conclusion that I need to start stocking sheets of HDU, 1.00" & 1.50", and therein lies my delimma. If I'm going through the trouble and expense to purchase and stock the material, shouldn't I mark up the cost of the HDU somewhat on top of what I charge to machine the sign(s)?

I know that some folks charge by time. I try to charge by the square foot so I can give a definite bid on a job. Those of you who have cut enough of these type signs (typically routed-down background with raised letters/graphics) would agree that it can take longer to cut a smaller sign with a lot of copy in it that it takes to cut a typical 4' x 8' sudivision sign that just says "Jefferson Oaks" or whatever.

Thanks in advance for any advice/thoughts/ideas.

Mark

[paco]

Don't give it away!

If you provide the material, you should definitly make $ome money on it. How much depends on you...

Keep in mind that they'll save time from this (shipping). They would anyway have to buy it and that they readily plan to make $ome too (on material).

Do you always make money from charging on square foot?! Not so much and (on the other hand) a lot can happen on a square foot...

[tuck]

Hello Paco my friend. It's been a long time! LOL!

Yes, I have been making good $$$ charging by the square foot. I get $20.00 per sq. for raw unpainted signs and $25.00 to $30.00 per sq. for painted. The adavantage (to me) by charging by the square vs. time is I don't have to "guess" how long it will take to cut the sign and I can give my customers a bid price right away. The prices mentioned above has been with THEM furnishing the HDU to me. So do the math,...a 4' x 8' sign cut and painted is 32 sq. ft., x $25.00 per sq. = $800.00. Nice money for a day's work. (ok, painted, maybe 2 days)

However, now I have to start figuring in material cost. I heard somewhere that the standard mark-up for most materials is "x 1.66%". A sheet of 1.50" x 4'x8' HDU is $300.00, that comes out to $9.37 per sq. If I mark that up x 1.66%, ($9.37 x 1.66%), I come up with $15.56 per sq. If I charge that, plus say $25.00 per sq. for a routed and painted 4'x8' sign, that comes to ($15.56 + $25.00) $40.66 per sq., or $1, 301.12. The retail market around here is about $55.00 to $75.00 per sq. for these type of signs, so I should be leaving plenty of room for my customers to mark up my signs and make $$$ as well.

Am I on the right track? Thoughts, anyone?

[tuck]

BTW. Paco, here is a link to that primer I was telling you about:

http://www.alumapanel.com/view_product.cfm?step=1&lines_ID=79&name=FSC%2D88% 20WB%20Hi%20Build%20Water%20Based%20Primer

I haven't tried it yet, so I can't say how helpful it might be to solve that problem we were talking on the phone about.

[den73160]

Mark

Have you considered gluing pieces together to make the 2'x 3' from scraps? This would be simular to end jointing wood. Any thoughts?

[den73160]

Sorry as far cost per sq ft. I am working with Joe Crumley and he is changing $150 on the more complex designs that he makes.

[tuck]

Dennis, yes, I have glued up HDU with Gorilla glue many times and it is terrific. When all is said and done (sanded & painted), no one can tell that the sign is a glue-up. Sometimes, however, I am simply out of scrap. Like now.

$150.00 per sq.??? Wow! A 4' x 8' would be $4,800!!! :-0 Well, most all of the signs I make aren't that complex,...just routed down back grounds with raised letters/graphics. Pretty simple, really. I think it's reffered to as 2 1/2 D.

[donchapman]

I regularly get $100/sq.ft. for simple but attractive HDU signs, dealing directly with the user. Routing takes the least amount of time. Meeting with the customer, designing, matching paint and obtaining mtls., painting, delivering and often installing take 80% of my time. I usually get extra for installation and charge for time plus materials whenever I can, or estimate them if I can't. I still regularly fail to get enough for my design time. I've never had it happen, but if someone brought the HDU to my shop, provided a clean and simple dxf file ready to cut, and all I had to do was set up and rout the file, I'd feel good about getting $25/sq. ft. for an unfinished sign but I'd want more than $10/ft to paint it.

[tuck]

Don, you're right, I probably should get more than I do for painting, although I've got that down to a science. I use Behr exterior grade semi-gloss acrylic latex enamels for the background colors and I apply that with an airless sprayer, 2 to 3 light coats. I have an old furnace fan to blow-dry between coats and I can start rolling on the copy/graphics color(s) usually within a couple of hours. I generally use no primer. I've never had a problem with paint adhesion except once when I used a cheaper grade paint and that taught me a valuable lesson.

On occasion I have to do the design work but I don't charge for that if it's a relatively simple design. I can draw up a typical 4' x 8' oval subdivision sign in just a few minutes and make changes easily enough. I use to work as a full time sign designer for a large company in Florida and they never did figure out how to charge customers for design time. Back then, I did things the old-fashioned way, on a drafting table with pencils and pens and T-squares, french curves, etc. (My, how times have changed!) Sometimes I would spend hours on end on a design and we'd lose the job to another company because of price or whatever. My company chalked up the loss to the cost of doing business.

I'm starting to get the feeling that we're not charging enough for our routed HDU signs around here. I'd like to hear from some more folks in here as to what your local market(s) allow you to charge.

Mark

[joewino]

While we haven't done a lot of work for other sign folks, when we do we are normally asked to do the complete job - paint, assemble, install - the works, except the design.

Our dimensional HDU work is priced by the job rather than by the square foot because we try to stress the advertising value of the sign, along with the positive image it produces rather than just a commodity that you take off a shelf.

For a starting point, though, it will usually run around $100 a square foot and then go up, with the addition of hand carving, gold leaf, etc. Any posts, finials and such are additional plus the cost of installation.

Unless it is an extremely simple project there is a separate design fee that is billed apart from the sign. When the client receives the artwork he is free to have anyone actually do the sign, although I can't think of a time when someone has taken the design to another shop for the actual blasting and installation.

