Hi, I have a 20 in cutter and have a logo design that is 22x48 Reduced to that to occommodate the 24in. gold vinyl required W/ vinyl shade. I asked Gregory, my supplier that also cuts graphics to quote it. They refused to tell me thier shop rate for cutting-weeding and taping but after deducting the vinyl cost it came to $50 an hr. I looked in Sign Mart's catalog and they go by sq. in. ( 850 ) $30. I know from experience that it takes about .45 hr to cut the two vinyls and tape. That mkes Sign Mart about $60 an hr. My total shop rate including about 30-40% profit is $40. After marking this job up it makes the sign somewhat overpriced. Some might say that my total shop rate is too low but in my travels in the rural areas of America I think that my retail is reasonable.
Wholesale to shops with $100 rate Retail to mine.
Posted by Si Allen (Member # 420) on :
Jerry....ever think of raising your shop rate to $60/hr?
As long as you and everyone around you works for $40/hr, that's what everyone will expect!
My motto: "the highest price that you can say without laughing!" It works, more often than not!
Posted by Kissymatina (Member # 2028) on :
I think your $40 is low. You'd have to be in an area even worse than this one for it not to be.
There are a lot of people here that could cut it for you, why not try that route? Besides learning, friendship, keeping the craft, this place is also a great source to find buddies to outsource to.
Posted by Mike Pipes (Member # 1573) on :
Gregory and the others know how to make money!
They know that a $10/hr employee costs the company $20/hr by the time they figure in paperwork, sick days, unproductive time, etc etc. If they charged less they'd barely cover their labor costs.
The job you mentioned, if I did it at my $60/hr shop rate (which includes a 30% profit buffer) in the same time you could do it, the profit on labor based strictly on shop rate and time invloved is.... drumroll please.... a whopping... $10!
Waaaaiiiiiiit a minute! 30-45 minutes of work and I'm only making $10??? (give or take a couple $$)
You gotta go beyond relying on shop rates to price your jobs. They're good as a starting point but in the end, each job carries a value that is not determined by the time and materials involved - it's whatever you can get for that job and you can't get what you don't ask for.
The whole "rural area" stigmata is bogus. Everyone that lives in a rural area (there's lots of us here on this site) can tell you that all the commodities cost more in rural areas. Either you're paying more for goods to be shipped in or you're having to drive a good distance to pick the stuff up yourself.
Posted by Rick Chavez (Member # 2146) on :
Do you really think Gregory or Signmart are making a lot of money with your 30 or 60 bucks? Thier facilities are large, an order like yours has to go though at least 6 people (the order taker, the production manager, the vinyl production guy, the weeder/taper, the shipping person, then billing from start to finish...or do you think Gene at Signmart does it all?
Posted by Rick Chavez (Member # 2146) on :
Oh yeah, and what Mike said.
Posted by jerry jaran (Member # 524) on :
Hi, Well, You are all right and I think I will boost my basic rate which now is (please don't laugh) $25. With my usual 40% included makes most jobs $40 an hour. I rale against lowballers- have one or two here but really don't think I'm there as I mentioned first. I do'nt have much overhead in terms of rent. 115 for a 10x40 storage locker and 150 a month for my trailer space. My shop rate could be $17. In this town I have one other signguy and I don't know his rate. I always thought to be lower and I imagine people going to him with my quote and him saying "I'll do it for $25 less." The people in this town would use him in a second. Oh well. Anyway, Gregory and Signmart are not wholesale to the trade. It's a LIE to get customers. By the way, Concerning lowballers and Old Paints rant- Last week I tried to get the City or County to make an actual bum whos been around here for 4 yrs doing sloppy signs get a business lic. They arn't interested like other towns I've been in that stop me from finishing untill I get one so I turned this around to a postive by putting an ad in the Advertiser ( I don't usually advertise ) that says: SA VE MONY have a bum do your sihn. MAKE MONEY have Able Signs do your sign.
Oh, Those contradictions are flying every which way !!
Posted by Mike Pipes (Member # 1573) on :
quote:Originally posted by jerry jaran: Hi, Anyway, Gregory and Signmart are not wholesale to the trade. It's a LIE to get customers.
It's no lie, you just choose to pass savings along to your customers instead of using your low overhead as an opportunity to make a nice bankroll or have extra funds for investing back into your business. If you'd have charged more for your work in the past you could just buy your own larger plotter and not have to worry about outsourcing the job. It's not like the plotter wouldn't give you any return.
If the wholesalers to the trade are commanding $50-$60/hr wholesale, that oughta be a clue what sign shops should be charging on the retail level ($100-$120/hr) regardless of their locations.
Like I said before, it's not all about shop rates anyway. Just because I can finish a job in 30 minutes doesnt mean I'm going to charge for just 30 minutes of labor if the job itself is actually worth $300. If it's worth $300 I'm gonna charge $300, not $30 in labor plus $20 in materials.
Posted by Dave Grundy (Member # 103) on :
I agree with Mike...
My shop rate is $50/hr...no "if's and's or but's"
But I sometimes figure I am underpricing my time when I do vinyl removal at that rate, or do customer supplied graphics at that rate.
I guess it's time for me to up my rates!!! Ya think $100/hr would fly????
