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2009 PMA U.S. Custom Framing Report

Discussion in 'Picture Framing Business Issues' started by Rob Markoff, May 29, 2009.

  1. Kirstie

    Kirstie PFG, Picture Framing God

    Hey, don't laugh Bob. We take chocolates to the local BBs every holiday season to thank them for the referrals. They usually seem very touched and appreciate the holiday spirit.

    Shayla, thanks for the compliments. We do work very hard, but often feel as if we are swimming against the tide. What we do know is that we must continue to offer lower priced options to our university neighborhood. Today was proof. Just about every sale, except one, was for the poster frame special or ready made frames. Very low end, but reasonably busy day. We would be sunk were it not for these options. I have Bob Carter to thank for the model. I have our initial strategy of stocking most of what we sell to thank for keeping us going. Buying well is also a huge advantage, along with forging relationships with a few suppliers who give us excellent deals in exchange for volume. But I won't lie to you. Right now, in this economy it's a struggle. That won't go away overnight.
     
  2. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Shayla, it's barely conceivable to me that the discussion about relative age groups has a modicum of value to my decision making. The survey that's at the base of this discussion is of little more interest. The only national trends I'm interested are retail sales, interest rates on govt. bonds, consumer confidence and, even the dow. I read the local papers, I go to work every day, I talk to my employees and customers; believe me, I know where the local economy is trending and I'm mainly interested in the local economy.

    I read this discussion and it almost seems to me that here we have grown people playing at "business", discussing aspects and concerns of big business as if they were relevant to very small businesses; they aren't. I don't know why they don't go to work for a large business where tracking national trends and the gleanings of focus groups may have some relevance.

    The real important trends that are visible under their noses they seem to overlook. Take Christie's posts. She correctly notices that there is real price resistance and that the wise decision is to work on lowering prices. The real problem with the bread and butter aspect of our industry is that we're pricing ourselves out of the market and we don't seem to be able to get a grip on it. What we should be discussing here is how to lower prices, how to get away from the siren song of expensive preservation techniques, how to make our businesses more efficient (and believe me, the vast majority are very inefficient).

    Why isn't Bob having as much fun as he used to, could it be his mall location is eating his business? I remember hearing him profess years ago that location with plenty of traffic was all important, that paying the exorbitant mall rents was worth the cost. I'm sure as heck glad that rather than paying those rents I bought land and built and paid for buildings at affordable out of the way locations. If things really get bad, and they could, I won't have to pay rent. I can survive. I'm efficient. Of course I don't have years and years of rent receipts to gaze at and maybe frame to museum standards. Big national businesses belong in malls and so far, picture frame shops aren't there yet.

    I don't mean to pick on Bob who is a nice guy and has always been kind to me, but one of his earlier posts in this thread just rubbed me the wrong way; he wasn't making the kind of money he used to, he wasn't having fun anymore, he would like an opportunity to follow other interests, he wouldn't recommend the business to his children.

    Well my business has been very good to me and I'm still having fun (maybe because I'm able to see the difference between a microcosm and a macrocosm) and I'm fully aware that mine is a very, very small business and doesn't answer to the same drummer as a large business. I'm not a business man; I'm a shop keeper and there is a difference. If you don't want to be a shop keeper, don't open a shop. If you want to be a business analyst, go into big business. I never went near a business course in college (economics doesn't count) and I'v never been associated with a business (I was an english teacher at UNCW before becoming a shop owner)and none this has had any bearing on how I grew a very, very small business.

    The reason my daughters are not going to take over the shop when I leave is that they followed other interests, one is in pharmaceutical sales and the other is a doctor of pharmacy. But, believe me, they realize the value of the shops. Sarah recently said to me, "dad, do you and mom realize what you've done, what you've built?"

    We have great products to sell; framed art and pictures look great on walls and for years were considered the provence of the wealthy; with diy framing in the 70's more and more people were able to afford and appreciate custom framing, and framing, in a minor way, began to grow. There are way, way more custom frame shops now than there were when I started. But the trend is reversing and we don't need a weather man to know where this ill wind is coming from. Framing is becoming too expensive.

    Of course, there is room for expensive high end shops but not nearly as much as there is for bread and butter shops. Anyone who thinks he can climb into that rarified atmosphere should give it a shot and I tip my hat to him but, for me, I'll take the more humble and more likely to succeed option and concentrate on making my shop affordable in the firm belief that that's where the larger market is, and, if the truth be known, that's where my talents lie.
     
  3. cvm

    cvm PFG, Picture Framing God

    Come on Warren, stop sugar-coating it man. :icon21:
     
  4. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    There is an interesting article in today's San Diego Union Tribune by Anne D'Innocenzio of the AP regarding "Moms using blogs to flex some marketplace muscle"

    They discuss a website Consumerqueen.com that is read by 30,000 people per month and is attracting the attention of corporate America. One brand has hired the founder of the blog to help in marketing a line of frozen foods and to develop a presence on social media websites Twitter and Facebook.

    It sure seems to me that a relatively cost effective "marketing" campaign could parallel such activity to develop "framing" awareness within a targeted group and to plant the seed to have Millennials want to have things framed - or to drive them to a local shop instead of the big boxes.
     
  5. surferbill

    surferbill SGF, Supreme Grumble Framer

    I agree with most of what you say. I think there is way too much worry from framers about using acid free mats, CC, and museum glass on 90 percent of what is framed.
    I've got a pretty affluent clientel, and even the really wealthy customers are looking for value and deals.
    If I add on $100.00 for museum glass and $50.00 extra for Alpha or rag mats, the customer is usually going to have a hizzy fit in the shop and take it over to M's across the street.

    To address price resistance, I've added a value line, stocked more box mouldings, and have a set price package for 8 different sizes using one regular mat, clear glass, and a selection of 100 in stock mouldings.

    The part I think you are overlooking (or being too modest about) is that probably 90 percent of the frame shops in America could never copy your business model.

