Let's Play "What Would You Charge"

[Scott Shepherd]

Yeah, I don't agree with that at all Bert. Items and services have value. The markets determine the value. I don't follow the train of thinking that if you're not doing anything, you should charge less. Some people do, I'm just not one of them. Our services have value. That value doesn't cheapen depending on our financial situation. Starbucks custom makes every drink that comes through. Their product has a value. They don't lower the prices when there's no line, or raise the prices when the line is out the door. If they have a great quarter, they don't lower the price of their products.

There's the example of people having a slow machine. Let's say you have a machine that takes 5 minutes to do this job and you get $5 for it. If you go buy a faster machine and spend $30,000 to get it, but it does it in 2 1/2 minutes, do you lower your price to $2.50? Then you get a faster machine, you lower it to $1.25? Or you buy 2 more cheaper machines. Do you lower it to $1 each? No, you profit from your increase in productivity. Otherwise, there would be no incentive to spend money on modern, faster machines. If I take $1000 in machine time to make a sign, but then buy a machine that does it in 1/2 the time, I'm certainly not going to lower my price to $500. That would defeat the purpose of buying a faster machine. The faster machine lets me double my profits, not maintain them at the same level.

Some people don't look at it the same way I (and others) do, but I still believe that all products and services have a market value and that's what the price should be.

You might find out that the market value for these imaginary plaques is $23 each. If that's the market value for them, and what their budget is set for and has been for years, then you just left a pile of money on the table at $5 each. You could have been making 4 times the money in the same time frame, which, to me, is a good thing.

[Jerome Stanek]

When I was bidding drug store installs I would give them a break if I knew that I only had that store for the next month as I would have to still pay my help. I would rather make a little less money than no money. Just like when we would be out of town and some motels would give us a break as they still had to pay the help and there wasn't anyone staying there. A couple of the clerks said not to let anyone walk out because of the motel next door is cheaper. I did get some great rates that way. had a couple tell me if you find it cheaper they will beat the price.

[Neil Pabia]

This one is easy, I would just load them up and bring them to my shop in CT which has 2 steps down and the truck is less than ten feet from the door. My laser is about fifteen feet in from the door so this is getting real easy. Now, I would do it for $6 each as long as you bring them here and I could have them done in two days (early in the week) for you (one day if you want to pay more). We will even load and unload for you.

[Keith Winter]

Bam! And just like that Bert is no longer the low bid! Let's see how long this takes to race to the bottom.

This one is easy, I would just load them up and bring them to my shop in CT which has 2 steps down and the truck is less than ten feet from the door. My laser is about fifteen feet in from the door so this is getting real easy. Now, I would do it for $6 each as long as you bring them here and I could have them done in two days (early in the week) for you (one day if you want to pay more). We will even load and unload for you.

Wise words Scott! Kirk, Bones, and I approve.

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Yeah, I don't agree with that at all Bert. Items and services have value. The markets determine the value. I don't follow the train of thinking that if you're not doing anything, you should charge less. Some people do, I'm just not one of them. Our services have value. That value doesn't cheapen depending on our financial situation. Starbucks custom makes every drink that comes through. Their product has a value. They don't lower the prices when there's no line, or raise the prices when the line is out the door. If they have a great quarter, they don't lower the price of their products.

There's the example of people having a slow machine. Let's say you have a machine that takes 5 minutes to do this job and you get $5 for it. If you go buy a faster machine and spend $30,000 to get it, but it does it in 2 1/2 minutes, do you lower your price to $2.50? Then you get a faster machine, you lower it to $1.25? Or you buy 2 more cheaper machines. Do you lower it to $1 each? No, you profit from your increase in productivity. Otherwise, there would be no incentive to spend money on modern, faster machines. If I take $1000 in machine time to make a sign, but then buy a machine that does it in 1/2 the time, I'm certainly not going to lower my price to $500. That would defeat the purpose of buying a faster machine. The faster machine lets me double my profits, not maintain them at the same level.

Some people don't look at it the same way I (and others) do, but I still believe that all products and services have a market value and that's what the price should be.

You might find out that the market value for these imaginary plaques is $23 each. If that's the market value for them, and what their budget is set for and has been for years, then you just left a pile of money on the table at $5 each. You could have been making 4 times the money in the same time frame, which, to me, is a good thing.

[Mike Null]

It's fairly easy to see who's playing and who's trying to run a business.

[Kev Williams]

Neil's bid may be lowest, but only with stipulations! ("as long as...")

But that's fine! "Businesses" and "small businesses" simply can't do business the same way. You guys with big shops and employees and meetings and accountants and lawyers and tax advisers and all that that entails have to hold fast to your rules and pricing. Totally understood.

Us 'one-man-show' guys who are all-of-the-above, and who consider nearly every regular customer who picks up and drops off as "friends" (what percentage of YOUR customers bring you gifts around the holidays? ), we have some wiggle room to make adjustments depending on the situation.

