If you cut your costs...

[Barry]

If you cut your costs do you cut your prices?

Over the last year of owning my versacamm I have cut my costs from around a $1 a sq foot to around $0.35 a sq foot. I however do not feel it necessary to lower my prices. I figure all the work/research I do to cut my costs is covered by the savings. It is however nice to be able to lower the price that extra bit when you really need to. Some of the bigger jobs you really have to cut the prices to be competitive.

[jayhawksigns]

We haven't cut our cost any, it may cost us less to produce banners now but we still have to pay for the equipment that allows us to do it. Actually, I believe for full color, full bleed banners we charge more. They are speciality items right .

[mastergutah]

Anybody who spends a fortune on expensive equipment, and does a lot of research to lower his costs, and then lowers his prices, is an idiot.
.,
Remember: you'd didn't buy expensive equipment to save your customers money- you bought it to make money for yourself.
Anybody who wants to work for free can paint my kitchen!

[John Miller]

Originally Posted by mastergutah

Anybody who spends a fortune on expensive equipment, and does a lot of research to lower his costs, and then lowers his prices, is an idiot.
.,
Remember: you'd didn't buy expensive equipment to save your customers money- you bought it to make money for yourself.
Anybody who wants to work for free can paint my kitchen!

You said a mouthfull there. I agree completely.

[bpatrick3]

If you got the materials FREE would you produce your signs and banners for FREE?

I know is sounds a little harsh, but it is a fair question.

I have also asked myself the same question when Got my VersaCamm,
All of my pricing was based on HP3000 printing Dye and UV inks and that more expensive to run. I have lowered my pricing to competive level but not bargain basement. What has kept me more competive is not having to laminate everything.

[tdgraphics]

The way I see it, you paid a sign shop to provide you with the prints etc, which you then passed on to your customer for a fair price.

Now you have purchased your printer, you still have to pay for your materials, AND you have to pay for the investment made in the the printer. Therefore although you may find that your overall costs have gone down, you still need to factor in your investment costs.

You should not reduce you prices as the customer may think you have been ripping them off over the past few years.

Much better to charge the same as before and increase your profits at present. Then with the cost of materials going up all the while, you may be better positioned to absorb some of those costs without significantly upping the cost to your customers, keeping the customers happy.

Thats the way I see it anyway.

Neil

[Merritt Graphics]

Cutting costs just allows you to play a better hand of Poker when pricing projects. If you hold to standard pricing, more margin. If you want to win jobs effortlessly than extend your C.O.G savings. In the end you didn't lose a dime.

[mastersignwizard]

Originally Posted by Merritt Graphics

Cutting costs just allows you to play a better hand of Poker when pricing projects. If you hold to standard pricing, more margin. If you want to win jobs effortlessly than extend your C.O.G savings. In the end you didn't lose a dime.

That is very true...... but how much time did it take for you to find out how to cut your cost????? that is worth money as well!

[HandLaminator]

I know that some of us see a seasonal peak in sign making. To keep our customers happy, we have to be able to get the job done in a reasonable amount of time. If we get too far behind, some customers will go somewhere else to get it done faster. To many customers, getting it done faster is worth more. It is important that we service as many customers as walks in the door during peak periods

If we cut our prices because we can do the job faster then we are cutting our profit margin. I can do lamination and mounting up to 10 times faster than with any other method I have ever tried. The process didn't cost very much. Does that mean I cut my prices? How is this going to make the customer feel? If the customer is getting the job done faster with just as good quality, I would think he would be willing to pay more for it.

[mastersignwizard]

well guys I just had a new sign shop open up sometime this week This @#$%@#$#$% is charging $3.75per sq ft for digital printing. he has all new equipment (sp300) How long will this digital monkey be in business!!!! I give it 3-6 months.... I am inexpensive compared to some shops out here but $3.75 per sq ft. for retail is just nuts....... the owner is 19. One of my customers came in with a sign he had just done for him and it looked like #$%%$#@@@#$. I don't think he will last long.