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Hi guys, We were just surfing ebay and saw some magnetic signs, all were going for about $25 to $35 a set for 12 x 24"s. Of course they werent that great looking, but then we saw some nice cutout ones, with decent designs and they also were cheap. Now we are all for free enterprise, but we just want to know how they can make any money at that price. The materials arent cheap, and the product should be worth more. A nice 10oz. banner, 4'x 8' was $49.00 with artwork.(no reserve on these items). A 4x8' MDO standard price here starts about 200-250. Banner material is cheaper but should be similar in price, right?We are in the Midwest and we sold magnetics for $50 set, 10 years ago. Do you feel this is a smart way to sell a product, I've always felt cheap isn't the thing to sell, but quality, and service is. I did have one customer try one of those on ebay and they were not satisfied and ended up coming here for a more expensive sign, and left happy. Lets hear it!
-------------------- Tom & Kathy Durham Weber Hill Signs House Springs, Mo. 63051 636-671-4676 Posts: 11 | From: House Springs, Mo. | Registered: Mar 2003
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posted
To make a point, let me play Devil's Advocate here.
Offers like these are serving a legitimate market just as you and the rest of us are. Lots of buyers want the lowest cost solution they can get. The main cost of those mags is labor. The blanks are worth $4 to $5 and 4 feet of IP is about $1.20. If I can teach a high school kid to bang out the setup, own a high speed plotter, the labor here will come in around $7 or $8 a pair tops.
So my cost is about $12 to $14 for no brainer text on a piece of mag sheet. It isn't a sign, it's just some text on a piece of mag sheet. If I average $30 a pair, the gross margin is $16 to $18. If I do volume .... let's say 100 pairs a day I have a paltry $1600 to $1800 a day after I pay my supplier and my help.
There's a lot to be said for getting satisfaction from one's craft ..... but on the other hand ....
[ April 04, 2003, 11:56 PM: Message edited by: Fred Weiss ]
-------------------- Fred Weiss Allied Computer Graphics, Inc. 4620 Lake Worth Road Lake Worth, FL 33463 561 649-6300 allcompu@allcompu.com Posts: 427 | From: Lake Worth, Florida | Registered: Feb 2003
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""Good judgment comes from experience; and a lot of that comes from bad judgment" - Will Rogers Posts: 3506 | From: Beautiful Newaygo, Michigan | Registered: Mar 2003
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Fred, you forgot the cost of having it on Ebay. You have to pay an 'insertion' fee for anything listed and then a percentage of the final selling price. So, you'll have to subtract a few more bucks from your profit, then you'll probably have to ship it somewhere, so take a few more bucks off for that while you're at it too. Suddenly, your $16-$18 gross margin is going to be $10-$12.
-------------------- Mike Murray Murray Signs Freeport IL Posts: 193 | From: Freeport IL USA | Registered: May 1999
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It's not a question of selling cheap. If someone wants cheap and you can make money then sell them cheap. Sure I prefer to sell quality and service but not everyone can afford the price that it comes at.
It really does come down to selling all three (Cheap, Quality, Price) and knowing when and where to sell each.
I have to agree with Fred. If I could find a market to sell crap and pull down a $1,000 a day I would jump at the chance.
Im in business to make money and I'll do it anyway I can so long as its legal and I can sleep with a clear concious.
-------------------- Bob Stephens Skywatch Signs Zephyrhills, FL
quote:Originally posted by Mike Murray: Fred, you forgot the cost of having it on Ebay. You have to pay an 'insertion' fee for anything listed and then a percentage of the final selling price. So, you'll have to subtract a few more bucks from your profit, then you'll probably have to ship it somewhere, so take a few more bucks off for that while you're at it too. Suddenly, your $16-$18 gross margin is going to be $10-$12.