If we do the work for another sign shop it is figured exactly as if we were doing it for one of our customers, less any selling and design time. It takes the same amount of time to do it for another shop as it does for our regular client.

We don't have a flat bed router (yet) so our work is either sandblasted or done in cut out layers. That is time consuming and costly. However, whenever we begin routing our work the price will not go down....they are buying the image and advertising value of the finished product, not letters by the pound.

[superior]

Well said, Raymond.
What is in the mindset of sign people that makes us almost ashamed of being paid for their work? I have watched/paticipated in this for years. Go to a plumber, electrician, welder, doctor, lawyer, Indian chief: see if they do not price at least market rates, most above. We are, afterall,craftsmen. We do what most people only dream of doing. We create something. That something is ours. Copy right and all. What not be paid what it is worth? We have allowed the public to control our income, livelyhood, and dreams. Why? Because they have seen it done for generations. Without sounding like a jerk, let me share my pricing philosophy. When a customer wants to pay less for a job, I tell them the only way to accomplish this will be by making it smaller. Smaller relates into less material cost, NOT less design time, quality of materials, etc.
I have watched and admired Raymonds work for many years, have visited with him at Fred Self's Letterheads meetings. He is absolutely right on. For those of you wondering about how to price jobs, there is a new book available from Sign Craft magazine. It is entitled , amazinly enough, 2006 Sign Pricing Guide. And, don't forget the tried and true 2006 Official Sign Contractors Pricing Guide, by Jack Rumph. Both these are excellent. There is a couple of articles in the Sign Craft that I copied and gave to our campers regarding how to determine an hourly rate, overhead, and billable hours. Most interesting reading.
It is up to you to determine what you are worth. Also, what your future holds regarding available funds for growth, new equipment, and peace of mind. This may be one time to really look at where you are headed. And, be honest with yourself.
Joe C. and I had almost this same discussion last week. I have four sticker shops in Ada, mostly Mom & Pop stuff. Three work of of their garage/home. Sure wish they would read some in the above books. I no longer attempt to bid on simple vinyl jobs. I can't afford to waste time on bids for jobs against them. Naturally, one of the same type shops closed up in December. No funds to operate on. Wonder why.
Remember: this is you livelyhood, your future. Just because is so enjoyable doesn't mean it is a hobby. It is your chose profession. Treat it as such.
Doug

[joe]

I understand: You're in the process of building your business. You are probably one of a few router guys in that area, so if that's the case your very lucky.

It's not expected that you charge the same prices for your work as some of old, seasoned, artists. However it's good to remember that a reputation is built on quality not price. If price is the main basis by which customers choose you, the future isn't very bright. Quality wins out for small shops like ours.

Even if all your materials were free, still there is rent, utiltites, auto, childrens shoes, taxes, insurance, some kind of cash in the bank and old age retirement. All of this should be taken into account in your pricing.

Sorry I didn't mean to lecture.

Just remember, you can grow faster by doing something of quality. When you are known for that, customers will seek you out and pay your price.

[tuck]

Thanks to each of you fine folks for your input. All are thoughtful comments and I appreciate it.

I like doing work for other sign companies because all of the design work and decision making (colors, etc.) is generally done by the time I get the jobs to rout and paint. However, I have made an attempt recently to cut out the middle man, but the rather expensive ad I ran in the local "Yellow Book" has yielded not one call in the 2 months that it's been out. :-(

Obviously I need to do some serious research as to what the local market will truly allow price-wise for the type of signs I do. I think that my biggest client (a local store front franchise vinyl shop), has been selling the signs retail for about $55.00 per sq., and they have been supplying the material to me up till now. That price may be way too low based on some comments in this thread. If they could get $100.00 per sq., I'd be VERY happy with doing the work for, say, $75.00 per with me even supplying the HDU.

I am going to call some local commercial sign shops in the Atlanta area and try to find out what their prices look like for routed HDU work and get a better idea of where I'm at. Meanwhile, I have ordered one of the pricing guides mentioned by Doug. When I was researching pricing guides today, I came across this quote; "Remember, it takes absolutely NO SKILL whatsoever to LOWER your prices!"

Thanks again all, and I'll post in this thread what I find out in the next few weeks.

[joe]

I think a well designed yellow page ad can really pay off.

When you think about it, how else is the buying public, who only orders a sign once in their life, find you? Most of my sales come from this type of customer.

I'm voteing for yellow pages.

[tuck]

Joe, just one small job could pay for my ad ($480.00), but so far, no calls. Perhaps my mistake was to run it in the "Yellow Book" and not the "Real Yellow Pages"? Live and learn.

[joe]

Good Thought Mark,

Just for fun, look in your local yellow pages to see if there's anyone advertising Routed and Carved Signs.

That's what I did last year. The field was wide open. My AT&T yellow book covers about 1.5 million souls. So I went for it big time. My accesment was like yours, in that I only need one good job a month to make it worth while.

I'm not saying it allways works, but it's sure worked for me. I targeted my advertising. It only offers one kind of sign. "Beautiful Carved & Routed Signs". Thanks to Shopbot, I'm into a fun and profitable business.

Good luck with your business. I bet you do well.

[gerald_d]

Do you sign guys ever do free "show" signs? For example, for a school on a very busy route, with a small "Sign made by xyz" underneath.

