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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. Paul N

    Paul N In Corner


    Do you mind filling out lots of the missing information in your profile?? (essentially there is nothing about you)

    Your arguments and posts would carry more weight if you did, instead of remaining an anonymous admirer of Warren's business model.


    PS: If that business model is a solution and the means to a successful framing business, I wonder why Warren has not patented (if possible) or at least franchised said business model.

    Any idea why not??
  2. PaulSF

    PaulSF PFG, Picture Framing God

    I agree, Framing. Warren has an excellent business model, and it is worthy of study. He tends to gloss over a lot of what makes it successful, so it looks deceptively easy -- you just buy moulding and mats by the box or truck at really low cost, and pass the savings on to the customer! Um, not so easy. You need to gear every aspect of your operation to that low-price model. You need to spend a lot of money on advertising to generate enough traffic to make it viable, and you need to do this for quite a while before you develop a critical mass. Only then can you lay off the advertising somewhat (or may not).

    The doo-doo Warren steps in here is that he projects his business model and the only intelligent and viable business model in the industry. He's the visionary, and we just need to follow his example if we want to survive. There are many viable business models, however. I have a friend here who does more than a million dollars a year in sales, selling closed corner frames more than 90% of the time. Her clientele are collectors of fine art, and they would poop out a brick if someone suggested putting that original Rembrandt sketch that they just paid $250,000 for into a cheap frame with paper mats and non-UV glass. Warren and my friend are on opposite ends of the framing continuum (OK, I may be doing Warren a bit of a disservice there), and most of us fall in between. We have some low-budget customers, we have a handful of well-heeled customers, and we have a lot of middle-class customers.
  3. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Paul N, as I’ve mentioned, I have very limited business skills and no interest in running a “big operation.” I’ve done well at my little business but I imagine if I had the marketing and advertising skills that Kristie has I would have done a lot better. If I had the organizational and managerial skill that other’s here have I might just have considered franchising but, really, I’ve made enough money, way more than I would have as a full professor. I went into this to support my family and I’ve done that. There have been two consultants sent by my bank who’ve looked over the business and said we could have made way more money if we had been more aggressive, had been willing to expand. For me, it wasn’t a matter of being willing to expand, I knew I didn’t have the capacity. I’m not a sharp business man as anyone who’s met me knows. I’m pretty much retired now and have little to do with day to day running of the framing business. I’ve never said that my model was perfect, my comments have been about efficiency and competition from much larger retailers. If you’ve read what I’ve said surely you must have noticed. It’s not that I think my way is the only way, it’s that I see the just in time ordering of materials (not stocking what you sell) as very inefficient (the fact that my COGS in 08 was 19% and my prices are very low compared to other shops should be a warning ); there are too many attractive opportunities in this industry. I made my most recent posts in a thread that seem to indicate that the current way of doing business is in some trouble. And while I haven’t attempted to franchise my business I have trained other framers to go into business who’ve done very well. An ex manager of the Frame Outlet is running a successful framing business employing what he learned here over 10 years. It was an ex trainee of mine who introduced me to the Grumble in 03. Here’s my position as clearly as I can state it. By merely stocking what I sell, I can sell the very same product that a non stocking framer can sell for about half his price, maybe even less. I think that’s an important observation, not because I’m doing it but because anyone can do it. Here it is in simple terms: List price of moulding, $1.00 per foot, chopped price of that moulding, $1.85, discounted price on a mixed 3,000ft order, $0.70. The same holds for mat board , glass, everything. Don’t those figures make you wonder a little bit?
  4. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Paul SF, here's what I think is the problem with the example of shops A & B. And this is pretty close to reality if I'm shop A. Shop A's $100 ticket ($65 was only an average) it the same ticket as Shop B's $225 ticket. That is, Shop A sells the same thing for $100 that Shop B sells for $225. That's a dangerous discontinuity for Shop B. It also says something important for the framing market as a whole: there will be a lot more buyers at the $100 price than at $225. Your example of the gallery doing $1M also has dangerous implications. There can only be a few customers at its prices and there can only be a few shops like it. As I mentioned in referring to today's Wall Street Journal, big spenders are pulling back. Neiman Marcus is cutting prices. What do you do when the big spenders stop and you have nothing to sell to the little guys? That's an important question that no one tackled in their replies to me. Could it be that we're at the end of, say, 15 years of wretched excess? That in the coming years people are going to be more careful about what they do with their discretionary spending, maybe even using it to flesh out their depleted 401Ks? If that’s going to be the case, and it might very well be, who’s going to be around to buy the big ticket items that they can get for half the price from a value framer? In fact, who’s going to have anything they can sell to value seeking customers. Something to think about.

    And I haven’t even mentioned a phenomenon we’ve seen here and it’s ugly. A customer buys a frame from B and learns he could have gotten the same frame from A at half the price, same quality and faster service. That situation goes way beyond advertising and longevity. It’s ugly and it’s happened.
  5. Jay H

    Jay H PFG, Picture Framing God

    Not really all that much. Your cost to sell the first frame was $2100 where mine was $10 at lenght price. Don't misunderstand me. I hear stories of people buying so horribly on here that I wonder how they stay open. I even shared my dumb moment today. Your theory makes one false assumption though. That is that I don't stock ANYTHING. Your deals may be on ALL your mouldings but I can match you on about 10 mouldings. That gives you the upper hand but a blowout it is not!

    Dad was looking at getting back into the business a while back. He was shocked at how I paid about the same for supplies today than he did in the 70s and 80s yet retail prices have skyrocketed. I love "chop shops" as well as you do. Their inflated prices make mine look aggressive and make yours look insane. I'm happy with my lot and I know you are as well.