(actually, kinda serious, when you consider how much it would cost customers to have a flunky spend all day and still screw up an easy job when they pay him only $10/hr...when I can do it in an hour or two)
[ September 15, 2004, 10:59 PM: Message edited by: Dave Grundy ]
Posted by Mike Pipes (Member # 1573) on :
Dave, go for it.
Do the math. The flunky gets $10/hr to do it and it takes him an 8 hour day. $80 for him less a little taxes.
It takes you an hour to do the same amount of work, but of that $100, $40 of it goes straight into overhead leaving $60 "profit" but $20 of that "profit" goes into taxes. So you do the same amount of work as the flunky in way less time but you only get to bank $40 of it.
Hmmmm....
$150 or $200/hr sounds SO much sweeter.. Posted by Checkers (Member # 63) on :
Hiya Jerry, I think Mike is being too nice in the way he's replying. But, he's definitely on to something. A short while ago, I did the math to see what my hourly rate would be if I decided to start my own business and work from home. After doing the math, I came up with a conservative shop rate of about $47.00 without figuring in any rent payment. If I added in a fair amount for rent and 1 trip to a letterhead meet a year, that rate went up to around $65 an hour - Thanks Mark & Estimate Software So, I have to ask you are you sure you are adding your numbers correctly and/or have you captured all your costs? By time you figure in your productive hours and expenses - retirement, health benefits, equipment maintenance and upgrades, magazine subscriptions, liability insurance, dues, licenses, clip art, etc. you should be around $50 or more. As for the other guys, don't worry about them. See Old Paint's post about Idiots, vinyl cutters... For the record, we have sign shops in the area charging anywhere from $25 - $85 an hour. Our lowest rate is $65 for labor and design averages about $115 per hour depending on the length of the project.
Havin' fun,
Checkers
Posted by Curtis hammond (Member # 2170) on :
I alway say that anyone who charges less becasue they can are taking care of the wrong people. You are NOT doin anyone a favor by charging less.
The customer will not respect you, and your industry peers will not respect you.
It is stupid to not take every dollar you can. It is NOT an advantege if someone has a lower overhead and charges less. Its best to charge within a few bux the highest one around. If they are too low then you must be the highest.
I am among the highest priced in my area and i get work. I am proud to charge high. I turn away work if they try to beg me down to a just a workers wage. Im not gooan work for 10 bux an hour..
Posted by Michael Latham (Member # 4477) on :
I read this with interest. Before I got estimate software and profit watch software from estimate, I was 37.50hr shop rate. Profit watch made me put in all expenses and it shocked me, my rate went to $66hr. After using Estimate for a few months now, I'm busier than ever! I don't quote hourly rate, just put info in estimate and time and complexity and it says...profit. Present this to the customer and I'm running 90 to 95% job retention! Before I was lucky for 50 to 60% people okaying jobs. It's quick and present profesional quote, now I just have to do the work! Posted by jerry jaran (Member # 524) on :
Hi, I did'nt get to my computer yesterday. Well, I still think the cutting srevices are retail. Raising my shop rate including profit to 100 hr. would have me twiddling my thumbs here and the small towns I go to. I'm not totally sure, of course. Concerning the value of a sign, there is'nt anything worth 300 that takes 1 or 2 hrs to do. Unless one says it is . I like to price from a standard to maintain consistancy. I used profitwatch but I have no medical or liability ins. I did input 750 for rent as if I was in a real shop and it came to 17. I bumped it to 25. and divide my materials and time by .6 usually. I am considering getting a 24 in. cutter tho. My 20 in has served me very well since '93. It's amazing how much copy fits 18.5 in. without much waste.
Posted by Mike Pipes (Member # 1573) on :
Jerry,
In the end all that matters is that you have profit, afterall that's the whole point of running a business. If you can manage that at your current rates more power to ya.
The clash here is when you try to outsource to another company that has higher costs than you do, and is also supplying product to other shops in areas where more money is required to operate.
It's all relative. Just because their wholesale rate is the same (or more) than your retail rate doesn't mean they're ripping anyone off. I have no doubt in my mind that there are shops out there that think Gregory's prices are dirt cheap compared to what they would normally charge.
"Value" is also relative. The value IS the absolute highest price the market will bear and that's what you need to focus on, not the shop rate. The value of an item starts with its creator though, so ultimately we are responsible for setting the "going price" on certain things. You can set yourself apart from the pack though and offer design and layout the other places cannot. The customers who appreciate that aspect are willing to pay more for it.
I certainly did not expect a customer to be willing to pay upwards of $500 for a one-off custom jetski graphic kit nor did I ever expect to sell a set of "Mike Lavallee Style Fire" graphics airbrushed on vinyl for $1500.. but I did! These are rare cases, I won't lie about that, but it all started with ME placing that kinda value on my work and it just took someone else to take the bait. Those types of customers are out there, tough to find, yes.. but they're out there.
Posted by jerry jaran (Member # 524) on :
Hi mike, You are right. And those rare cases... I need to finally get a 24 in. cutter tho anyway to avoid my size problem. As if 4 extra inches would that benificial. I just didn't want a seam thru the gold vinyl.
![[Off Topic]](graemlins/offtopic.gif)
![[Confused]](confused.gif)
![[I Don t Know]](graemlins/dunno.gif)
![[Smile]](smile.gif)
![[Applause]](graemlins/applause.gif)