[jhicks]

Great discussion on a critical survival skill. PRICING FOR PROFIT. In our area vinyl guys get between $12.00 and $30.00/ sq ft so I can't imagine being even close to that range for the dimensional routed and finished work we do.
Our opening discussion with a client includes, "Do you have a budget?" We can fabricate signs from $50.00/ sq ft to $150.00+ / sq ft depending on graphics, material choices and finish.
Once a client can see the work in lower end materials like color core (cut and deliver) to more exotic logos and letters in exotic hardwoods, or finishes, they quickly realize the sign is in a totally different league than a 2 year life vinyl on sintra or MDO sign. If they don't have that kind of budget, someone else will appreciate the difference and understand the true VALUE in the work.
My opinion has been that the time, equipment, learning curve, overhead, design, competitive alternatives, and salesmanship all add up to create the total VALUE. Time and material pricing plans are for commodity items. The real question is "What would it cost to hand carve, hand route,or use Gemini letters?" A single gator foam unfinished Gemini letter can cost $5.00 to $55.00 alone!
When one compares the alternatives, a botter can deliver a signature piece that will last and elevate the image of their business or property.
Vinyl will give them a great Garage Sale look or window sign if thats what they want and the franchise shops are tripping over themselves to drive prices into the dirt to pay their franchise fees. Just doesn't seem to make a good business model from our perspective.
Finally I find that the proper client appreciates the technology and consultation to create a signature piece over the "send me your artwork" approach of a franchise vinyl shop. Every sign ends up having a story and a unique personality the buyer loves to tell his friends and customers about. That really does represent added value that customers appreciate having met with the "artist" that created their new sign.

[tuck]

Good stuff going on here, for sure. In my quest to research the local market prices for HDU signs, I found a web site for a local company that does wholesale routed (and blasted) HDU. I had heard of them before and they've been around for a good while. I requested a quote online (pretending to be a customer), for a 4'x8' routed HDU sign, single-sided and finished. Lo and behold, I got an e-mail quote yesterday morning for $1,760.00, or $55.00 per sq. ft. There would be an additional $75.00 if I couldn't supply a file/artwork, but the price did include 1.50" HDU and 1Shot paint. Shipping, of course, would be considerably extra, but this is some of my LOCAL competition. Shipping is not necessary, and I have no reason to believe that their work isn't first rate. For arguement's sake, let's say it is...

I am all for getting top dollar for my work. I am an experienced sign designer/fabricator and I've gotten pretty good on my Bot. I may not have the best business sense in town, but I do know enough to see what my competition is doing and what I'm up against. Actually, if I were getting $55.00 per sq. while supplying the foam and painting, I'd be doing a good bit better than I am now. So I called one of my best clients today and said; "Hey, man, we gotta talk..."

Here's the bottom line with me: I intend to get top money ($90.00-$100.00 per sq.) whenever and however I can (I just haven't found that magical market yet), but I still want to do the "wholesale" thing because it's easy money, just not "top" money. I see it like this...my Bot ain't making me one thin dime when it sits idle, and "a little bit of something is better than a whole lot of nothing".

Am I wrong about that? Thoughts appreciated...

[gerald_d]

If you start selling finished signs in a big way, you must expect to lose business from your wholesale customers because then you will be competing with them.

[tuck]

Not really, Gerald. They can't compete with ME because they have NO router table and no room to put one, but still have the market for that type of work. They need me and they know it. (Quite frankly, I need them, too!) I just have to figure out how to get my rates up to par and convince them (my customers) to raise their rates as well without everyone going into shell-shock. By the same token, I don't wanna cut off my own nose to spite my face. I've been doing work for some of these folks for 4 years. I have always offered personalized and EXTREMELY fast service, and that's gotta be worth something, no?

[tuck]

BTW, for those interested, here's a link to another forum where this very topic is still being discussed. Our good buddy Joe Crumely is in there with his 2 cents. ;-)

http://www.letterhead.com/ubb/ultimatebb.php/topic/1/39423.html

[joewino]

As I see it, one of the problems with selling dimensional signs by the square foot is just what you described - you want to go up on your prices, but how can you explain why you are asking more for the same product?

In order to get more we have to offer more. In our case, what we offer is design and image - not letters by the pound. Basically, we all have the same equipment (computers, routers, plotters, etc) although some may do slightly different things than others. So, what makes my work different from yours and why should I charge more? Hopefully, it is not because my equipment is faster, but rather that I can create a better image or mood for my client than anyone else.

In other words, I can make my customer look good...and that's my goal. If he looks good, I look good. If I can make him more money, he will make me more money.

Generally, I tell my customers, "This sign will make you more money than it does me".

[jhicks]

Based on everything said above and the same input on the letterhead forum, its pretty obvious that a large part of the equation is salesmanship,believing in the value of your finished product, and understanding the costs are far more than material per sq ft. I remember when we all had the opportunity to buy YUGO's from Russia. Great price no doubt. Where are they and their customers now?
I guess there will always be those that try to compensate for low sales by "making it up in volume" but they don't last long.
The overwhelming concensus is clear. I just wonder what it will take for the bottom feeders to wake up.

[mikejohn]

Yugo's are Serbian, not Russian by about 1000 miles!
Still being made for those who need a cheap car.

............Mike

[mikejohn]

There appears to be an assumption here which doesn't stand up to scrutiny, the assumption that every ones costs are the same.
Someone renting or owning workshop space in the centre of a city are paying a lot more per square foot than someone with their workshop in the back yard.
Husband and wife working together is going to cost a lot less than employing someone.
Having a regular item you make and sell, so that sign making is only a part of your business that keeps the Shopbot from lying idle is going to be costed less per hour than those who have to work in 'idle' time.
The amount people need to take as a salary differs widely. My needs 25 years ago when I had four small children are greatly different than they are today.
There are those amongst us who can make the same profit out of $15 per square foot, as others at 5 times that amount (excluding similar materials).
It is irritating to be beaten on price. It is even more irritating to have hours in the day when you are not earning.
Pricing I believe is the hardest thing in business, when you are first starting, and have no reputation.
Your business will fail if you turn out a substandard product at any price.
Your business is much more likely to succeed if you turn out a high quality, original product that customers want, even at a much higher price.
But there are no guarantees.
It is possible to give (and take) advice about pricing strategy, and its vital you come up with the best solution for your situation, but someone in rural Virginia can hardly advise exact $$ prices to charge to someone in downtown Brooklyn.

It would be facile to even begin comparing prices anywhere in the USA to my locality!!

