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What formula do you use to quote a job?
- Thread starter Lau Designs
- Start date
bob
It's better to have two hands than one glove.
You just keep telling yourself that. Perhaps if you say it often enough you'll actually believe it or maybe get someone else to believe it.
Signs are indeed a commodity. At least they are in my shop. I have no spiritual or aesthetic connection to any sign I might do. It's just a sign. It's a job. It's something I do for money. There is no component of self-expression. It's just a sign. It's pretty much the same price whether it says 'No Parking' or is something worthy of hanging in the Louvre. Same materials, same size, same price. A commodity.
Mark Smith
New Member
Malkin
New Member
They can, in fact, be either.
Whether or not a sign is a simple commodity is a distinction that entirely rests in the customer's mind. Sometimes it is to our benefit to extol the virtues of a custom designed sign that will enhance their business. Sometimes, all they want is a No Parking sign that would be much the same anywhere.
Whether or not a sign is a simple commodity is a distinction that entirely rests in the customer's mind. Sometimes it is to our benefit to extol the virtues of a custom designed sign that will enhance their business. Sometimes, all they want is a No Parking sign that would be much the same anywhere.
binki
New Member
We never, ever, ever, ever price on cost. we price on value to the customers. some jobs have a small margin, 10% or less and others have a large one, up to about 80%.
There is no simple answer and at the risk of giving one that is wrong, here you go: If you give your customer an price and he walks, you are too high. If he bites right away, you are too low. If he thinks about it and then buys or negotiates, you are probably just right.
Now, that does not mean you charge the same price for the same item for everyone.
There is a theory in economics of elastic and inelastic demand. Customers that have elastic demand (don't need it now) can command a lower price, those that have an inelastic demand will fetch a higher price for you.
Other examples I have seen are with printed and cut vinyl banners. We charge 50% more for printed banners because the value is there to the customer. The same with embroidery over screen printing. Embroidery has a higher value to the customer and is perceived as a premium product.
Customers should also be classified. A simple classification is A through D. A customers get the best pricing and terms, D gets the highest price and pays cash in advance. Customers earn the spots. When push comes to shove and you need to trim customers then the D's go out the door.
Here is an example. Corporate customer that buys several banners a month from you gets pricing at $X/sq ft and payment on pickup. Soccer team needs a team banner and gets $X + premium and pays in advance. All else being equal each one got value and paid a price appropriate for what they want and you didn't leave money on the table.
And the latter can be bought at Home Depot for pennies--my point is you position your business to pursue jobs which cannot be commodities, otherwise sooner or later someone else will eat your lunch and you'll be back to square one. Take the commodity jobs that fall in your lap but build your brand for work which has a higher perceived value. Otherwise a national will walk in and eat you or a former employee will clone your shop equipment and bid you out of town, etc.
The only thing a competitor can't steal or copy is you so figure out what it is that makes you better and position yourself around that. Usually in this industry that will be service or design, price wars are a necessary evil but not something to build around as anyone can be the low bidder. Once you're big enough to have equipment out of reach for most competitors the math changes a bit but most shops are easily cloned for early six figures or less, hardly a high entrance barrier. Many cut vinyl only shops you can clone for low five, hundreds if you're hungry!
Anecdote: I have a friend who bought a used friction plotter for a few hundred bucks and cut vinyl at the racetrack out of his car, stole the business of shops with decades in the area because they had only positioned themselves on price and he offered low price with more convenience (on site cutting). If you only chase customers who only care about price, someone else will eat your lunch--it's just a matter of time. This is true in every industry and isn't just "sign industry" advice.
threeputt
New Member
You can't sell something you don't own. (legally, anyway)
Unless you're going to tell me you have some sort of contract with the client that obligates him to buy from you, you can't sell "him" or the "relationship" you have with him.
He's free to buy from anyone he pleases. (again, in the absence of an agreement)
TheSellOut
New Member
Bob, that might be the most ignorant thing I have ever seen you post!
You just keep telling yourself that. Perhaps if you say it often enough you'll actually believe it, but you will never get me to believe it.
True that, but I could sell years worth of files that I do own.
bob
It's better to have two hands than one glove.
Perhaps. So enlighten me. What fact, if I were in possession of, would cause me to feel otherwise?