And I'll always figure out a way to work the work in. Since my dad bought a Scripta 3D pantograph and a business license in 1966, we have never turned a single job away.

[Ross Moshinsky]

This site illustrates what's going on in the engraving industry. You have "real businesses", "home businesses", and "hobbiest businesses". As a result, you see different thinking, different situations, and different pricing practices. It's very easy for a home business to charge less. They don't have any real additional fixed costs. As a result, they can easily afford to charge less. Imagine if rent, utlities, ect all went away or went down to essentially 0. It makes bidding lower on certain jobs easier because you have that flexibility. Home businesses often have to charge less, unless people don't know you operate out of your home. Home businesses, in general, have a horrible reputation for being unreliable. How many B&M stores get customers coming in with a job because their guy dropped the ball or couldn't handle the job?

The other thing that's going on in the awards industry is there are a few big companies that have really dropped the price on everything. They have low cost employees ($10-15/hr) and are making their money on numbers. They don't want 10 plaques where they make good money. They want 100 plaques and they'll make okay money on each. I contacted one of the companies last month out of curiosity if they could do a very rush job. Their answer was no problem and the price was the same. Who am I to tell them how to run their business? I don't know if they're actually making a profit but I do know they've expanded their business 3 times over the last 10 years. They could be in huge debt with their fingers crossed that they'll keep growing and pay off their debt in a few years.

[Bert Kemp]

So Scott you have an engraving business in Rural Louisiana and a local store big box or not wants you to do this job you charge $12 a board.


So Scott you have an engraving business in Beverly Hills California and a local store big box or not wants you to do this job you charge $12 a board.

If you tell me yea on both I wouldn't believe you. You'd go out of business in both place's

Everything I read here in this forum and other places I see a term called what the market will bear and if your overpriced you loose and if your under priced you loose.

[Bert Kemp]

My point exactly Scotts statement doesn't hold water. If he doesn't adjust his prices for what the market will bear he will lose. He's getting 12 today but whats his name is doing it for 11 so who gets the job.

This site illustrates what's going on in the engraving industry. You have "real businesses", "home businesses", and "hobbiest businesses". As a result, you see different thinking, different situations, and different pricing practices. It's very easy for a home business to charge less. They don't have any real additional fixed costs. As a result, they can easily afford to charge less. Imagine if rent, utlities, ect all went away or went down to essentially 0. It makes bidding lower on certain jobs easier because you have that flexibility. Home businesses often have to charge less, unless people don't know you operate out of your home. Home businesses, in general, have a horrible reputation for being unreliable. How many B&M stores get customers coming in with a job because their guy dropped the ball or couldn't handle the job?

The other thing that's going on in the awards industry is there are a few big companies that have really dropped the price on everything. They have low cost employees ($10-15/hr) and are making their money on numbers. They don't want 10 plaques where they make good money. They want 100 plaques and they'll make okay money on each. I contacted one of the companies last month out of curiosity if they could do a very rush job. Their answer was no problem and the price was the same. Who am I to tell them how to run their business? I don't know if they're actually making a profit but I do know they've expanded their business 3 times over the last 10 years. They could be in huge debt with their fingers crossed that they'll keep growing and pay off their debt in a few years.

[Ross Moshinsky]

My point exactly Scotts statement doesn't hold water. If he doesn't adjust his prices for what the market will bear he will lose. He's getting 12 today but whats his name is doing it for 11 so who gets the job.

That's actually not what I said. If I had the choice of dealing with someone out of their garage pricing lower vs a business with a reputation that is working regularly but charging more, I'm more inclined to pick the regular business. Not always, but if it's serious business where I need something done right, I'm not taking a risk. I've had little luck going with the guy who thinks he can price lower because of all the reasons listed in this thread. They either don't know what they're doing, do a bad job because they think they can get away with it, a flake, or a million other things. You can't be those things and afford $6000/mo in fixed costs. You'll go bankrupt or go out of business in a few months if you are. Being able to make rent every month and pay your employees is a decent test to see if a business has a clue what they're doing.

Also I have no clue what the company I'm talking about in the awards industry is doing. They could be debt free making money hand over fist. I know their material costs, within 5-10%, but the rest is a complete unknown to me. They could be growing but driving themselves out of business or they could be growing and being insanely profitable or somewhere in-between.

My point is, there are a lot of different people out there and they can charge different amounts for different reasons.

[Keith Winter]

My point exactly Scotts statement doesn't hold water. If he doesn't adjust his prices for what the market will bear he will lose. He's getting 12 today but whats his name is doing it for 11 so who gets the job.