.............Mike

[tuck]

Raymond, another great post. You give me much to think about, good sir. Quite frankly, as a "sub-contactor", with most of the design work given to me, I have little opportunity to flex my muscles as a good designer and competent sign man. I'm working on changing that, but at this point it's still hard for me to imagine making the kind of money that you and some others do.

Jerry, if it wasn't for us bottom feeders, you Great White Sharks would have the ocean all to yourselves, and goodness knows we can't have that! ;-)

[tuck]

Excellent, Mike. Thank you. I cannot be compared to someone running a regular business, i.e., renting a shop, paying employees and their taxes, insurance, etc. I work alone. I built and payed for my shop and it is 6 steps out my front door. I'm a bachelor with no kids. $50.00 can serve me as well or better than $100.00 for some, but that doesn't mean I'd not take the Ben Franklin. But if I can't even make the $50.00, I'll take what I can get to make ends meet and not be ashamed about it.

I have a new customer (another sign shop) that has beat me up pretty bad on my prices. I hate to admit it, but I'm doing his work DIRT cheap. Why? Because I'm STILL making decent bucks and my Bot is running as I type this and not sitting there waiting for the next job. It is out in the shop working hard. I'm sittin' here typing like a fool.

[joewino]

Listen carefully to the guy (or gal) that comes by to sell you space in the yellow pages. (This is not about whether advertising in the YP is good or bad).

You will never hear them explain what it costs to print that book, or how much ink has gone up, or whether they live in the country or the city, or how many kids they have in college. None of those things determine what you will pay for the little space on one page of the book. And they don't try to defend the price - that's the price it is, take it or leave it. What they will do is to try to convince you how much more money you can make with that ad and how much exposure you will receive.

It sounds to me that some are in business just to keep their ShopBots running. If I can do one sign and make the same amount of money (profit - not just what I got for the sign) as you are doing ten, I'll be satisfied doing one and letting the router be silent for awhile...if I had one.

Go to any large city and you will usually find a Lexus car dealer. There will also be a Ford and a Chevy dealer. They all sells cars, but they are not all the same price. All of them do the same thing, but I would almost guarantee you that the Lexus dealer is not trying to justify his price by how little or large is overhead happens to be.

End of sermon.

[tuck]

Raymond, you are a wise man, and from what I hear, very talented as well. I am coming around to your (and other's) ways of thinking. I want to be the best around and get paid accordingly...not as just another dude with a router table, but as someone that can take those extra steps to make something unique and beautiful and command top dollar for it.

I have learned a lesson here and I'm not too proud to admit it. Thank you all, and...

LET'S GO DO IT!!!

[joe]

I shouldn't post this but!

You've advertised yourself as an experienced designer who can complete a 4'X8' development sign fast. That designing and revisions can be done quickly and cheap. "You couldn't figure out how to charge for it".

As an Illustrator, designer, and teacher, I take this as an insult.

I know what it takes to come up with clean, sophisticated, intelligent concepts and the way you describe isn't the way it works. It's not easy, or cheap. The history of design goes back for centuries and is deep and rich. It's the Golden Thread which hold us designers together.

This discussion of pricing has missed the point. It should be directed tword quality and improvement of our image. Or how we can offer a better product with our great equipment and get paid a good wage. Not how cheap we can go.

I think this guy has found your nitch, as a dollar based wholesaler.

[drodda]

Joe,
I have followed this thread on both the shopbot and the Letterhead forum. I have to say that I for one always love to read the words
"I shouldn't post this but!"
I can't seem to stop reading a post that starts with those words.

Like the sign industry the card table building comunity is filled with this kind of selling. They justify giving their work away for the sake of staying busy. I get calls all the time from people who want 100 tables for next to nothing. I have always turned these sales away. I am way too busy without working for free. I have a different view than most on the shopbot needing to be running all the time. The shopbot does not cost me a dime sitting idle. With wear and tear on the machine and the electrical consumption that takes place every time I flip that switch I have come to realize that this machine is not a unlimited resource. So I am trying to use the time that I have with the machine to the best and most profitable that I can get out of it. If you feel you need to hear the noise without making any real money just record the machine running and then you can play back the tape over and over again.

So many that are in "business" do not realize what really is included in the everyday operating expenses of said business. This goes way beyond the shopbot and materials.

By the way I was not allowed to use the "Poke her" word so I had to write "card table" instead. I did not realize that we were sensored so close on this forum?

[tuck]

Joe, the LAST thing I want to do is insult you or anyone else in here, believe me. I started out as the Devil's advocate, I admit that, but that's just because I don't know what the hell I'm talking about. After studying this thread as well as the Letterhead forum on all of this, I have come to see the error of my ways,...and I apologize for my ignorance, because I AM ignorant! I am getting an EDUCATION in here (and elsewhere!), so please be patient with me. Getting involved with boards like this and the Letterhead forum is ONE of the best things I've done since I bought my used old Bot and quit my job.

I just may suffer from a self-esteem issue. Heck, I don't know! I was born with a love for art and design as well as working with my hands, but I grew up being told most every day about "starving artist" and how I should go to technical school or something. Taking any kind of risk was frowned apon in my family. "Do the safe thing and get a paycheck every Friday."

When I say, "It's easy!", I'm just mostly comparing CAD to the old drafting table. I am in no way saying, "Any idiot can do this." I know better than that.

I'll be 54 next month. I put that out there Joe because I've seen your photo and I know you're an older guy. I want you to know that you're not talking with some mixed-up teenager, but you MAY be talking with a confused and misinformed artist.

To any and all that I may have upset in here, I am sorry.

Peace.