    I would love to compare privately what you pay for mats and glass and such. I think you may be surprised what things are going for elsewhere. My moulding may not be priced aggressively but I'll be shocked if you get mats much cheaper than I do buying one at a time. Or not, maybe I will be but I doubt it.
  6. Paul N

    Paul N In Corner


    Thanks for the reply and I am really happy you found a way that works perfectly for you and you're successful at that. And believe me, I try to emulate that, on a much smaller scale though due to logistics and resources, but mine is something similar to what our friend Bob Carter would call "smart buying".

    I guess the issue that many here have a problem with is that they think you are claiming your method would apply and work in every situation while, as you clearly stated, that is not the case (but would work given the right circumstances).
  7. PaulSF

    PaulSF PFG, Picture Framing God

    Warren, you're making an assumption that Shop A and Shop B are selling exactly the same items for different prices, and I don't necessarily agree with it. First of all, conservation glass is not the same thing as museum glass, and neither of those are the same as clear glass. Paper mats are not the same as rag mats. Three-inch mat borders are not the same as 1-inch mat borders. And Roma is not the same as Decor.

    Finally, your assumption simply ignores the fact that Shop A needs 3.5 times more orders than Shop B to produce the same amount of dollars.

    You're talking about buying in volume, and I'm talking about selling in volume. Two very different things. If you don't have a steady stream of customers, that 150,000 feet of moulding inventory will get dusty very fast.
  8. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Jay, when I get back to the shop tomorrow, around 2 (I'm retired, after all) I'll post exactly what we pay for mat board and glass in the open. (I'm going to be trying out the bow thruster just installed in the Beach Music in the morning; even I will be able to approach a crowded dock with confidence) I think it's time for real numbers. I think 2,000 lbs. of ssf glass costs $850 on the ground in our parking lot. These are 40 x 60 lites. Maybe 455 lites but I really don't know. The lites per case vary a bit; I can't imagine why they can't put the same amount of glass in each case. I'm actually surprised at how little I know now about the business. Which, btw, is how I planned it.
  9. surferbill

    surferbill SGF, Supreme Grumble Framer

    I started out years ago stocking all my moulding, and then after the 1991 recession used mostly chop service for a few years, and now in the last 5 years I've gone back to stocking around 100 mouldings.
    I always show the customer the mouldings that I stock first, which i have grouped together on my sale board.
    It's amazing how fast you can eat up a box of moulding if you put your mind to it.

    With the way the picture framing market is evolving with an increasingly thrifty customer, I would think the all chop service, high mall rent, high moulding mark up business model is a dinosaur, and will die a slow death.

    In my opinion, I would think a better business model would be to invest in equipment like a double mitre saw, commercial grade underpinner, CMC, upgraded website, stock dozens of bread and butter mouldings, have reasonably priced rent, and not be perceived as an "expensive picture framer."

    Oh, and build up a customer base over a 10 to 20 year period, and hope the framing gods are smiling your way. :)
  10. DTWDSM

    DTWDSM SGF, Supreme Grumble Framer

    Is it me or did this go from a somewhat intellegent and meaningful conversation to a pi$$in match?
  11. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

  12. johnny

    johnny SGF, Supreme Grumble Framer

    That's always a good idea. Maybe a PM to him instead?
  13. PaulSF

    PaulSF PFG, Picture Framing God

    I've started stocking more mouldings...the hard part is figuring out which ones to stock.
  14. Kirstie

    Kirstie PFG, Picture Framing God

    For the Bay Area? All simple profiles, no ornament. Leave that for special order. A couple for certificates, a mahogany and gold and a black and gold, then three sizes of blacks, two silver and two gold 3/4" stems, ditto for larger stems in silver, gold, mahogany, walnut wood tones for canvases. One chunky black 1.5 x 1.5. A few olive woods. A natural maple, a natural walnut, a couple of quarter sawn oaks , a very few 1/2" silvers and golds, a very few 1/2" woods. We stock a lot more, probably about 200 or so, but these would be where I would start. Then I would look to add bargains in colors, and maybe a white stem. For special order you order everything length at your discount and use leftover for ready mades.

    Nothing is expensive except the olive wood the the oaks. We still like the Roma. Our 1" oaks come from Picture Woods. Vermont will have them too. These sell well despite thier price. Lots of Carftsman homes in this area.

    Work with just a few companies to work up your discount level over time. There are many companies out there who are loose with the discounts but you pay freight to get the goods to the Bay Area.

    Try Orr-Bay, Valley, Studio, LJ. These are the cheapest freight options for the Bay Area. In Los Angeles I would look at Max, Direct.

    Upscale certificate would be LJ Academie, lower end I buy at shows or on close out. Basic black 1 1/8" from whoever gives you the very best price and shipping. Same for OEM aluminum. I get one from Northern CA and one from Los Angeles.
  15. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    I have got to offer the contrarian view to stocking mats, glass, and frames. For Warren's model it works, and is consistent with a shop built around volume. But, it requires money and space...a lot of money, and cheap space.

    The $1.00 a foot moulding, which is discounted to $0.70 does not appear to include the associated cost of:

    1. Freight

    2. Space and fixtures to store

    3. Equipment to cut and join

    4. Increased cost of workman's comp (because now you are a manufacturer)

    5. Potentially, the additional cost of a location to cut and join which is separate from the retail shop. Strip centers are not generally happy about the noise associated with a saw.

    6. Waste, plan on at least 20% of length going to waste.

    7. Fashion, other than some basic blacks, mouldings seem to have a life span. We tend to sell the new stuff and forget about the old. The stuff that was hot last year, sits longer and longer. Most inventory is like fish, it gets stale quickly.

