Full Version: Are you making too much money?

From: Stunt Engraver (DGL) [#1]
 6 Feb 2005
To: ALL

Sometimes, I get the feeling, some of us think we're making TOO much money.

Why would I say that?

Well...I guess I shouldn't. I seriously doubt anyone would make that claim, but in some of my private discussions regarding pricing, I'll often hear comments like, "Oh, I wish I could charge that much, but none of my customers would stand for it." or "Well, I'm from a small town, and people can't afford that type of pricing."

When I ask, "Have you ever TRIED to charge that much" the answer is universally, "No."

I say, "Give yourself a raise, nobody else will!"

Are you living where you would like? Driving the car you would like to drive? Taking annual family vacations? Maximizing your retirement account? Do you have medical coverage?

As for myself, the answer to some of those questions is NO. Fortunately, I can answer YES to many of those questions, but that only became possible through my realizing that I'm a skilled veteran in my trade and deserve to be paid as such.

I'm not suggesting that we become predatory in our pricing, but many of us (I'm at the front of the line) have been undercharging for far too long.

My definition of "Fair Pricing" is when we're fair to ourselves. Not everyone shares the same financial sensibilities as we do.

That fact was graphically demonstrated just the other day.

I received a call from a lady who had been unsuccessfully searching for someone to foil stamp initials to a leather wallet.

One shop she contacted, said, "We stopped foil stamping because we had to charge too much." The lady couldn't believe what she was hearing. She later asked me, "Why don't they charge what they have to, and let the customer decide if it's too expensive?"

I told her that I didn't understand that approach, any more than she did.

The lady hit the nail on the head, and that's the crux of my message - Let the customers decide their pricing threshold.

Anyhow, the lady was elated that I could do the job for her. My minimum charge for foil stamping a customer supplied item is $30. Some feel that's too much - Others think it's a bargain. Some buy - Some don't.

Some of us have further to go than others, but none of us will ever reach our financial goals, by allowing our customers to set our prices, or worse yet, by us standing in the way of those customers who would gladly pay more, if we'd only let them. :-)

David The Stunt Engraver" Lavaneri
DGL Engraving
Port Hueneme, CA

EDITED: 6 Feb 2005 by DGL


From: Myyk [#2]
 6 Feb 2005
To: Stunt Engraver (DGL) [#1] 7 Feb 2005

I applaud your attitude which you can afford to take if you have a large loyal customer base without any close opposition or are financially independent.

As I am nearing retirement and am well established in the trade, I can afford to take a similar stance, but for years I had solid opposition from a hobbyist who was just in the trade for fun. This person was disabled and had much sympathy and support from locals (and deserved it) Their income was not dependent on the engraving business.

Unfortunately at that time, our economy was struggling and to stay in business, I had to match or better their pricing and the upshot was that the pricing was set by my opposition and held or lowered for 10 years. I had to get the price I could. Some money was better than no money!

Consequently, we have not been able to upgrade our machinery as quickly as I would have liked. We still don't have a laser and with retirement looming, we are unlikely to obtain one.

This person has now moved on and the business has twice changed hands since then and we have gradually been increasing pricing, but of course will never catch up 10 years inflation.

However, we have had a couple of excellent years and are now able to pick and chose the work we do somewhat and state our price. Desperation is no longer a factor in our calculations!

 


From: Stunt Engraver (DGL) [#3]
 7 Jan 2007
To: Myyk [#2] 7 Jan 2007

Just wondering, since this is the beginning of a new year and almost two years since you replied to my editorial, how things are going for you now?

More competition from home-based businesses?

Equipment upgrades that have allowed you to offer more variety?

From: Myyk [#4]
 7 Jan 2007
To: Stunt Engraver (DGL) [#3] 7 Jan 2007

Hi David,
Thanks for your enquiry. Is it really 2 years?
Despite, my comments earlier, we purchased a laser (with some of our retirement fund) some 15 months ago. Have we made money with it? No, not really as our retail premises are somewhat unsuitable without costly exhaust filters, so it was installed at home. Not the best move as after putting in a full day at our retail site, my motivation to do laser work at home is not that great.
Financially, the business is doing quite well, and the opposition has changed hands once again. The new owner is far more motivated and expert than previous ones,and has already upgraded equipment so we can expect some stiffer competition in 2007.
I still have difficulty with some of the pricing (artwork is one of them). I wonder (being self taught) if I should charge similar prices to graphic artists and signwriters who have been formally trained. I may well take longer to generate the design than professionals in that area. what do you think?


From: Stunt Engraver (DGL) [#5]
 7 Jan 2007
To: Myyk [#4] 7 Jan 2007

Yeah, time flies. :-)

I can imagine how you feel about digging for motivation, after a full day's work at the shop; especially while you're home, where there are more distractions to take your mind off of work.

They're pleasant distractions though, i.e., having dinner with the family, watching a bit of TV and essentially doing the things that make you feel like you have a life beyond your work.

That's one of the more difficult aspects of having a home-based business; even though you're not officially home-based.

Are you a morning person? If so, it might be better to knock out some of the laser work then.

I've never considered myself a morning person, but find that I have more motivation and clarity of thought then, than if I try to push myself to work far into the night.

quote:
I still have difficulty with some of the pricing (artwork is one of them). I wonder (being self taught) if I should charge similar prices to graphic artists and signwriters who have been formally trained. I may well take longer to generate the design than professionals in that area. what do you think?


If your results are professional, regardless if you're self-taught or not, I say you deserve professional pay. It's a service, that generally, your customers can't perform for themselves.

Some can, and in those cases, I'd welcome them supplying the artwork.

EDITED: 7 Jan 2007 by DGL


From: Myyk [#6]
 7 Jan 2007
To: Stunt Engraver (DGL) [#5] 8 Jan 2007

Good Suggestion about morning laser work. However, the young couple next door have a baby and I don't feel disposed to turn on the laser and blower before 8am as they generate some noise

From: Stunt Engraver (DGL) [#7]
 8 Jan 2007
To: Myyk [#6] 8 Jan 2007

I'm sure there are many people who would like to have neighbors as considerate as yourself. :-)

What about a soundproof box for the blower?

From: Myyk [#8]
 8 Jan 2007
To: Stunt Engraver (DGL) [#7] 9 Jan 2007

I have considered that, but haven't got around to it so far. My wife also wants to move, so there's another excuse for my continuing inaction on this front.

I also need to build a proper outlet for the exhaust. At present, it's just a tube stuck put the handiest window. After all, it's only been about 15 months since I installed the laser and one can't rush these things!

EDITED: 8 Jan 2007 by MYYK


From: ram (MCTAWARDS) [#9]
 8 Jan 2007
To: ALL

Hi all,

We are in this business for the past 3 yrs. Hvg got a great confidence in laser engraving photos in wood we started and thought of getting the returns very quickly, since there is no competitors. But , we are hung with pricing.. we failed to make market using wood. Customers say its too costly.

we had to think to change our view.. from photos to awards.depending colleges, educational institutions.

Still we have not achieved atleast 25% of our goals to touch the hieghts..

Competitors with minimal rates, hobbyists, game of the customers... are the factors to decide our engravers fate. Sometimes we think to close the business.. very frustrating.

suggest us to get rid of this..

Ram


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