[gerald_d]

Dave, there is an automatic spammer that posts messages promoting on-line gambling. Blocking the p0ker word keeps the spammer out of the Forum

[mikejohn]

If many things that have been said here are true, why not charge $1000 a square foot, or $2000?
Is it that there is a certain amount that the market place will stand?
Yellow pages are a national (international) company.
Selling in rural Kansas is probably more expensive than down town Boston.
I repeat, you need a quality product (at the right price). If someone in you market place produces a product at a similar quality to yours, sells it for less, but still makes a profit he (or she) is happy with, where do you think the business will go over time?
Joe says 'As an Illustrator, designer, and teacher, I take this as an insult.'
In this day and age this also needs inspection.
It has been said by many (including myself) that this Forum is a Shopbot university. Even more so is the web as a whole.
Google 'signs' you get 437 million web pages, 776 thousand images. Google 'carved signs' you get thousands of images.
With this wealth of information you can see what works and what doesn't work.
There are a limited number of shapes for signs. Some fonts look particularly good, as do certain colour combinations.
Software now does the lettering layout for you, no longer do you need to understand kerning.
Images are everywhere on the web. If you can use Coral, Illustrator, CAD programs you can create images from photographs to fit your sign.
This is not in any way to belittle trained illustrators, sign makers and artists.
It is to show that times have moved on.
A year ago I could not have made, by hand, a yard sale sign.
I have since made hundreds of V-carved signs.
You have to compete in the market place you are in. If someone has lower outgoings they can, and probably will, charge less.
My main business is making large Traditional rocking horses, which sell for thousands of dollars. If you stand my horse up against many of the British rocking horse makers (there aren't that many!) a customer will find difficulty in quickly spotting which is the better horse. In fact many are of the same high quality.
But prices differ by up to 200%.
I have orders already for this year which are equal to my entire sales of last year, and I expect to have at least the same number for the rest of this year.
I have found a way of making my rocking horses to the same high standard (we give an unconditional lifetime guarantee) as before, but at a much more economical price.
I market my horses on quality, increase my sales by price.

Marketing and pricing are complicated business decisions. Moaning about the effect other peoples prices are having on your business is a waste of time and breath. You are not going to change them. Many (most?) of customers are still going to be heavily influenced by price.
I still feel strongly that one businesses strategy, that works for them, may not work for another business, even in the same locality.

.............Mike

[joewino]

"There are a limited number of shapes for signs."

You've got to be kidding.

"I have found a way of making my rocking horses to the same high standard (we give an unconditional lifetime guarantee) as before, but at a much more economical price.
I market my horses on quality, increase my sales by price."

Please excuse me, I'm just trying to get a handle on this statement. You can do the same type of quality as before but more economically...so why lower the price? If you find another way to reduce the cost again will you reduce the selling price again?

There's an old saying that goes "It's not how much you make, it's how much you keep". It would seem that the more you reduce the price the more items you are going to have to produce to end up with the same amount of profit.

Evidently, there is a market for the higher priced horses, even though they all look alike as you said. If you can do them more economically than the guy who sells his for the highest price, then it would seem logical to sell yours for that same price, make more money per item and not have to produce as many or work as hard.

[Andy (Unregistered Guest)]

Just because you can V carve a few bits of wood does not mean you are a sign maker.

Computers are tools like any other- if you don't have design talent then all the computer software in the world won't help you one bit. All the old skills are still valid- you just use a PC to help you with the composition.

Sit someone with no talent in front of Corel and they will turn out rubbish- it's the talent part that counts.

[artisan]

There is some really great stuff in this thread and I have enjoyed reading everyone's different perspectives very much....and here is my two cents worth. Pricing is generally a function of your costs...initially, and then your reputation later on. At least that's been my personal experience. Starting out, I worked from my house and underbid everyone to get the work. My customers at this point were all price oriented.... and ultimately a pain in the *%^$ to deal with....but I was getting my education. Now, with eight years behind me as a sign maker and a modest 4000 sq. ft. shop, I get to pick jobs more carefully and my clientele has improved tremendously. Like Joe Crumley, I tend to retail my HDU Signwork for between 100.00 and 150.00 dollars per foot. This is a starting point and does not always include intricate 3D embellishments. I also wholesale to local shops when I have time for 65.00 to 80.00 a ft...for unfinished signs.

The absolute biggest factor in my pricing has become the look and design of our signs. I separate myslf with 2.5D router work ....that is beyond the scope of most of my competition.... and solid design and coloring. I have found that competing in an average market where everyone does the same type of work has little future in it as the work becomes a commodity and eventually price does win out....like buying a loaf of bread. The Shopbot allows you to be more creative than that....but will only do what you tell it to do. If your routed signs look the same as a sandblasted sign....then THAT's your competition. Prismatic letters. V Carving and Dimensional work are what set my signs apart from my competitors and allow me to reach the better clientele.

I have found that good businesses REALLY want to differentiate themslves and stand out from their competition....and catering to that has been my bread and butter.....my two cents....D

If you do what you've always done....you'll get what you've always got. (I don't know who said it)

[drodda]

I would have to disagree with you Andy on the talent statement. I for one have no atristic ability in my body. But I have 20 plus years of computer experience. My wife is very talented and has an Art and Design degree but little skills with illustrator or corel or Autocad. I bought a CNC machine to make up for the lack of talent in my hands. She can come up with an original design but I can bring it to life through the use of my computer skills. My point is that the talent part is becoming less of a factor as technoligy gets better.

Let me also say that I admire all on here that has the talent to build original designs by hand. I am not saying that you are not far better off than myself I am just saying that the gap between us is slowly closing. Does this mean that I am getting more talent or does this mean that talent is not as vital as it once was? I guess this is a matter of opinion.

[mikejohn]

A limited number does not necessarily mean a small number. Proportions will differ, but Google for signs and you will run out of alternative shapes after a while. (I am not talking about shapes like horses or Kentucky or bananas).

Manufacturing, pricing and profit.

If I can create more horses (or anything) more efficiently and economically, in a shorter time, thereby making more a month, I would be an idiot not to sell them for the higher price.
You say "Evidently, there is a market for the higher priced horses," there is, but its a small market compared to the market for lower prices.
So I still spend the same amount of time making horses as I did before, but make considerably more of them than I did previously. I could not sell all those horses at premium prices, but by passing on to my customers my new economies, I sell all the horses and make considerably more profit over all.

