I wanted to hear from those who do Edge work for other shops that are building their print services. Do you do much of it and is there still a profit in it since you may have to cut profit to resell the work by the end user?
Thanks,
Posted by Rick Sacks (Member # 379) on :
I don't do the Edge prints, but I do buy them from a couple other companies. One place charges me $7.50 per square foot with a $75 set up fee, and the other get around $8 without any fees. This is for four color printing contour cut with a clear coat.
Posted by Raymond Chapman (Member # 361) on :
Until I get my own Edge I have been subbing out the work to other folks here on the BB. Most of my Edge work is one of the parts of a larger project (pictorials, airbrush type logos, etc.)rather than just single short run decal type jobs.
Presently I am just doubling my cost and adding it in to the total of the sign. So far I have been providing the artwork and that is figured at my regular design rate. At some point when my outlay to others equals the payment on a new Edge I will take the plunge. Soon. Very soon.
I know that wasn't an answer to the original question, but hopefully, the people selling to me are making a buck or two....otherwise, why would they be doing it? If you are planning on doing work for other shops, why would you charge less for your service since you are doing the same amount of labor and using the same amount of materials. Granted, you are not having to deal with the customer and possibly not having to do any design, but that can be extracted from your pricing formula. Certainly I don't expect those who are doing work for me to be making less than if they were working for the general public.
[ May 18, 2002, 11:04 AM: Message edited by: Raymond Chapman ]
Posted by Mike Pipes (Member # 1573) on :
Well here's another take on it, kinda adding to what Raymond mentioned..
If someone is going to offer edge printing or any other service to the trade at wholesale, they need to establish a retail price (ie: MSRP) then back off that amount to make the service worthwhile to attract wholesale customers while still making a profit for themselves. It's then up to the customer to set their price, whether they set it above or below the suggested retail price is up to them.
The wholesaler needs to be charging a retail price to the general public that still allows them to make a profit after they cut the price for the wholesale customer. If the wholesaler is actually selling their retail goods to the general public at a wholesale rate, they're going to have a tough time making provisions for wholesale customers, or maybe they simply wont make provisions and just sell wholesale to everyone (as is the case with postcardpress).
Also keep in mind there is no set "wholesale price" on anything. One shop might be running on a pretty tight margin and only give ya 10% off retail.. another shop might be running on a pretty steep margin and give ya 50% off retail.. another shop may not offer a wholesale price at all although if they're like postcardpress they dont need to cause their price is cheap enough as-is.
Either way you look at it, if the wholesaler isnt charging enough to make a profit it's their problem, and to anyone that's considered doing "wholesale" work but hasnt because they dont think they can make profit, you don't have to give it away. Discount it 10 or 20% off retail.
Posted by Stephen Deveau (Member # 1305) on :
Raymond and Mike....
I like your set up (Ideas) on the out-sourcing of the Edge work..
As People in this business I think that (Others Supplying) for us that don't own this system.
To allow a addtional discount for the materials that you supply.
Sure many shops will give the break of Sq. Ft. cost, but on their supplied materials..
I am nothing less that a 3-M fan!!!
Seen the others and this is the choice of myself..
I believe that if I supply it! (Bought fresh from the market!) I will back to warranty of the product.
I have dealt with some companies that told myself if I use inhouse product.. It will save and gain myself money.
Naaaaaaaa!
Knowing the medias' that I like,I perfer it this way, and not theirs.
So to me 30%-35% discount on image printing if (I have all raw marerials needed.)
Posted by Chuck Gallagher (Member # 69) on :
Thanks for the comments Rick, Raymond and Stephen, but I'd still like to hear from anyone else that does this type of work for the other shops. Matter of fact I'd like to talk to you hear if possible! Or even email a few times. Mike, your answer was well written.
Thanks!
[ May 18, 2002, 07:31 PM: Message edited by: Chuck Gallagher ]
Posted by Checkers (Member # 63) on :
Hiya Chuck, The last shop that I worked for that had an Edge II did a fair amount of wholesale work. It improved our bottom line by increasing efficency, because we spent more time working and less time trying to get work. Also, since we were doing more work, we were able to buy larger quantities of materials & receive better discounts from our suppliers. I wasn't an easy decision to buy the machine. We purchased our prints from another shop for a while. Once we were buying & reselling enough graphics to make the monthly payment, we dove in. . . one of the smartest & luckiest moves we've ever made. Within 3 months of having that machine, it paid for itself by generating new business that we wouldn't have had without it. We also found ourselves using it on more jobs that would have taken longer with other applications. We were very lucky when we bought the Edge II. A lot of jobs came to us just at the right time. If we bought it even 3 months sooner or later, I probably would be telling you a different story. Havin' fun, Checkers
Posted by Glenn Taylor (Member # 162) on :
Along Mike's comments, one of the things I do in determining a wholesale rate was to look at the larger print houses like Gregory and Ad Graphics.