Signs is signs. Letters and possibly decorations arranged on a substrate. Not anything for which I have anything resembling an emotional attachment. Whatever is is, no matter how well it's done, it remains just a sign.
That it's handcrafted work, or not, that I might execute it in my own special way, is not germane. No matter how special you might feel it is, it's not. It's just a sign. A commodity.
signmeup
New Member
Nice try bob.
"A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market."
Consider the humble beer. Beer is beer you say? No. Beer is a diverse and varied product that can sell for whatever the maker can convince you it's worth. I don't remember the price of beer skyrocketing because there was a blowout on a major beer well.(Mmmmmmmm......beer well......) Same with signs. There has never been a sign shortage because the sign mine collapsed or a giant drop in sign prices following a major discovery of untouched signs in the high Artic.
Maybe a good rule of thumb would be, if you can trade it on the stock market it's a comodity. If not it's something else.
"A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market."
Consider the humble beer. Beer is beer you say? No. Beer is a diverse and varied product that can sell for whatever the maker can convince you it's worth. I don't remember the price of beer skyrocketing because there was a blowout on a major beer well.(Mmmmmmmm......beer well......) Same with signs. There has never been a sign shortage because the sign mine collapsed or a giant drop in sign prices following a major discovery of untouched signs in the high Artic.
Maybe a good rule of thumb would be, if you can trade it on the stock market it's a comodity. If not it's something else.
bob
It's better to have two hands than one glove.
Signs are a fungible commodity. One can be substituted for another and maintain identical functionality. It has nothing to do with sign mines, sign quarries, or sign farms. It has to do with fungibility.
You have the cart before the horse. Is something a commodity because it can be traded in an appropriate market or can something be traded in an appropriate market because it is a commodity? I should think the smart money would be on the latter.
signmeup
New Member
(goon babble deleted)
So bob, A sign painted in the dark by a blind Parkinson's sufferer would fetch the same price as one meticulously painted by a master? Same fuctionality and materials...... Heck, they're down right fungible!
We're not talking about fuctionality here. We're talking about getting paid for doing a quality job. Making our signs better than the run of the mill....not making/pricing them as if they were commodities. Try to follow along as best you can.
bob
It's better to have two hands than one glove.
Goon babble eh? Which word didn't you understand?
Are you deliberately obtuse or is it that you just can't help yourself? Two signs, perhaps saying "John's Cleaners", that are equally legible, typographically correct, and durable are functionally identical. You might think that one says "John's Cleaners" with more skill and grace than another but that's merely your rather subjective sense of aesthetics. Both are functionally interchangeable. The both serve to identify John's cleaners, which is why they exist.
Assuming like materials, typography, and workmanship, how do you tell a quality sign from a lesser effort?
signmeup
New Member
Here is an interesting quote from bob on another thread. Seems like bob does think some signs are worth more than others and that they are not merely a commodity:
"If you can't see the difference in layout, execution, and resulting elegance between something cranked out on a computer and work by a journeyman sign writer, you have no business being in this business."
"Signs is signs"................... indeed! Sounds like there is a component of self expression and just a little pride in that last quote.
bob
It's better to have two hands than one glove.
Excuse me there sport but where did I say that one was worth more than another or even intimate that they are anything but a commodity?
This week in particular there has been of spate of jobs come into my shop where the client has laid out the work exactly as it's supposed to be. Each and every one was ghastly, nephew art all. Fine by me, they'll just never know what they could of had for exactly the same price.
If you detect self-expression and/or pride beyond doing something well in anything I might say, you need to send your detector out for a tune-up. Nor has anything I've said gainsay that I enjoy what I do. Whether or not something is accomplished in a journeyman-like manner and that accomplishment is an enjoyable experience has nothing whatsoever to do with it's status as a commodity.
This debate has become fruitless but just because you choose to treat something as a commodity doesn't make it one. The original point is that price is a comparative advantage, not a competitive advantage. Maybe you're in a tiny burg where you can compete by being the only shop but in a competitive market using price as your market differential is a recipe for disaster.
Anyway that's the last time I'm checking this thread, good topic, bad discussion. Best of luck to everyone
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Anyway that's the last time I'm checking this thread, good topic, bad discussion. Best of luck to everyone
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