What's next........FREE FRAMING

FrameMakers

PFG, Picture Framing God
Joined
Mar 20, 2001
Posts
7,395
Location
Powell, OH
I just received a flyer in the mail from our favorite gal...Jo~Ann's. It's not 40% off, or 50% off, it's now up to 60% off .

I guessing that thier alliance with LJ is biting them in the butt. A neighbor that works part time a Jo~Ann's mentioned that they have layed of a bunch of framers due to slow sales.

I was told by several folks at LJ that thier discounts aren't much better than mine :rolleyes: Yeah right.
 
One of classiest responses to this phenomenon was from the jewelry store next door. Their radio ad said, “We ask you compare our prices to our competitors, even when they are offering 50% off.”

I wonder if that will still work when the ad says, “We ask that you compare our prices to our competitors even when they are giving it away for free.”

This madness has to stop somewhere. I have been considering adding something like that into my marketing media. My wife thinks it’s a little too aggressive and sounds like I’m whining. But if somebody is so blind that they fall for 50, 60 or 70% off then maybe a little aggression is what they need to see the light.
 
Originally posted by FrameMakers:
I was told by several folks at LJ that thier discounts aren't much better than mine :rolleyes: Yeah right.
I heard that as well... so I am just going to run my business as well as I can run it and trust that the majority of customers are smart enough to not buy into the coupon/discount game... there are shoppers and there are the people that purchase based on quality, service and straight forward honest retailers.

Roz
 
Hmm.... lets see now, they are laying people off, advertising ridicules discounts in an effort to get people into their store... What would you think if a small custom framing shop was doing the same thing?

My opinion is that they are in serious trouble, you may not have to be concerned with their marketing strategy for long, sounds like some desperate folks.

Your best bet is to ignore them, run your own business as usual. There is no point you acting desperate as well. Myself, I think you should be rejoicing.

John
 
I'm no businesss expert,but when I read, " I was told by several folks at LJ that thier discounts aren't much better than mine Yeah right."

I think back to an incident I encountered with a large grocery chain that my brother was a manger for. I was helping plan a Bar-b-que fro my Union and thought I could get a good price for the BEER we needed with my conection. I asked my brother what was the best price he could get me ,and even when he gave me his straight wholesale price we only saved pennies on the six-pack.

I realize this isn't true of every product but he explained that his chain and many like it depened on sheer Volume not margin to make those big bucks. I later heard the amount of VOLUME that individule store did (not the entire chain) and I must admitt I was in awe.

So it is entirely possible that Jo-Anne's is doing the same. By this I mean not getting "THAT MUCH" bigger discount but counting on VOLUME to get them through. And when there is No Volume something has to go.Which leads me to think John just might be making the correct assumption.What do you think Mr. Carter?
BUDDY
PS an other example but with a different and Local BB just occured to me. I got a call yesterday from a lady who was totaly upset with the price she was quoted by this BB for a cutome 32X40 frame. She was advised to call me from a friend and aske if i could better their price. I asked if she had any particulars sinec she didn't live near by . she said the work sheet said it was a 6746 sanmarco moulding .Thinking i new the supplier (which I did) i called and found out that this BB orders their frames chopped and Joined .I asked what my price would be if i did the same I was told about $320, Icalled the lady back and told her the good news iwas i could get the exact frame the bad news is it would coat her about $535 .She told me the BB was less in fact they where only going to charge around $420.So i guess two things ,One their discount IS more than mine ( but then so is most ) and they are willing to make much less .this is especailly true sice they aren't doing any work just pure retail.

I'm thinking about calling the lady back and saying I'll do it for $400. (if a cutit my self I'll pay length and still make a nice profit,even though it's not my normal margin)

Still more surpriseing wasthe fact that this lady said that this frame was her THIRD choice since the first would have cost $980 and the second was $650. That computes to this BB carrying moulding that sells for near $70 a foot. I know of some very hauty shops that don't show $70 per foot profiles .The BB 's game is indeed changing,and so had we.

[ 08-18-2004, 01:03 PM: Message edited by: BUDDY ]
 
One other thought, If thier pricing is set up so that the real retail is 50% off, then going to 60% is like us having a 10% sale.
 
The key to this is that they are laying employees off. Cutting your expenses, giving deep discounts, that is not competing, that is desperation.

I am not guaranteeing they are in trouble, but it sure seems that way. In either case, you do not have their buying power.

You put out, I would hope, a better quality product. You give much better personal service. Those things SHOULD make your prices be higher.

You can not compete with them on price, if you try going head to head with them, you will lose.

Just ignore them, do your own thing. Bigger companies than JO Ann's have gone belly up, so can they. Why are you wanting to be like them?

John
 
I once went on a "competition shopping" day with a cheap poster in hand. On this particular day, I went to Garden Ridge and AC Moore. Garden Ridge had 40% coupons in their sale paper, AC Moore had 60%. The two estimates were less than $4 apart. Oddly enough both stores framing is done by the same company. Moral to the story is, It doesn't matter what % they advertise, the end price is the same. One day they will be advertising 90% off. It will still be the same old retail price.