    I think we have developed the mistaken idea that inventory represents wealth. To disprove this idea, just go to your bank and ask how much they will give you for a loan based on inventory. What you will find is $0.20 on a wholesale dollar in the best case. In the worst case, they will give you nothing. They want to see cash flow, not 10,000 feet of mauve moulding.

    If you still want to build inventory:

    1. make certain you have added back all the costs (1-7 above).

    2. make certain you have an understanding of inventory turn and a way to measure your turn. A $1,000,000.00 of inventory that has a 0.1 turn is worthless.

    For most 1,200 square foot shops in urban markets, stocking any moulding that has less than a 2 times turn is not a smart investment. This is the reason we have distributors.

    Kirstie makes a great point in stating that a good strategy is to be a big customer with of as few distributors as possible. If you have 10 profiles from 20 distributors, you do not have much room to ask for discounts. If you have 100 profiles from 2 distributors, you do. If you think retailers are hurting, then know that distributors are also, and are willing to discount.

    For most shops, a combination of stocked inventory, and chops make sense. Stock the black moulding that is selling at a rate of a few hundred feet a month, and use chops to experiment with new mouldings. If you are ordering a profile once a week, think about adding it to inventory, but be prepared to remove it when the sales begin to fall. Most mouldings have a life cycle.

    Finally, be disciplined by setting an amount you will invest in inventory. When you hit that amount, you cannot add to inventory no matter how good the deal. In big-time retail, this is called Open To Buy. It forces you to define your investment, and to sell off non-moving items.


    William Parker MCPF GCF
  16. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Stocking only the basics makes a shop no different than my 100 closest competitors. You sell basic black because it is cheap, period. I am 100% in stock and the basic black is my slowest seller except for commercial jobs. Now if you need to compete with me on a 4" Hand finished Italian moulding you are dead in the water. I sell it for the same price as my basic black.

    I am currently watching dozens of framers in my market fold. They all showed 5-10 times the corner samples that I have. They all stocked The most basic items in small quantities. They were all the same.

    Now when it comes to high end mouldings I pay 10 cents on the dollar to what many of my competitors pay for theirs. I buy a 100 foot box for under $100 including freight (freight averages less than 3 cents per foot) and my competitors pay $100 for a single chop with freight. I had 70,000 feet of moulding while I was in just over 900 sq ft. Double miter saws are cheap if purchased used and a great v-nailer runs $2,500 new.

    Now as far as the value of moulding I have stated dozens of times that moulding is worth pennies and frames are worth dollars.

    I built my business with an exit strategy knowing before I opened how bad the economy would get. Should I decide to close I will sell about 10,000 ready made frames and go home with cash in hand. Most framers have nothing to sell on the way out.
  17. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF

    I have found that the quickest way to kill a thread is to start talking about accounting details. But, in this case, it is critical to understand the impact of investment in inventory before you start spending money, so here goes:

    The definition of Inventory Turns is (Wikapedia is the source):

    Inventory Turns = Cost of Good Sold (over a given period)/Average Inventory

    The higher the number the better because you are reducing invested capital. To understand this better, please read:


    The lesson from the above example is the higher the turn, the less capital you have to invest.

    William Parker MCPF GCF
  18. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF


    Very good job. Most people never address an exit strategy (short term or long term) as you have. I would suggest that everyone that stocks moulding have an exit strategy for everything they purchase.

    Question, do you have a fixed dollar amount for your investment in inventory, and do you track turn?

    William Parker MCPF GCF
  19. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    No I don't do much traditional tracking other than how long it takes to pay for a full box of moulding through sales of that moulding. Almost always 3 frames or less. Most boxes have sold enough to pay the invoice before it is due.

    I understand in depth retail accounting and strategies but tracking turns is not something I care about. Once a box has paid for itself the rest is gravy. Should a moulding start moving slowly it becomes ready mades. I always hold back a few sticks for custom.

    Now going back to accounting principles, those are all well and good if you have a better place to keep your money. What will you do with it, put it in a bank or the stock market. I end up doubling my investment in a box of moulding every month until it is gone. I could earn 2 1/2% per year with a bank or lose it all in the market.
  20. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, I’ll give you the space problem but your points are exaggerated. Freight is negligible, around, $0.10 per foot. The fixtures to store moulding are usually shop made and not expensive. Cutting and joining equipment isn’t very expensive, either. We have the best; the basic suite of double miter saw and v nailer represents a $25,000 investment. That that figure is so low is a main reason the entry to framing is so easy. I mentioned in a previous post that there is a strong relationship between risk (investing in equipment) and reward (the profit that equipment will produce). The higher the risk, the greater the reward.

    The 20% waste factor in a canard. Ours isn’t nearly that high. Also, classic moulding patterns don’t readily go out of style. We’ve been selling one pattern for 30 years. It just doesn’t seem to every die. We started buying it from Bendix and now get it from Colonial. It’s 8-037 and 8-038. The thing about stocking moulding is that 100 ft of a pattern can be made into any number of different sizes frames. And you can always sell for what you paid for it. We’ve never thrown away moulding. Take a close look at the Backroom Gallery of the Frame Outlet. In the room with the saws three walls are lined with bins for shorts. We make ready mades with those shorts as they accumulate. We’ll even include a leg with a flaw because the customer knows he’s getting a bargain (50% off the regular selling price) and he sees the flaw. Most flaws are minor and represent what a frame will look like after a few years anyway. That $1.00 moulding that we get for $.70 and we may sell for $3.25 goes for $1.70 in a ready made. These frames get snapped up. Do they hurt custom sales? I don’t think so. They sure get traffic in the store. About every 5 years or so, we identify the moulding that just isn’t moving and we price it low, but still above cost but way less that $1.70 and have a warehouse sale. Cash and carry and we move it out. We get our money back and more traffic. Win, win. There is very little waste. The cost of the inventory we maintain is very low compared to our sales, really not even an issue. Another thing, there is the notion that Hyaek calls “specialized knowledge” (Thomas Sowell devoted an entire book to it: Knowledge and Decisions) To succeed in business the entrepreneur needs this knowledge and in our case it’s knowledge of what will sell well and what won’t. This knowledge allows a shop to buy in quantity.