This is so incredibly inaccurate it's hard to put into words. Open any college text book and the first thing they will tell you is you cannot win on price alone which is what you are suggesting. It's ALWAYS a race to the bottom. I recently completed certification in Business Strategy from Cornell University. The first thing they taught on there, just like they taught in college, was you cannot compete on price alone unless you are one of the big boys in the industry who can weather the price war storm + those super big guys have lower input costs than anyone on this board does. That is why they can charge those lower prices. The guys Ross is talking about are those types. To compare yourself to those massive players and say hey I'm right and Scott is wrong is ridiculous. Your time is valuable too even if you don't have to pay someone else for it. There is always a cost for everything and an opportunity cost. For example, yours might be might seeing your children as much, instead of financial. If you choose to not consider all the costs you put into something that's fine, but don't make it personal we're all friends here

[Keith Winter]

I had the opportunity to talk to one of these "mega" shop owners last spring at the ARA in Las Vegas. I'm sure I have his card in my desk somewhere. He flew there from the UK just for the show. He didn't give me exact numbers but I got the impression he was running not 2 or 3 machines, more like one or two dozen lasers and an army of sandblasters. He talked in 1,000s of units not in dozens or hundreds like we're talking about. It was really eye opening to hear. I got the impression that mega shops/vendors like him didn't really view us as the competition. A 100 plaque job they might take, but it really wouldn't be of much interest to them, low priority. They wanted 1,000s or 10,000s of units. Leading me to assume they probably are competing more against a customer going direct to china and having it done, vs most, if not all of us on this board. When you get to that level say you're Jack Daniels and you want 10,000 engraved cutting boards to give away with your new BBQ sauce, the engraver has to be extremely cheap or JD will just leap frog you and go direct to China. Plus when you are doing serious volume like 1,000 or 10,000 boards the pendulum on cost starts to swing the other way. You get more efficient at it, you find ways to make the job take a few seconds less on every board, you source the boards cheap + you do the engraving, and sell the boards and engraving combo as a package to Jack Daniels to increase margin, etc. Local guy who says he'll do it for $5 a board isn't even in their decision matrix.

The other thing that's going on in the awards industry is there are a few big companies that have really dropped the price on everything. They have low cost employees ($10-15/hr) and are making their money on numbers. They don't want 10 plaques where they make good money. They want 100 plaques and they'll make okay money on each. I contacted one of the companies last month out of curiosity if they could do a very rush job. Their answer was no problem and the price was the same. Who am I to tell them how to run their business? I don't know if they're actually making a profit but I do know they've expanded their business 3 times over the last 10 years. They could be in huge debt with their fingers crossed that they'll keep growing and pay off their debt in a few years.

[Ross Moshinsky]

I had the opportunity to talk to one of these "mega" shop owners last spring at the ARA in Las Vegas. I'm sure I have his card in my desk somewhere. He flew there from the UK just for the show. He didn't give me exact numbers but I got the impression he was running not 2 or 3 machines, more like one or two dozen lasers and an army of sandblasters. He talked in 1,000s of units not in dozens or hundreds like we're talking about. It was really eye opening to hear. I got the impression that mega shops/vendors like him didn't really view us as the competition. A 100 plaque job they might take, but it really wouldn't be of much interest to them, low priority. They wanted 1,000s or 10,000s of units. Leading me to assume they probably are competing more against a customer going direct to china and having it done, vs most, if not all of us on this board. When you get to that level say you're Jack Daniels and you want 10,000 engraved cutting boards to give away with your new BBQ sauce, the engraver has to be extremely cheap or JD will just leap frog you and go direct to China. Plus when you are doing serious volume like 1,000 or 10,000 boards the pendulum on cost starts to swing the other way. You get more efficient at it, you find ways to make the job take a few seconds less on every board, you source the boards cheap + you do the engraving, and sell the boards and engraving combo as a package to Jack Daniels to increase margin, etc. Local guy who says he'll do it for $5 a board isn't even in their decision matrix.

Sadly, I'm not even talking about those people. I'm talking about internet companies doing standard plaques for $15, providing proofs in 24 hours, and shipping 24 hours after. Buy $100 worth of stuff and shipping is free. Those people are counting on doing 1000's of plaques and other items a week so that they can pay the bills.

[Keith Winter]

Wow free shipping too, that's really low margin. Are these promo companies?

Sadly, I'm not even talking about those people. I'm talking about internet companies doing standard plaques for $15, providing proofs in 24 hours, and shipping 24 hours after. Buy $100 worth of stuff and shipping is free. Those people are counting on doing 1000's of plaques and other items a week so that they can pay the bills.

[Bert Kemp]

Ross said
"The other thing that's going on in the awards industry is there are a few big companies that have really dropped the price on everything. They have low cost employees ($10-15/hr) and are making their money on numbers. They don't want 10 plaques where they make good money. They want 100 plaques and they'll make okay money on each. "

were talking 500 boards here remember

and I said this is my point if you don't adjust your prices to whats going on around you your gonna loose.

Scott said that he prices by value that his price is his price no matter what.

I said so Its 12 bucks in Rural Louisiana and 12 bucks in Beverly Hills Right Scott.

I don't think so.
OK I'm done here because no matter what I say someones going to argue the point. You seem to not understand what I'm saying and just see your sides of it. I see the whole picture, not just my side as I mentioned I understand your sides and why you price the way you do but Ya'll want to tell me I'm wrong, But I'm just as right as ya'll are