Getting Killed On Price - Engraving Etc. Forum

<body> <h1>Full Version: <a href="https://www.engravingetc.org:443/archive/index.php?webtag=EE&msg=6678.9">Getting Killed On Price</a></h1><a name="a6678_9"></a><p><b>From: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.9">#9</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>I could be "nice" and symnpathize with the OP and tell him all the platitudes and the things he wants to hear re his pricing , but I wont be. If hes 3x more expensive , he has a BIG problem right now.</p> <p>At the end of it all , in the face of competitors that can do the same thing as us , we are merely purveyors of a product or service thats not unique. <br /> If you are being undercut in a product or process , the fact is that you are not efficient or have adopted the wrong pricing structure. No one goes into business to make a loss , least of all your competition. <br /> If they can do it at 1/3rd of your price , your price is wrong for the market or that product. Be aware , the price you charge might be right for you , but that doesnt matter a whit. <br /> The choice is yours , stick to your guns and watch your market share dwindle and your machinery idle , or be proactive to your competitors pricing. If you cant even begin to match their pricing , then you need to seriously consider whether you should be competing in that market.</p><hr /><a name="a6678_10"></a><p><b>From: UncleSteve</b> [<a href="lmessages.php?webtag=EE&msg=6678.10">#10</a>]<br /> 18 Apr 2007<br /><b>To: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.9">#9</a>] 18 Apr 2007</p> Rodney,<br /> <br /> I must disagree to some extent.<br /> <br /> If I am working out of my garage or spare room and consider this a side business/hobby, doubling my cost is a "fair" price since it represents a sideline and not my rent money.<br /> <br /> If I have a retail space, pay rent, insurance, employees, taxes, carry inventory, etc., being 3 times as expensive on a low end item is also "fair" pricing.<br /> <br /> Many of us won't even turn the machine on for less than a $5-10 profit!<br /> <br /> On expensive items, I agree such as a cost of $125 and a retail of $500 could be excessive but at the low end of the scale, 4x cost is not unreasonable at all. <hr /><a name="a6678_11"></a><p><b>From: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.11">#11</a>]<br /> 18 Apr 2007<br /><b>To: UncleSteve</b> [<a href="lmessages.php?webtag=EE&msg=6678.10">#10</a>] 18 Apr 2007</p> <p>I take 5-6x the cost of materials as a good rule of thumb in terms of pricing a fabricated object - its not cast in stone.<br /> if your expenses in running a business mean your selling price is 3x more than your competitors , being blunt , you are innefficient in that market or with that product. Its a wake up call to examine your pricing or production or cost of production.</p><hr /><a name="a6678_12"></a><p><b>From: Stunt Engraver (DGL)</b> [<a href="lmessages.php?webtag=EE&msg=6678.12">#12</a>]<br /> 18 Apr 2007<br /><b>To: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.9">#9</a>] 18 Apr 2007</p> <div class="quotetext" id="quote"><b>quote: </b></div><div class="quote">we are merely purveyors of a product or service thats not unique. </div><br /> <br /> Rodney,<br /> <br /> If we're doing it right, we do have a unique product or hard-to-match service.<br /> <br /> I agree with what you're saying, if the example were novelty items that can be found anywhere, or a product like imaged T-shirts. Competiton is stiff and people will go with whoever is cheapest.<br /> <br /> It's the difference between creating an impenetrable niche and duking it out with the masses; and I've never been much of a fighter. :-) <hr /><a name="a6678_13"></a><p><b>From: Harvey only (HARVEY-ONLY)</b> [<a href="lmessages.php?webtag=EE&msg=6678.13">#13</a>]<br /> 18 Apr 2007<br /><b>To: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.11">#11</a>] 18 Apr 2007</p> <p>If your competition has an overhead of $0 per month, and you have $6000 per month, meeting his prices will bankrupt you fast.</p> <p>Getting every job out there is NOT a sign of good business, usually just the opposite.</p> <p>I would much rather lose a job that will result in a loss, than lose established customers that represent a gain.</p> <hr /><a name="a6678_14"></a><p><b>From: Mark (MAXMACHINE)</b> [<a href="lmessages.php?webtag=EE&msg=6678.14">#14</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>A long time ago, I decided that I was not going to work for free. Price is not what you sell, service is. We have large clients that don't even ask what the price is going to be... their primary concern is "is it going to be on time" and "will they deliver it". The item in question is worth at least $10.... unless you like working for free. Then it's worth about $3.</p> <p>Possible solutions:</p> <p>go fishing</p> <p>reduce your overhead</p> <p>stop eating</p> <p>live in a cave</p> <p>I like #1.