    I'm guessing the vast majority of frame shops don't have a double miter saw, don't stock vast quantities of moulding, don't have the 5-10 employees needed to make it work, are not willing to work 80 hours a week, and don't have the space or low rent to be able to frame cheaply. IMO
     
  6. cvm

    cvm PFG, Picture Framing God



    I kinda see your point, but the crux would be finding the 'crossover' between what she does and what you are proposing. She's hit a really-right nerve - stretching the household budget via aggressive couponing discipline/practices - and it works because she is empathizing with a huge demographic and expanding/expounding on a time-tested ritual very familiar with that demographic, ie couponing.
     
  7. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    True, but if we have an advocate(s) who blogs that custom framing is cool, can make a room/house look "new" without blowing the budget, and that you can get better design, service,and craftsmanship from an independent - isn't that what we are looking for?

    I'm not saying that she or her blog is the right choice, just an avenue that I have not heard anyone else suggest.
     
  8. shayla

    shayla WOW Framer

    This really is a good conversation.

    Warren, I read your answer and am going to think about it for awhile. Bill, what you said has me thinking, too. The closest we come to having a value line is our willingness to still stock paper mats and regular glass. Some framers don't approve of that, but to me, at the very least it provides a lesser alternative for the people who choose up to feel good about having surpassed. And for the people who only want to frame decoratively for several years, or those who just can't afford higher quality, it allows them to come to our shop and not somewhere else.

    I agree that it's most important to understand your own market and where to place yourself in it. But it also seems valuable to be aware of larger national trends. Even if just for the value of re-affirming that what you need to do in your town is different than that. If I had to choose between there being no national survey about picture framing and there being one, I'd certainly choose the former.

    In the town where I live, it must be something of a bubble. There are certainly people who don't come to us, but of those that do, I'd say a good eighty percent leave their work to be framed. Our prices are often higher than those that other shops here mention, but maybe it has to do with the fact that we're a small shop in a smaller town, ordering in mostly chops for specific designs. So far, our customers are willing to pay a bit higher prices for the freedom of having a larger frame selection and giving me the time to relax and really explore different design options. Who knows it this will continue, or if that's about to go out the window, but so far, that's what still works for us.

    I like Kirstie and Bill's idea of having some kind of value line, but for us it would be tricky. We're a very small shop, and if we started bringing in something that was far, far lower in price, it couldn't take up too much space or time for us to sell. That would cut into the profit we could be making by taking time to come up with the much nicer designs, that usually cost more, and which our customers, knock on wood, are still wanting to see. Your point about the danger of conservation purism is well-taken, but most of my customers want that kind of treatment for their work. It seems like, in order for it to work to have a really low-priced value line and sell a lot of it, you have to have a bigger operation and find your profit in the volume of those sales.

    As has been pointed out here, it seems that what's going to happen is there will be a widening divergence of extremes in this industry. What remains will be the mass production, low-priced giants and those smaller shops that do high quality work at a premium price. The tailor analogy earlier was perfectly made. I think it might be easier in a way to make it in a smaller town, because it's a service that people in that town still need, and there are far fewer competitors than in a city. The thought of having a frame shop in a city seems daunting to me, because you really would have to struggle to differentiate yourself from the zillion other frame shops people could go to. But it's very true that there's a way in which the internet is turning everything into that same big city. People who used to have only their small town sources to choose from are now able to hop down the rabbit hole and find the world at their fingertips. I understand that, and the importance of learning to compete in such a market, and it makes me feel grateful to be living in a place where most people still bring their framing in our door. Partly it's that they like my designs, partly it's that they trust the quality of our work, and partly it's because they feel better about life from coming in and being with us. It's an experience that goes beyond just buying and selling, and they enjoy that experience.

    Warren, I have a question. If you were given the task of conducting this national survey, and given the freedom to decide what form it took, how would you make it different? What ways would you change it so that the information it gleaned would be more useful to people like us? I'm curious to know what you would do differently.
     
  9. shayla

    shayla WOW Framer

    P.S.

    Rob, I think it's a pretty good idea to see if that lady
    would feature independent custom framers on her blog.
     
  10. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Hey Warren-Mall rents have become unsustainable making this model not quite so attractive, but I must say that for many, many years it was absolutely the best move for us. Markets change and so do we

    I'm not having fun for several reasons.

    I tend to be an entreperneur and love the start ups. 25 yrs is an eternity on one biz. As this biz declines, and we have lease contingencies, shifting becomes just a tad problematic. You do not know me and the best thing i can say is that we simply have different ideas (although about 85% are in agreement)

    Another is a little health related and some days, I would just rather be at home by the pool with my lovely wife. But, you do not know me, so I won't hold that against you

    We have lived a great life, great homes, great cars, great vacations, kids got great educations. Not much I would change. Will say this: when compared to nat'l averages (there is that survey thing again) we have consistently made multiples of typical earnings. So, we did something correct for many years

    You keep bringing up education as if it's a bad thing. Why is business education less valuable in this environment than it is in your daughter's arena? I am certain that there may be an exceptional talent in a tech position working in a Walgreens that might be easily the equal of your daughter. But like yourself that person is ananomaly. make no mistake, i do not think education ever hurts and I have been very fortunate in receiving the education i did. The majority was in a mentoring, hands on, realworld approach

    So, see we aren't so different

    If you and I prove anything, it is that there are several valid appoaches in this trade

    My greatest suggestion is that you teach some classes (there is that education thing). I suspect it might be really instructional. And here is the "Bob on Bidness" theorem: I have never convinced a single person to go into a mall location and I'll bet I have taught thousands. But if everyone of them took one thing home and added it to their operations and it was helpful, then that truly is the essence of teaching. I do know that, from several common friends, that you are very helpful and sharing. I also know (and I'll keep it a secret) that you often espouse many solid established business techniques (but I won't let anyone know). They all say you are pretty good at making those concepts and ideas clear and approachable.