    My thoughts on “Open to Buy”. That notion is what I think is wrong about running a very, very small business as if it were a Big Business where the notion might make sense. The independent framer has a big advantage over his much bigger competitors; he’s not hobbled with corporate rules. If he sees an opportunity, he can take it, take a risk. If we see an opportunity, a really good deal, we’ll snap it up, take a risk on future rewards. This attitude has allowed us to mark up some mouldings 10x and still present our customers with a great deal.
  21. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    What a great point, Jeff, having somewhere else to put your money. Warren Buffet invests in businesses he knows will succeed but we don't have his insight. We can, however, invest in ourselves and know that we will carefully use the money. When Toni and I max out our IRA's, we invest all our savings in ourselves, and so far, we haven't been disappointed with management. Why, indeed, throw all the advantages of running you own business to adhere to accounting rules designed for large businesses? Frankly, I have no idea what our "inventory turn" is or, even, how to calculate it, and I don't care. I'm running my own business, I'm there every day, I know what's going on. I walk by the moulding bins frequently every day; I can tell with a glance if inventory is building up. Nothing's hidden. I have no interest in playing "big business man" and spending hours of my time in accounting analysis. We make no effort to track our sales. We'd have to be stupid not to know what's selling and what's not.
  22. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Also on the storage point, I have racks that hold about 80,000' and spent less than $200 building that rack. Most shops with no inventory have more than that in their little bin system. My moulding uses a 10' x 10' footprint.

    I also sell length wholesale to folks who are currently buying from our vendors. I make a ten dollar bill for every stick I hand out. These people would buy nothing from any retailer otherwise because this industry sells to anybody with a heartbeat no license required. I have considered starting a thread to out all of the vendors selling to the public. Here in S.C. these vendors are required to collect and pay sales taxes. Very few of them do. I am considering turning over the names of those vendors to the Dept of Revenue to help level the playing field.
  23. Thedra

    Thedra CGF II, Certified Grumble Framer Level 2

    William when I got my accounting minor many of these items were called fixed costs. While they definately have to be addressed, they are not figured in cost of goods. Space is probably the largest variable for some want to have everyone in town pass them twice a day and others want customers to come and see them. Thus price of the space is more worrisome than amount of space. Workman's comp and the equipment costs are going to happen unless you just order your frames all put together already and we have talked about how that is for most not the most effective way to get a good return on your money.

    The level of stocking is different for every store. Not everybody is going to stock 10,000 ft of moulding but it would not be hard space wise or money wise to store 4 sticks of 40 mouldings and when someone orders something different than what you have in stock, order 3 sticks instead of 1, unless you think that the customer has all their taste in their mouth.

    If fashion changes before I sell 4 sticks of something I think is a good moulding, maybe I better change occupations. At least two of my suppliers allow mixed boxes for discount and one even gives quarterly discounts for volume.

    As in all businesses risk versus reward is the main tenent. This method seems to have little risk and great reward.

  24. JFeig

    JFeig SGF, Supreme Grumble Framer

    4. Increased cost of workman's comp (because now you are a manufacturer)


    From my experience with my workman's compensation audits in my shop.... There is no change in the rates. Picture framers who only fit ( cut glass, join chops, and assemble) or those that cut from length moulding are the all the same SIC code. This SIC code is lumped in with cabinet makers since our industry is too small for a separate classification in Workman's Compensation categories. :(
  25. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Jay, here's our mat board story. In 08, an off year for us, we bought $15,057 worth of matboard. We paid between $3.16 and $3.48 per for Baindbridge regular, $6.38 to $7.05 for Alpha. Crescent regular, $3.06/$3.41 and acid free (rag) $6.58/$7.25. I guess the higher price toward the end of the year reflected some sort of fuel allowance. We bought $79, 940.00 worth of moulding at various prices.
  26. Jay H

    Jay H PFG, Picture Framing God

    That was as I suspected. I don't buy regular boards but could at or just under your price. You pay about a dollar less than I do for SRM and more than I do for Alpha boards buying one at a time. I've got an invoice on my desk now I'd be glad to scan and email. I pay a few bucks more than you do for rag's for suede!

    International is coming out with a line of boards that are either Alpha or buffered white core that will lower my costs more. I should get my first look at them in a week or so.

    You make an excellent case, at least to me, for not tying money up in inventory for mats anyway.
  27. Kirstie

    Kirstie PFG, Picture Framing God

    I was given a quote on Berkshire to use as flaw board slip sheets for the CMC for under 2 on a sheet basis. Of course that board is not a real white core. International White is the next up in price, I believe. I'm still lookng for $1. flaw board if anyone has a source since LJ dried up.

    Warrens's prices are less than mine, and I wish we had the storage capacity to buy differently! He moved a lot of mat and moulding in '08, more than we did by far. Our Larson bill was around 90, I think.

    I will check actual prices when I am in the shop because now I'm curious.

    Is there a way we can talk price less openly, perhaps a code!? The general public has no idea what labor and overhead go into a frame.
  28. Jay H

    Jay H PFG, Picture Framing God

    It's not a real white core?
  29. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I believe "White core" refers to bleached, buffered core paper, which is not aplhacellulose. A far as I know, it is similar to "acid free" boards, except for the bleaching of the fibers, and still contains most of the impurities that would cause discoloration over time.

