500-600% Markups?????

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framenart

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Albuquerque, NM
OK, So I was out on the web looking at picture framing and ran across a site that offers training for potential picture framers, and was surprised to see the following in the “Profit Picture” of the site. This is a direct copy from their website…….

""Profit Picture
If you've ever purchased custom framing, you may have figured out already that it's a business that offers high profit margins (with markups as high as 500%-600%). It also offers prestige, fun and variety in a business where your creativity and professional opinions are valuable assets to the many appreciative customers whose lives you enrich..""

I have questions….

1. Are any of you working with mark-ups of 500-600%?

2. If so, how’s that working for you?

3. If not, how come this guy is able to say this?
Should we all be attending his school?

4. And what does this say to new folks coming into the business?
Are they expecting to really do this??

5. And what about our customers?
Is this why they think we charge too much??

I’d like to hear from you guys what you think.
 
Well, it's a little like my caning - to do a "blind caning" job, I will have $5.00 of actual materials in a piece that will retail for $300.00. How's that for markup?

Ooops, I forgot, there is the 20+ hours of overhead/shop rate/labor/FICA/Withholding/SUTA.

You'd better be marking anything you "manufacture" up that amount or you're in trouble.

By the way, $3.00 x 500% is only $15.00...

[ 12-28-2005, 08:37 PM: Message edited by: B. Newman ]
 
Oh shoot, I always get the edit icon and the quote icon mixed up!
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Of course they will say such outrageous things. They want to sell the training to a "potentially lucrative profession where the markup is sky high....".

But certainly, there are cases where a markup of %500 is OK, but it is the exception not the rule.

Example:

If you get a good deal on a liner that you buy for $1.50 per ft/length, would you sell it for $4.50?? Or $8-$10??

But otherwise my markup is definitely less than %500 - %600.

And as Ron said, I might be losing money in that case, but I have the prestige.....
 
Originally posted by B. Newman:
Oh shoot, I always get the edit icon and the quote icon mixed up!
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It's worse for a moderator.

I once edited (re: seriously pruned) one of Jim Miller's posts when I meant to quote him.

That probably explains why I didn't get my annual Christmas fruitcake from him this year.
 
Mark up on my art is 1000% on average. My framing is about 300 to 400%. This is all just straight profit and doesn't take into account labor.
In my training, I was also told mark up is 500 to 600%... not where I live!
 
Since this forum is available for anyone to see I wouldn't be posting any of this. I thing posts like this should be made available only to certified members. But maybe I am just being paranoid.
 
I'd be happy to sit down with any customer and show them the cost/overhead/prices and ask "just how much do you make per hour?

A friend of ours (another industry) had a customer who kept griping about the cost and the friend finally said, "Look, this is what it costs me. How much do you think I should make?"
 
If this was such a profitable business then why did I eat leftover hotdogs tonight.

Seriously though, when faced with that kind of crud you have to ignore it.You put your best foot forward, know your community, be true to yourself and your business, buy intelligently,have a business plan and educate your customer. We are not shirt folders or produce stackers. we are craftspeople. We try every day to do the unexpected be artist and good business people
 
Originally posted by Bluewing:
Since this forum is available for anyone to see I wouldn't be posting any of this. I thing posts like this should be made available only to certified members. But maybe I am just being paranoid.
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Umm yeah, i'd say you're paranoid.
 
You don't want to know the markup on the buttons I sell for $1...

"Markup" on things you build is not a hard and fast figure. You may price your matboard to sell at so much per square inch, but you don't get paid for every square inch of it. So your markup gets watered down. So, what may sound like a "high markup" could be a "break-even' markup. There are many other factors in picture framing that are different from straight retail.

Even your basic cheap retail store prices at at least 200% just to make utlities and payroll.
 
Back in the 60s, the "standard" mark-up for glass was 1,000% or 10x.