I did refer to Gross Margin. There is always other expense to put against sales and the E-Bay fee would be appropriate. Not sure what it is but Yahoo, for example charges .5% and 3.5% if their link is tracked to the sale. So yes, there's another two or three dollars in this example before I get to a bottom line for sales expense and overhead.
Shipping costs ..... I have not looked at the E-Bay example originally referenced are usually passed on to the buyer along with a small amount extra for shipping materials and labor.
I love creating and seeing praise in the eyes of my customer ..... but I wouldn't turn down a bottom line of $5000 to $6000 a week in my pocket no matter how mundane the output was. There are other times and ways to be creative.
-------------------- Fred Weiss Allied Computer Graphics, Inc. 4620 Lake Worth Road Lake Worth, FL 33463 561 649-6300 allcompu@allcompu.com Posts: 427 | From: Lake Worth, Florida | Registered: Feb 2003
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Do a little test. Save the guy's eBay name, and check back in six months to see if he's still selling magnetics. I bet he won't be around that long. I've watched these items before out of curiosity, and I've yet to see anyone bid on these. I may have missed a few, but unless he is selling MANY pairs of magnetics a week, he won't make a dime. eBay gives everyone an equal chance to lose their shirt!
-------------------- Tim Whitcher Adrian, MI Posts: 1546 | From: Adrian, MI | Registered: Mar 1999
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Sorry to disagree, but we have been selling banners,mag signs and window signs on ebay for 9 months so far and going strong! We have noticed many people come and go and perhaps those are the lower quality signs, however we have so many repeat customers stating they cannot believe our quality and are very impressed. We have had so many people compare ours to others who bought theirs at "signstores" only to find ours are actually a higher quality and much better product. As far as bottom line, we get a set of mag signs for $3 and do the labor ourselves vinyl costs less then .50 ( we do use premium rated vinyl). Total cost is $3.50, I do not count the cost of ebay as in the cost of the sign, beacuse to me that's under advertising, we do no other advertising except ebay and that is much cheaper! We do recieve other work off of ebay also,people wanting something different or maybe add additional colors, etc. We do graphics also if requested not just text. I wouldn't suggest it to many people as ebay can be quite frustrating, but for us its great!
posted
they must be tiny magnetics and only one color...i pay 165.00 for a 24"-50 yd roll, so that's a 1.10/ per ft(2' x 1') just in vinyl times 2 plus magnetic cost..i wouldn't dream of doing a set of normal size magnetics for less than $95...but than again that's not the clientele i want to service..but hey power to ya!
-------------------- Karyn Bush Simply Not Ordinary, LLC Bartlett, NH 603-383-9955 www.snosigns.com info@snosigns.com Posts: 3516 | From: Bartlett, NH USA | Registered: Jan 2001
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There's just a nice satisfaction about knowing that we get at minimum of $90 for a pair of quickies while others are doin 3 times the amount of work for the same money.
One day you'll finally get it and realize your only hurting yourself, meanwhile screwing your competitors because of your stupidity.
-------------------- Bruce Evans Crown Graphics Chino, CA graphics@westcoach.net Posts: 913 | From: Chino, CA | Registered: Nov 1998
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Last I checked, high performance cast vinyl runs around $5.00 a yard. Two 12 x 24 pieces of magnetic material: $6.00. The ability to make a decent middle class living: priceless. No matter how you slice it, if you PROFITED (not "sold for") $40.00 a pair, you would need to sell ONE THOUSAND PAIRS to make $40,000.00 a year..... that's a lot of layout, weeding, sticking, packing, invoicing, bookkeeping, eBay listing, etc. If you worked 365 days a year, eight hours a day, you would need to layout, email, get approval/payment, make the signs, package, ship and invoice THREE PAIR OF MAGNETICS A DAY. Have fun!
-------------------- Tim Whitcher Adrian, MI Posts: 1546 | From: Adrian, MI | Registered: Mar 1999
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1. Cast vinyl on mags is a waste of money. The mag sheet has less of a life than standard calendared vinyls.
