It seems to me that left and right prices of stuff that goes into framing rise unstopably. If I use the LJ suggested pricing from their book my profit margin in sinking faster than the Titanic. Just learned that Tru-Vue is raising prices, and Roma seems to be sending updated prices more often than ever. To me this is kinda hard to follow . I did not even mention the cost of the support material thats out there: gas prices, bus fare, energy to run the shop, etc. What do you suggest I or we should do to keep profits and cost at check.
Question Future Pricing
- Thread starter 2400
- Start date
C
Cliff Wilson
Guest
Getting a POS will help tremendously!
Updates for most material is automatic and prices are (usually) based on recorded costs.
Trying to do this by hand is silly.
I won't even try to go into the "why are you using those price lists" question.
Updates for most material is automatic and prices are (usually) based on recorded costs.
Trying to do this by hand is silly.
I won't even try to go into the "why are you using those price lists" question.
mayos
MGF, Master Grumble Framer
We just added framing to our merchandise mix in November '07. The very best investment I made for this venture was the POS software. I could buy my frames joined and glass cut to size for me, but no one could priced the product for me. The POS was a HUGE help. It's the very best investment you can make for your business.
"Future pricing"? "Today pricing" is equally important, and taking care of "today pricing" properly will enable you to keep up with it in the future.
No matter what sort of business you operate, profitable pricing is essential. It is unwise to rely on any "suggested" pricing formats. They may provide you a starting point, but few of us could live with them long term. Determine your own costs, determine your own market, and determine your own prices to provide a reasonable profit. Nobody else can do that for you, the business owner.
Once you have determined profitable pricing levels for everything you sell, establish a method by which you can easily review and revise everything, and use it routinely. A professional POS system is highly recommended as the best way to do that; to monitor and revise your lists of material and labor items, material costs, and prices. Many prices may be automatically revised to maintain the markups you have prescribed, and you can revise other items at will. Reports provide full information about costs, pricing, and profits.
Yes, our costs are rising, and we must account for the changes in order to remain profitable. A fundamental challenge of operating a business is finding ways to remain competitive and earn a profit at the same time. Smart pricing is part of that, but so is smart buying, and careful production planning in order to minimize labor costs. Also, smart selling enables you to offer customers products and services of greatest perceived value to them.
If it were easy, everyone would be doing it.
No matter what sort of business you operate, profitable pricing is essential. It is unwise to rely on any "suggested" pricing formats. They may provide you a starting point, but few of us could live with them long term. Determine your own costs, determine your own market, and determine your own prices to provide a reasonable profit. Nobody else can do that for you, the business owner.
Once you have determined profitable pricing levels for everything you sell, establish a method by which you can easily review and revise everything, and use it routinely. A professional POS system is highly recommended as the best way to do that; to monitor and revise your lists of material and labor items, material costs, and prices. Many prices may be automatically revised to maintain the markups you have prescribed, and you can revise other items at will. Reports provide full information about costs, pricing, and profits.
Yes, our costs are rising, and we must account for the changes in order to remain profitable. A fundamental challenge of operating a business is finding ways to remain competitive and earn a profit at the same time. Smart pricing is part of that, but so is smart buying, and careful production planning in order to minimize labor costs. Also, smart selling enables you to offer customers products and services of greatest perceived value to them.
If it were easy, everyone would be doing it.
framing fashionista
CGF II, Certified Grumble Framer Level 2
Maybe it is just me but personally, I would rather see price increases than decreased service or quality from my vendors. How many complaints have we seen in other threads when vendors give poor service, decrease delivery routes, or change their product to something lesser without telling us just so they can hold their prices steady? And I certainly don't want my favorite companies to go out of business because they didn't properly price their product.
What to do about it? Raise your prices and don't look back. The only way your customers will know that you have raised your prices is if they have the same types of things framed in the exact same way repeatedly. Also, your customers probably feel the same way about you that we do about our favorite vendors. They don't want you to go out of business and if they do see a slight increase, they will understand. If not, it may be a good customer to fire.
What to do about it? Raise your prices and don't look back. The only way your customers will know that you have raised your prices is if they have the same types of things framed in the exact same way repeatedly. Also, your customers probably feel the same way about you that we do about our favorite vendors. They don't want you to go out of business and if they do see a slight increase, they will understand. If not, it may be a good customer to fire.
Paul N
SPFG, Supreme Picture Framing God
Now more than ever, one should revisit their pricing information. Once a month is not a bad idea.
A POS (I use LifeSaver) is a huge help, as it takes care of most of the pricing updates. The only category that needs a bit more (albeit minor) tweaking is glass, mirrors and plexi. One could easily forgo any profit if one accepts a large framing order and those prices are not correct.
