Alternative way of pricing?

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Alternative way of pricing?

Post by GeoSpectrum » Thu 29 Apr, 2021 8:57 am

At risk of starting off another pricing discussion i'm trying to work out a way of charging for a non standard product that, buy and large, is bought in and resold with only slight modification. The item in question is stretcher bar but with a design tweak I have devised. The problem I have is getting the price down to point where I can be reasonably competitive. if i run the stretcher though my pricing program im coming up with a price that just wont fly.

Is there another way of doing this? Given I'm buying in and selling on i might expect to charge minim markup on material but add the hours plus overhead and profit to reach the final price.

Any thoughts?
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Re: Alternative way of pricing?

Post by Steve N » Thu 29 Apr, 2021 12:18 pm

In normal retail business, buy in and charge around x 2.5 the cost price, that's without doing anything to the product, and that mark-up covers your overheads, or you could just sell for the price you are reasonably competitive, ask the supplier for discount for quantity
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Re: Alternative way of pricing?

Post by Not your average framer » Thu 29 Apr, 2021 12:33 pm

This is a hard one! You still have much the same amount of wastage making up stretchers and there is always the cost of disposing of that waste. At what point does it cease to be worth doing stuff like this? I don't think that this is always a simple question to answer! Personally, I would not be thinking about reducing my hourly labour rate. So how much is it worth reducing your materials mark up? I don't have a separate figure for labour rate and material mark up, I just have a general mark up to cover everything. If push came to shove, I might drop by 20 to 25 percent if I really needed the work. I'm not always spending all other time doing picture framing and the time spend doing some essential tasks still needs to be covered at least to some degree from somewhere. If I'm cutting my mark up on my productive work to the bone, what's that going to do to my cash flow and overall margins. What effect this may have in theory and in practice, may not only be difficult to determine, but may not be something that you can't know for sure until much later.

Are you trying to compete with a well geared up large production specialist outfit, or just other normal framers? Also how far do you need to come down to compete on equal terms? I guess if a lot of your customers are artist and they come to you for other items as well, then it good to give them plenty of reason to keep coming to you, in order to pick up other sales as well. I don't personally think that customers will necessarily take their business somewhere else, because they can make trivial savings. If they have to make an extra trip to save only a few pence, it's pointless! I have no doubt that you are offering excellent quality and service, which must count for a lot. I think there maybe some wiggle room here for two pricing options. How about your normal quality of stretchers and a economy version, using a cheaper stretcher moulding, if the price difference between the two options is not excessive in the minds of your customers, there is a good chance that some will decide to pay the extra for something which appears to be superior.

I have some items where I have the option to offer three different items at three different price levels, it's a quite deliberate business strategy, most customers will take the middle option. It does not matter what you are selling, it is a proven fact that sales psychologists have found to be true and it works. The secret it to be good at guessing how much extra customers are likely to be willing to pay for something a bit better that just the basic option. I don't like losing the sale, so it's nice to have a back up option just in case they don't want to spend quite as much money. Not all of my srtetcher mouldings are purpose made stretcher mouldings, a couple are chunky pine mouldings with part of the sight edge cut down on the table saw. Normally I use these mouldings just as picture frame moulding, I like to use stock items for more that one thing. If customers don't like the price, I prefer to offer them something else. They might be looking to try and get me to drop my price, well I don't really want to play that game, so they get offered something cheaper. Many of these customers, eventually pay what I was originally asking for the original item.
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Re: Alternative way of pricing?

Post by JFeig » Thu 29 Apr, 2021 1:07 pm

Alan, contact me privately. I am experienced in cost accounting.
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Re: Alternative way of pricing?

Post by Gesso&Bole » Thu 29 Apr, 2021 6:02 pm

There's no reason to apply the same pricing strategy to everything.

Is there a significant labour element to this product? If not, then you can just look at the price that the market will stand, and then see if the cash margin that you will earn on each sale is sufficient for you.