    "Alpha cellulose" is purified pulp from any cellulose source, such as cotton and wood. Lignins and other impurities have been extracted, so it contains nothing to cause discoloration over time.
  30. PaulSF

    PaulSF PFG, Picture Framing God

    If you had read Jim's article, you would know that!
  31. PaulSF

    PaulSF PFG, Picture Framing God

    For those of you that buy a lot of your mouldings by the box, how do you deal with the inevitable warpage and flaws? Is that just waste, or do you return it to the supplier for credit?

    In my case, I sell a lot of LJ's Cranbrook ebonized walnut, and that would be a prime candidate for better purchasing. Based on the length I've ordered in the past, however, I expect as much as 30 or 40 percent of the box to be unuseable due to warpage and other flaws. Consequently, I'm reluctant to invest in an entire box, when the savings might be illusory.
  32. Jay H

    Jay H PFG, Picture Framing God

    I think SRM's say "white core". Crescent's literature doesn't at all even kind of suggest there is anything archival about it. I don't understand what all the confusion is about except that Berkshires and SRM's are essentially the same product. If SRM's are called white core what is so different between them and Berkshires? Does Jim's article cover that?
  33. surferbill

    surferbill SGF, Supreme Grumble Framer

    About once a month, I will call my rep up and ask if I can return any warped or unusable moulding that I've bought by the box.
    LJ is good about returning warped moulding, some of the other distributors are not as willing to do it.
    I don't think I should have to pay for warped moulding, and I will not hesitate to return any i can't use.
  34. Kirstie

    Kirstie PFG, Picture Framing God

    Good article, BTW. I know that! I was referring to the fact that Berkshire paper mat has a slightly cream colored core.
  35. Jay H

    Jay H PFG, Picture Framing God

    Ah! I suspect Jims article didn't cover the shades of each core. Who knows maybe it did. I'll look closer. I hadn't noticed.
  36. JWB9999999

    JWB9999999 SGF, Supreme Grumble Framer

    Sounds like a poor quality run of that moulding if you are having that much unusable footage.

    What I do with problem moulding depends on how much I get, and how much it costs.

    1. If I get a stick that is warped beyond usefulness, I call the company and get a credit.

    2. If I get a stick that has damage on it, how much is damaged versus how much did I buy at what cost? If it's a moulding I paid $.49 a foot for and I got 400 feet, I'm not going to complain about a few feet of damage on the occasional stick. If it's a LJ moulding that cost me $10 a foot and comes 30 feet to the box, I'm definitely calling for a credit for every foot of damage that I have.

    Realize that you may not find damage until LONG after you received the moulding. Three weeks ago, I discovered that about 60% of a box of moulding I got from Studio was "marked". Something had rubbed the matt finish and it was shiney down 7 full lengths out of 12 that were in the box. I didn't discover this until a month after I'd received it. Called them anyway and had them just send me a whole new box, and credit me with the 70 feet that was damaged (which I will be sending back to them, at their expense). No problem at all.

    3. Lengths (or partial lengths) with minor, reparable damage, and minor warpage, often end up as ready-mades in my shop. Usually I section the moulding where the bend is, often entirely removing the warpage.

    4. I don't assume that I can use 100% of any length moulding that I buy. My pricing reflects the scrap waste. There is a percentage added in my POS system to every moulding sold, increasing the actual inches sold, which accounts for having to cut the ends off mouldings and some inches of remnants of lengths that are wasted. So normal waste is covered and paid for by my customers.
  37. Kirstie

    Kirstie PFG, Picture Framing God

    I buy Cranbrook by the 40-60' bundle, not box. Talk to your rep ;-) about price if you are serious about stocking more. I only buy about a dozen box mouldings but I get the rest at very good prices, sometimes better from certain companies. I always return more expensive moulding if it is flawed.
  38. PaulSF

    PaulSF PFG, Picture Framing God

    Kirstie, that sounds like a good option, especially since a box of Cranbrook is something like 500 ft!
  39. Kirstie

    Kirstie PFG, Picture Framing God

    I would like to try to return to the original topic as this has been a most interesting thread. If the framing report is telling us that the small percentage of the public that actually have items custom framed frequent an increasingly large percentage of BB craft stores, what does this mean for our rapidly shrinking market?

    Some of us stock our materials, some place ads, some are offering lower priced options, some make their stores look open and inviting, some carry ready mades, but what else? I spoke with two local businesspeople today. One owned a custom and handmade furniture shop. He said that his business was down, and that the whole country was turning into Wal Mart. People will have nowhere left to shop. He has very little low end furniture, none, in fact. Another owned a restaurant. He told me that his chef was working on a lower priced menu using different ingredients because the public are not going out for expensive dinners. He is not discounting, but he is changing his product mix. We are not alone.

    Are we looking at a public who will have a permanent change in buying habits or is this temporary? Personally, I have never seen anything like it in my 32 years at the shop.

    Any other ideas?
  40. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MCPF GCF


    A really good question, and not an easy answer. I think, it depends on how we, as retailers respond. If we discount, the future is bleak because we will drive our prices below cost. Since this thread has proved that cost varies among the group, the survivors will be the larger among you who buy at the best price. Their advantage is only temporary. As the distributors are faced with a declining customer base, they will reach out to a retail base. Most will fail in this attempt and drive retail prices lower. Ulitmately the distribution network will fail and the real winners will be the big boxes.

    Or, we can take the example of you restaurant owner, and look for new options to add to our product lines which are lower in price, but maintain margins. In the Great Depression, Cadillac, Lincoln, and Packard were faced with same problem. Cadillac introduced LaSalle, Lincoln introduced the Zephyr, and Packard the 120 Series. Each saved the respecitive company.

