How do you charge for waste?

[ColorCrest]

Why would them knowing the cost of a base material matter 1 iota to your pricing structure?

In my case it’s simply because of the competitive bid process with sophisticated, long-time buyers who have calculators.

In other cases it may be a new customer who is shopping vehicle-wraps and comparing quotes. His first peddler could have said; “My cost for x-brand, x-year vinyl is $xxx.xx.” Even that so-called knowledge can affect the price from the next guy for the same competitive reason.

 

[Christian @ Visual Graphx]

In my case it’s simply because of the competitive bid process with sophisticated, long-time buyers who have calculators.

In other cases it may be a new customer who is shopping vehicle-wraps and comparing quotes. His first peddler could have said; “My cost for x-brand, x-year vinyl is $xxx.xx.” Even that so-called knowledge can affect the price from the next guy for the same competitive reason.

That's your problem... You are competing to the lowest common denominator. Compete on value, skill, service, and quality. You are still in a skilled trade and none of your clients would sell below value because you could buy part of their product cheaper

 

[ColorCrest]

That's your problem... You are competing to the lowest common denominator. Compete on value, skill, service, and quality. You are still in a skilled trade and none of your clients would sell below value because you could buy part of their product cheaper

Would you please help me further to understand what you are trying to help me with, especially as far my problem and my clients selling below value????

 

[Christian @ Visual Graphx]

You are saying that you can't price a markup on the full sheet because your clients know what the commodity cost is. I'm saying you're wrong, you certainly can price the full sheet with whatever your deemed mark up is because the commodity has no bearing on the finished product. If it did your clients wouldn't need to contract you for the finished product because they could do it themselves.

If the commodity cost was the deciding factor on your jobs, you have either undervalued your skill and trade or your clients don't value you. Both are fixable, one is your responsibility and the other is weed out those clients.

 

[mmblarg]

On MDO, full sheet. No one ever comes in for a 24x96 in MDO....

 

[ikarasu]

If you go get your car repaired, they'll charge you 150% for a part. You could go to a O'Reilly's and buy the part for 75% of the price. But you don't...

Mdo may cost you $20. If you charge the customer $20 then your printer drops a big blotch of ink in the mid of the print... You.now have to buy a new $20 4x8, and now your out. Usually we double material cost for small quantities, for large quantities they get a break.

You always mark up... If your competitors dont, then just let them sell for cheap and watch them go out of business in a few months / a year.

You're not going to win every single job. But odds of a job ending up costing you more than you put into it are much lower.

If we can use the pieces for another client without storing them for a year, we may give them a break. If it's deemed waste that we won't ever use, they get charged for it.

 

[Megagrafix]

Our estimating software will identify the percentage of waste. We can then elect to charge for the whole sheet or none of it, meaning the waste, or we can add a percentage to the waste which can be lower/ higher than our full mark up.

 

[NateF]

Most responses here talk about substrate panels, so I'll answer that one first. Our internal pricing lists shows two prices for each substrate - a per-square-foot price and then a full-sheet price. The square-foot price is much higher than the full-sheet price, and depending on the size, we default to the lower number, and then charge for cutting if needed. So a 2' x 3' sign (that we'll make using a drop from a previous job) gets charged at the square foot price, while a 4' x 6' sign would get charged the full-sheet price plus the cut. It works for us, and as others have mentioned, jobs that use the drops are just gravy. If anybody ever orders a bunch of 6" x 96" backlit acrylic signs, I'll make out like a bandit

When it comes to printed media, I've built an average waste factor (25%, if I remember correctly) into our pricing tables. This might not be the most accurate method, but it's pretty close and saves us from the headache of doing it differently on every job. We can nearly always nest jobs together so the waste isn't significant. And since our price reference sheets are only for internal use, we can still charge extra if we're quoting something like a 12" x 120" print on 3M wrapping film.

 

[RBDesign]

Thanks to everyone who responded. I really appreciate it.
Great Info to work with.

What I ended up doing is I priced my MDO separately at 96"x48" and the digital printed vinyl at 71"x48" and came up with a price that I feel will not leave any money on the table and gives me the reassurance that I'm not over charging.

Thanks again everyone!!

--rbd

 

[ColorCrest]

What I ended up doing is I priced my MDO separately at 96"x48" and the digital printed vinyl at 71"x48" and came up with a price that I feel will not leave any money on the table and gives me the reassurance that I'm not over charging.

Awesome you've come to a conclusion. However, if you have the time, what is your rational of using two different methods of the two materials? They both have scrap (or waste, if you prefer). Your customer pays for scrap of one material but not the other? You absorb the costs of one but not the other?

 

[RBDesign]

Sorry about the confusion -- Laminated digital printed vinyl was charged by the linear ft. of 54" wide -- which cover the waste for a 71"x48" print.

Best approach I learned here is:
Cost of 4x8 MDO plus markup
plus
Cost of 71x54 Print & Lam plus markup

This way I don't overcharge for print and I don't undercharge for the MDO board.

 

[ColorCrest]

Sorry about the confusion -- Laminated digital printed vinyl was charged by the linear ft. of 54" wide -- which cover the waste for a 71"x48" print.

Thanks for taking the time. It now appears you have a consistent method and it makes sense to me.