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Don't hate me because I'm beautiful

 
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Old January 21st, 2008 Jan 21, 2008 5:33:31 AM -   #1 (permalink)
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Default Don't hate me because I'm beautiful

Don't be angry with me when I
  • Don't charge a setup fee. My business model allows me to work with 'out-the-door pricing'. This makes my customers happy because they know how much they will be charged without any surprises or industry jargon. After all, how many of your customers know what a 'tape charge' covers?
  • Charge less than you. A capitalistic model, like what we have in the USA, guarantees that the customer will get the lowest price through competition. Your high profit margin is what attracted me to the business in the first place. The first thing you learn in Business 101 is to charge the highest price the market will pay. The second lesson is to charge a price low enough to prevent competitors from entering your market. Guess what, you fell asleep after lesson 1, I didn't.
  • Have lower overhead than you. So I purchased the latest equipment and software that makes my operating costs lower and thus I can price lower. Yes, your expensive graphic artist is talented and has years of experience but my customer just wants his logo at a reasonable price.
  • Provide services to customers you would not touch. Yes, I do one-offs, short runs, and provide services you would never do because your hourly rate won't allow you to service these customers. It is my business, not yours. If you don't want these customers then don't tell me I shouldn't service them.
I don't see that much, if any, griping at this forum about stuff like this, but holy cow, a few other forums that I frequent is filled with posts by the same 8 guys all complaining about how some guy in his garage bought a cheap cutter and photoshop and is selling product for as little as 5% of their selling price. They wax-poetic about the good old days when they charged for setup by color, a high hourly rate, their craft involved lots of labor and required a learned skill, etc, etc, etc. Give me a break. No business model stands still and those that fail to adjust will go out of business.

Remember White Front, Grants, Montgomery Ward? Others that nearly went out for good (and some still may), K-Mart, Harley Davidson, Sears.

So, don't hate me because I'm beautiful.
 
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Old January 21st, 2008 Jan 21, 2008 6:03:14 AM -   #2 (permalink)
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Default Re: Don't hate me because I'm beautiful

Feel better?
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Old January 21st, 2008 Jan 21, 2008 6:19:29 AM -   #3 (permalink)
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Default Re: Don't hate me because I'm beautiful

Yes I do. There is another forum out there where 50% of the threads are 'look at what this guy did, it's just awful'. Responses often include other berating of the job and descriptions of the 'good old days' when they were free to charge for their 'creative work' rather than just doing what the customer wanted.

The one that sent me over the edge was this morning where a guy was complaining about the awful artwork that the client wanted. He wasn't complaining about the format or quality of the art from a usability standpoint, he just thought it was ugly and wanted to change it. I just don't get it. If someone gives me something that he wants printed, as long as it is doable, why would I argue?

My intent is more to spur conversation on business models and how to successfully operate in this space. I am actually happy when my competitors get angry with me. We operate with a business model that allows us to charge less and make money. We operate in a space that has a lot of pent up demand that has gone unsatisfied. We are backlogged with about 3 weeks of work now since November. We work about 40 hours each week so it is pretty much full time now.

Last edited by binki; January 21st, 2008 at 06:28 AM..
 
 
Old January 21st, 2008 Jan 21, 2008 6:58:23 AM -   #4 (permalink)
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Default Re: Don't hate me because I'm beautiful

I just don't like when people like the one's you describe are complaining period. If this one guy that they're complaining about is really out of his home or garage then he should be having a very hard time and should be working much harder than the guys with storefronts are to get his sales. I know that I had to when I started. Good for him for not being a couch potato.

If he's taking their sales and getting all of their business I think that that is mainly their problem, not his. However, if he really is underpricing that badly, then he is hurting the market and ultimately himself, since as he grows and has larger overhead, he will still have to give his customers the same low prices and will have to accept a lower profit margin.

I don't see how 5% of their charges could be realistic. The guy wouldn't be able to make a living doing that. That's like if I was charging $8.50 for each t-shirt, he would be charging less than $0.50. How would that work? Unless these complainers are charging way to much to start with.
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Old January 21st, 2008 Jan 21, 2008 7:08:26 AM -   #5 (permalink)
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Default Re: Don't hate me because I'm beautiful

One problem with printing horrible artwork is if people ask where they got those shirts from, I don't want my name associated with it. People won't look at the quality of the print, just the design.

