Recently, someone mentioned calling around to competitor's shops to see what their prices are. This is something I've wondered about for years, but never did. Here are some of my contemplations: "Do unto others what you would have them do unto you". But just because I wouldnt mind, doesn't mean somebody else wouldn't. There are people out there who are aware of things I am not. The honest approach: "Hi I'm Jim with XYZ sign co, I'm doing a survey of prices in the area..." Based on previous conversations with sign people, Those that didn't hang up or laugh 'till it hurt might give inflated figures. Is this price-fixing? My honest motivation is to charge more, often I feel constrained by "what the market will bear". Any comments would be appreciated. Jim D.
Posted by Fred Weiss (Member # 3662) on :
There are lots of ways to learn what the market will bear numbers that have nothing to do with price fixing or pretending to be a prospective buyer.
1. Make friends with other signcrafters in your market or even form a local association. You can talk all you want about what this or that should be priced at or has sold for etc. provided there is no discussion designed to reduce competition or fix prices. This type of information has been used for years by realtors and used automobile dealers to get a handle on market value.
2. Track your own closing rate with buyers using variations on material markups or shop rate. If you're closing every sale, you're pricing too low. Only half (or whatever), you're maybe a bit high. I shoot for 75% myself.
There are lots of other benefits to socializing with your competitors as well which I won't enumerate. But one comes to mind that's worth passing on:
There was an old hand letterer in our area that asked my advice on a particular job quote one time. It was to do a 2 color vinyl job on the doors of a truck. He mainly did 4 x 8's for which he would charge $100 including the board and posts. He figured he was doing just fine if he could do one a day with the $60 he would net.
I gave him my formula which was based on buying the vinyl lettering wholesale and marking it up double, then adding on all time at my shop rate. This would include sales time, time to order and pickup the lettering, and application time. Using my method the job came out to $225.
He went into shock at that since he was thinking of around $75 and I suggested that he put the job at risk by trying my approach. The next day he stopped by, in greater shock. The client had approved the quote.
From that point on, this particular person earned a better living and was not a source for underpriced work in the local market.
Posted by PKing (Member # 337) on :
Other sign shops prices,have NO!effect on mine. THEY know what thier work is worth,and I know what MINE is worth! An educated customer knows "that you get what you pay for" Cutting corners by using inferior products, (hum-drum)design,or placing no value of your time. IS NOT a formula for success. We ALL know what Rent,Phone,Electric,Insurance, Business Lisence,Permits,etc. cost us. SO....The price differance is based on the Quality of work you produce for your customer. And REMEMBER: "a GOOD sign doesn't COST money,It MAKES money" for your customer and YOU!
Hope this helps
Posted by Bruce Bowers (Member # 892) on :
C'mon, Pat...
Couldn't you have squeezed one more overworked cliche in there?
