Pricing for larger orders - 50+

[StevenG]

Hi everybody

I've got a guy coming in to see me on Friday (well, he said so anyway). He wants multiples of various sized frames 20x16 etc etc. He's talking in numbers like 50/60 frames per size. I'm not 100% sure yet on the number of different sizes though.

My question is ... what's the best way to price for an order like this. Do I just get a good idea on the material cost & add a little then add an hourly rate. Or do I just use my pricing software and give generous discount?

Any advice would be appreciated

Cheers
Steven

Oh, if anyone does do this sort of work can you give me an idea of what a 20x16 (Simon's Econ/0022 - just moulding/glass/backing) would be please?

[JFeig]

I would be wary of what they want. Is that 50 of the same size or 10 sizes of 5 each? Are they to be delivered all at once or 5 per week for 10 weeks?

The above questions have a lot to do with your pricing.

BTY, if you are not at least doubling your actual costs, you are not a businessman.

[StevenG]

I would be wary of what they want. Is that 50 of the same size or 10 sizes of 5 each? Are they to be delivered all at once or 5 per week for 10 weeks?

Ah, good question!

As far as I know it would be batches of 50/60 per size.

[prospero]

Yes I would be wary...

If you quote him a price, quote for a set amount. If you quote individually, chances are that he will ask for a single 'sample', pay
the bulk rate, take it away and never be seen again. Might even ask for a F.O.C. sample and do likewise.

That could sound a bit cynical but you get to know the signs.

Of course he may be a perfectly genuine chap. There are still a few around.

[Rainbow]

A scenario similar to the one prospero has described has cropped up a few times on this forum, and the person in question was from Northern Ireland, as you are, featurepiece. I seem to remember that one person who sent him a sample stamped the word "Sample" all over it so that it couldn't be sold on and the guy was very unhappy about it

(Would this thread be better in Members Only?)

[Not your average framer]

I am very wary of giving large discounts on large orders, I know that some people do large discounts on large orders, but for me it seems like working twice as hard for half the money. It's too easy to get carried away trying to clinch the deal. Don't let yourself get pushed about because it's a large order.

[prospero]

The needle of profit in the haystack of turnover.

[Not your average framer]

Only a few words, but that pretty much sums it up.

[StevenG]

Hi, thanks for all the replies - I'm very aware of being a 'busy fool' & believe me I have no interest in that But it might be something I could do over a weekend, a few extra ££££ in my pocket wouldn't go amiss

But back to the the initial question - does anyone have an recommendations on the a good way to price jobs of this size?

Thanks again

[grahamdown]

I would base any discounted pricing on the reduction in labour costs as a result of a production line approach rather than your labour costs on producing a number of frames based on different materials; ie chopping all the frames then joining all the frames will significantly reduce your normal labour times.

[Steve N]

I have a rolling discount, so the more they order of the same size the more discount, the quantities for discount are
10 or more
25 or more
50 or more
100 or more

If they are all different sizes, then they pay retail plus a very small discount if the total quantity is more than 15

[kuduframes]

Assuming this turns out to be a genuine enquiry with no snags or funny business as has gone before, then...

Putting the volumes into perspective, lets say 50 frames 20*16 at a nominal, say £20 each. That's £1000 worth of orders and multiple sizes in similar quantities start adding up to a substantial order in anybody's terms.

A few thoughts,
Depending on how this fits in with your normal sales pattern it may be worth considering this order as "incremental" work and as such any gross profit (after direct material and labour costs) would really be extra bottom line rather than contribution to your regular operating cost.
In this case its an easier option to think about, If you can accommodate the extra work without effecting you normal sales then it's worth discounting heavier than usual to get the order. If on the other hand it would mean you do not achieve other normal sales while you get this job done, then I would say you cannot afford to discount in the same way.

Either way, I would start off with pricing close to your normal pricing and then let the customer lead into volume pricing and discounts, in other words dont start by offering to give too much away unnecessarily and only offer your bottom line price if you really need to.

Good luck

[prospero]

I used to do batches of 25 frames for a customer. Just the rims with glass/backs. That doesn't sound to drastic but when you come to
pick the bones out of the job you get a few surprises. 25 frames = 100 rails to cut. 100 corners to join and touch up. I temp tacked the
glass/backs in. Not a long job on one but on 25? Then I had to place each frame in a poly bag and pack them all in a box. It all adds up.

I once had to frame about 40 pictures for an exhibition. Again 40 is not a big number if you say it quick, but when I was fixing the hangings
I got to thinking.... Stringing one frame only takes a short time and we tend to dismiss it. Doing 40? Say 2 minutes per frame = 80 minutes.
In practice it will take a lot longer. I could eat a ham sandwich in a minute. I couldn't eat 40 in 40 minutes. These are the sort of factors that
get dismissed when pricing 'production' jobs.

I remember a thread on the Grumble where a framer was invited to quote to supply mirrors for a new hotel in Dubai. Tasty job - on the face of it.
I think he submitted a quote for about $800,000.00. The mirrors were quite big, maybe 4'x5' + frame.He didn't get the job, but consider this. If you
crated up all those mirrors and the crates were say, 6" deep - you would have a stack 800ft high (or long). If you have a smallish shop, you
don't need many frames to block it up. And shipping that lot out to Dubai would likely consume most of his budget. The elegant solution would be
to take temp charge of a few of the unfinished hotel rooms and have the moulding/mirrors delivered there. Buy all the equipment and set it up there
and when the job was finished, abandon all the equipment. And have a nice little holiday while you were there. :clap

[StevenG]

Thanks for all the replies - some interesting points were brought up & has made me rethink a few things. I'm forever thinking that a little extra will only take a few minutes but when a lot 'a few minutes' are needed then that will be an issue. It may sound silly, and even though I can do the math, I never really considered that 60 x 2 mins is 2 hours of work!! Yeah, there it is - I said it out loud.

BTW - my new contract contact never appeared, not yet anyway but I do believe I'm meet him at some point soon. Anyway, thanks again for all the advice, it really was useful for this and it's opened my mind going forward.

[cleaver]

Following on from what Steve N said: what about a retro-active discount?

I.e tell him he'll get x% off (or £x) back AFTER he's brought you 20, 50, 100 or whatever number of these jobs.

That way, he has incentive to hit those targets, and you won't be giving him a red cent off normal prices till after he's delivered the stack of work he's promising.

You could even give him the option of slightly more £, by way of a credit (so he spends it with you)

Anyway, all the best with it.