2. $40 a pair is a basic, basic text on mag sheet sign. It is also a starting point to upsell.
3. Some of you should shop around for materials. A one roll quantity of .030" 24 x 50 mag sheet sells for $115 ($1.15 per sq. ft.). 15" x 50 yd cast vinyl now ranges from just over $100 to just over $200. Calendared is widely available for $40. Counting only 12" usable from a 15" roll that puts cast at 67¢ to $1.35 depending on brand and supplier. Calendared is 27¢ a foot.
4. Using calendared for a pair of 12 x 24's (4 sq. ft) I come up with $4.60 in mag sheet and $1.08 for vinyl and another 40¢ for transfer paper. Total materials $6.08.
5. Shipping and handling is always charged for separately and either breaks even or is a profit center.
6. Gross profit therefore is $40 - 6.08 = 33.92 per pair. 4 pairs a day (1000 pairs a year on a five day week) = $135.68 a day ($33,920 a year).
7. Labor and miscellaneous to manufacture 4 pairs a day = 2 to 3 hours with apprentice class help = $30.00.
8. Time, materials and miscellaneous for 4 pairs = $54.32. Transaction profit before overhead = $105.68. Markup (160 / 54.32) = 295% which is better than most retailers or manufacturers average. Profit margin based on selling price is 66%. Annual gross profit before overhead = $26,420. Profit per manhour = $35.23.
9. Upselling and additional related business not counted into projection.
10. Your role is supervisory in this projection so at 4 pairs a day it would rate as a nice profit center but not a living. Add $7,500 a year if, in fact, you do make the signs yourself.
To those who feel this is hurtful to the industry, the argument is moot. The problem isn't independent operators on e-bay .... the problem is major sellers like Office Depot who make the same of similar offerings along with on the shelf consumer solutions that all serve to siphon work out of your business and mine. They aren't going to go away.
E-bay and sign stores on the internet are a logical response for signmakers to generate business in a world where the rules of marketing are changing.
-------------------- Fred Weiss Allied Computer Graphics, Inc. 4620 Lake Worth Road Lake Worth, FL 33463 561 649-6300 allcompu@allcompu.com Posts: 427 | From: Lake Worth, Florida | Registered: Feb 2003
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I would think selling, laying out, manufacturing and mailing three pair of magnetics a day would be pretty difficult on eBay; actually, I know it's impossible unless your help works for $3.00 an hour. I can make a $350.00 sign in the same amount of time (remember, time is money, and I'm sure not going to spend even 30 minutes of my time making a $40.00 sale). And shipping costs more than just what you pay UPS. Packing materials and TIME packing items COSTS MONEY. As for gaining more business, I don't really care about selling more CHEAP signs to CHEAP customers. You can't make a pair of magnetics fast enough at $40.00 a pair to make a decent living, or even $50.00 banners, or $8.00 "Calvins". If you think you can, go for it! I sell a pair of magnetics for $99.00, and consider it a "loss leader". If I never sold another pair, it would be too soon.
-------------------- Tim Whitcher Adrian, MI Posts: 1546 | From: Adrian, MI | Registered: Mar 1999
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Tim, I don't sell $40 mags either and am just doing a projection. But I have seen over the years that marketing can be the most expensive thing one does and a lack of adequate marketing can also be the biggest problem in having a stable or growing business.
One never knows where a good client is going to come from though, so I try not to prejudge. One of our best clients at the present time came to us over the internet for a simple Edge print of his logo. I think the total order was just under $50. If we made anything it wasn't enough to justify it on it's own. But at this point, the client sends me files all set to run, orders regularly and has an average invoice of around $700.
-------------------- Fred Weiss Allied Computer Graphics, Inc. 4620 Lake Worth Road Lake Worth, FL 33463 561 649-6300 allcompu@allcompu.com Posts: 427 | From: Lake Worth, Florida | Registered: Feb 2003
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