</p> <p>Mark</p><hr /><a name="a6678_15"></a><p><b>From: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.15">#15</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>Ok, you got a competitor out there thats a 1/3rd of your price and is already taking your customers - Its yet to be proven that their service is significantly worse than yours. <br /> In my book if you dont react to that your business is in major trouble. You can wait till your competitor takes your market share and perhaps folds , and you maybe get your customers back after he goes belly up oir delivers bad service , thats if you havent gone down the tubes in that time.<br /> Or failing that , you can abandon that particular product or market segment if you cant compete there and find some other area where you can. Either way , you have to react.</p><hr /><a name="a6678_16"></a><p><b>From: Dave Jones (DAVERJ)</b> [<a href="lmessages.php?webtag=EE&msg=6678.16">#16</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <img src="http://www.redtengu.com/images/raw/howmuch.gif" /> <hr /><a name="a6678_17"></a><p><b>From: Laser Image (LASER_IMAGE)</b> [<a href="lmessages.php?webtag=EE&msg=6678.17">#17</a>]<br /> 18 Apr 2007<br /><b>To: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.11">#11</a>] 18 Apr 2007</p> <p>There is a significant difference between your price being 3x the competitors and their price being 1/3rd of yours. You are taking the stance that the OP is wrong in his pricing/production and he needs to take action to correct the problem. I submit that the "problem" is with the other business - he doesn't value his work highly enough and is undercutting his profitability and needs to correct his pricing accordingly.</p> <p>Just because a competitor is whoring himself out doesn't mean I have to, or that I am wrong!</p> <p>Not sure why you accused the OP of being the person who is wrong, it could just as easily been the competitor. For that matter, it could be both - the OP was a bit high and the competitor is a bit low.</p> <p>Gary</p><hr /><a name="a6678_18"></a><p><b>From: sprinter</b> [<a href="lmessages.php?webtag=EE&msg=6678.18">#18</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>My question is why would the customer even bother coming back to show an invoice for a cheaper price anyway?? Sounds like something is being left out here.</p> <p>But I agree that the $8 price is more than fair, if not on the low side.</p> <hr /><a name="a6678_19"></a><p><b>From: Mike (MIKEN)</b> [<a href="lmessages.php?webtag=EE&msg=6678.19">#19</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> You can get my two cents worth for $8. That is my price. <hr /><a name="a6678_20"></a><p><b>From: gt350ed</b> [<a href="lmessages.php?webtag=EE&msg=6678.20">#20</a>]<br /> 18 Apr 2007<br /><b>To: sprinter</b> [<a href="lmessages.php?webtag=EE&msg=6678.18">#18</a>] 18 Apr 2007</p> Ditto! <hr /><a name="a6678_21"></a><p><b>From: Goodvol (JIMGOOD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.21">#21</a>]<br /> 18 Apr 2007<br /><b>To: gt350ed</b> [<a href="lmessages.php?webtag=EE&msg=6678.20">#20</a>] 18 Apr 2007</p> <p>I tend to agree that if the "typical" cost of a product is $9 and someone sells it for $3, the masses should not have to jump down in price. If you think they should, what happens if someone does the job for $1 or even for free!?! Do you pay your customer a $1 for the privilege of filling his order? 8-O </p> <p>Personally, I think you should outsource your plastic plates to this guy so you can free up your time and push him closer to the poor house! You can still charge $9 and make your 3x and keep him busy not making money!!!</p> <p>Jim</p><hr /><a name="a6678_22"></a><p><b>From: RALLYGUY (RALLYGUY1)</b> [<a href="lmessages.php?webtag=EE&msg=6678.22">#22</a>]<br /> 18 Apr 2007<br /><b>To: Goodvol (JIMGOOD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.21">#21</a>] 18 Apr 2007</p> <p>Sweet idea!</p> <p><br /> Ask him for wholesale pricing.....Hahahahahahaha!!!!!!</p> <p><br /> Now that's taking lemons and making lemonade. :)</p><p class="edit_text">EDITED: 18 Apr 2007 by RALLYGUY1</p> <hr /><a name="a6678_23"></a><p><b>From: gt350ed</b> [<a href="lmessages.php?webtag=EE&msg=6678.23">#23</a>]<br /> 18 Apr 2007<br /><b>To: Goodvol (JIMGOOD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.21">#21</a>] 18 Apr 2007</p> Jim: I'm assuming that you intended your post to the originator of the thread, as opposed to "gt350ed". B-) <hr /><a name="a6678_24"></a><p><b>From: Rodney Gold (RODNEY_GOLD)</b> [<a href="lmessages.php?webtag=EE&msg=6678.24">#24</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>In terms of pricing , For him $8 is fair , for the competitor $2.50 is fair (I would actually sell an item like this based on reasonable qty at about $5 or a little less - cost of material is round 75c ) Pricing is also about what the market can bear.<br /> However this does not mitigate the fact that the guy has a REAL problem in his market in that he has a competitor agressively pursuing his customers and is pricing stuff at WAY below him.<br /> The days of him pitching his pricing at what he feels is fair and what he feels the market can bear are over now there is another player on the scene thats spoiling the party....thats the reality!