Um, also how does buying the latest software and equipment make it so you have a lower overhead? Most of our stuff is paid off.

Also, what is the purpose of this post? Did you just want to compare size or something?

Our business model is ever-evolving. We have to change to what the market is doing, these aren't drastic changes, just small(er) ones. As competitors come and go, it's nice to see that we are still here and stil making money.
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Old January 21st, 2008 Jan 21, 2008 7:29:02 AM -   #6 (permalink)
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Default Re: Don't hate me because I'm beautiful

Quote:
Originally Posted by tim3560
However, if he really is underpricing that badly, then he is hurting the market and ultimately himself, since as he grows and has larger overhead, he will still have to give his customers the same low prices and will have to accept a lower profit margin.
Says who? He's free to jack up his prices once he drives the competition out of business. Happens all the time.

Quote:
Originally Posted by tim3560
I don't see how 5% of their charges could be realistic. The guy wouldn't be able to make a living doing that. That's like if I was charging $8.50 for each t-shirt, he would be charging less than $0.50. How would that work? Unless these complainers are charging way to much to start with.
Materials cost for printing a basic one color shirt is on the order of $3. If you have lots of spare time (or are very bad at business) you can get away with not charging for it. It's the same principle that applies to outsourcing. If you pay less for labor, you can charge less for your product.

Being an engineer that's locked up in a cubicle most of the day, I have been pretty naive about the business world. One thing that's been VERY apparent to me is that there is very little true competition out there. Prices are fixed in almost every industry to preserve profit margins.

If you've been in that system long enough, of course you're going to ***** if somebody doesn't play by the 'rules'!
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Old January 21st, 2008 Jan 21, 2008 7:34:31 AM -   #7 (permalink)
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Default Re: Don't hate me because I'm beautiful

Quote:
Originally Posted by mk162
Our business model is ever-evolving. We have to change to what the market is doing, these aren't drastic changes...
My point exactly.
 
Old January 21st, 2008 Jan 21, 2008 7:48:32 AM -   #8 (permalink)
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Default Re: Don't hate me because I'm beautiful

Well, if you don't change to market conditions, you will fail. Let's face it, business is different now than it was 10 years ago. What worked then, might not work now.

Of course, finding a niche and filling it is probably the best route to take. It seems you have found one. The guys that do amazing custom, almost retail like work have also found theirs. It's all a matter of what you want your market to be.

We are starting to focus on nicer embroidered apparel since we make more per item than sewing the basic polos. Less work and more money.
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Old January 21st, 2008 Jan 21, 2008 8:01:32 AM -   #9 (permalink)
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Default Re: Don't hate me because I'm beautiful

I agree that if you can realistically charge a lower price, you should be able to, but you also need to consider other things.

Mark was telling me about three sign companies in Alabama when he lived there. Two of them had existed for quite some time. Then a third came in and started undercutting the other two. Those two had to lower their prices to get work. Then the newbie lowered his prices even more, then the other two had to follow suit if they wanted any jobs. This went on for a while until they were all charging so little that they weren't actually making any money on what they were selling, and all three went out of business within about a month of each other.

Competition is a good thing, but you also need to consider the market. If you have lower overhead and you charge less than everyone else, fine, but soon the market will EXPECT much lower prices, and when your overhead goes up, you won't be able to offer those lower prices anymore and you won't be able to compete.

This has been one of the factors to jobs being outsourced to other countries. People now expect such low prices now that American companies can't compete. We lose jobs.

I'm not saying that companies shouldn't adjust to current market conditions, but you still have a responsibility to the market as a whole.
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Old January 21st, 2008 Jan 21, 2008 8:08:35 AM -   #10 (permalink)
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Default Re: Don't hate me because I'm beautiful

The 5% example I used was for printed vinyl banners. Some guy was offering something like under a buck/sqft in a market that normally sells $10/$20 a square foot.

The latest battlefront seems to be vehicle wraps. The skill is in the application which does require some amount of knowledge but it isn't rocket science. There is a ton of margin in wraps right now and that very fact is what attracts competition. As more competitors enter the space, the price must go down.
 