If you don't believe me, grab something out of your shop and get in the car.
 
Just In: "Crafttrends" Magazine August

Jo-Ann Stores: June same-store sales increased 6.8 percent and net sales increased 7% from 146 million from 136.4 million last year. Year-to-date same store sales increased 5.8% and net sales increased 6.8% to $661.8 million from $619.7 million.

Michaels: June same-store sales rose 13 percent and total sales increased 19 percent to $267.7 million from $225.5 million last year. Year-to-date same store sales increased 7% and total sales increased 12% to $1.196 billion from $1.069 billion. Average ticket for the month was flat with a 12% increase in customer traffic and a1% increase in the custom frame deliveries. For the year-to-date, the average ticket incrased 2% and customer traffic increased 5 percent. Strongest zones were the Pacific, Northeast, and mid-Atlantic, and best performing catagories were scrapbooking, frames, custom framing and general crafts.

Interesting on both parts.

Now, if someone were joining all your frames, cutting all your mats would you need as many framers. Duh!

(Sorry-had to edit some spelling. Still recovering from rotator cuff surgery)
 
Sales and trafic are up, what do their profits look like, up or down?

John
 
John your point (if they use chop and join they need less FRAMERS?/WORKERS) is well taken .However Jo-Anns isn't the one doing the chop and join ,it is a local BB Named Gordon's.

Still another point that is a bit deceiveing is while the stock divedens or the craft magazine articles may indicate that the profits of Jo-Anns and Michaels have gone up,they both do sell more than just FRAMING. My point is it is entirely possible for their Framing department to be taking a beating while the other crafts and sales are carring them .However you can bet that if it is a loseing proposition they will either go under as JRB suggest or drop the line or make some drastic changes.

In regard to the offer to take less of a margin to compete with Gordon's ,I was doing it to further my reputation.However it was a one time thing for the PR and since the referal came form a very good customer.

The amazing thing is that whaile I was originally trying to reply to your post the lady called and I explained what I was willing to do. However she informed me that another BB a "Deck The Walls" offered to do the job for under $400 and to have it completed by Friday. She told me that had she not lived close to DTW and 15 miles from me she would have brought to me but I informed her that she was better of with DTW since it would be a stretch to get it done by Friday ( today is Wed.I don't get deliverys on Thurs. so I'd have to go pick it up and complete it by the next day). So I guess you can see that more than ONE BB is HUNGRY for the business and willing to take a smaller margins.

But all in all, I made the offer but I don't intend to make it a practice.But I'm getting a very different impression about a few BBs and what they are willing to do and how much margin they work on.
BUDDY
 
John: The information is from a trade publication in the crafts industry. Just showed up today. It did not report profit information and I typed the info exactly as it appeared in the magazine. If I can get the time I'll see if the SEC listing for both and see the reported profits. I don't know if this is SEC information or information gleaned from press releases.

Buddy: My information was based on John's getting a 60% off offer from Jo-Anne's and then the speculation that they must be doing badly. I'm not familiar with Gordon's and I think you need to be cautious considering a Deck The Walls store a BB. They are independently owned custom framers that are franchised. They run under the same circumstances that most custom framers do.

From interviewing former Jo-Anne's and Michaels employees it is a dangerous assumption that they do not make a profit in framing. Most of us agree that the custom framer can do it cheaper and better than many of the big boxes. I say many because some of these stores do have some talented framers. They do not always turn out junk as some would like think and now they have professionals cutting their mats on Eclipses and are providing quality joined Larson Juhl frames. Yes they sell many other products and yes some are quite often used as loss leaders to get people in the store. From everyone I've personally talked too, despite what we would like to think, framing and their photo frames are NOT a loss leader.

I wish I could be of more help marketing wise regarding being able to combat these behemoths and their marketing and advertising budgets. If a brilliant solution stikes me, I'll post it here.
 
Associated Press: Earnings but no profit information. It looks like profits are reported to the SEC quarterly and this was for July.

Michaels said it expects August same-store sales to increase by 4 percent to 6 percent from last year and third- and fourth-quarter same-store sales to increase by 3 percent to 5 percent. The company reiterated its earnings outlook of 38 cents to 40 cents per share for the second quarter and $2.92 to $3.05 per share for fiscal 2004.

Analysts predict that Michaels will post earnings of 40 cents per share and $3.02 per share for the second quarter and the year, respectively.
 
Jo-Anne's SEC Section 8 Filing 8/16/04

2nd quarter operating profits of $4.6 million or 1.2% of sales vs. 0.7 million or .02% of sales last year for the same quarter.

Sorry that took so long.
 
John, thanks for the info. Wonder why it seems they are running scared. Could be they have a large debt to earnings load, could be they are smarter than they seem. Warren Buffet would have a better take on this company. I do not buy retailers stock any more, got burned big time a while back on a company that was over a hundred years old. I stay away from all retail stock except my own company.