</p> <p>We can all bleat unfair practices or stick to your guns etc , but thats not gonna help him at all. If he cant compete in that market or segment , then he needs to get out of it and if he wants to compete , he will HAVE to drop his prices or respond to his competitors strategy.<br /> He asked if he's outa line - in the circumstances he is in , he IS out of line in terms of pricing.</p><hr /><a name="a6678_25"></a><p><b>From: sprinter</b> [<a href="lmessages.php?webtag=EE&msg=6678.25">#25</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> Please post the shop that will do them for $2.50, I want to out source to him :D <hr /><a name="a6678_26"></a><p><b>From: Bill (ALBILLBERT2000)</b> [<a href="lmessages.php?webtag=EE&msg=6678.26">#26</a>]<br /> 18 Apr 2007<br /><b>To: ALL</b></p> <p>Ok my two cents.. it was never determined what the qty of plates a month was. Also what other business does this customer bring into your shop. If you just tell them you wont budge.. and that this is your price.. you could be loosing all the other potential business there giving you.. I would call the customer talk to him.. tell him your pricing and that you would love to keep his business.. and what does he think you have to do to keep your business.. </p> <p>Normally you would be surprised. The customer is just like us trying to cut costs, they like you , your prompt professional and great service. For him to show you the other companies price is him telling you to see if you can come to a compromise.. you might be surprised as to the price the customer thinks would be fair.. </p> <p><br /> think of all the business.. not just the one job... but again.. your not saying how many is a nice amount of plates per month... is it 15 is it 40 or 100 or more..</p><p class="edit_text">EDITED: 18 Apr 2007 by ALBILLBERT2000</p> <hr /><a name="a6678_27"></a><p><b>From: Jer (DIAMOND)</b> [<a href="lmessages.php?webtag=EE&msg=6678.27">#27</a>]<br /> 18 Apr 2007<br /><b>To: sprinter</b> [<a href="lmessages.php?webtag=EE&msg=6678.18">#18</a>] 18 Apr 2007</p> My customer did not come back with the invoice. I delivered the product to his office, (part of my service for a good customer). He looked at my invoice and told me he got the same product last year for $1.50 each. I told him the material cost more than that. He said he may be wrong so he pulled the invoice that showed he paid $2.50 each. He and I are friends and I appreciate the fact that we talk openly about these kind of situations. I also appreciate that he checked the original invoice to make sure what he had paid in the past. I do believe I must charge what the market will stand, but we are so far apart on this one that I will have to decide if I will lower my price, or give up on this job. I will not do it for $2.50 no matter what.<hr /><a name="a6678_28"></a><p><b>From: Stunt Engraver (DGL)</b> [<a href="lmessages.php?webtag=EE&msg=6678.28">#28</a>]<br /> 18 Apr 2007<br /><b>To: Jer (DIAMOND)</b> [<a href="lmessages.php?webtag=EE&msg=6678.27">#27</a>] 19 Apr 2007</p> <div class="quotetext" id="quote"><b>quote: </b></div><div class="quote">He looked at my invoice and told me he got the same product last year for $1.50 each.</div><br /> <br /> Jer,<br /> <br /> This is a true story. Pretty much the same line was given to a engraver friend of mine.<br /> <br /> My friend said, "That's a great price. Why are you talking to me?"<br /> <br /> The would-be customer replied, "Because that guy went out of business."<br /> <br /> Here's a separate "low bidder" story, from just this afternoon:<br /> <br /> A previous customer calls. He wants me to remove some existing engraving from his radios (walkie-talkies) and re-engrave them.<br /> <br /> <i>Note: For customers who don't want to replace the plastic housing, I occasionally route-out the existing engraving, which leaves an indented rectangle, then engrave new information in another area.</i><br /> <br /> I said, "Oh, you bought some radios from another company and want to put your information on them?"<br /> <br /> He said, "No, my company's name is already on them. The place I bought the radios from engraved them for free and I don't like the way they turned out. From now on, all my engraving goes to you."<br /> <br /> This won't be the first time I've fixed another engraver's <i>handiwork</i>.<p class="edit_text">EDITED: 18 Apr 2007 by DGL</p> <hr /><form accept-charset="utf-8" method="get" action="lmessages.php" target="_self"><input type="hidden" name="webtag" id="webtag" class="bhinputtext" value="EE" dir="ltr" /><input type="hidden" name="msg" id="msg" class="bhinputtext" value="6678.29" dir="ltr" /><input type="submit" name="submit" id="submit1" class="button" value="Keep reading…" /></form><p align="center">Show messages:  <a href="lmessages.php?webtag=EE&msg=6678.1">1-8</a>  9-28  <a href="lmessages.php?webtag=EE&msg=6678.29">29-38</a></p> <h4><a href="lthread_list.php?webtag=EE">Back to thread list</a> | <a href="llogout.php?webtag=EE">Login</a></h4> <h6>© 2024 <a href="http://www.beehiveforum.net/" target="_blank">Project Beehive Forum</a></h6> </body>