    Plus you will meet many great pople and make many great friends. We have

    Anyone that has taken any of my classes is free to disagree if not true, but I never disparage a single method, if it works for them. I might, no, often, say it isn't for me, but God Bless You if it works for you
     
  11. Kirstie

    Kirstie PFG, Picture Framing God

    Warren and I agree for the most part. I don't really know how education came into this discussion, but I do believe in framing education. I do take classes, I do read trade journals, and I do read the G with regard to what I can learn on the technical side. I don't want to be caught short when someone brings in an antique plate or a delicate needlework that they want to preserve. And I have mentioned before that we do use CC glass and Artique/Bainbridge mats. We also sell quite a bit of regular glass and acrylic. The price differences on mats are not that great and as our BB compeittors only use better mats so do we. We did before they did, acutally, and it is something we do believe in.

    Having said all that, what Warren says in regard to price is, in my opinion, very true. My neighborhood is not wealthy and most customers are price conscious. We work hard with our best supliers to get good deals and we shop great bargains at the trade shows so that we have lower priced offerings.

    We do not buy float glass by the pallett, and we don't have a double miter saw. We don't buy some mats even by the pack, let alone by the carton. And we do special order materials for several jobs each week as we have a huge special order section. However, most of our work is bread and butter from stock on hand, usually value priced with fairly simple designs. We do all our volume in one shop, with one staff and the two of us.

    But for the bigger questions here that apply to most frame shops. How indeed can the smaller shop, say 1200 sq. ft. offer lower prices? How can a one or two person shop of this size buy and store all the mat, moulding and glass in sufficient quantities to earn the discounts necessary to sell at prices competitive to the BBs? Will these shops survive over time or will current owners close or retire, not to be replaced? Is it a good idea to lower prices in a falling economy with fewer customers?

    I don't proclaim to have all the answers, very few, in fact. We have had more price resistance than ever lately, yet we did lower prices to some extent and we brought in more value priced moulding and increase the ready made wall frame selection. People have always been price conscious, but this is different. Customers are sacrificing style for price every day. These are people who drive the Lexus, who carry expensive purses, wear nice shoes, and often just returned from an international holiday with paintings brought back for framing. We are the last item thought of in the decorating process that often involves travel, expensive furniture, expensive plants (I heard this yesterday) and so on. And yet, $100. seems to be a threshold that many do not want to cross. They want two designers to give input on design, they want to see liners and beautiful frames, and consider all the options, but when it comes to placing the order, they don't want to pay for all that service. The boomers are tightening thier financial if not physical belts.

    I see our industry as having made two mistakes. We are not percieved as a valuable hand crafted service on par with even the housepainter's product, and we have indeed let prices soar while the buying public obviously want something very different, something they would prefer to buy at Target.
     
  12. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    You know, Bob, that's a little cold; walking away from a business you must have had some pride in because you want to spend more time at the pool. Me, I'm proud of my little operation and I want it to go after me and I'm working toward that end. And then there are the employees; maybe they can hang around their pools, too. I, too, have health issues, but I also have some responsibilities. My decisions are as much based on the welfare of the people who got me to where I am, with the pool and the houses, the boats, whatever, as I am about myself. I haven't just been renting a stall for the last 30 years trying to squeeze out some money from it. I've always thought what I was doing was growing a living business with real human beings depending on it and one that might endure. And, really, I'm sure you are too.

    Heck, I came from teaching, Bob. I was in the English department at UNC-W for nine years as an assistant professor teaching 12 hours a week (a full load for an assistant prof) until Toni got me into framing. I think I might have done a bit of teaching here over the years. Think back about my first posts. I've always stressed price competition and value lines and there seems to be some acceptance now when there wasn't then. I'm sure I was the first grumbler to get into large format printing and digital imaging. Large format printing is a large part of framing now, and it should be. I wonder if the qualities that are needed to run a very, very small business can be taught. My guess you have to come from a very small background; at least that would be helpful.

    Kristie, Toni started out in just that 1200 sq. ft. shop. It was on Oleander drive. There was just the two of us but our first orders were 50 ft. each of 100 patterns from Piedmont Moulding, We bought 5000 ft. to get the maximum discount off list. We bought 500 sheets of paper mats direct from Crescent. From that point for nearly 20 years we never bought any moulding for less that 20% off and mat board 500 sheets at a time. Somewhere we let designers talk us into showing some chops and that's about 10% of our business now. After the first 4 months we were making money and we hired our first employee, Mark Smith, and we reached a critical mass. We had three people in the shop 5 days a week and two on Mark's day off. After we got really lucky and Talmsi started (she's still with us) and right after her, Patti (she stayed 17 years and is emeritus now with an employee discount; she wanted to be a stay at home mother). Eventually we bought one of the first Cassese v nailers, an 810, from Juhl Pacific and a double mitre saw. We sold our souls during the Carter years and bought the land where the Frame Works is now, sold half of the property to Chas Weiss, a State farm agent who's still next door. You don't have to start big, you can work up to it. So, yes, a small shop can do it but, I don't think can stay small. Three is the minimum to make any kind of money. A business is organic, it needs to grow, to a point. We've never hesitated to buy labor saving equipment and have never been sorry. We now have 11 computers, three double mitre saws, three Cassese light industrial v nailers, but no visualation and no POS. Go figure. We do have one of the most advanced digital imaging labs in the country. Bob, we're growing a business.

    Toni and i haven't taken any classes and Toni got mad at the PPFA 27 years over their attempt to establish Workman's Compensation Insurance for members and hasn't had any use for them since. We go to trade shows when we need to buy equipment or to see new lines, but that's about it. Picture framing isn't rocket science and we learned about acid free treatments 27 years ago. I'm considered by people whom I respect to be a competent cabinet maker (furniture quality) and I've taught a cabinet maker who's now better than I. Cabinet making is the ultimate picture framing. I was taught by a master and a legend around here, Wolfgang. People advertise $2M homes as having a Wolfgang kitchen. I actually have one. I've made a lot of the furniture in my house. I know what I'm doing. You want to frame a three panel tryptic as an alter piece? We can do it (we let Edward in Chapel Hill do the gilding). Take a look at our shop; it's there for a reason. Brandon is currently looking into cases for electric guitars; apparently there is a big market for them, and they are frames of a sort. They look like retro suitcases. And, Jay, we're going to sell 'em on the internet. They're something that can be sold on the internet. I'll let you know when the site is up.