But once those (glass, pleci and mirror) are in place and there is a price increase, one can raise (or lower, if there ever were a need to!) the prices as a percentage and it is done very easily indeed.
A POS (I use LifeSaver) is a huge help, as it takes care of most of the pricing updates. The only category that needs a bit more (albeit minor) tweaking is glass, mirrors and plexi. One could easily forgo any profit if one accepts a large framing order and those prices are not correct.
But once those (glass, pleci and mirror) are in place and there is a price increase, one can raise (or lower, if there ever were a need to!) the prices as a percentage and it is done very easily indeed.
I didn't invent this but learned it from another much smarter operator.
To keep costs in check sit down with your whole weeks worth of worksheets and invoices. Take each worksheet and scratch down exactly what you paid for materials from the invoices from your supplier. Then figure your COG for each work order.
POS software will help but isn't the magic bullet and I'll explain why. Lets say you have a supplier that stops sending sort length and starts sending only bundles. You may or may not notice the extra waste. A POS program is worthless in this case. It just figures that you need 6' of 203984038 and prices from that. It doesn't know that you have actually been receiving 2 times more moulding than you ordered. It doesn't know about that $10 fuel charge. Even you may not know the extent of the problem until you figure actual COGs for each order.
Sitting down with a stack of worksheets and invoices figuring the actual COG's, you may start to notice quickly where costs are soaring that you may not notice if you just wait to see it on your monthly bank statement.
I do this for about 20 work orders a few times a year. It can be an enlightening drill.
Jerry Ervin
PFG, Picture Framing God
Jay makes a great point.
It is much easier to track COGS if you are buying chops. If you cut length, you need to get out paper and a pencil.
After doing this several times, I determined I needed to buy chops on certain profiles.
A POS is great for calculating a retail price quickly. However, it doesn't always give you an accurate representation of your cost or profits.
It is much easier to track COGS if you are buying chops. If you cut length, you need to get out paper and a pencil.
After doing this several times, I determined I needed to buy chops on certain profiles.
A POS is great for calculating a retail price quickly. However, it doesn't always give you an accurate representation of your cost or profits.
C
Cliff Wilson
Guest
2400s initial question was "How do I keep up with changes?" To which a POS is the best tool to enable this easier. It doesn't solve the problem entirely, but helps tremendously.
In asking the question 2400 set off many alarm bells in our collective heads about HOW their initial pricing was done!!
Jay's comments concerning COGs are right on, but a POS will enable you to be partially proactive and instead of 100% reactive.
In asking the question 2400 set off many alarm bells in our collective heads about HOW their initial pricing was done!!
Jay's comments concerning COGs are right on, but a POS will enable you to be partially proactive and instead of 100% reactive.
Jerry Ervin
PFG, Picture Framing God
We wasn't disagreeing with you Cliff.
Just adding to the discussion.
Just adding to the discussion.
The POS I use has the capability to do just what Jay suggests within the system to create a very accurate COG report on each ticket. The POS is only part of the equation. Market research and vendor negotiations are other elements that lead toward profitability.
So, what POS are you using? I haven't decided on which one to get yet but will make a decision in the next 2-3 weeks.
Ylva
Paul N
SPFG, Supreme Picture Framing God
Wow, shipping!! What a huge factor in pricing!!
Maybe Wally gets 99% of his mouldings delivered, just like me. Sheesh.
Maybe Wally gets 99% of his mouldings delivered, just like me. Sheesh.
wendy lang
CGF II, Certified Grumble Framer Level 2
Take the "overage" from the extra lengths sent to you and bought and make READY-MADES!
We make a TON of $$$ from that "left over" moulding!! It's EXTRA! It's a Gold Mine!
Wendy
The Art Corner
Salem, MA 01970
978-745-9524
We make a TON of $$$ from that "left over" moulding!! It's EXTRA! It's a Gold Mine!
Wendy
The Art Corner
Salem, MA 01970
978-745-9524
Jay makes a good point. When we receive chops or other materials by UPS, FedEx, motor freight, or other carriers at our direct expense, our POS systems do not account for the transportation expenses in line item cost.
Unless we visit the line items to add-in and revise per-unit price factors representing variable transportation costs, they have to be accounted separately. Our POS system includes "set price" factors, commonly used to account for fixed labor cost, which may be a good way to add specific $ amounts per frame.
