Direct to substrate pricing

[FishnSigns]

Hello All -

We just purchased an HP FB700 - trying to figure out how to price direct to substrate printing. We have a pretty good pricing structure for traditional roll to roll printing/laminating/mounting but this is a whole new ball of wax. I know pricing changes from region to region but any suggestions would be greatly appreciated.

 

[SBTJC]

This is how I price mine. I figure out the time in minutes its going to take to print. Then take my burden rate and figure it out to the minute. Add the sqft cost of substrate and ink, then add the burden cost of the time involved to make the product. Then I pop in my multiplier for qty and profit. So if I have a run of 10 Coroplast I can put on one solid 4x8 sheet, I know it takes for double sided, about 15 minutes total from loading the printer with file to printing then cutting it down. My burden rate is $100 per hour, and I know my ink cost and substrate cost. I calculate it all out and I know how much I HAVE to get to break even on that job. From there its Market and what my multiplier is.

 

[FishnSigns]

Thanks SBTJC! I appreciate the info.

 

[Kevin-shopVOX]

This is how I price mine. I figure out the time in minutes its going to take to print. Then take my burden rate and figure it out to the minute. Add the sqft cost of substrate and ink, then add the burden cost of the time involved to make the product. Then I pop in my multiplier for qty and profit. So if I have a run of 10 Coroplast I can put on one solid 4x8 sheet, I know it takes for double sided, about 15 minutes total from loading the printer with file to printing then cutting it down. My burden rate is $100 per hour, and I know my ink cost and substrate cost. I calculate it all out and I know how much I HAVE to get to break even on that job. From there its Market and what my multiplier is.

Our system does this almost to the tee as you've explained it. Hopefully you are not having to do this every job. The ideal thing would be to be able to just enter size and quantity and be done with it regardless of what you are printing on. Add in all the other good stuff we offer and you've got yourself one heck of a management system.

 

[Tom Dalton]

I don't always include our indirect production costs (burden rate). With some products, I feel like we might have to make that up on our other products. Other products being things we sell other than direct-to-substrate printing. direct-to-substrate printers are too expensive for most sign shops. So, as a result, the direct-to-substrate market is still establishing (to some degree) and we want a piece of it while the pieces are being determined. We've got to be competitive or we won't get the amount of the market that we're going after. We paid cash for the direct to substrate printer. We pay zero rent because we own our building and have a renter in half of it and they pay our mortgage. We've got property tax and utilities, but our other products cover those costs.

So, to remain competitive .. I search high and low for the best retail sq/ft pricing on direct to substrate digital prints. I get roughly 20 sample prices. I then average what the most competitive 3 or 4 companies are getting per sq ft at different quantities and that helps us determine our sq ft pricing at different price levels. I then do the same for our reseller pricing.

That said, there are times where I throw out the lowest competitor and average the others. Occasionally there is one that we just can't compete against. I feel like they are loosing money to get the work. I am aware of our material costs and our labor costs and our overhead and I've got our "ridiculously low absolute minimum" in my mind ...and if a highly visible competitor goes below that number... I won't follow them.

Then, after we found our target pricing.. we made an in-house app. With that app we can plug in the size and number prints and the number of art files and pick the material being printed on and click "retail" or "wholesale" and get our cost. The app uses a dollar amount per square ft and that amount changes with quantity. It also factors in the cost of eack substrate (per sq ft) and the discount if "wholesale" is selected. It also has a multiplier for 2-sided prints. The app spits out a number that puts us right where we want to be relative to our competition. ...BUT, to calibrate that app we started by looking at what prices were readily available from our competitors.

I know you can't totally ignore your "burden rate", but I feel like if you ignore the competition and solely concentrate on your cost and your desired margins... you'll also be making a mistake.

-Tom
Signs Direct