    In the late 1980's we had another downturn in the economy. In the period betwee 1988 and 1992, the hardware industry went through a major change which was based declining prices. Wall board/sheet rock became the focus of the big boxes (Home Depot/Lowes) as a device to buy market share. As the big box portion of the market share grew, they used wall board as a loss leader to draw in contractor business. Using their buying volume, they drove the price down to a point below cost. Manufacturers stopped producting, distributors went out of business, and independent harware retailers closed their doors in record numbers. Eventually, prices rose in an effort to restart production.

    The current economy is a problem, but the larger, long term problem is that the Boomers, upon which we have based our businesses, are no longer our target consumer. Generation X is half the size, in numbers, of the Boomers. If we do not expand our penetration within this generation, then the future is bleak. There is too much production capacity, and too little demand. This is a bigger problem, than the current economy.

    If we make price the trigger for purchase, then we can kill the independent retailer. I have not seen the big boxes backing off their retail prices. Why should the rest of the market? The problem is bigger than price.

    William Parker MCPF GCF
  41. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, there’s a world of difference between hardware stores and frame shops. It’s not a difference in degree, either; it’s a difference in kind. There are no big box frame shops (or if there are, very few) nor will there ever be. Sure there are small departments within a big box, but that’s it. At least not in my experience. And, no, the big retailers are not cutting prices and I don’t think they will; our segment is just too small and too labor intensive to invite a price war. Framing is attractive to big retailers because there is a big discontinuity between costs and prices they can exploit. When the independents toss out distributor/chop, weekly delivery way of doing business, a lot of that discontinuity will vanish and the big retailers will lose interest. So far, it’s been cherry picking; they’ve made no attempt to price at a rational level. Why should they? BTW, I’ll define a rational level as a 20 to 30% discount off current list and marked 3 to 4x. Shops can do that and make money, but that’s not going to appeal to the big retailers; at least I don’t think so.

    I think whoever in the independent segment survives this recession; she’ll be a lot more competitive, more competitive to the extent that the big retailers will loose interest. There are more lucrative avenues for them to follow. After all, framing is labor intensive and does require a degree skill. Productive framers are not as easy to come by as counter help. Then too, there is the issue of ease of entry. Train a good framer well and he’s likely to strike out on his own. I really think the interest of big retailers in framing is an anomaly in a highly inefficient segment. Once that inefficiency is soaked up, the anomaly will disappear.

    Also, do you realize how easily you skipped from discounting to selling below cost? What we’ve been discussing here isn’t discounting that’s likely to lead in that direction. My view of discounting is becoming more efficient and passing along to customers the fruits of those efficiencies.

    I think Christie’s shop already appeals to gen xers more than it does to boomers. She’s already way ahead on that curve. As she becomes more efficient, big retailers won’t want to compete with her or anyone like her. They can’t; they can compete with most current shops because they get a great margin, large enough to be attractive, but when that margin begins to contract to rational levels, they’ll rethink their position.
  42. Kirstie

    Kirstie PFG, Picture Framing God

    My shop is actually still most popular with the Boomers and William's comments make me realize that we need to search out what Gen X wants in a frame shop. I have made comments about this earlier on this thread, but to recap, Internet aside, it has to do with accessibility, convenience, the abiity to browse, price, ambiance, selection, and not having to deal with a hidden price list and a big rigamarole to get a quote. I think they want to point to something and say, "I'll take that one." Or better yet, pick it up and take it to the register. And they do like nice looking shops.

    Look at the malls, those shops are gorgeous and expensively designed. Gen X is there. The price of a bra at Victoria's Secret is not the price of one at WalMart. The Gen X with a bit of money will shop at VS. And so will I. In fact, VS as a business, is fascinating to me. It's luxurious, fun, colorful, sexy, has well made product at moderate prices, has friendly energetic help, and manages to span the generation of women from Gen X to Boomer. And yes, they have a discount program, by mail and e-mail, to regular registered customers. Across the mall they own Bath and Body works where they churn out sales to both generations again. A tube of body cream, with a new scent available at least every season, is not cheap, but moderately priced. It smells great and makes you feel good. Maybe that's it--the product makes you feel good. Oh, and there is always something new in the window. Always.

    How on earth do you translate all that excitement to a frame shop?! In our local outdoor mall we now have West Elm alongside Pottery Barn and Aaron Brothers, and one more design shop, forgot the name. The home furnishings market appeals to the same demographic but just slightly older than those that frequent VS down the sidewalk. There is a lot to learn here, despite the limited budget of the frame shop. Decades ago we did not have this competition for shopping dollars. Now everyone is used to high tech decor and luxury. Look at the sets on cable news, regular news, in fact. it's all glitz and color, fast moving, entertaining. Translate that to retail. I see the same trend. Where do we fit in?
  43. PaulSF

    PaulSF PFG, Picture Framing God

    I had a visitor to the shop the other day, a gentleman who worked for Aaron Brothers (in management, not at the retail level) until maybe 6 months ago. He was asking me what I thought about the framing packages that Aaron Brothers and Michaels are now promoting:


    I told him I thought it's an intriguing idea, because it tends to remove alot of the secrecy from pricing and makes framing more accessible to first-time customers. It gives customers a sense of what they can expect to pay, without having to play "pricing chicken."

    His response was really interesting. He said he wasn't a fan of the program. He thought it would drag prices down, and make it harder for designers to sell the higher-end, more creative designs. And he had a very valid point -- any price-based competition is a quick race to the bottom. Someone is always cheaper than you. Always. You might think you have the best prices in town, and then your distributor decides to sell direct to the public, and you're scrooed.
  44. John Ranes II CPF GCF

    John Ranes II CPF GCF SGF, Supreme Grumble Framer

    Getting through to December and 2010...