John
 
I don't try to compete with them on discount. My prices are competitve as are most of ours. As to competing on quality, it is very hard for a customer to experiance our quality when all they seem to care about is price.

My real problem is that they own the preception of being cheap. I can't nor do I really want to compete this way.
 
Thanks John for pointig out that DTW's are not a BB. Yes we are all independantly owned and deal with the same problems as many other framers, including compeating against BB's like Mikes and Hobby Lobby.

Buddy, Sorry but I am going to play Devil's advocate here

How do you know what the margin was for the DTW? How do you know that that particular store didn't have the frame in stock and didn't have to order it? You also mentioned that you would have to pick up the frame since you didn't have delivery on Thursday, how close are you to the supplier?

You said that "one BB is Hungry", 2 things for that. One, shouldn't we all be hungry for business? I have yet to here anyone here say that they are swamped and are turning customers away on a regular basis and do not need anymore customers. Two, A competitor can offer something that you are not willing to do does not mean that the competitor is hungry and/or working on lower margins, it only means that the competitor is willing to do something that you are not willing to do.

Nobody is right or wrong here but if the customer is happy with the service and quality then they probably (there are always exceptions) will not come to you in the future.
 
In our area the grocery stores have used a new gimmic for the past several years in their advertising. They call it "buy one, get one free". As an example one week prior to the advertisement is prices at lets say $1.29 ea. For the week of the two for one advertising, it is priced at $2.39 each.
thumbsup.gif


Let's see
week one $1.29 each x 2 = $2.58

week two $2.39 each x 2 = $2.39

actual sale savings = $ .09 each

But what if you only want or need only one
cry.gif


actual increase of $1.10
 
The BBs have a HUGE ad campain that they spread over lots of stores.
What's yours?
They work on margins that are "similar" to ours, so they need to make it up with volume....
How are you increasing you volume?
How does anyone know that you have better quality?
How do you generate new footsteps?
These are the real questions that you should be asking yourself. When you stop watching the other guy, and focus on your success, it will be a success.

I know that nobody watched the Olympics last night so nobody saw Paul Hamm explode into not one but TWO 9.387s to take the Gold. He only kind of watched the Koreans turn in incredable routins and numbers. I don't think he ever had a moment where he thought about their margins or skills or moves. That man was doing his next routine in his head...

That is what we ALL have to do. Small guy, Franchies, or BB. Focus on growing YOUR business, but KNOW your competition.

As for discounts from LJ.... what discount?

baer

Just had another thought to help this one along.
I used to work with a kid who had a wrist band that said "WWJD", I thought he was a Juvinal Delinquent.
So, if you insist on obsessing about the practices of Big Boxes; why not make a wristband that says "WWBBD" or would that be tomuch like WMDs. :D
 
Baer, I agree that we need to constantly ask our selves these questions. Finding the anwsers is a whole lot tougher task. I watch the other guys in all forms of business to try to gleen ideas. Not watching the other guys is just putting your head in the sand.

And yes I did watch Paul Hamm last nite. It was inspiring to see him put his mistakes behind him and move on. He would not have taken Gold or any medal if others in front of him hadn't faultered.
 
Anybody that has ever laced 'em up knows that competition makes you better.

I can't believe that the "competitor" in Paul Hamm wasn't inspired just a little bit by his foes.

The difference is that he had a plan and the ability; he just needed some motivation.

He just didn't talk about it and wring his hands saying "Woe is me"

He went it out and did it
 
:confused: Baer, what made you say you thought no one watched the Olympics last night? Sounds to me like a bunch of us are glued to the thing. Can't wait for tonight as well when the girls fly all around those diabolical devices.
 
Mom, the word is pronounced Fu - see - sh - us.

They estimate 450 million viewers in America alone. I totally enjoied watching Carley. And she has them sparkley eyes too. If I had a daughter....

Bob, the Apache used to measure the power of a warrior by the ferocity of his foes. Not always those that he defeated, but by the ones that he atracted....

When I was doing the broadsword fighting, I would always go drop my gaunlet at the feet of the knights. They didn't always feel like fighting that many fights, but they knew that I was a good challenge myself. (I couldn't be a Knight because I didn't/don't dance) But on any given day, it was a fair fight with a 50/50 outcome.

That night with Paul Hamm, things were decide by 12/1000s. I think there were some really powerful matches this Olympics. It's been really good to see. It's to bad there isn't a few venues that could be televised so a person could see other things like the Sailing, Fencing (local girl got the Gold in 54 second flat, I've watched her against past medelist, and was wondering why it took so long. She's refered to as "Viper" at the local academy) Rowing, and such.

NFL is over. Back to the Olys.

baer
 
I'm not sure if they are running the same deal nationwide but this weekend they had their "Founders Day" flier which offers the 60% off the complete frame order but what was interesting is the coupon also said they would be any competitor's quote by 10%. Another new twist.
 
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