But it would be time-consuming, and how accurate could that be, anyway? If our buying habits vary, so will the shipping costs. That is, if we buy a box of moulding, the transportation cost per-foot would be different than if we buy chops or short lengths. Likewise, buying a case of ATG instead of a carton, or buying a box of matboard instead of a sheet, would carry different transportation cost factors per-unit.
Shipping is already a big factor in pricing, and it will surely become bigger. Higher fuel prices will increasingly affect all of us, including our suppliers, and their suppliers, and their suppliers.
As increasing fuel prices work their way up the supply chain, transportation costs will be added into the item costs we pay. I would speculate that transportation cost changes might account for most of the price increases we suffer in the next few years.
In my business, transportation cost is accounted as an overhead item, not as part of COGS. That way, the variable doesn't affect material cost, it affects net profit more directly.
Paul N
SPFG, Supreme Picture Framing God
Jim:
Nobody is disputing that shipping costs money. My point was that maybe Wally is like me, where almost everything is delivered by truck or get free shipping from some companies (Free Shipping Fridays, at Turner, for example).
And yes, truck delivery is already built into those prices. But it is still the moulding's cost and no extra shipping cost to factor in.
Nobody is disputing that shipping costs money. My point was that maybe Wally is like me, where almost everything is delivered by truck or get free shipping from some companies (Free Shipping Fridays, at Turner, for example).
And yes, truck delivery is already built into those prices. But it is still the moulding's cost and no extra shipping cost to factor in.
Ok then...Sheesh.
So when you have a POS system, and you get the "new" pricelist from Roma, you have to go through the entire list and change things manually on the prices, or this is all done electronically? Is there a use friendly POS for picture framers?
The way most of them work is that you set the MARKUP FORMULA for each vendor (or even each item individually, for those that will fetch a higher market value), and it uses that markup formula and the current cost to determine the selling price. (ex: $5/ft chop cost * 3x markup formula = $15/ft retail)
There are usually some other variables, too. For example, you can define a minimum size or an additional flat fee per foot. Most professional framing POS systems use this for mats and mouldings. They deal with hundreds of vendors every week, and type all the changes in, on our behalf.
Labor and optional treatments (stretching types, mounting types, spacers, additional windows, glazing types, archival hinges, etc) are also figured in, but from different tables.
I suggest downloading some demos, evaluate some systems, and you'll not only have a better understanding - but will be on your way to finding one that you like.
I should also mention that while a POS is a fantastic tool you shouldn't be without, it's also not a case of "set it and forget it".
It still requires some of the same periodical review, as a manual system. Glazing, labor, and some other items do not automatically change as the costs go up. The default prices are also not meant to be used. They are an industry average, but may not meet your profit goals or the local prices of your market.
If you're going to the Atlanta show in a couple weeks, several vendors will be teaching classes to demonstrate their products. You can also get demos at the booths.
Happy shopping!
Mike
There are usually some other variables, too. For example, you can define a minimum size or an additional flat fee per foot. Most professional framing POS systems use this for mats and mouldings. They deal with hundreds of vendors every week, and type all the changes in, on our behalf.
Labor and optional treatments (stretching types, mounting types, spacers, additional windows, glazing types, archival hinges, etc) are also figured in, but from different tables.
I suggest downloading some demos, evaluate some systems, and you'll not only have a better understanding - but will be on your way to finding one that you like.
I should also mention that while a POS is a fantastic tool you shouldn't be without, it's also not a case of "set it and forget it".
It still requires some of the same periodical review, as a manual system. Glazing, labor, and some other items do not automatically change as the costs go up. The default prices are also not meant to be used. They are an industry average, but may not meet your profit goals or the local prices of your market.If you're going to the Atlanta show in a couple weeks, several vendors will be teaching classes to demonstrate their products. You can also get demos at the booths.
Happy shopping!
Mike
C
Cliff Wilson
Guest
To shorten Mike's response a little ...
Yes, it's all done electronically
and ...
there are a number of very user freindly systems each of which behaves a little different and you have to pick the one that feels best to you.
Thanks Cliff
Sometimes, I need that! ha
Mike
Sometimes, I need that!
haMike
Bob Doyle
SPFG, Supreme Picture Framing God
When I started in 2001 you could get away with updating your price charts every six months. Then every 3 months, but with the POS it's weekly! And easy. (Except that LifeSaver has locked the price of glass)
Mike could you repost the link to the review of POS's
Mike could you repost the link to the review of POS's
It's not so much a review, but a neutral list of features and contact info for every known vendor. It's down in my tag line, below.
LifeSaver didn't lock the glass prices. You can change them to be anything you want.
Mike
LifeSaver didn't lock the glass prices. You can change them to be anything you want.
Mike