Doug said above:
"It is up to you to determine what you are worth. That is my point exactly.
" Also, what your future holds regarding available funds for growth, new equipment, and peace of mind." And this varies with different peoples differing financial circumstances.
"This may be one time to really look at where you are headed. And, be honest with yourself. " This is also great advice.
My point is, to answer Marks original question we need to offer advice on what is involved in pricing. The mere fact that one man can get $100 or $50 or $200 for a sign, is not necessarily relevant to Mark, unless he is competing in exactly the same market place.
Price too high, you have no customers, price too low, you have no profit. You must decide what price to charge according to your personal circumstances.
There appears to be a vein of discontentment in this thread because others are getting business which they may like to have, because they are charging lower prices. That's business! The solutions are many, but probably not easy.

............Mike

[artisan]

Dave....I think you have possibly made Andy's point for him. As CNC abilities become more widespread and computer skills are just a "given", the price for this will come down while good design and the abilty to create the content will continue to be in great demand and separate one business from another. Ultimately you will need both...D

[jhicks]

Mark, sorry if you took the "bottom feeder" personally. Not my intent other than a generalization to describe the "lowest price mentality for quality, custom work". I just have a difficult time understanding why anyone would make the investment in technology, training, software, materials, advertising, selling etc, etc and conclude that these unique capabilities and capacity should be marketed as the "low cost/ Low profit" solution provider. Regardless of their overhead and cost structure.

Just doesn't add up to me. The guy who "builds the better mousetrap" doesn't enter the market at bargain basement prices, does he? If its clearly better, you expect to pay more for the value you percieve it holds to satisfy your requirements.
When a manufacturer has a patented or proprietary item, they do not sell it based on time and material. Rather the OVERALL value to the customer compared to the competitive alternatives available that could or might satisfy the need.

Markets and manufacturing capabilities are commonly segmented as "High Mix, low volume" and "Low Mix, High Volume" environments. Correspondingly these segments command market competitive prices for all the reasons described.
Low Mix/High volume = production efficiencies and economies of scale allowing for "commodity" or low cost provider pricing. This does not imply low profits though. Just more economical fabrication methods weather through automation or offshore labor.

Conversely Low Volume/High Mix environments require and command high prices for signature or custom items being provided. The proprietary and unique nature of the product is easily justified and includes YOU, what you have accomplished to get where you are, to do what you choose to do, and how YOU value it. If you thinks it is of low value, you certainly can't convince someone otherwise.

UP selling is a skill and a state of Mind but 1st one has to believe, understand, and present the reasons their VALUE, Features, & benefits outweigh the alternatives. Sell the sizzle, not the steak. Then deliver to those high standards.

GOOD SELLING OUT THERE TO ALL.

[drodda]

How do you argue with a man who builds 14 foot tall horses? As I reread my post I have to agree that I probably ended up making Andy's point a better one.
Being very new to sign building I have really enjoyed reading all the information that this thread has brought out. Many people on here have a passion for their work and it shows. I have talked with Joe on the phone and his passion for his work is very clear even over the phone. For this I admire all on here that share this passion with those of us new to the business.
I have yet to let go of my security blanket of the day job. So I find that finding time to do projects limits me to only taking on the projects that will be very profitable.

[mikejohn]

Jerry,
It's ok, I took nothing personal.
There are manufactures lower down the price scale than me, but with most of them it's obvious in their products!
As for bottom feeding, my horses are still out of reach of a lot of people, unfortunately.
Now, if anyone wants to take on the USA distributing rights...........


Dave
Wrong horse maker!!
Mine are only 4 feet tall.

..............Mike

[drodda]

I was refering to Darrell on the size of the horses. Sorry for the confusion.

[artisan]

Awwww...Dave, you made me blush.... These threads are what I really enjoy so much on this forum. Even though I haven't participated so much lately, I enjoy seeing this educated and talented community hash and thrash things out and share thought processes....VERY informative stuff and often eye opening....D

[tuck]

Jerry, no offense taken, brother.

I've gotten a lot out of this thread. One thing it has prompted me to do is some serious research on my local competition and I've come away knowing that, while I may not presently be able to command $100.00-$150.00 per square, I can do a good bit better than I am now. In time, as my reputation grows, I hope to do as well as some in here and elsewhere. My biggest issue right now is to get some of the "middle men" I do work for to unserstand that THEY aren't charging enough for these signs, and they are not. My rates are going up and their "retail" prices are going to have to reflect that. We should still be in good shape.

My next issue is to find my own market that eliminates the middle man. As I said above, my ad in the Yellow Book has been a huge disappointment so far. I'd like to hear how some of you good folks market your work other than the yellow pages, ESPECIALLY some of you guys that operate from your home like I do. Working out of your own shop or garage certainly saves a lot on overhead vs. renting "a place in town", but it also keeps you out of the public eye and that can be a bad thing.

[jhicks]

Mark, I too worked nights and week ends for 3+ years until my "career job evaporated". Fortunately I had set up and expanded my back yard shop and was prepared to give it a go full time. 13 months later its still fun, profitable, and growing all the time. I decided early on (after a few camps & Jamboree in 05)I would follow 3 simple rules.
1) pick our focus areas based on what we could accomplish profitably and successfully with our resources.( Signs, Turnings, & Trim)2) Rather make one sign/project at a premium than 5 at a discount in the available hours I had.(Go where the money is)
3) Spend a minimum of 16 hrs a week selling via phone, e-mail, and personal visits. (Franchises wait for someone to come in the store front which I don't have and don't want)
3)Take on even challenging jobs perhaps beyond my current skill level and learn the tool/techniques so at least if I burn up some stock and bits, my education is being paid for.We generally don't sell things people NEED rather what they WANT.
(If they want it and have the budget, we say YES then figure out how to make it happen)

The one step I recently took was to join my local Chamber of commerce. I attend as many functions as time will permit and find there is a lot of good networking contacts that provide leads, and referrals. Plus Chamber members like to work with other members.
A couple ideas for your consideration. Find out who the property managers are in the area. They have recurring needs for signs on multiple commercial and residential properties. Watch your paper or use your library to find "new business licenses" issued in your county or township. And if you stay on the wholesale side, check the web for all local franchise sign shops. You can usually find their e-mail addresses and send notes, offers, photos etc to stay in front of them from your PC at the Day job.
Finally consider a paid listing subscription on http://signsearch.com/
Then just keep investing in your skills and shop while you still have that day job so when you do make the break, you have the experience, capacity, and skills you'll need. We learn something new every day so its like being a kid again only with better toys.
And of course continue to seek and contribute via the best resource available here at the forum. I think of it as my virtual community of consultants and advisors with a never ending capacity for ideas and support.
Best of luck and BOT on.

