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This week's survey
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(These survey questions are sent in by our readers. Please spend a minute to give your answer to this week's survey as one or possibly more of your industry peers thinks this question is important and wishes to see your point of view as well as others in the industry.)
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How do wide format margins compare to other parts of your business?
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Our last week's survey results...
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How do you price what you make or print? Is it hours + materials + % mark up = Price OR do you consider the value of the job to your customer and how many new customers it might bring them?:
- Get rid of the guess work and nasty surprises. "% Mark Up" as a means of pricing is akin to fools gold. Looks good upfront but does not do the job in the way "Gross Profit" does. Take a look at your P&L and try to find "Mark Up" Doesnt exist! Your P&L works on Gross and Net Profit so why not cost your jobs on that basis so that you already know whether you are maintaining or losing your average GP. Try this simple formula - turn the GP you want into a decimal (eg 60% = .6) and then subtract that from 1.00 (1 - .6 = .4)Take the cost of direct inputs and divide by that number (eg 100 / .4 = 25)This final number equals the sell price. Obviously adding 10% to mark-up is not the same as increasing GP by 10%. As to the value of your job top your client - suggest it should always be of great value - just not a cheap price. (Michael - AS Fisher & Co)
- I rarely consider how many clients will come from my work as it is a bit hit and miss. To get any work from my work is just seen as a bonus. My prices reflect the relationship I have with my clients. A regular clients with repeat business doesn't pay what a one-off client will pay. That said, if that one-off client comes from a business that I'd like to pursue for more work, then I price it accordingly.
- THE most hotly debated issue of ALL time in the sign and print game.
Considerations may include:
Relationship and trust with the sign or digital print client
Your sign business's proven track record and delivery of your sign products
Ability to meet deadlines mutually set on the sign project
Quality of the signs and prints for the intended purpose
Demographics and market size of your regional sign area
We suggest some common sign quoting strategies, and many can lead you on a road to success or disaster!
Here are some popular formulas I see in the sign game
1. Cost Plus (or 1+1 = 1)
When the pressure is on, work is short and often companies think this method will help them. You think of using a quote at a rate based on costs plus + small margin and even if you cover your costs, you will end up in profit often, however the opposite is true. Cost Plus assumes: your costs are under control, you are buying your sign product competitively, you have reasonable sign labour rates and altogether when combined with the skills for your estimators will always win business.
Perhaps, however what happens if - your costs are out of control, you don't have everything in your sign business as fine tuned as you should and your costs and prices are higher than your competitors' costs?
The net result could well be = you lose the whole sign business anyway.
Cost Plus = generally creates a culture internally that it's about you and your business
Fact is = your customers are generally only interested in their needs and don't have any idea what the sign is worth anyway. So, why risk your sign business's future?
2. Win the Sale (or 1+3 = 4 less 30% = 2.8)
Everybody wants a deal, our culture is changing and if your sales team are taught to win the business at any cost, I propose you are on the start of a very slippery slope. If you start discounting - you're training your clients to do business with you that way.
It proves to the sign client they should always negotiate with you and screw you down. If you adjust upwards, no one knows where your sign prices are. In the long term it will devalue your market confidence and business relationship with your sign clients.
3. Kill off a competitor (or 1+1 =-1.5)
One of my favourites of self-destruction in the sign business! You develop a need to wipe out a competitor by assuming you and them are locked in some sort of gladiatorial battle of right and wrong. Trust me, leave Gladiators to Russell Crowe! In the real world this sign pricing strategy will only have one winner, and it's certainly not the combatants!
Take a tip...donate your profit to a charity, at least that way you will feel good about ripping up your sign making profits.
4. Market Rules (or 1+1 = 2 less whatever is current today = .5)
Hmm, last time you looked it was your sign business right? And you're in business to make a profit right? Then, if you have faith in that concept why let wildly fluctuating sign market prices control your sign making business? Thankfully the sign and print manufacturing business marketplace is not an open market place like a stock market. If your aim is to sell your sign products to a wide and varied group of diverse sign clients well simply put, that diversity offers some safe harbours, learn to listen to sign clients specific needs and develop a balance of price, quality and service to suit.
5. Fair and reasonable (or 1+1 = 3+)
Most fair-minded and well-run businesses understand value for money. The principle secret is selling signs and prints at more than they cost you to make...YES? So, use common sense, based on your real costs add a percentage margin aimed at delivering what your sign making business needs to run a fair and reasonable business, within your values and aims. Sounds too idealistic?
Time and time again we see profitable sign and print businesses who understand their business and their clients' needs. Tell me what have you got to lose? Who knows you may even get time to have a round of golf, walk along a beach or see your kids!
6.Value based prices (or 1+1 = 20)
This is better told as a real life tale, it is one of mine and based completely on facts. Many years ago we supplied a simple banner to a client who did waterproofing inner city. His claim was this banner, worth say $300, increased his whole business by hundreds of thousands of dollars every year. We of course suggested more signs, graphics on his vehicles, reception signs, and just about anywhere he could put a sign, he did.
Everybody is winning so far - Right? The result was simple; his business grew exponentially as did the profits he collected... Nice story?
Ask yourself: "Would the banner, at a cost of $450 or $600 have made any less of a result for the client?" or "Would my clients' customers stopped calling him?" Than had I charged say $600 and made a very handsome profit, in turn we could have really done something very special - and even generated more business for the waterproofing business. Over the years we taught him the value of a GREAT sign, and he understood the value of our work, together we formed a stronger relationship!
We call it Value Based pricing, if you learn the real value of the goods you make, importantly you can live a different life. I share a view with many like minded individuals, that an appropriate percentage profit component should be added to every project you deem is suitable to 'add value', based on your experience...Try it.