Old January 21st, 2008 Jan 21, 2008 8:15:53 AM -   #11 (permalink)
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Default Re: Don't hate me because I'm beautiful

Supply and demand, if too many people offer their services, you're right, it becomes more competitive. Same thing as in screen printing, there are so many shops that come and go because they figure they can survive off of lower prices than their competitors. The problem is, they went too low.
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Old January 21st, 2008 Jan 21, 2008 11:53:57 AM -   #12 (permalink)
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Default Re: Don't hate me because I'm beautiful

Quote:
I don't see that much, if any, griping at this forum about stuff like this, but holy cow, a few other forums that I frequent is filled with posts
I'm glad you've found this forum to be a bit "different" than other forums
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Old January 21st, 2008 Jan 21, 2008 2:12:38 PM -   #13 (permalink)
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Default Re: Don't hate me because I'm beautiful

Quote:
Originally Posted by binki
Don't be angry with me when I
  • Don't charge a setup fee. My business model allows me to work with 'out-the-door pricing'. This makes my customers happy because they know how much they will be charged without any surprises or industry jargon. After all, how many of your customers know what a 'tape charge' covers?
  • Charge less than you. A capitalistic model, like what we have in the USA, guarantees that the customer will get the lowest price through competition. Your high profit margin is what attracted me to the business in the first place. The first thing you learn in Business 101 is to charge the highest price the market will pay. The second lesson is to charge a price low enough to prevent competitors from entering your market. Guess what, you fell asleep after lesson 1, I didn't.
  • Have lower overhead than you. So I purchased the latest equipment and software that makes my operating costs lower and thus I can price lower. Yes, your expensive graphic artist is talented and has years of experience but my customer just wants his logo at a reasonable price.
  • Provide services to customers you would not touch. Yes, I do one-offs, short runs, and provide services you would never do because your hourly rate won't allow you to service these customers. It is my business, not yours. If you don't want these customers then don't tell me I shouldn't service them.
I don't see that much, if any, griping at this forum about stuff like this, but holy cow, a few other forums that I frequent is filled with posts by the same 8 guys all complaining about how some guy in his garage bought a cheap cutter and photoshop and is selling product for as little as 5% of their selling price. They wax-poetic about the good old days when they charged for setup by color, a high hourly rate, their craft involved lots of labor and required a learned skill, etc, etc, etc. Give me a break. No business model stands still and those that fail to adjust will go out of business.

Remember White Front, Grants, Montgomery Ward? Others that nearly went out for good (and some still may), K-Mart, Harley Davidson, Sears.

So, don't hate me because I'm beautiful.
Great post Fred!

I agree with your comment about not seeing much griping on this forum about such things. I have visited several other forums and most if it is just as you describe. Which is why my home is here!!

You make some very valid points. We don't charge setup fees, design charges or screen charges but offer one price that covers everything and we are still lower than them according to customer feedback and our own research. There are many that don't agree with that but they typically state their point but don't berate it here.

Hey..if I can live confortably with my pricing structure and offer something different than the other guys in town...why not? I'm not responsible for the other guys. Do you think they are worried about me?? Now, I'm not purposely trying to close down businesses but rather shake things up a bit. In our area, there have been a few guys in town for many years and they pretty much offer the same services and prices for screenprinted work. We came in with a different idea and are making it work. Trust me...if I can raise my prices successfully...I would!.

We've invested in technology (DTG & vinyl cutter) that allows us to do low volume (as low as 1 shirt) and use indirect (plastisol) & direct screenprinting for higher volume jobs. My brother-in-law is a good degreed graphic designer that also helps us manage the business / store.

In a nut shell...we go where others do not and don't want to go with their business model. The market will decide if we are right or wrong.
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Old January 21st, 2008 Jan 21, 2008 2:24:52 PM -   #14 (permalink)
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Default Re: Don't hate me because I'm beautiful

Quote:
Originally Posted by Rodney
I'm glad you've found this forum to be a bit "different" than other forums
Most forums are dominated by a few who chase away all newcomers that have a different opinion or ask a naive question. This one has many contributors and lots of questions in many categories. It is simply the best all around garment decorating and promotional product forum.
 
Old January 21st, 2008 Jan 21, 2008 2:32:11 PM -   #15 (permalink)
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Default Re: Don't hate me because I'm beautiful

There's one dude on another site... who's name i wont mention that thinks it's all about him... Posting about what he's up to and what he thinks and if anyone questions his judgement... he goes nuts... kinda sad... lol

These forums are cool... A lot of great info to be found and everyone has been nice and helpful...
 






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