[paco]

About quoting sub contract signs; how do you deal with customers that need 2, sometime 3 and even 4 quotes on a single sign project?
Some of my customers ask me this sort of multiples quotes having in mind to have a price range (going from simple cutouts, part of it carved and fully carve awesome kinda project) to offer their customers...
I always try to keep it to no more than 2 prices (2 different versions of a same projects) but I find it hard to say no when someone ask for (a) price(s).
On the other hand spending 1/2 hour to 1 hour (sometime more) on each quotes can make me wonder about this kind of practice since in any case I get the order, only one of 'em will became an order... should I charge for quotes?! I could I handle this?!
This is different than when someone ask for price range for 10, 100 or 10 000 of a same part; much easier and faster to quotes than sign project... what am I missing?

[joe]

I gonna buy one of those old timey shoe stands and set it up right outside the front door. You know the one's from way back, when you'd climb in the chair and a chap would black your boots. Yep, that's that what I'm gonna do, and I'll advertise, A Shoe Shine With Every CNC Order.

Don't anyone else try this, it's my own idea! Exclusive too.

Also I'm gonna make big horses and bears, and when I get really good at it, I'll doem or less. The more I make, the less I'm gonna charge. No one else will be able to compete with me. No Sir,

Watch out Raymond, here I come. I hear you make some good signs. hehehehehe

j.

[tuck]

Jerry, that's some sage advice. I need to hob-nob more, and the local Chamber of Commerce sounds like a good place to start. Guess I gotta buy some new jeans, t-shirts, suspenders and work boots so's I can look more presentable! (j/k!) BTW, I quit my day job 4 years ago.

Paco, if you know what the basic design looks like, you should be able to come up with an ESTIMATE quickly enough based on different ways of making the same sign. I NEVER give quotes on anything without knowing what is involved. This is how pricing on the sq. ft. can get you in trouble if you don't know what the client wants and you're just tossing out quotes. I learned that lesson the hard way. I'm STILL learning lessons, but I only had to learn that one once. And no, you can't charge for quotes! LOL! ;-)

Joe, how much for a shine with no CNC order?

[mikejohn]

"Also I'm gonna make big horses and bears, and when I get really good at it, I'll doem or less. The more I make, the less I'm gonna charge. No one else will be able to compete with me. No Sir,"
It's not often people take so much umbrage on this website about others opinions!
In my case developing techniques and methods to improve my product whilst decreasing the costs have greatly expanded my market and profits.
And I guess this could be true in most areas of Shopbot use.
I can understand the concern of anyone who has spent long careers training and working in any branch of illustration, including sinage, now that computers do 90% of the job for you.
This is, however, the same in a large number of professions.
The aerial survey business I entered in 1960, which required high levels of skill and training, is now entirely done by satellite navigation, computers and digital cameras. And the photogrametric profession, the people who create the maps, is also now computed entirely. And draughtsman no longer exist in this profession.
Look forwards, chaps, not backwards!

.....................Mike

[tuck]

Computers have changed everything. Anyone that denies that is simply in denial. If you're not interested in what a computer can do for you, you wouldn't even be reading this. True? No? Think about it! I can say with certainty and no shame whatsoever that computers have changed my life forever.

On the other hand, some things never change. In the sign business, for instance, a person needs an eye and sense for good design, balance, color schemes and so forth to set your work apart and design/produce great signs. Any hacker nowadays with a router or a plotter and some computer knowledge can produce a sign of some sorts, but still not get the job done in the end. Right, Joe?

I could be wrong, but I think what Joe is trying to tell us all, as an older veteran, is, "Be the BEST at what you do. Cut no corners. Take the extra steps. Always be eager to learn something and educate yourself, no matter HOW experienced you are. Be proud of your work, but not proud of yourself. Work hard and smart and get paid accordingly."

Right, Joe? No?

[joewino]

"what Joe is trying to tell us all, as an older veteran"

I like that "older" part. Is Joe really that old, or does he just have a lot of miles on him?

My advice: whenever Joe says something - listen very carefully.

[superior]

Amen.
Words to the wise.
Doug

[john_shiel]

Hi Mike,
It must be past Gerald's bedtime or he would surely have some innovative marketing suggestions for your illustrated sinage .John

[mikejohn]

This thread started with a question that seemed to be asking how to charge for materials, but with a title that gave much larger scope for various answers.
On the way it took many paths.

I have paraphrased the following from other articles on the web.

I believe one question asked more than any other with people new to marketing a product or service is how to work out what to charge for their labour. There are several ways to do this. We can see if there are guidelines from within the industry We can charge the 'going rate'. Or we can make a good guess at what the client is willing to pay and charge that. There are others, but these are the typical methods.
Guidelines from within the industry are a good starting point of you feel that your business fits in the mould. The 'going rate' is called that because if you're not careful with it, you're going out of business. Unless you happen to be clairvoyant, guessing what you think the client will pay is just plain bad business. The idea isn't to figure out what the client will spend. It's figuring out whether you can make any money on the project.
A better way to approach the problem is figuring out your bottomline: where you need to be to really make money. Go below this point and you're paying your client for the honor of working for them. The more work you take on at the wrong rate, the deeper the hole you'll dig for yourself. You can actually 'sell' yourself right out of business with a rate that's too low. Go too high and you'll price yourself out of the market. Once you know your true costs of doing business, you can make sensible decisions.
The place to start is you. What's your target salary? And let's be realistic here. If you have employees, you'll need to add up all the salaries. On top of that, you'll need to figure in other associated costs like taxes, insurance, etc.It is said a safe figure is 25-30%. The sums looks like this:
•

[tuck]

I've been accused of being a "low-ball scum sucking bottom dweller" in here already.

