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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
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.
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.
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
I was refering to Darrell on the size of the horses. Sorry for the confusion.
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
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.
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.
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?
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.
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?
"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
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?
"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.
Amen.
Words to the wise.
Doug
Hi Mike,
It must be past Gerald's bedtime or he would surely have some innovative marketing suggestions for your illustrated sinage .John
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:
•
I've been accused of being a "low-ball scum sucking bottom dweller" in here already.
It's "cometition", folks. That's all.
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
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.
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
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
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!
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?