One of the mistakes a local shop makes when first setting up a wholesale rate is that they quickly learn that their retail rate is too low in the first place. In other words, they find that they had been charging their retail prices at a wholesale level.
A shop that decides to getting into wholesaling needs to make a fair profit and so does their customer. They buyer should be able to sell the prints at somewhere between 20 and 40% above cost. But, if the Wholesaler had been selling the prints at only a 20% margin, they aren't going to be able do well as a wholesaler.
Time to crunch some numbers.
Lets take a job I did not too long ago. The customer had a one up 36"x18" 3 color job on cast vinyl. The customer sent me an AI file via e-mail. If he had been one of my retail customers, the job would have sold for $147.00. My net profit would have been 53%. Since I wholesaled it, I discounted it $58.80 or 40%. I still made a 22% net profit.
[ May 19, 2002, 12:26 AM: Message edited by: Glenn Taylor ]
Posted by Doug Allan (Member # 2247) on :
I bought edge work from another shop for 3 years before buying my own machine. I paid $12/sq. ft. & still was able to double that quite often. I always did most of the set-up of image & cut files to size, as well as dealing with my customer & travel to pick up the prints.
Now I do some wholesale work & I charge the same thing. I also don't weed & tape a lot of wholesale work since the other shops can do that.
I still charge twice that on retail work when I can. Sometimes more.
The advantage I see in the wholesale work besides those already mentioned is that repeat customers are usually the least hassle in terms of sales, consultations, file prep. & all non-productive time that often occurs dealing with one time customers.
Posted by Mike Pipes (Member # 1573) on :
quote:Originally posted by Glenn Taylor: Lets take a job I did not too long ago. The customer had a one up 36"x18" 3 color job on cast vinyl. The customer sent me an AI file via e-mail. If he had been one of my retail customers, the job would have sold for $147.00. My net profit would have been 53%. Since I wholesaled it, I discounted it $58.80 or 40%. I still made a 22% net profit.
Glenn, let me ask you this.. just posing a question, no other malicious intentions here.. You stated right there you made less profit on the wholesale job. Do you feel the 22% you did make is an adequate amount? Is the probability of more volume of work from wholesale customers worth taking the cut off the retail price? I'm only asking this because it goes back to that question:
"Why offer wholesale work at a discounted price when you can make more doing the same job at retail?"
Obviously you feel the profit margin on *your* wholesale work is still worth it otherwise you wouldnt offer it, or the increased volume makes up for it? Maybe it's having that business contact that can lead to other types of jobs in the future?
Posted by Glenn Taylor (Member # 162) on :
Good question, Mike.
The 22% profit is the percentage I make after all expenses (i.e. - overhead, material, payroll, and pro-rated wear). Most businesses I know would be jumping for joy at 22% net.
So why do I do it? Why does Stouse? Volume. Because I buy more material than most shops, vendors give me a lower rate than the norm. This translates into "unrecorded" additional profits that help cover the business and survive during lean times.
Secondly, I have to spend less time with the client. Retail clients tend to waste a lot of un-billable hours whereas wholesale clients don't. This allows me to turn my money faster. And the faster I can turn it, the more money in my pocket at the end of the year.
It also expands my customer base and helps the business not experience some of the more severe ups and downs of the economy.
[ May 19, 2002, 04:39 PM: Message edited by: Glenn Taylor ]
Posted by Chuck Peterson (Member # 70) on :
I do Edge printing for a few shops in my area. I have a minimum to cover my setup, since I'm not getting Gerber plot files but EPS or whatever, and the cost depends on how many colors and how many feet. I give 33% off of my regular prices to these customers, only because they are doing the selling and setting up the file. I just print. If I figure it by the hour I should be making the same amount retail or wholesale. My point is the only reason for having a wholesale price is because I'm spending less time. On my own jobs I tend to make design changes, fine tuning as I work. I (usually) won't do this with wholesale customer's files. To answer your question, I probably spend 4 to 5 hours a week on wholesale edge (Edge 1) work, and yes, there is profit in it.
![[Smile]](smile.gif)
You stated right there you made less profit on the wholesale job. Do you feel the 22% you did make is an adequate amount? Is the probability of more volume of work from wholesale customers worth taking the cut off the retail price? I'm only asking this because it goes back to that question: