What's the general feeling about quantity discounts. Let's say coroplast yard signs. A customer wants two or three...then asks at what quantity do I get a price break? Same with mags, banners, etc. Looking at the Sign Craft pricing guide...it refers to a basic price...then the next column says "Additional" Does that mean the second one is discounted? I put myself in the customers place and kinda agree that I expect some consideration when ordering multiples. Thanks
Posted by Cheryl Lucas (Member # 1656) on :
Hi Tony,
I sometimes struggle with inquiries of discounts for quantity. If it's the same amount of material, same number of steps, same time involved to produce one item, why lower the price for more of the same?
For me, quantity discount starts when "I" can purchase enough product to get and give a price break. Or, jobs where I can set up a jig and produce at a faster rate. Still, have to consider the time involved in setting up a jig, etc.
Cher.
Posted by Joey Madden (Member # 1192) on :
Is price relevant? I want to buy 5 boxes of See's Chocolates, whats the discount? how about 3 new cars....
Posted by Jane Diaz (Member # 595) on :
The OTHER side of the question is: I would rather have a customer order 5 of the same sign at one time than order the same sign five different times.... We offer a 10% discount on multiples, for just that reason. If I am set up to do one, or have to order materials to do one and then next month he orders the same sign again, it costs me more in time, shipping to get the materials here, etc. The way I look at it, I just pass that savings on to the customer. This isn't true with ALL substrates or jobs, but on the small metal signs, vinyl orders, etc. it just seems to work well. Just my humble opinion...
[ February 12, 2005, 03:24 PM: Message edited by: Jane Diaz ]
Posted by Jon Butterworth (Member # 227) on :
I only give discount on quantity if it's going to make me money.
For example a "one off" $300 sign includes a "design/set up" fee of a minimum $60.
If the customer then wants 10 he will save this charge on the next 9 = $540. I don't tell them the reason, just a %.
But, I will a bigger profit on them. For example it takes the same amount of time to pick up 10 sheets of metal as it does one. etc.
Posted by Doug Allan (Member # 2247) on :
I try to price everything between the price I will regret offering when making the sign, & the price I will regret not lowering when I lose the bid to someone else.
In other words the factors that Jane & Jon mention would make me lower prices on quantities, but not based on any formula, or any predetermined quantity... just based on my own knowledge of what price is worth my time. When I get requests for pricing a specific quantity for items I know will be re-ordered... I offer another lower unit cost for a larger quantity even when not asked for it, because (again, as Jane & Jon said) I will save time & money by doing them all now, over half now... & half later.
Posted by Bill Lynch (Member # 3815) on :
I will discount for multiple orders(not talking about screen projects, but multiple orders that are "hand done") Only one layout, only one invoice, less time to do multiples, you know all the measurements etc. The discount depends on the specifics of the job, but it isn't usually more than 10% or so.
No I wouldn't expect a discount in a retail store if I bought 5 boxes of candy. But I would expect a discount if I was buying 3 cars. I do get a discount from my supply house when I order quantities.
Posted by Sheila Ferrell (Member # 3741) on :
If you notice when you order catalogued sign materials (or even other everyday stuff). . .the discount price by quantities will usually be as follows:
1-10 - 11-20 - 21+
or:
1-49 - 50+
If I order materials that are discounted to me by qty. for a job, that is usually the only discount I pass along to customers.
This is just me, but I personally like to charge MORE for quantity stuff since it's an enormous burden to me to keep motivated when I have to act like a factory rather than a custom shop . . .lol:D . . . I'm KIDDIN' . . . . .kind'a.
But I can't recall anything I've done with more than 10 of anything, because if they want more than that I send them to a screen printer. Now that I have a plotter, I may pick & choose more stuff like that in the future and put Emily to work. Did'jall know little kids LIKE to weed stuff!!! Posted by Stephen Deveau (Member # 1305) on :
To your Question.. Is the first Mag. at full cost and the second one half the Price?
What is the setup price first.. and can you get materials at discount prices to save yourself and the customer the price.