    I don't know what education has to do with any of this, either. I've been to two large southern universities, one well thought of and have degrees from both. Neither in business. My point is that the tools of what we think of as business are of little use to a small shop keeper and for a small shop keeper to talk in terms of them is, well..... I'm sure the Frame Works was 25 years old before I heard of the term, "margin." I did know about the cost of good sold and kept a sharp eye on it.
     
  13. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    I don't want to name vendors by name, but I can assure you that loyalty has its value- and for the smaller shops, partnering (or whatever you want to call it - and I don't just mean with LJ - though their program is excellent) with a vendor to achieve lower prices in your purchasing can make a significant difference.

    It may mean the 200 sheet price on matboard for all matboard purchases even if the quantity of the specific order is not 200 sheets. It may mean the 10 box price on glass even if a few boxes are ordered. You have to spend time with your reps and ASK about any specials or promos that you may not know about.

    I don't think it is any secret that there are published prices in vendor price sheets, then there are the prices those of us who have demonstrated a significant commitment (loyalty) to a specific vendor pay. But -you also have to pay your bills on time. Always.

    I have one supplier who has an unpublished deal that if I buy in 100 foot quantities (min) and I place the order through the rep, I can get 50% off. I don't think the size (sq. foot) of my shop is/was the determining factor. I had a 1200 square foot shop once and I received great deals then too.

    There is a value to vendor loyalty.
     
  14. DVieau2

    DVieau2 PFG, Picture Framing God

    Warren,

    I think this the third time I've read your story. Good for you and your success.

    I would have so much more respect for you if you didn't feel the need to ridicule almost everyone else in the business.

    Doug
     
  15. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Warren-I really do not know what to say except you do not know a dad-gummed thing about me other than I have acquired a reputation as an business educator and industry "well known" in a format that differs from yours

    Not sure why that bothers you, but it sure seems to

    May I say that I have shyed away from posting Biz advice because it seems to bring you out in spades and doggone it, it's just tiresome
     
  16. Kirstie

    Kirstie PFG, Picture Framing God

    Excellent advice Rob, advice we also stand by. Loyalty to and from vendors works both ways and can be lucrative. Right now we are participating in two selected vendor programs that are benefiting both us and our staff.

    So are we hinting around, after 215 posts, about exit strategies? We don't have one. We hope to run this business for quite a while, phasing ourselves out to part time and then with luck, having the right management to run it for us. After that? Well, we'll see. For now we are trying to rebuild the business to 2007 levels and beyond. There is still a lot of growth to be had and we have work to do.

    Education? I value all education. I was fortunate enough to come from a family who believed in me enough to help send me to college. Now I feel fortunate to have been able to take advantage of professional education. There is always something you can learn and after losing a parent to dementia, now more than ever, I treasure the capacity to continue learning each day.
     
  17. CAGallery

    CAGallery MGF, Master Grumble Framer

    Although we have been in business for 25 years now I do not consider myself in the same league as most of you who have posted on this thread. For various personal reasons our growth as business owners stagnated for several years and it affected our business greatly. It is only recently that we returned ready to devote our attention to our business and it has been an uphill battle but we are making progress in many areas even in this economy.

    That being said I wanted to make an observation on surveys/studies and knowing your own market. I am not sure if there is another frame shop on this forum (in the US) whose neighborhood/client base is as different as ours. At least 75% of what is said here about customers does not relate to our area. Despite that I do find that it is important to know what the trends are across the country. Some of what is going on will trickle down to our client base and some will never apply. The key is having a good understanding of your community and client base and then filtering the information that you acquire from outside sources to what applies to your particular situation.

    Just my humble opinion.


    Chavie
     
  18. shayla

    shayla WOW Framer


    Amen.

    Here's an example that might sound strange, but it works for
    us. I've read a lot on here about how important it is to have
    a fast turnaround time for framing. People who are shocked,
    shocked that someone else takes a week and a half to get frames
    out the door, when it only takes them two or three days.
    To me, this kind of thing is so dependent on the nature and size
    of your business that it doesn't bother me how much difference
    there is between us.

    This will probably get some rotten tomatoes thrown at me,
    but over the years, I've gotten to where I use longer due
    dates instead. In fact, now, I don't even give a specific day.
    At the shop where I started, we came up with actual dates
    for jobs, as in, "This will be done by the tenth." We usually got
    them done by then, but if not it made for tension with the customer.

    Over the years I've thought about this. Now, I tell people
    that the job will be done in two or three weeks. Faint in shock
    if you must, but that's what I say. And they're just fine with it.
    It gives us plenty of time to do the job, without some 'cast in stone'
    date breathing down our necks, and I'd rather surprise people
    with an 'early' call than have to apologize if something wasn't done
    by an earlier promised date.

    Doing this allows me to do a couple things. One is, it gives us
    enough wiggle room so that if a truly urgent job comes through
    the door, we can squeeze it into the flow. I tell most of my customers
    two or three weeks so that I have the freedom of telling the people
    who truly need it sooner that they can have it sooner. For those
    orders, probably fifteen percent, I write a note and we make darn sure
    to get them done in time. The other thing it allows me to do is to make
    better use of free shipping from my suppliers. For a small shop that
    designs a lot of chops to offer really short turn-around times seems
    self-limiting to me. By having a wider window of time to get it done it,
    I can build up orders and keep from having to pay so much shipping.