    Great thread minus a couple of the personal "wars" that tend to flare up here and there... One observation is that I can extract a few words of wisdom even from a posting on this thread where I dissagree with 90% of the content!

    William - I think that this is a profound realization that Sarah and I have also discussed as we plan our marketing and position going into 2010. Despite the fact that the Boomers are aging and spending less, they are still a large group and do spend so should they should not be ignored. At the same time, having a sensitivity to the X-gens and their buying habits is extemely important as we move forward....

    I think that we cannot ignore that these X-gens will spend for quality products, but it's how we attack their needs, how they buy and how we get them into the doors that will be the key to our survival. I think that you hit the answer for yourself, Kirstie when you stated...

    We (our own business in particular) need to address the pricing options and presentations to a better degree. People still want quality and a larger percentage of consummers who can afford custom framing want to have it done by professionals in a successful looking establishment.

    Surferbill - I think your model is a good where you embrace technology, inventory, and marketing. However I have an issue with the last "not to be perceived as an expensive picture framer." Our X-gens have grown up in an era of affluence, and recognize the value of perceived value...they already associate brand names as statments of quality. We still need to portray a professional and quality image in all that we do.

    Each of us are obviously more perceptive to these details today than just 12 months ago - one observation that I've made over the past few months is that despite folks eating at home more (include me in this group), is that the nicer dining establishments (especially the expensive places) are busier than ever. I believe that quality still sells.

    Warren - I think you would be surprised at the numbers generated in the small "back corner frame shop" within these BB's across the country. And I believe that they will be around for quite awhile (in my business lifetime, anyway), due in part to a number of reasons, least which is that Custom Framing is a product that is not easily understood by the general public. For a large portion of the potential consummers, it is associated with paint, arts and crafts - it is a home project.

    Heck, only two of the dozens of HGTV Designers understand custom framing, how do you expect the person next door to "get it"? Bob Carter's example of his children not being aware of custom framing, had it not been a family business is a statement about the awareness and postion of our potential market more than anything.

    Secondly, these BB's see their custom framing departments as the "milk aisle" within their businesses - examine where they are located within the building.

    Finally, the consummer is amazingly naive to the big discount marketing employed by the BB's - The perception of savings is still a stronger alure than any real savings to many.

    * * * * * * * * *​

    Each of us, despite how we've shaped our business model, needs to examine COGs, Percentage of gross profit, Dollars of net profit, Inventory turns and product mix. Regardless if you use a POS or a "seat of your pants" system - as long as you have a feel of what is happening - that is important.

  45. William Parker

    William Parker CGF, Certified Grumble Framer

    William Parker MPCF GCF


    You wrote:

    "Also, do you realize how easily you skipped from discounting to selling below cost? What we’ve been discussing here isn’t discounting that’s likely to lead in that direction. My view of discounting is becoming more efficient and passing along to customers the fruits of those efficiencies."

    Yes, I do realize how easily I skipped from discounting to selling below cost. Earlier in this thread it was suggested that selling for as little as $2.00 over cost made sense when you have unused excess capacity. You and others have pointed out that your cost of materials and certain fixed costs are well below others. There is no way for the strip-center shop that pays $1.00 per foot against your $0.70 per foot to reduce their price 30% and compete with you. While you are not driven below your costs, your competition is.

    You can say that this is the reward for "becoming more efficient", but I am not entirely clear on what you mean. Is this production efficiency, or purchasing efficiency or both? Regardless of the nature of the efficiency, would it not be better to maintain your retail price, and just take more home as your reward?

    I think we presume price is always the trigger and custom framing is a commodity. I think price is a glass ceiling and we tend to assume what our customers will pay only what we think the retail should be. An 8X10 1" black frame is a commodity and price is an issue. An 8 X 10 finished corner frame is design, and price is secondary...unless there is someone selling at a discounted retail.

    Earlier in the thread we were discussing DIY. I believe you mentioned that you had reduced your price. If I remember correctly, the volume did not increase. I have to ask how was the business benefited by this price reduction if it did not result in a significant increase in volume? It is your decision, which you are free to make, but it would appear to be giving money away for no reason.

    See Warren, I want you to have a bigger boat, every boat owner needs another two feet, through pushing the glass ceiling and as the reward for you efficiencies. It will not come from discounting.

    Finally, those things (departments, etc.) that are moving toward 50% of the market are out there and are real. Call them whatever you want, but they are a force in the market, and I do not think they are walking away from this market any time soon.

    "...That which we call a rose by any other word would smell as sweet..." Romeo and Juliet Act II, Scene II

    Just my thoughts.

    William Parker MPCF GCF
  46. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Paul, any vendor that sent me 30% carp would hit the dumpster. Don't you value your time. I have now cut 2,000' of basic black moulding in the past 10 days with a total of 4 defects in it.

    William, your statement of 20% waste is insanity. If that is what I had to expect from my vendors I would exit this industry so fast it would make your head spin. Our suppliers and a few of the industry leaders have conditioned us to expect it because they sell junk on a regular basis. This 20% factor has even been built into many of the POS softwares as the default.

