Pricing again

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CalicoFraming
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Pricing again

Post by CalicoFraming »

What do you do about pricing if you need to order more moulding than you actually need. Say you only need 3.1 metres of moulding which comes in 3m lengths, you'll have to buy 2 lengths. If it's a moulding you know you'll sell again I guess you just charge for the actual amount used, but if you don't think you'll be able to sell the 2.9 metres left over, how do you price it to cover the cost?

thanks
:D
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GeoSpectrum
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Re: Pricing again

Post by GeoSpectrum »

If its not something you stock and dont want to stock then you need to charge the full cost of whatever you need plus delivery. Not allways easy to do especially if the customer is price sensitive. You could order chop or take it on the nose, make a chevron and try to sell the remaining moulding to the next customer. :roll:
Alan Huntley
Ashcraft Framing
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Framiac
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Re: Pricing again

Post by Framiac »

Waste is something that most manufacturers have to deal with. It is a cost of manufacturing and businesses need to have systems to deal with it.

Firstly it is necessary to look at what percentage of your material cost is lost to wastage. For instance what is the most common size (in area) picture frame you make and what is the most common proportions that you receive your stock. Obviously with sheet sizes this is easier to assess because they are all standardised. Moulding varies somewhat, but often lengths come between 2.7-3.1 meters.

This will let you proportion what percentage of materials should be allocated as waste. 30% is considered a reasonable allocation for waste but businesses will have different percentages of wastage for various reasons.

For instance if your business offers a large range of choice it is most likely that you will have a lot more wastage then a business with a smaller choice. Production framers will have a lot less material waste because they buy in larger quantities and do large runs of the same material. They also try to keep to sizes that get the best out of sheet sizes.

Storage of stock will also affect how offcuts are used. If you have good storage systems where stock is well sorted and easy to find, this will cut down on damage and reduce the chance of more stock being ordered when there was already stock on hand (I’m sure we’ve all done this before).

Like all retailers framers have to look at the demand of the products they sell. If there is no demand for a product, remove it from display or if you believe it fills a limited niche, be willing to charge a premium for it.

An interesting point which isn’t often considered is that when you carry a greater range of choice, all your expenses increase. You need larger display areas and extra space to store stock; this means you need larger premises which in turn increases rent, electricity, etc, which then increases your hourly rate.

Waste is often a small cost of a small cost. For instance material cost is often between 25-30% of the cost of making the frame and waste is approximately 30% of this cost. So it is a cost of diminishing proportions.

So make sure that you have your wastage percentage correct, this won’t be right for every frame you do, some will have a higher wastage and some will have a lower wastage but if you set it as close as possible it should balance out.

Finally ensure you have enough margin in your mark-up to cover eventualities; buying in more stock than you require is just one of many unforseen circumstances that can eat into the profits of a business. If you set your margins too tight these unforeseen circumstances can eat away at your profits. If you are offering clients a greater range than the shop down the road you have reason to increase margins. You’re offering a better choice and your material expenditure will be higher.

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CalicoFraming
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Re: Pricing again

Post by CalicoFraming »

ok, so basically factor in a % for wastage and expect to win on some jobs, lose on other, it'll even out over time. I guess anything more sophisticated is just going to take up time better spent making frames.

Thanks guys
DCS
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Re: Pricing again

Post by DCS »

We have had a 2.0m piece of moulding sat in a corner for months being the remainder of a job we did.
Yesterday a chap came in with a Giclee mounted print looking for a particular width and style to make a frame 30cm square.

Low and behold the bit of moulding is now a frame and someones Christmas present, now all I need is another 387 people to come in with odd jobs and the place is clear!! :Slap:
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GeoSpectrum
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Re: Pricing again

Post by GeoSpectrum »

I have accumulated plenty of 'handy' lengths of various moldings. I keep an eye on what is the pile and try and steer customers towards choosing those moulding if they suit the item being framed. On the whole my collection isn't getting any bigger now and I do manage to sell most of the moulding, but it can take some time.

I think it is part of being a bespoke framer and a side effect of offering the range of choice a bespoke framer does. As long as you have a decent % wastage and keep an eye on what you have in the 'handy' pile then it should be manageable.
Alan Huntley
Ashcraft Framing
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fusionframer
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Re: Pricing again

Post by fusionframer »

I factor in for wastage within my pricing. However, in order to keep my stock to a minimum (apart from mouldings I always have in stock), I tend to use the offcuts to make the ready made frames to sell. The problem I found keeping it in stock is you eventually get a job in using that moulding, but need another length and this will then be from another batch and not match perfectly.

The other option that can work, is to suggest that moulding to a customer and maybe offer a slight discount. If I have charged for the moulding in the first job, any way of selling the remaining moulding via ready made frames or to other customers at a discount is going to give me a very good profit margin.
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prospero
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Re: Pricing again

Post by prospero »

If you are ordering stuff for a special job then you really do have to charge for all of it. Anything left over is waste. Great if you get a job that nicely uses it up, but if that happens it's a bonus. Essentially it's not worth anything. You can't spend it at Tescos.
A lot of framing places (so-called Big Box joints) won't order non-stock moulding. If it isn't on the board it isn't an option. But if you offer a wide choice and take trouble to source materials then I feel you have to charge a premium.
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