    There are probably plenty of people who would look at this and think it's
    nuts. But maybe it's only nuts for their size of business and their model.
    To me, as long as my customers are content with it this way, having a
    looser stated schedule for turnaround times makes sense. I'd be interested to
    hear if there are any reasons why people think another system would be
    better, but so far, this one works well for us. There are plenty of ways I've
    changed what I do because of being on the Grumble. Things like how I hinge
    art, and other technical skills. But this is one thing that I still feel good about

    This comment isn't about big business model changes, but is what comes to
    mind when I think of being aware of national trends while still doing what
    works best for your particular market.

    I'm just a framing designer at an itty bitty shop, and I know that what I have to say here doesn't carry the same weight as from someone who's a longtime successful business owner. But I still appreciate the chance to take part in these discussions. It helps me learn to think with greater clarity about the broader picture of what people in our industry face, it helps to keep me from getting tunnel vision about what I do, and it also helps me to feel more confident about the ways in which I feel okay being different.

    LOL... and after all my yapping here, that quote at the top still says it best. :icon21:
     
  19. CAGallery

    CAGallery MGF, Master Grumble Framer

    Shayla, we do that too. And although we are not as big as we used to be we still have several employees. Most of our customers understand that to have the kind of selection we have (frames, liners, nearly every fabric you can think of, hundreds of fillets, marble and decorative papers etc. etc.) and to be able to pull together that perfect design combination we just can't stock everything. Of course if someone needs it quicker we will do our best to accommodate them. They understand that they have to choose something from stock if they want it the same day or while they wait.

    Today a customer with a total of 11 photographs selected double frames (at least) on each piece. She wants it next week and we will have it for her. We had several same day jobs one day last week. We completed a job of 50 frames on Thursday done within a week of order. Everyone else was perfectly happy to wait the two to three weeks.

    There are a lot of people on the Grumble who run their businesses differently and I respect their business model. However, there are different models that work as well for frame shops just as there are different models for other businesses. I can't imagine that Nordstrom's runs their stores the same way K-Mart does theirs (first thing that popped into my head). The key is for each business owner to evaluate their business based upon location, clientele, what type of market they serve etc. and make decisions accordingly.

    Maybe I should do some evaluating about why I am still up at 4:17 a.m.!
     
  20. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Bob, I’m really sorry that you feel I’m commenting on you personally and with animosity; I’m not. I’ve never ascribed to the win friends and influence people school of rhetoric: “my friend, Warren, my friend, Bill”, etc so I may seem caustic, but believe me that’s not my intention. I just prefer to have what I say judged on intellectual merits. I hope a careful reading of what I’ve posted here will show that I have not directed my comments at you personally but rather at what you’ve written. I don’t like ad hominem discussions and I avoid them. I have to say, though your last post was pretty much an attack on my motives and not my points. I’d really like to see replies addressing the issues I raised and not my motive behind them.

    I believe my point in an earlier post about locating our shops in malls is worth examining. You, however, chose to blow it off with something along the lines, “it was a great idea for years.” That same observation could be aimed at the housing market whose collapse we’ve just seen. Housing speculation was ironically particularly virulent in Arizona.

    Another point I hoped you’d address was the issue of whether we as small shop owners are merely renting a stall in some bazaar with the intention of moving along when the business climate changes, or are we interested in growing a business with longevity and substance not merely managers who rent a slot in a mall, gather together a few workers, cobble together a “marketing plan”, work on “branding” and work the business until things don’t look so good and then close up shop. If you think that was an attack on you personally it wasn’t; it was an attack, I’ll readily admit, on the notion that, frankly, I don’t like. I’m not a business man who looks coldly on what I’m doing; I’m fond of my business and the business itself is very rewarding to me, not the revenue it generates. I’m proud of it. I’m not “passionate” about it, though, which I think is a ridiculous notion.

    I hope you see this as an objective reply and not a personal one. I think it contains issues worth discussing. And, additionally, I’m not so bound up in my positions that I take comments on them as personal attacks.

    Perhaps what I’ve been responding to vis-a-vie business education is that I don’t see what I’m doing in a purely business light. I’m a shop keeper with an attachment to his shop. My motivation isn’t maximum revenue; it’s having a successful shop.

    Reading my last post again, I can see how my comment about what I viewed as my responsibilities could be seen as a personal remark. I addressed just that issue in the next sentence but in the editing process I added another clause to the preceding sentence which weakened my sentiment. I have no doubt you’re as responsible a person as I am, likely more responsible.

    I think I’m very transparent as anyone wanting to know about the Frame Works has only to spend some time at our web site and he’ll know pretty much all there is to know. I refer to our history to offer some objective evidence to bolster my arguments.

    I noticed this morning that Apple has cut the price of its I Phone in half and reduced the price of its laptops. They may have been reading my posts
     
  21. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MPCF GCF

    Warren,

    The iPhone price cut is, in my opinion, a little more complex than just lowering the price of the product. The old iPhone price has been cut in half at the same time that Apple is introducing a new model which is at a price point that is equivalent to the older model. They are actually seeking to maintain a higher price point model with their strategy.

    In my opion, the price cut was part of a marketing plan which had as its goal to:

    1. create a buz around the price cut and to introduce the new iPhone. The free advertising that the price cut has generated is amazing. It has been all over the networks, and the cable news stations. You mentioned it here.

    2. create the implication that the full-price replacement is better because it costs more. In a generation that craves the new-new thing, the price cut makes the old product inferior, and helps sales of the new product.

    3. make the lower priced iPhone the product that buys market share. Apple is under more competition than ever, and needs to maintain and grow their market share. The older iPhone is a product that can buy market share among price sensitive buyers, but I suspect the goal is to get the buyer in the Apple Store and then move them up to the new, higher retail, product.

    4. use brand alteration to create a product-life extension. In this case the brand alteration is a reduction in price. Apple has made the majority of money it is going to make off the older model, and by reducing the price, they will ring (humor) out the last few dollars from this product. They have covered their development costs, and any money captured is gravey.