    These reasons are a big piece of why we are perceived as expensive and have a reputation for gouging. What other industry in the world works with these assumptios. Certainly there is 20% waste in milling the moulding but not converting the moulding into frames.
  47. PaulSF

    PaulSF PFG, Picture Framing God

    Jeff, if you can point me to an equivalent of Cranbrook ebonized walnut, at an equivalent price, I'm all over it. It's a more upscale look than the basic black frame. When I buy length, if they send me something inferior I can just send it back for replacement. It doesn't take any of my time up, but I do have to inspect it quickly so that I don't have to delay a project.
  48. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    William, if someone gave me another boat 2’ larger than the Beach Music, I couldn’t afford to maintain it. Currently, just the bright work is straining the bounds of domestic tranquility, but I appreciate your effort. People don’t realize how expensive it is to maintain a boat that sits in salt water. Buying it is the inexpensive part of ownership. The slip Beach Music’s in cost 3 times her cost, but then it doesn’t depreciate, it’s like Manhattan, they can’t make any more.

    As to the selling for $2.00 over cost making sense, I honestly don’t remember the context, but if the cost were $1.00, then it would make sense. Or if I had to do that for one component and the rest of the deal made sense, yeah. I’m a kind of an entrepreneur, after all, willing to seize advantage where it pops up.
    It’s not the strip center shops whom I consider my potential competition, it’s the big retailers. I’ll let the strip center shops figure it out for themselves. The cost of materials is what it is, $.70 or $1.00 or whatever. I mean both production and buying efficiency; and, no, it wouldn’t be to my advantage to maintain one retail price if I can sell at a lower one. After all, I’ve got the big retailers out there who, according to the survey, have captured close to 50% of some markets. I can tell you they haven’t captured 50% of my market unless my market has grown (and according to the survey it’s been constant) by about 100%. I would have noticed a decline in my sales that large. Even in a deep recession my sales aren’t off nearly 50%. Not even 10%, but 10% is big because it comes off the top over fixed costs.

    I could easily be wrong, but all things being equal, I’ll place my bets on price. I don’t have the flair Kristie does, not even close (just compare her Web site to mine, pictures of her shop to mine) so I’m not going to count on shop appeal to get by. Instead, I’m going to rely on outstanding service and really good prices. It’s worked for me so far. Plenty of people have told me I’ve left money on the table, but I’m ok with that. I’ve taken enough off to be satisfied and to maintain a healthy and well capitalized business, one that actually has a worth. If I can make enough money to live comfortably, pay my employees’ salaries and health insurance premiums; I’m satisfied and I’m more interested in maintaining the status quo than I am in scraping a few more dollars off the table. Paul N wanted to know why I haven’t expanded, well that’s why.

    You got the earlier DYI pricing wrong. We just made the cost of a custom mat the same whether or not a customer was framing with us or not. We used to charge more for non framing supplies, more than we would a framing customer, DIY or not. We thought the reasoning behind that policy was a bit strained. We got rid of a premium rather than instigated a discount. And who knows how the business has benefited by that change. I can tell you, we want every customer to think he’s gotten a very good deal from us. Over the 31 years, that feeling (understanding?) must have permeated the consciousness of community. It’s worth a lot to be generally thought of as offering good values, worth more than advertising and marketing maybe. We’re not going to go under over the cost of a custom cut mat but we might gain with a satisfied customer. Frequently, if the mat is small, we’ll just give it away. Good public relations.

    I’m well aware that those departments are out there moving into 50% of someone else’s market (but not mine). If you read my post carefully, you’d realize that I think the big retailers want to compete with the shops operating on chops because there they have a big advantage, not with me because we’re on a more nearly level field. They might even be able to undersell me, but then the profit they want would vanish. They probably looked at how framing was being sold and thought, gosh, there’s a market we can milk. They’re selling chops for $15 per ft that we can sell for $4 if we wanted to. We’ll sell for $10 and clean up, capture more that 50% of their market. Their model is close to distributor’s selling to small shops except they’re the distributor and their departments are the small shops, but the cost of doing business is close to the same which gives Jeff and me and the others like us an edge. Sure they probably (actually a small probability) could undercut us but why would they? They want the cream. They don’t want to give up their $10 price to meet our $6 price. We’re happy with the 6 bucks but they wouldn’t be. Heck, for the thing to work for them, they probably need the 10 bucks. I don’t think it was shops like Jeff’s and mine that lured these guys into the market.
  49. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I'm not so sure the typical mass marketers' total cost to build one-up frames sold to consumers is much less than that of smaller shops. They have an awful burden of inefficient order processing, transportation, handling, and large fixed costs. We already know that most small-shop framers can beat their net prices and still earn acceptable profits.

    The perception that the mass marketers sell frames for half the price of small shops is nothing more than a testament to mass marketers' successful advertising. I believe that marketing/advertising is their only real advantage, but it is huge.

    In sluggish market conditions, such as now, small shops are able to adapt quickly and profitably, but mass marketers absolutely must have large revenue in order to support their infrastructure. They must be very nervous these days.
  50. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Jim, they do have the advantage of double dipping since they act as both the distributor and the retailer. The model is efficient from the price point of view but the operation may not be efficient due to management and execution.

    The chop shop model in independent framers is what makes it attractive to be active in the industry. Many framers claim their prices are in line with the 50% off price but these shops don't do any real marketing. The BB gets paid twice for every job where most shops are just trying to squeeze out a profit.

    An Independent advertising one time per month and stating that "Our Prices Are the Same as Theirs" will lose the majority of the time. Pair up the frequency of advetising and the lack of major physical presence of the Indie and add the message that we might be able to match their prices and where will the public go.

    When a customer asks me if they can get a better deal I let them know that M's is running a 50% off sale. I try to keep coupons around to hand them and send them 2 miles down the road. The majority of my customers have been fleeced by M's in the past and know M's sale price is 2 to 3 times higher than mine. The ones that actually head down the road are back in 20 minutes, always with a smile on their face and there is no longer ANY discussion of my prices. Some people just need proof and I will provide the coupon for the BB's.
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