posted
Good question. I was talking to a competitor of mine about this. He said he'd charge full price and give the guy a 10% commission. Meaning if the job sold for 1,000 you would get 900 and he'd get 100. It sounded harsh to me at first, but what it comes down to is otherwise your competitor is able to offer the same services you can with investing in the equipment. A different competitor asked me to CNC route a sheet of polycarbonate the other day. He supplied the art and the material. I had to charge him $300 just to run it otherwise, I'd just become his router table and he's made no investment. That's my thoughts on it.
-------------------- Mark Rogan The Great Barrington Sign Company 2 Stilwell Street, Great Barrington, MA 01230 mark@gbsignco.com
"Sometimes I think my head is so big because it is so full of fonts" Posts: 332 | From: Great Barrington, MA | Registered: Mar 2003
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I'm sure I could start a huge argument here but here's my two cents:
We do Edge printing and have a good location in a retail center. We offer Edge printing to other shops at 33% below what we would retail it for based on either a simple setup or the other shop providing the file to be printed.
We've been doing this for three years in our current location and have yet to see a lost job or client as a result. Our wholesale sales typically make up 25% to 40% of what we do each month.
The benefits are:
1. Added volume from jobs I would otherwise never be asked to bid on .... that my customer would just take to another Edge owner.
2. Added volume in the most efficient and profitable part of my business.
3. Friendships and positive relationships that otherwise would not exist.
I personally think a sales commission size discount is shortsighted and will not cause, in most instances, you being provided an opportunity to bid on the same job. If it did then that's another issue and would be a problem. But the chances are that sign will be produced by somebody and sold by the guy that contacted you .... who isn't a sales rep but another sign maker with overhead and more time in the job than just getting it sold.
-------------------- 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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Hi Wayne, The similar subject of subbing out wholesale services came up a couple weeks ago. In that case the persom was asked to blast someone else's material and all I could see were potential problems. Even building the whole sign is risky because you are too insulated from the end buyer and don't know their expectations. There are national wholesalers who can make a better profit than you can, at an even lower selling price. Without even addressing the issue of enabling them to undercut you, suppose you take the job and all goes well - the extension of that is he'll send you more work. You sell one job at $100 less than your usual price today. Next week you do it again, then two times the following week, cuz it's working out so well. Eventually you get too busy to keep up with your regular customers who pay full price. You could wake up one morning realizing you're working just as hard but bringing in $2000 LESS per month. Then what happens if you ruin a job? If there's not a proper profit in it already, how can you recover? more wholesale work? It's a tough way to make a living. Saps the fun right out.
SONGPAINTER Original Sign Music by Sign People NOW AVAILABLE on CD and the proceeds go to Letterville's favorite charity! Click Here for Sound Clips! Posts: 1974 | From: Orleans, MA, Cape Cod, USA | Registered: Nov 1998
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Strangely enough....... We're wholesale only. All of our clients are Architects, Generals and Corporate Offices. We also work for a number of sign companys who come to us for really odd or unusual applications for signage. Over the years I've noted that they markup our schtuff from a 40% minimum to a full 250%. We depend on volume and large contract projects. One of our clients is a camper manufacturer. Every time a fax comes from them it's another $2,000 plus in applique orders. They do a 60% markup to their distributors.
k31
-------------------- Pierre St.Marie Stmariegraphics Kalispell,Mt www.stmariegraphics.com ------------------ Plan on knowing everything before I die and time's running out! Posts: 4223 | From: Kalispell,Mt 59903 | Registered: Mar 2000
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I will wholesale to anyone under certain circumstances. I get a finished vector file, and I use my materials. I encourage sign shops to be involved with the project. They do the design and all the finishing. If something goes wrong with the paint, not my problem. I don't have to worry about design changes, matching colors, installation, getting paid, or other peoples weird substrates.
When the other shop is doing the design and finishing, there's plenty of money in it for them and I can charge my full price for the portion of the work I'm doing.
If they want me to design & produce a completed sign, I charge full price. They can add a "sales commission" if they want to.
quote:I can understand that they are selling the job and supplying the "cut ready" file but what is a fair percentage?