    The price cut was the basis of a rather smart introduction of a new product and not an action to drive sales of the older model. The goal of the price cut is not to sell the discounted model but to maintain the sale of the newer model at a higher price. The fact that we are talking about it here, in my mind, proves it works.

    William Parker MPCF GCF
     
  22. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, you know what Freud said, sometimes a price cut is just a price cut.
     
  23. William Parker

    William Parker CGF, Certified Grumble Framer

    Warren,

    Thank you for the laugh...I will go back to my cigar now. As you might guess I am more of a Jungian. Thanks again for the laugh.

    William
     
  24. William Parker

    William Parker CGF, Certified Grumble Framer

    Warren,

    We have an English major backgound in common, and I realize this is totally off topic, but if you had to pick the great American novel, which title would you put forward?

    William
     
  25. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    William/Warren-

    Could you please discuss novels in a new thread and keep this one on track?

    I would love to follow such a topic which deserves its own place on Warped.
     
  26. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Warren-May i say that you are welcome to parse words as you wish

    I guess perhaps that had you singled my good friends Kirstie and Rob (and I do count them as friends) for having no desire for their kids in the biz, I may not feel your points directed.

    If I were to list all the directed posts (sitting by the pool comes to mind) I am not sure we have enough bandwidth

    I was an athlete for many years. The best advice i ever received was to always respect your opponent

    May i suggest that you add my name to the ignore feature and i will do the same

    If you truly wish an intellectual discussion, feel free to contact me privately. I will and do respond to very message
     
  27. William Parker

    William Parker CGF, Certified Grumble Framer

    Rob,

    Your point is well taken....sorry to get us off tract. Warren, just send me an email.

    William
     
  28. Kirstie

    Kirstie PFG, Picture Framing God

    That's where you are wrong. This is a level playing field.
     
  29. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, it's a no brainer: Huckleberry Finn. Sorry, Rob.

    To use an example from literature, Henry James' Golden Bowl is an example of a writer writing himself out of an audience much as the framing industry is in danger of pricing itself out of a market.
     
  30. Kirstie

    Kirstie PFG, Picture Framing God

    Yes, start the discussion on Warped. I was also an English major (UCLA) and taught English for some time. A great training ground for framing!

    Back to the topic please...
     
  31. cvm

    cvm PFG, Picture Framing God

    What exactly is the topic now?
     
  32. cvm

    cvm PFG, Picture Framing God

    I have to agree with Warren on the macro-picture. I've said it two different ways on this thread so far, and I'll try a third way: What we're all experiencing right now is less a paradigm shift and more "it's the economy, stupid"'.
     
  33. surferbill

    surferbill SGF, Supreme Grumble Framer

    It started out as a discussion on a report on Custom Picture Framing, with many pro and con posts, then morphed into a debate on low cost framing versus chop service, and the last time I checked we were sitting around the pool talking on an iPhone.
    However, sometimes I get a little confused, so I might be wrong. :)
     
  34. William Parker

    William Parker CGF, Certified Grumble Framer

    OK, since I am the one who got us off topic, let me suggest that my last serious post was in response to Warrens mention of the lowering of the older iPhone model. I have outlined my view that it represents more than just a reduction in price in a post at the top of the page.

    Your thoughts,

    William
     
  35. cvm

    cvm PFG, Picture Framing God

    None more than me, so rest easy!
     
  36. shayla

    shayla WOW Framer


    You know, Kirstie, what still amazes me are the ways in which what you just said is true here. I didn't find the Grumble until I had been in framing for sixteen years, and was thrilled to stumble across it while looking for answers to a question of technique. I'm still blown away by the fact that I can write a question and within hours, have gotten valuable feedback from people all over the country. Including the people who write books, give workshops and are considered the
    'experts' in our field.

    It's been such a great help. I suppose I wrote that comment about not being on the same level because I feel that most of you have a great deal of business acumen, and I don't even own a shop. But I still have the courage to pipe up and share my thoughts, hoping that someone, somewhere might find them useful. It takes guts to do that in a place where so many of the other participants are really successful business people, but it feels so good to be able to take part. I know that in this economy, even a successful business owner might feel like they aren't one. But to my way of thinking, if you can own your own business, make a living at it, and survive the ups and downs of these financial times, that's a great deal of success. I think of you as a perfect example of this. I know that times really are rough everywhere, including at your shop, but you constantly show us the kind of positive, forward-thinking tenacity that it takes to stay flexible and guide your business as best you can. You're always looking for new ways to improve your business, and your comments here are refreshingly free of ego-driven posturing. I've take courage
    just from knowing that you're out there, and I would say the same thing to many others who post on here.

    I agree with your comment, it's just that I have so much respect for you, and people like you. I feel lucky to be able to be in the same room. In one way, though, it has an advantage. Even though I write a lot here, it's not as any kind of loud-mouth. I'm shy by nature, and wouldn't even pipe up if we were all in the same room together. But Grumblers have been so welcoming that I feel free to share my thoughts, trusting that they'll take what they want to and pass over the rest. The fact that I'm just an ordinary person with no great credentials is sort of a gift, because it means I have no reputation to prop up. I always say what I think anyway, and am not capable of pretending to be anything but myself, but this position really does give me the freedom to just write what I think. There are people on here who have national reputations, and I know they have to think about what they say, and if it will affect how many sign up for their workshops or buy their books. Or their reputation among the leading lights of framing, whoever those are. I'm really glad not to be in their shoes, and to just be able to write my true thoughts.

    LOL.... although sometimes those same movers and shakers can get so carried away that what I just wrote fails to apply. That kind of jousting can get old when it starts to contain thinly-veiled barbs. It starts to look like insecurity rather than confidence. What I truly admire are those people who are able to carry on conversations with a measure of grace that shows they are still open to the thoughts of others.
     