Work with your profit line. Remember to give Lost Leader pricing to work for discount,but never Overhead & Labour........... Posted by David Harding (Member # 108) on :
Sheila's comment reminds me of the story of a person on a cruise who purchased a carving from a local artisan. The tourist liked the piece so much that he decided to buy five more. He was shocked when the unit price went up and asked the carver why. The reply was: “The first one was fun.”
Posted by William Holohan (Member # 2514) on :
I like Jon's method. Reduce by the cost of the Design Fee that you should absolutely have gotten in the first place. Then no more than 5% on anything less than 10 units. 7 1/2% on ANY number above. More, and you give the impression that your first quote was excessively high. Same time to cut, weed, prime, weed, hand letter, or whatever. A close look and the time per unit will probably prove that you really don't save a really "discountable amount of time" that goes beyond 7 1/2 percent. No matter what, you must maintain your per hour shop rate. Never let the customer know that you don't have the stock on hand. None of his/her business. Figure your discount as if you paid the one up price for materials. Only discount on the total normal price for a single unit x however many units. I am sure most of the smaller shop owners here can look a client in the eye and say something to the effect, that "My prices are the lowest I can make them and still guarantee a good product for you sir/madam and a reasonable profit for me. Not an outrageous profit, just a reasonable profit." It's a statement that any reasonable business person can understand and accept. The unreasonable ones should be shown the door.Unless the electric company truck is there to cut off the power, stick to your guns. Just my two cents.
Posted by William Holohan (Member # 2514) on :
OOOPs, Me again. Sitting here reading my post, a memory popped up from my burglar alarm days. Like any business, I had my share of tire kickers, and cheapos. One of my favorite ploys was to tell a potential client that I could not meet thier demands for pricing and then hand them a card from another alarm company and tell them to try them. I would do it with a huge smile. The card was for one of the cheapest guys in the Worcester area. He dressed like a street person and smelled like a bag of rotten veggies. I always got the question, "Why him?" "He's cheaper than me, and you do need a system." Some would call me back after they had their homes fumigated after his sales visit... Some would call me back to rework the "money saver" this guy put in. He lasted about two years. It was my fondest hope that I helped him "cheap" himself out of business. Have an ultra low baller in the neighborhood? Have someone pick up some of his cards and help him "out". Remember, your "haggle" time is also worth your shop rate. Size up the customer early so you can fit that time into your proposal.
Posted by Sheila Ferrell (Member # 3741) on :
LOL David . . Exactly.
Posted by Sheila Ferrell (Member # 3741) on :
LOL David . . Exactly.
BTW...Mr. Holohan . . .(and I always think of hotlips on M*A*S*H when I see your name )
ANYWAY . . .I think every town needs a cheapo-Joe-wino to send customers to ...I take great pleasure in saving my valuable time by doing so....and I TRY not to say 'I told'ja so' when they come back saying . . ."OK point well taken."
I think I mentioned this fact on another post, but our customers who are really serious business people, and as you said, have a 'clue' what that's about, realize that THEIR OWN time is too valuable to worry with hagglin' over saving a few dollars when they can make ONE simple phone call to a trusted service person and get quality goods, pronto, realizing it's WORTH the extra cost.
I have no idea why I'm digressing from pricing quantity sales . . .lol...sorry Tony.
Posted by William Holohan (Member # 2514) on :
Sheila, There is a sign guy in the area here that has two nick names amongst the other sign companies.
"Simple Simon"...all his signs look like tombstones. Line after line of centered text. No graphics or other embellishments.
And "Old Two by Four"...he uses basically two fonts, Times and Helvetica...and four colors... red, yellow, blue and black. Been around for years...I'll never understand it...
Posted by Mike Pipes (Member # 1573) on :
Our local Joe Wino is goin outta business and moving to another area, we'll have to look for another one to send el cheapos. That's the only problem with guys like that.
We'll also have to find someone else to make fun of. Posted by Tony Lucero (Member # 1470) on :
Thanks All. I think I can agree with Wm. Holohan's 5 and 7.5 percent discount philosophy. The clincher is the larger the discount...the more it makes your individual price seem like it's overpriced. The main thing I have now is a number in my head that I can come up with when this occurs. I've given as much as 15% when I am trying too hard to get an order. That gets back to my "gotta meet my overhead nut this month" paranoia. At some point I hope to get to a "comfort zone" and feel that the business will be there month after month.
Posted by William Holohan (Member # 2514) on :
Tony, It is really hard to "make the nut" if you do work that is essentially trading dollars. If you discount a sign to the point where it just meets your overhead and materials mark up, you are trading dollars. One of the major mistakes many small businesses make is not figureing profit for the "Company".
A month ends and you do the books: All bills paid All salaries met including a decent one for yourself. Bank balance, say $1000 just as an arbitrary figure. Good, you say, I'm ahead. No, you are probably behind. Minumum of 14% of yearly gross should be in a replacement reserve account. Based on an industry avereage of equipment life expectancy. Were you able to put 14% of your monthly gross into an account like that. That is just one example of business planning that most small businesses, pizza shop or sign shop fail to take into account. Then there is "REAL PROFIT". How much is in the bank at the end of the year that is not committed to upgrades, new equipment, replacement of old equipment, etc. Money that can be invested in stocks, bonds, your childrens college funds, etc. That is REAL PROFIT... Once you get past your overhead and materials, you have to make a decision on what you want your REAL PROFIT percentage to be. I would shoot for 12%. This is money that has no connection to the business, home expenses, credit card debt or what ever. This is REAL PROFIT money. Factor it into your every estimate. If you don't , then you are just working for the business at a nice salary. The business is in effect working you. Many people are in this profession out of "love of craft". And that is to be admired and applauded. But, love of craft, CAN be combined with a good business plan that will allow you to say at 65 or 70 (or earlier) that you "loved the craft that left you so well off in retirement." I can almost promise you that very few of your good customers will come up to you when you are retired and say, "Tony, here's a couple of hundred dollars. Just wanted to show my appreciation for all the great prices you gave me on my sign work years ago". Get the cash while thier wallet is open.
Posted by Sheila Ferrell (Member # 3741) on :
Mr. Holohan . . .
That needs to be a pamplet or a tract or something that all small business owners keep on hand. Or on a poster on the wall in front of us daily. You just said it so plainly and in such a down-to-earth way. . . .
Hey!...You Do have HOT lips!!
LOL
Posted by Jon Aston (Member # 1725) on :
I'll second that motion!
Posted by Gavin Chachere (Member # 1443) on :
quote:Originally posted by Joey Madden: Is price relevant? I want to buy 5 boxes of See's Chocolates, whats the discount? how about 3 new cars....
Everyone flew right by this statement here and seems to want to add complicated theories into the mix.....when was the last time the electric provider told you your bill would contain a discount for using it for 10months straight? Or when have you walked into a grocery store that you frequent and had the manager come over and say since you come here every week today everything is 10% off? The answer is never. By offering them a qty discount you just told them that yes you would luv to make them one sign and since they need 15,working 15x's as hard for less money.....and after all the diatribes that go on at this place regarding value of work and percieved value of work its surprising the length thats gone to to defend the process when this question comes up. Regardless of material similarity,set up times etc its still 15x's the work for less money.....think about how you would feel going to a surgeon because you have 2 aneurysyms...and he says well ya i can fix em both and since youre having 2 done i can knock 20% off the 2nd one?
Posted by Sheila Ferrell (Member # 3741) on :
lol Cu'tis . . .that car dealer MIGHT have been a bad analogy . . .they actually will knock something off if they sell 3 cars at one time to one person . . .AND take 'em out for a steak to boot....lol Posted by Si Allen (Member # 420) on :
Quantity discounts work well for both sides IF you are using an automated, or semi automated process!
I can easily see a discount for silk screen signs or digital signs...since the majority of the work is in the setup!