If there is significant labour, then cutting down the margins from your usual pricing could lead to problems if the product goes well, as you could find yourself becoming a 'busy fool'!
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Re: Alternative way of pricing?

Post by Not your average framer » Fri 30 Apr, 2021 11:39 am

So, what is the normal pricing strategy for stretcher frames in general? I've never seen it as being much different that charging the same way as charging for just the rim of a frame alone. Am I wrong in thinking this? It's not that I sell I stretcher frames by themselves. In fact as far as I know, I can never recall any enquiries about my supplying stretcher frames by themselves. I've only ever supplied stretcher frames as part of jobs where as canvas needs stretching on to a frame and even that is not something that happens not all that frequently.
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Re: Alternative way of pricing?

Post by GeoSpectrum » Fri 30 Apr, 2021 12:20 pm

I wanted to offer a particular aluminium reinforced stretcher to my customers, many of whom stretch thier own canvases. I couldn’t source the one I wanted so decided to devise my own solution which for a while was working out rather expensive hence my question. I’ve since found another cheaper method of making them so will be able to apply a normal pricing method to them. Here is a photo if anyone’s interested.
FAC4EDD9-88C7-4FDD-83DF-68B12744BDC5.jpeg
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Re: Alternative way of pricing?

Post by Not your average framer » Fri 30 Apr, 2021 1:05 pm

Oh wow! Now I can see what this is all about! This is clearly a premier quality product and it looks fantastic. I'm really impressed.

:clap: :clap: :clap:

I'm guessing that the wood moulding is probably specially machined to order and that the aluminium extrustion it something that is a standard product. You have mentioned the material element and the labour element of the pricing, but I would suggest that there is also an interlectual element as well. No doubt you have designed this as well and I'm thinking that there should be a financial return on this as well.

Great job!
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Re: Alternative way of pricing?

Post by JFeig » Fri 30 Apr, 2021 1:32 pm

Short of producing a custom machining system, I would suggest that you join the wood and aluminum portions of the stretcher bar system separately and then assemble the 2 together.
1. assemble the aluminum portion without fasteners.
2. wrap the wood portion around the "squared" aluminum portion.

OR

1. miter cut the aluminum portion
2. cut open mortise and tenon ends to the wood portion
3. attach the aluminum portion to the wood portion
4. sell in a ready to assemble "knock-down" configuration.
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Re: Alternative way of pricing?

Post by vintage frames » Fri 30 Apr, 2021 3:37 pm

'Looks ingenious and unique.

Maybe set aside the pricing programs and ask - 'what's the maximum I would be prepared to pay for something like this?'
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Re: Alternative way of pricing?

Post by GeoSpectrum » Fri 30 Apr, 2021 9:22 pm

I join the alloy and wood profile in 3m lengths. Too much messing around cutting them separately. Plus I make them
To order so store several lengths ready to cut.
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Re: Alternative way of pricing?

Post by Not your average framer » Fri 30 Apr, 2021 10:43 pm

A very professional looking and well presented product. Something you should be very proud of. Excellent in every way.

:clap: :clap: :clap:

This is a truly top draw product and I don't see any reason why this should not command a premium price reflecting something of obvious quality of design and manufacturing excellance!
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Re: Alternative way of pricing?

Post by JFeig » Sat 01 May, 2021 12:35 pm

So, I take it you are making your own version of strainer bars vs adjustable stretcher bars?
I assumed that you were making the adjustable version since you used the term "stretcher bars".
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Re: Alternative way of pricing?

Post by GeoSpectrum » Sat 01 May, 2021 2:38 pm

Stretchers. They are adjustable.
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Re: Alternative way of pricing?

Post by JFeig » Sun 02 May, 2021 1:58 pm

:yes: :yes:
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Re: Alternative way of pricing?

Post by cleaver » Sun 12 Sep, 2021 8:45 am

Like others have said, it looks brilliant. BTW, what about a patent? Seems unfair that big companies could potentially just swoop in and do their own version without you getting anything for the idea and toil that went into perfecting it. Any road up, well done :clap: :clap: :clap:

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