  37. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    Ok, no one took me up on the alternative view of the iPhone pricing discussion (post 221), so let me try again. Lowering prices is a strategy, but before you go out and discount, you need to understand your business and the effect this strategy could have. I do not agree with Warren (and Bob with whom I have gone around and around on this view) that we should be seeking ways to lower the prices of custom framing. I think most framers will understand this statement as give the same product and charge less. In effect, give a discount.

    We should view our businesses not as retailers, but as manufacturers. The question then becomes

    HOW MANY CAN WE MAKE?

    6 days per week @ 5 pieces per day = 30 pieces per week.

    52 weeks @ 30 pieces per week + 1,560 pieces per year.

    That is your potential total volume without adding production components, the actual production will be less.

    Now let us look at your possible retail volume using average ticket prices at maximum volume.

    HOW MUCH MONEY CAN I GROSS

    1,560 units @ Average Ticket of $51.02 = $79,591.20
    (International Black Moulding Single Mat Regular Glass 8 X 10)

    15,60 units @ Average Ticket of $171.85 = 268.086.00
    (Roma Moulding Single Mat Regular Glass 8 X10)

    What happens on the income statement?

    HOW MUCH CAN WE TAKE HOME

    Average Ticket $51.02 $171.85

    Total Sales $79,591.20 $268,086
    (Cost OF Goods Sold 33%) (26,265.10) (88,468.38)

    Net Income $53,326.10 $179,617.62


    Expenses

    1,200 sq ft
    1 ½ employees

    Total Expense (54,600.00) (54,600.00)

    Net Pre-tax ( 1,273.90) 125,017.62

    The shop with the $51.02 average ticket cannot reduce their retail price and survive. The shop with the $171.85 can consider lower cost alternatives. I would suggest that they look at lowering the cost through DESIGN, and not a retail price reduction.

    The 4” mat has become the industry standard, and done a lot to increase the cost of framing. For our example here, these items are based on a 1” mat. The result of increasing the mat size for the $51.02 retail example is:

    1” Mat Retail $51.02 X Capacity 1,560 = $ 79,591.20
    2” Mat Retail $60.68 X Capacity 1,560 = $ 94.660.80
    3” Mat Retail $65.65 X Capacity 1,560 = $102,414.00
    4” Mat Retail $73.57 X Capacity 1,560 = $114,769.20

    We used design to increase prices, and if you need to lower retail your retail to compete, do it through DESIGN, not DISCOUNT.

    My contrarian view is that our business model should NOT be based on maximizing volume by discounting price. In my opinion, if you do, and unless you understand the requirements of a volume driven shop, you will be one of those people standing outside a padlocked shop saying “I don’t understand, we were busy until we closed.”

    Just my opinion…what’s yours

    William Parker MCPF GCF
     
  38. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    William - you must have taken my class :)

    It is interesting that Bob (as well as I) have found that the original models we had for rent (mall and strip center) had rents being sustainable and still allowing us to make a good living. I do not think it is true anymore.

    I am about to close my last retail store in a strip center as the rent for 1200 square feet has reached over $6500. When we started, we had a central frame shop in an industrial park and the model was for a series of smaller 1200 - 1400 square foot design centers in strip centers around the city. We got up to four (planned 7), the economy started to decline and rents began to increase. With $2900 per month rent on a $400K (annual) store, it was doable. With $6500 per month rent on a $225K store it is not.

    I firmly believe it is not just about price, but an entire shift in our industry, especially in Southern CA. There is just no way we could ever buy a building in a location that would support "retail" sales. True, we could have owned an industrial building by now, but it would not be feasible to run the same business model (retail store) with the same convenience.

    It looks to me like after this is all over (economy situation) there will be a shift on what custom framing is all about. I think you will see more home based businesses and firms like mine operating in an industrial park focusing on commercial sales and trying to attract the "retail" clients to come to us more as a "manufacturer" than as a big box retailer.
     
  39. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    William, I have not posted much here because I am a one man shop in the middle of a 400 piece job.

    If the numbers you use are real then we deserve to die off as a breed. I wait on 10-20 customers per day and manage to frame between 10 and 50 pieces per day. The retail figures you have used are numbers that the distributors would like us to use because if we do there is less price resistance at the wholesale level.

    This industry has followed so much of the distributors theories about how we should conduct business that I'm surprised every major retailer in the world hasn't entered this business.

    This industry is overpriced because we do not typically own what we sell. Stocking moulding is a piece of cake and very inexpensive compared to buying as needed. I sell my product at or below what many framers are paying wholesale and still maintain an 85% margin.

    We can argue the value of what we do until the cows come home but the public has spoken loud and clear "THE INDUSTRY HAS PRICED ITSELF INTO OBLIVION". Most framers can't even use the defense that the BB's are selling plastic because the PROs do it also. I am 60 miles south of Warren and this area where I live has 55,000 residents in 6 cities and has phone listings for 291 framers. The majority of these so called framers work from their garage making their own frames because they are artist that order from our suppliers at wholesale prices. They wouldn't have gone there if we had not acted like housing builders during the real estate boom.
     
  40. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    Jeff,

    You are proof that a well run single-person shop can make money...as long as you maintain your margins and work very very hard.

    William Parker MCPF GCF
     
  41. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, what do those numbers mean? Anything? It’s be a #### of a poor shop that could only make 5 8 x 10’s a day. $51.02 for an 8 x 10? Does that number have any meaning or is it just a number? We’d do the 8 x 10 for $38 and if the customer went to the Frame outlet and chose diy, it would cost $26, but those are real numbers. It’d be a poor shop that could only make 5 8 x 10’s a day. But these numbers must have no basis in reality.
    There’s also an assumption in you post that the world owes a producer a living. If $38 (and $38 is a real number) is the going rate, your guy is in even more trouble that you suggest. You know, there is a point when microeconomic and macroeconomic curves converge, where the cost of production begins to exceed the price of willing buyers. It doesn’t make any difference to a potential customer what inefficiencies a shop might be laboring to produce a product he thinks is too expensive. He’s simply not going to buy it. Woe to the producer who finds out that his costs of production exceeds what any rational buyer is willing to pay. And in a competitive market, there are always producers pushing the costs of production lower. Otherwise, there would never be any productivity increases. We’d all have the same standard of living we had at 50 years ago or wherever the cost of production stopped declining. It’s a rare producer who has any say as to what buyers will be willing to pay for his product. It’s sort of a Mr. Macawber situation: cost of production $10, market price $10.02, happiness; cost of production $10.04, market price $10.02, misery. It would, indeed, be a wonderful world, streets of gold, milk and honey flowing if we producers could set any price for our products and the buyers cough up. Ours is not that kind of world as our car makers and their unions are currently discovering.

