Pricing spreadsheet for subcontracted work

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Pricing spreadsheet for subcontracted work

Postby Jonathan » Fri Dec 30, 2016 12:22 pm

Does anyone else work for a gallery, or similar businesses, that offers a framing service to the public and then passes the work on to you?

I'd been framing for about 2 years, gradually developing my business up to about 5 frames a week, if I was lucky, when I was asked to take over from a retiring framer who worked for a local gallery. I now get an extra 5 to 25 frames a week :D They deal with the customers and take the orders I just do the work.

At present they use a spreadsheet of prices in 3 bands depending on moulding cost. Although this works for simple print framing extra items are usually under sold. such as an extra mount, needle work, Water-white glass, replacing the mount in an existing frame etc. What they have was set up 3 or more years ago, so prices need to increase. They always sell down as cheap as possible and are very price conscious.

On other work I have been using Framiac Pricing and my price seems to work for mid size frames, say 400x600 mm, on their chart. But small frames are well under priced and larger frames are profitable, so the present system is well thought out.

What I need is suggestions on how to produce a spreadsheet that is easy for a retailer to follow and also a simple way of pricing extras and special work.

Someone must have had experience of this - please help a new boy!

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Re: Pricing spreadsheet for subcontracted work

Postby nickhood » Fri Dec 30, 2016 9:22 pm

Hi Jonathan, I too used to frame for a local gallery and experienced the same problems. They were very price conscious and didn't quite understand up selling by way of conservation framing, specialist glass etc. I made money on large frames, broke even on medium frames and lost money on small frames. If you are using Framiac as I do you will know that they assume small frames take the same time to make as larger frames and price them accordingly. This does not sit well with customers or in your case galleries sub contacting work, who assume that because a small Costa Latte is cheaper than a medium one this must be the rule for all.

I can offer no solution to this other than stick to your guns and insist on a price you are happy with, though don't be surprised at the reaction from your customer. I lost mine but subsequently made up the loss over a years and now achieve a price level I and my customers are happy with and an increased profit level. I haven't looked back since. Don't be a busy fool.
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Re: Pricing spreadsheet for subcontracted work

Postby Not your average framer » Fri Dec 30, 2016 10:11 pm

It maybe quite important to their business to be selling to their customers at this low price. This is no doubt not what you want to hear, but you do need to get some specific facts and figures worked out to see how you can take this forward and keep them happy at the same time. As you probably have already worked out for yourself, the current economic situation does not encourage anyone to increase their prices for fear of losing customers and I'm already suspecting that you may need to find at least some of your extra income from options other than just increasing your prices. There are a number of different elements that go into making up a completed framing job and there may be some ways in which you can save money on some of the materials that you use, by adjusting your purchasing arrangements.

I am presuming that your customers have moulding and mountboard samples, which they show to their customers. Well maybe some mouldings are not the best choice for profitability and can be changed to other mouldings which are more profitable for you. There also are significant price variations between named manufacturers mountboard and special offer ranges offered by various distributors. If your customers are aiming primarily at the lower end of the market, then restricting the range of available mountboard colours will also be very helpful to your stocking and purchasing plans. In 2017 prices are more that likely to increase, because the exchange rate for pound has fallen and imported raw materials will cost more as a result. Everybody knows this, but these are seen as difficult times, so you have to set a limit on how much you try to increase your prices and maybe build in some incentives for the final customers to choose options that are better for your business.

You could consider options such as encouraging more customers to choose double mounts by offering the second mount at half the price of the first mount. You don't make as much profit on the second mount, but it's still extra profit on each job where they choose a second mount. Be sure to define what is and is not included in the existing price chart. Extra work, or extra materials need to be paid for and not at your expense. Very often these extras will slow you down and affect you productivity, so you do need to tie this down. Also anything above and beyond what is normally included in the normal price is an opportunity to charge not only something extra, but also above your normal rate. Anything special is at a special price, right!

As for a new price chart, I think it needs to be specifically generated for your business. The days when generic price charts were used are long gone and these days the price chart does need to fit the business. See if you can get a bit extra profit from gently increasing your prices, a little bit extra from minimising some of your material costs and things like that. Consider a minimum price per job as well.
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Re: Pricing spreadsheet for subcontracted work

Postby Tudor Rose » Fri Dec 30, 2016 10:53 pm

Hi Jonathan

Having that kind of deal set up with a gallery can be great for business, but it is always important to make sure it is profitable for you as well as them. As you are already using Framiac the solution may be quite easy.

We had a similar situation ourselves and the solution we came up with was to ask the gallery to use one of our Framiac licenses on their shop PC so that they could accurately price each job. It was set up specific to them at full customer bespoke price, as if the customer had come direct to us instead. But the price breakdown part is password protected so that only we can see that. The price we charge them is at their discounted price - so each of us makes our part of the profit and the customer only ever sees one price. You can talk to Mark at Framiac for more details but it will solve your problems.

All those extras, the glass options, everything is loaded in which makes upselling easier too. Nick is absolutely right - don't be a busy fool. We've all been there, especially while getting established. But it's a thankless thing to do. When we swapped from a pricing chart to a Framiac we had a price shock reaction from our gallery customer but we stuck to our guns because we knew every job had to be profitable. We're nearly 4 years on from that now and the gallery is still a customer, they upsell to their customers all the time and there is no longer any price shock.
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Re: Pricing spreadsheet for subcontracted work

Postby Jonathan » Mon Jan 02, 2017 10:57 am

Thank you all for your thoughts and advice.

Nick, yes, it sounds as if I am in the same situation. The gallery has agreed that a price increase is required and this has given me an opportunity to come up with a completely new structure. Unfortunately I lack the experience to know how best to do this. Once this new structure has been agreed it will be near impossible to change again. So I have to get it right, perhaps Framiac is the way to go, thanks Tudor Rose for this suggestion.

I find that the most difficult work to price is work on existing framed items. Such as replacing broken glass, put in a new mount, or repair the frame itself. It can take longer to disassemble the frame that it takes to make a new one!

Mark - supplies are a problem, I am up against minimum order value with moulding and minimum number of mount boards per order. But I have another source that will deliver a single board in their van. I am encouraging the gallery to up-sell and not just offer the cheapest option from the start. They often specify mouldings that are much to thin for the size of frame. They are also keen to use plastic frames that may be cheap but take me a lot longer to join.

All your suggestions have given me food-for-thought, so thanks again. And thanks John for the email and facebook link.

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Re: Pricing spreadsheet for subcontracted work

Postby Jamesnkr » Tue Jan 03, 2017 12:43 pm

nickhood wrote:who assume that because a small Costa Latte is cheaper than a medium one this must be the rule for all.

Of course there is no reason for a small Costa Latte to be cheaper than a large one. The raw materials in a coffee (and certainly a tea!) are inconsequential so the marginal cost of making a larger one over a smaller one is tiny. The time to make a small one is the same as the time to make a large one.

Therefore Costa make much more profit from a large Latte than a small one. The pricing is pure marketing.

Re: Pricing spreadsheet for subcontracted work

Postby gripper » Mon Mar 20, 2017 11:50 am

Hi Jonathan,
Drop me an email and we may be able to do each other a favour.......
Look forward to hearing from you
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