It's "cometition", folks. That's all.

[mikejohn]

Mark
You've also been accused of being a ShopBot novice, although you have owned and operated a Shopbot for 4 years, and have a background as a pencil and paper designer, which seems to have been overlooked in a number of posts.


This is your thread, and you are the one to take it where you wish, but it did split from a pure pricing question to comments on quality, and even integrity. I hope you weren't being refered to as you describe. Such remarks on a Forum such as this would be uncalled for, even down right insulting.
I disagree with many comments made on this Forum, but I try not to insult anyone.

a small aside, when do you sleep?


..............Mike

[jhicks]

Mark, I believe you will find an apology to, and your acceptance of, the generic description used as "bottom feeder" so I considered that a closed topic, properly resolved. Just to be sure, nothing personal and no offense intended.

Mike,On your financial overview, I couldn't agree more! The answer always lies in the numbers when one is on the subject of profit. Your overview is the true measurement stick in any business. It just helps sometimes to have the "quick base line" to determine if one is in the "range" of successful operating guidelines or not.
Your hourly base is definately in the range and should be used as the minimum in my opinion. That would never be considered "bottom feeding" but just old fashioned good business judgement.
If you want to see the same logic extended over the highs and lows of the sign business based on the "local market hourly rate or break even" check the 2006 Sign Magazine" pricing guide. It follows Mike's logic exactly and might be useful to establish your "range" based on higher or lower priced market areas in the US.

Mike, there might be room for a USA deal on your horses. Think about that and write me if you have an interest in expanding to the Midwest USA.

PACO, on becoming a BIDDING service, that indeed can take valuable time with potentially no reward. And agree with Mark, No, we don't feel one can charge for a quote.
One suggestion might be to use the terms "Ballpark Pricing for proposal only" which is what we do when there is no final design and there is where a sq ft price is effective in determining what their budget tolerance is. If they (the franchise shop)hasn't done their job to "qualify their buyer" then you're shooting in the dark anyway. The signs we make can range from a low of $50.00/ sq ft to $150.00 before exotic details, hardware, or design embellishments.
What is the customers budget range? Whatever it is, within that range, we can design something or use proper material that will fit but all have features, benefits, and cost implications, so are we wanting a Cadillac, Mercedes,or a Ferrarri? We don't make YUGO's here.

When they want to finalize, we attempt to get a design fee for the work and when necessary offer to credit their price for the design fee on the final invoice to close the deal. How one manages those numbers in terms of the final price is the flexibility to dial in the closing price (charge all, some, or none of the design fee)BUT in the end, the wholesale buyer will quote you to death and abuse your "free service" unless and until you establish that the midline base price is $X.00 and is subject to change based on final design and specifications. At some point they must realize that they need to qualify opportunities and target price budgets if they want to have a win/win deal with you. Now all they do is pass the buck so as long as you take it, you have the hot potato to deal with at your expense.
When they have an order, you'll be able to confirm whatever makes good sense for your success. After all many retail shops double the price anyway so they make as much as you for standing in the middle for their sales and marketing expenses so they do have room to move if they want a win/win situation with their supplier. otherwise its a one way street headed in the wrong direction.

[mikejohn]

Jerry
I saw your apology, which was why I suggested to Mark that he hadn't been personally insulted in this Forum. (However, I have just been insulted elsewhere on the Forum
)

...........Mike

[wcsg]

I don't think Mike could have answered this thread any better from all the twists and turns this thread took.

Just like vinyl cutters I see more and more sign guys with CNC's in their shops, along with others who follow no trade but who have water jets, laser and routers who will cut anything for anybody as long as you design it.. and charge you a hourly flat rate...entire jobs as $80.00 to $125.00 per hour. They look at it as how can I stack my 8 to 10 hour day whether they cut almun or dimensional. 3-7 tables going all day. I live in San Diego and I can't tell you how many CNC's there are in just a 5 mile radius.

Pretty soon everyone will have a CNC as the prices for them come down. I mean before shopbot became mainstream, shops were leasing and paying out the "you know what" to have one. This will diminsh the "Specialty" aspect of being one of the few with a special ability and getting the money for it as more and more own one. Anytime a specialty is diluted or in surplus it's not a specialty anymore.

It's Sunday and my mind is warped, I think I lost my train of thought so I'll stop right here :D

[tuck]

Jerry Hicks, I didn't mean that to you. Sorry for the confusion. I get so mixed up between this forum and the "Letterville" forum that I lose track sometimes of where I'm at! LOL! ;-)

Mike John,...I hope I didn't insult you!

*Group Hug!*

Erik Gastelum, that was a "spot-on" post and it inspired me to start a new thread about exactly what you're talking about, "CNC Proliferation". I don't mean to steal your thunder, brother, but this thread has lived it's life and it's time for a newer one!

[kittsi@cox.net]

Hi all -

I have been trying to research the wholesale cost of HDU and redwood for the past few days. For a marketing class I am taking, I am trying to put together a marketing plan for a wood carver here in the midwest. He currently carves only redwood for exterior signs, but we have researched HDU and in our marketing plan are recommending that he look at expanding his product line to use it. I am having a hard time trying to compare the price of redwood to the price of HDU. Both materials are extremely hard to find a wholesaler for let alone a price. Does anyone know what the price of redwood (4x4, heart free grade) versus HDU is?