    Rather than wondering how much money our producer would need to charge for his 8 x 10, he would be smart to consider what buyers are going to be willing to pay and if he can meet that price. He might also want to consider what that shark down the street is capable of making them for. If either figure is higher than his, he might consider another line of work, say a diaper service or an ice cream parlor. He might also consider that no matter how many efficiencies he or anyone else employs , buyers aren’t going to pay the price and then the product will simply not be widely available; crt TV sets are a good example, mechanical watches are another. Sure these products will enjoy some demand and will be sold but at exorbitant prices to the few.
     
  42. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    To everyone,

    Read what Warren has written until you understand it. This is an excellent analysis of our industry based on economic principals of supply and demand.

    Warren,

    I really like econcomic theory, and econometric models. My only problem is that most of them come with a list of conditions under which they function. An example would be the assumption of a rational consumer. Using Wickapedia (sp) as a source, they note that the demand curve is "...demand is defined as the willingness and ability of a consumer to purchase a given product in a given frame of time"

    The point I would raise is the inclusion of the words "willingness and ability..." Willingness goes to the desire for a specific purchase. That thing I have been calling an aspirational value. The ability goes to the current econcomic situation. The willingness can raise prices, and the ability can lower the number of people who will make purchases at a specific price point. The stronger the desire to purchase an item, the less price is a factor. We have to work on making framing an aspirational purchase unless we are moving toward Warrens point where production costs exceed our selling price. Who knew supply and demand curves could be this much fun.

    Thoughts?

    William Parker MCPF GCF

    PS Warren you must have had a double major.
     
  43. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    We also need to realize that at a certain point not only do we lose customers but also create competitors out of those customers.
     
  44. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MPCF GCF

    Warren,

    I did not answer your question about the numbers. They are from a class I taught a few years ago, and are designed to get you to think about your business from the standpoint of a finite production capacity. With that information in hand, what can I do to maximize my bottom line without increasing production costs.

    There is a break point at which increasing volume only comes with additional production costs (more people, more equipment, etc.). At that point, net income may be reduced by these additional costs, and higher volume will cause a decrease in the bottom line. Working harder getting less.


    William Parker MCPF GCF
     
  45. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    I believe we do not have the resources as an industry to "... mak(e) framing an aspirational purchase." The companies most framers thing are large (LJ, TV, etc) are gnats in most industries. The fact that surveys show less than 10% of the population ever sets foot in a custom frame shop says Warren's comments are much more of our reality.

    However, local conditions must be considered. After all, a Big Mac costs considerably more in NY City than in a small town in the mid-West.

    In addition, what most framers fail to realize is that people who have been "trained" to "aspire" to "more expensive" framing expect the place they buy to be an "urns and ferns' type place; to quote Vivian.

    I believe those that survive will be those that understand their local market and don't just "open their doors."

    The "standard mark-up" scaled pricing that has been recommended will likely kill many shops. Why in the world would you charge the people that are looking for a much "nicer" product less?? While marking up the lower cost (majority of buyers) more?!!
     
  46. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Who boy, that’s an excellent point, Jeff. If our prices get too high not only will encourage our customers to become competitors we attract outside opportunists, say Michaels or JoAnns or any BB retailer. It’s an iron law of economics that if one sector is able to get prices above what efficient producers can charge, that sector invites competition. The efficient producers will drive out the inefficient. By setting high prices, we sew the seeds of our own distruction.

    William, surely you’re familiar enough with framing to realize that the frame shop operating at anywhere near maximum capacity is as rare as a black swan. (By the Way, I highly recommend that book _The Black Swan_ Nissim N. Taleb, for anyone interested in the current economic situation, especially with reference to Bear Stearns and Lehman Bros., et alia). It was an incredibly prescient book. There’s miles and miles of slack in the typical shop and the atypical shop (mine) which would tend to denigrate your example. Your analysis would only make sense in a shop approaching 100% capacity and that ain’t likely to happen any time soon.
     
  47. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    If we were all wine makers, I wonder how many of us would be chasing the 'two buck chuck' and how many would aspire to rival Opus One.

    Just a thought.
     
  48. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    Agreed Warren! The one thing almost every framer I ever talked to had was capacity.

    Most cost analysis of chop/join vs. length ignores the available labor capacity in almost every frame shop. I bought into the idea when I first opened. How silly.
     
  49. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    Warren,

    "Denigrate" is such a harsh word. Remember this was for a class, and in that context theory, just as econometric models are theory. I should note, that in post #237 I wrote under HOW MANY CAN WE MAKE: "That is our potential total volume without adding production components. The actual production will be less." So I pre-agreed with you...and I acknowledge that "pre-agree" ain't good English.

    William Parker MCPF GCF
     
  50. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    But, William, if you're just sitting around, you might as well make something. Selling the 8 x 10 frames for $2 above cost would be preferable to doing nothing. That's extreem, of course but, I can tell you you could get some great deals from us now. We just finished a 15 frame job that required chop moulding that we marked up only 1.6 times. Hey, we wanted the business and even at that low mark up we made a lot of money, enough to offer bonuses that week. We sold, glass, mats labor as well. They were oversized frames (needed oversized mat boards).
     
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