How much does it cost V's what does it sell for? If you accept the fact that NO two businesses are the same, just as no two people are the same, then "how the hell do people expect prices to be matched or the same!" So, if your work is the result of years of training, investment in skills, knowledge, premises and equipment then isn't it up to you to set your prices? (John - Control Zone) - We use square metreage rates with discount scales for sizes and quantities. This means I can have 6 people of varied backgrounds quoting a job and our pricing will always be fair and consistent.
- My price is made up of cost of material, time to produce sign and mark-up. But in saying that I do also consider the value of the sign to the customer. My price structure takes in consideration the actual customers ability to pay. Battlers and mates get one price. Regular customers get another. Those that can afford it get "value added".
(As a publishing practice to protect ourselves from any potential liability, company and individual names that are referred to negatively in any of these comments are removed.
In addition we reserve the right to remove comments that are blatant advertising for one product or company)
Please spend a minute to give your answer to this week's survey as one or possibly more of your industry peers thinks this question is important and wishes to see your point of view as well as others in the industry.
If you have a subject that you would like us to survey, please send your subject to brian@wideformatonline.com. Thanks.)
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This month's Special Offers from industry suppliers
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If you wish to enquire about any Special Offer, just click the Supplier's name to bring up their email address.
If you have a special offer to the wide format printing trade and would like free promotion here, just click here to bring up the application form, fill in the details and then hit submit.
The information will go into the first available newsletter.
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2nd Hand Machinery/Auctions.
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If you would like to run an ad in this section, just click here __________________________________________________
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(NSW, Sydney) DTG M2 DIGITAL T-SHIRT PRINTER
(Posted 22nd May 2015)
(NSW, Sydney) For sale DIGITAL T-SHIRT PRINTER - DTG HM1 Kiosk,
(Posted 18th May 2015)
(NSW, Alexandria) For sale: $800 each ONO
(Posted 12th May 2015)
(NSW, Ingleburn) For sale 1 Dilli Flatbed ( agfa Annapurna) 2500ws machine
(Posted 11th May 2015)
(NSW, Leichhardt) Roland Xj-640 Eco-Solvent.
(Posted 11th May 2015)
(NSW, Chipping Norton) Teckpro UV3200 roll to roll printer
(Posted 7th May 2015)
(NSW, Sydney) Wanted LEC-300a, LEC-330 or LEC-540
(Posted 6th May 2015)
(NSW, Albury) Pad Printer, Tosh Logica 2, 3 colour Machine
(Posted 30th April 2015)
(NSW Pyrmont) VersaCAMM SP-300i Printer Cutter
(Posted 27th April 2015)
(NSW, Casino) SOLJET pro 2
(Posted 27th April 2015)
(NSW, Gosford) Gerber Edge 2 and software,
(Posted 15th April 2015)
(NSW, Bexley) Roland SJ-740 in great working order,
(Posted 9th April 2015)
(NSW, West Kempsey) Roland CAMM-1 PRO Cutter on stand.
(Posted 29th March 2015)
(NSW, Wollongong) Mimaki JV33 and CJV30.
(Posted 27th March 2015)
(NSW, Wyong) Camm 1 600mm cutter
(Posted 24th March 2015)
(NSW, West Tamworth) 2nd hand Lightbox sign for sale.
(Posted 23rd March 2015)
(NSW, Sydney) DIGITAL TSHIRT PRINTER DTG M2
(Posted 16th March 2015)
(NSW, Seven Hills) HP L65500 2.5m wide Latex printer
(Posted 16th March 2015)
(NSW, Seven Hills) HP Scitex Latex 850. 3.2m wide Latex printer
(Posted 16th March 2015)
(NSW, Ingleburn) PosterPrint Pro V14 - RIP Software
(Posted 6th March 2015)
(NSW, Deniliquin) Gerber Edge FX printer and GS15+ plotter
(Posted 25th February 2015)
(NSW, West Ryde ) XAAR 318 Printheads
(Posted 23rd February 2015)
(NSW, Lilyfield) Used Mutoh Value Jet 1604 printer $2000.00
(Posted 20th February 2015)
(NSW, Sydney) 1 Dilli Flatbed ( annapurna)
(Posted 16th February 2015)
(NSW, Wauchope) Roland SP 540v with take-up,
(Posted 15th February 2015)
(NSW, Wetherill Park) AGFA Anapurna M Flatbed Printer.
(Posted 10th February 2015)
(NSW, Ashfield) Roland VS-540i
(Posted 2nd February 2015)
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OH&S can lead to improved profits
Finally a free online book that tells you all you have to know about Occupational Health and Safety and how it can improve productivity and profits. A 20 minute read that could change your business for the better.
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Want to run an ad in this section? Just click here
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New South Wales
(Posted 12th May 2015)
(Posted 8th May 2015)
(Posted 27th April 2015)
(Posted 15th April 2015)
(Posted 27th March 2015)
(Posted 2nd March 2015)
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Businesses for sale/wanted
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Want to run an ad in this section? Just click here
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(QLD, North Queensland) Sign manufacturing business for sale
(Posted 20th May 2015)
(QLD,Sunshine Coast). Long established business.
(Posted 13th May 2015)
(QLD, North Queensland) Sign Manufacturer - Nth Qld
(Posted 15th April 2015)
(QLD,Bundaberg) VERY PROFITABLE SIGN BUSINESS
(Posted 15th April 2015)
(NSW, Sydney) Very well established signs business, solid customer base,
(Posted 9th April 2015)
(QLD, Gold Coast) WOW! NEVER TO BE REPEATED OFFER..! WORK FROM HOME ON THE FABULOUS GOLD COAST.
(Posted 11th March 2015)
(NSW, Helensburgh) Printing business for sale,
(Posted 19th February 2015)
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