And you bought your moulding 1,2,5 feet at a time [ that's 100', 200', or 500'] because that is where the minimum, box, and "bulk" breaks were. I remember a certain moulding we bought by the 1,000', stained it and sold it for about $2/ft. The 1,000' cost us about $25.00 landed. or 2.5 cents a foot. So that mark up was well over 600%; more like 8,000%. If all you look at is "raw" COG.

If you look at it from Betty's point... the true cost of the moulding gets a lot closer to a 1-200% at best... rattle can blk.
 
I buy vintage & antique paper collectibles from around the nation & world. These get fitted into either custom made frames or ready-mades, whichever is more economical for me.

If I don't realize 500 - 1000% markup, I'm doing something wrong. Buy low, charge what the market expects to bear for my geographic location. Always have room for a 'sale' price.

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Isn't there a saying...... "figures don't lie......liers figure"

a half truth is nothing new to any salesman from the beginning of time.

As for other industries........ what about the medical drugs? It might cost only $.10 for a pill that sells for $10.00. However, the $100,000,000 in research to develop and bring the drug to marker has to be considered into the cost equasion as well as direct overhead costs that were previously mentioned. Our R&D includes our education and mistakes that we have made over the years.
 
Suanne posted this in the HH, as well and as I see all the posts created, I wonder if she has a good sense of pricing

I wish she would jump back into the discussion and share what her "markups" might be on things like glass or mat board. I suspect she might be just as "surprised" at her own numbers.

In truth, this might be another reason why we need to "know" our numbers and a better reason to use Cost of Goods as a more measureable number (even though we get many that want to "massage" even that figure)

Suanne wants to hear from us, but I would love to hear from her, too. Perhaps if she doesn't have any of these "markups" for her unfinished products, she might want to make the short trip from Albuquerque to Vegas in a few weeks and take a couple of classes from Goltz or Bluestone. I even have one that might help her to not be so "surprised"
 
Thanks for the many comments, interesting that everyone came at it from the framing business perspective…..

What I was trying to get at was the perception of our industry that the consumer may get from statements like this.

Not only do we struggle with the BB’s and their constant 50%, 70% off ads, but here is a picture framing school promoting this “high profit” perception, that ALL THAT PROFIT goes into Mr. Famer’s pocket.

There is an illusion out there that we are a high NET profit business, and I’ve read many posts over the years about how we all struggle to find our place in the business world, how we must justify our prices to the customer, how we feel squeezed by the BB’s, etc.

This Web site is yet another example that propagates this.
 
Originally posted by framenart:
There is an illusion out there that we are a high NET profit business,. . .
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In 39 years I have had not one person say "Wow you have a high NET profit...."

What they do say or infer is "Framing is expensive".

Right up untill I point out what they will keep spending on Tires, Gas, food, movies, clothes, furniture, gardening... oh jeez, dont get me started on gardening....! :eek:

I wanted to make a poster of me holding the nice rice-paper print that I framed about 33 years ago... for about $25, standing next to the $17,000 worth of tires that I have sense thrown on my cars, truckes, (2 sets of 18 wheeler tires) and motorcycles. . . . but the local tire dealer (who now never complains about how much his wife spends in our shop. :D ) wouldn't help me with the stack.

"It would be bad for his business. People might start thinking that tires are expensive.."
 
Suanne's initial post stated 'high profit margin' and 'mark-up'.

The difference between GROSS and NET can be a world of difference.

I can obtain a nice gross profit realized through a gross mark-up, but what is left after the bills are paid? My net has to be a living wage (if I pay myself last), along with investment for future growth (or to maintain a competitive edge with better equipment and supplies).

This is where a class such as Bob's suggestions definitely come into play.
 
Originally posted by deaconsbench:
Suanne's initial post stated 'high profit margin' and 'mark-up'.
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I thought Rob's last name was Mark-off?!?! :eek: :D

<font size=1>sorry Rob, I couldn't resist. You can ride shotgun in the limo this year...</font>
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