Well, This is a great discussion and I would agree with many of you that the middle of the road (skewed to the high end) is the right answer. As we all know, not every customer is looking for the closed corner frames any more than they are all looking for a "Poster Special" for $29.
That said, I worked many years in Ops Management for one of the "Big-Box" chains, (since back out and on my own) I would like to take the argument of the other side. Just for fun. Sort of "A Modest Proposal" if you will.
I preface this entire argument with the following: Toyota lives in the middle of the raod in the car market and I doubt anyone would argue that they don't have an exceptional reputation and business) So here you go...
All of my signs and advertisig SCREAM the message: BEST PRICES IN TOWN!! NOBODY BEATS OR PRICES! CUSTOM FRAMING 60% OFF EVERYDAY! BUY MORE, SAVE MORE! etc...
My store is located in a busy regional shopping area with tremendous customer traffic. I pay a little more for rent, but I need the traffic. My store looks nice, nothing great, but has all of the required merchandising components, my employees all wear aprons with my company logo, provide mediocre service, and produce a decent product at a great price. Or at what appears to be a great price. ( more on that in a minute)
I buy and sell only closeout or box program moulding in large quantitity and offer a limited selection of matboard colors that way I can maximize my scraps. I sell primarily regular glass, and buy it by the pallet. I have driven my COGS down to 18% or better. I encourage my employees to write orders for double mats, drymount, reg glass, and a 2" gold wood moulding all day long. We have an average ticket of $120 at 82 points of margine.... again, all day long thank you. Oh, but I do need alot of them. 15-20 per day. Therefore I need to spend another 15-18% on advertising to keep my message in front of my customers. Now, if I consider my advertising and my higher rent to be part of my COGS and get a combined number of 30-40% I am no worse off than nearly all of the middle of the road framers. In many cases still better. Where I win is that I drive volume by constantly telling my customers that I am the cheepest.
Back to pricing. (After- all that is what this discussion is about.) I start my pricing at or above Decor Mag's pricing survey, and offer a huge discount everyday. My prices for my regular "Program" items are the lowest in the market. Not by much mind you, but it is the lowest. Nowhere near the 50% I advertise, but whose ever going to check it? Even if they tried, how could they? We sell very blind items and services.
"Your lying to your customer.", you say.
No I'm not. They are paying the lowest price, and I am discounting from the prices published by a nationaly recognized and accepted industry leading magazine. (Who actually charges those prices with a straight face?)
I do sell framing of all kinds, including my own version of conservation framing and specialty design. However, any item that falls beyond my standard menu of products, i.e. Cons glass, archival mounting techniques, needlepoint stretching, specialty framing services, are not that in-expensive. They are still cheeper than the "Mom and Pop" framer in town but boy, I make unbeleivable margine on those items.
At the end of the day my proffit margine may not be any better than yours, but I have alot of dollars to play with. Assuming my customers don't catch on to my game and you independant framers don't educate them on what good design and a quality finished product is, and stop giving that personal service. I will be a around and controlling the market for a long time.
Why not have the lowest prices?