Fred, by "cut ready" file i mean that I acknowledge the fact that they are expending some measure of computer time as well as selling time on the project. For that reason, and according to the sq footage involved, the other sign man would have a cut of about $155 on this project. He has told me that he is working out of his house. I realize that he may have more overhead than meets the eye but you have to also look at it from the maunfacturer's perspective(in this case, me).
Granted, they have to spend time designing the artwork, whatever that may turn out to be. They produce a vector file on their home computer....what....two, three hours time? I don't know. Email it to me or bring the disk. IF the file is useable without any need for modification or manipulation on my part, THEN all I have to do is load the file into my program scale it draw out the shape of the blank with my plotter (which will one day need replacing)I can do ALL of this by hand too BTW transfer it to the raw substrate cut it out with a $140 bayonet saw (way past waranty) (wearing out a blade in the process) sand/true the edges with a $250 machine(which will also have to be replaced but saves time and labor) wearing out a drum sleeve rout the edges with my old router(won't last forever) and an expensive carbide cutter blade sand the surfaces with a $60 jitterbug wear out a sanding disk, (and the jitterbug) blow the thing off with air using a $1400 air compressor( which, as everything above, uses electricity), $25 hose, $4 nozzle, $6 inline filter (keeps compressor oil, water contaminants off the substrate and has to be periodically replaced)
During all of this, it's wise to use a respirator mask(bout $25 plus cartridges, which also have to be periodically replaced)
spray the thing with expensive primer(and $1400 air compressor, blah blah) clean paitn gun with thinner or , in this case, water. either way costs money sand with lots of expensive sandpaper and dust it off thoroughly (need respirator mask again)
Spray with topcoat(wear respirator again) use compressor and spraygun, and disposable filter again. clean paint gun again
take a rest and let dry
drag out the sandblaster hose and $1300 respirator to save lungs (irreplaceable and way past waranty) use $1400 air compressor, $400 sandblaster(worn out and fast headed for retirement, will need replacing soon) sand(has to be bought), electricity, not to mention sandblast stencil, application tape to put it on with. Nozzles(cost me money) new valve parts for the sandblaster replaceable face shields for the respirator hood
Then, the other 3 colors( which I will probably end up mixing myself) have to be hand painted with brushes(cost money)
All of this (and I'm sure I left out a lot more little but necessary things which add up) and don't forget the clock is ticking on the monthly shop mortgage(or rent if you prefer), liability insurance, taxes, phone bills, office air conditioner(essential in Florida during summer and drinks electricity) Not to mention software, office supplies etcetera.
I almost forgot to mention another cost....TIME. Which I have incidently just wasted alot of.
But who's doing the work and who's got the "overhead" here?
Look I'm fully aware that other guy needs to be paid for his computer and selling time(which by his so doing will relieve me of that resposibility) but I still have to be compensated for at least attempting to do an above average job, using all the aforementioned stuff. Who's inhaling silica sand, HDU dust, paint fumes and sawdust? If I am willing to do an exceptional, jam up job on your sign, why should I try to beat the price of someone who might just be doing a devil-may-care job? Or risk my health on cheap wages for someone else?
I tend to lean toward doing along the lines of Dave's, Mark's and Joe's advice. I would even CONSIDER... MAYBE... matching the higher of the guy's two other quotes. But I refuse to undercut either of them. This kind of work is just way too costly and time consuming and I just can't make myself do a quick, sloppy, careless, throw-together job just to get it out the door and make a quick buck (not implying than ANY of you guys do) Please NO, don't take it that way But some do. I can see that there's nothing wrong with selling or buying wholesale and Fred's and Pierre's advice is sound as well. I just don't know if that's the direction that's right for me right now. If I can find the capability to set up to mass produce, so to speak, do work in volume while still maintaining quality control, that's a possibility. It might even end up being a must in the end. I had already thought about selling wholesale over the internet, etc.
Like I said, I would consider doing it, and would do my best. But I will deny that I ever saw it.... unless the design looks good.
Goodnight Y'all, I'm going to bed now!
[ July 19, 2003, 03:08 AM: Message edited by: Wayne Webb ]
-------------------- Wayne Webb Webb Signworks Chipley, FL 850.638.9329 wayne@webbsignworks.com Posts: 7405 | From: Chipley,Florida,United States | Registered: Oct 1999
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