As silk screeners say "The 1st one is expensive, the rest are much cheaper, how many do you want?"
Hand painted and vinyl signs are labor intensive, not much room for discounts ...except for spreading design and setup over the number of signs.
Read the post by Irish over carefully again, then act like Cher did on another thread!
I thoroughly enjoy the sign biz, but as anyone who has met me...knows that I am NOT a starving artist!
[ February 18, 2005, 12:48 PM: Message edited by: Si Allen ]
Posted by Bobbie Rochow (Member # 3341) on :
Hey, thanks to ALL of you. I have only been in my own business for going on 6 years, & I have a problem with pricing. When business gets slim, like right now, I am so happy to get a customer coming in that I am tempted to give him a deal! I am a very soft hearted person, & this has been going on for a while. There have been times when I began to get ANGRY at the ones who come in asking for a discount. I don't just mean on quantities, I mean, they see a soft spoken, small voiced woman, & want to take advantage of me. THAT'S IT!!!! NO MORE!!!! I have been looking over all the past meets & the pictures of all of you out there, & I want to go to these things!!! I have only been to one, three years ago. I never will get to any more if I don't get tough & tell my customers like it is.
You are all so right. Yes, I am paying my bills, & yes, spring time is coming, & I was swamped last year, but I want to do more than pay the bills. I love what I do, but I want to look back & say that I loved the work that I did that left me so well in my retirement! (thank you, "Irish")
There.. I said it. That was NOT easy for me, & maybe even a bit embarrassing, but I said it. I'm sure my work is not as good as a lot of your work out there, but it certainly does not stink, either! It's darn well good enough that my customer base has grown over the past 6 yrs., & no, it is not because I am cheap, I am not ALWAYS "talked down". I get people who come to me sent from others saying they like my work. The Good Lord gave me a gift, & He didn't give it to me to use to do cheap work, either. I am worth more than that.
Thank you, ALL of you.
Posted by Sheila Ferrell (Member # 3741) on :
Way to go Bobbie!
As the Sign Swami-Guru, big Daddy Si sez..."Work SMARTER, not harder!"
Posted by Bobbie Rochow (Member # 3341) on :
Thank you so much, Sheila!
Si, is that really what you say???
Posted by Si Allen (Member # 420) on :
Yup!
Posted by Sheila Ferrell (Member # 3741) on :
LOL. UH!
Would I lie??
Bobbie, Si's a man of few words but 'round here he's like E.F Hutton . . .
Posted by Cheryl Lucas (Member # 1656) on :
Hey Bobbie,
Chiming in to give you a 'You Go Girl!'
This year, I experienced the typically slow summer and on top of that a rough hurricane season. Though, through it all, I've managed to stick to my guns on pricing. You can do it too!
You're work is worth every bit of what you charge! Know it! Believe it!
When you're hurting for money, instead of feeling like you need to lower your price, to get the job, ask for what it's worth (or more) and get your price! Feel confident in knowing your worth...
I figure it like this; if I'm out of work and ain't makin' any money, I might as well raise my prices and make more money when I am workin'.
Still, I have room to improve...
Cher.
Posted by Kissymatina (Member # 2028) on :
As far as quantity discounts go, it depends on what the job is. If someone wants a 4x4 sign, you still gotta buy a 4x8 and the other 4x4 goes in the corner waiting till you need it someday. Now, if they want 2 4x4s, I may drop the price a bit because I'm still buying the same 4x8.
As far as taking jobs where you break even...If I wanted to be broke, I'd do it laying on my couch watching Springer, not working my butt off for the same $.
Posted by Bobbie Rochow (Member # 3341) on :
Thank you, Cheryl, you are a real sweetie, & quite an encourager, too!!!!!
Posted by David Harding (Member # 108) on :
My brother Dan tells of a guy who was working day and night doing jobs at half the price of the competition, losing money and his family because he had no time for them. He told my brother he needed to buy more equipment to get the work out faster. Dan told him he needed to double his prices instead. "But if I double my price, I'll lose half my business." "Do the math."
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