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Question Can a shop survive on chops

Discussion in 'The Grumble' started by Michael A Slavin, Aug 9, 2017.

  1. Michael A Slavin

    Michael A Slavin CGF, Certified Grumble Framer

    Last week I posted a question on why some shops are always busy and why others struggle. We have always bought our mouldings , foam, mats glass etc. in quantity and stocked them. We do this because we get much better pricing and that helps keep us profitable. We have the space, turnover, and the cash so don’t analyze this and say we are tying up our money. When you look at the cost of money vs the extra 20 to 25% we pick up on each job it is a no brainer. It has worked for us for decades and simply makes us more money on each job.

    My question is can a shop that buys nothing but chops be competitive, and stay in business in the current market? I know there has been a real swing to chops over the last five years but when we look at the difference in cost it is hard to see how some shops stay do it. I get chops. There is no cash outlay until the sale is made, no inventory, etc etc but in the end are chops sending customers to the web or elsewhere because small shops are too high priced? I don’t want this to sound condescending in any way so please don’t take it that way. It just seems odd to me that framers with only samples on their wall and no inventory can stay in business and be anything more than marginal. I am sure I will get some spirited replies!
     
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  2. MATTHEW HALE

    MATTHEW HALE CGF, Certified Grumble Framer

    The majority of our frame sales are chops and we've been plenty profitable. We do stock a handful of profiles for quick and easy turnaround but we offer hundreds of profiles from more than a dozen vendors. There's' no way we could stock everything.
     
    shayla likes this.
  3. Terry Hart cpf

    Terry Hart cpf SGF, Supreme Grumble Framer

    Survive? 39 years so far. I'm with Matthew. Our thing is to offer variety, never been a high volume business. It would take an awful lot of space & money to stock 3000 mouldings. Based on my experience at shops that stock mouldings you need a fairly limited selection or a bunch of stores. I wonder how much you really save after you pay for all that storage space, pull & cut, put away all that stock not to mention waste & dealing with offcuts. I may not have a money printing operation but I've been pretty happy with our little niche. I've done ok.
     
    Jim Miller, shayla and MATTHEW HALE like this.
  4. IFGL

    IFGL SGF, Supreme Grumble Framer

    I do not buy chops myself but do know that chop only shops can be profitable, my biggest expenses are staff and space, these can be reduced with chop only, it just depends on your business model.
     
  5. Larry Peterson

    Larry Peterson PFG, Picture Framing God

    In addition to chops, what about the shops that are join only?
     
    alacrity8 likes this.
  6. bruce papier

    bruce papier CGF II, Certified Grumble Framer Level 2

    Maybe 60% of our sales come from 120 or so profiles we keep in stock. We have in stock moulding mainly for speed although there is a cost saving also. I'm not sure the difference in cost between length and chop is as great now as it has been in the past due to the declining quality of moulding. Our waste factor has gone up considerably of late. I'm sure it would be as cost effective to order some of our in stock moulding chopped.

    So, yeah. I think an all chop shop would be viable (obviously, since people do it). I think you would have to weigh your overhead costs and watch the shipping and handling charges.
     
  7. Dave

    Dave SPFG, Supreme Picture Framing God

    I rarely order chops except from AMCI. Their chops are not much more than their length cost. The only moulding we stock on purpose are mouldings in our Frugal Framing Program and leftovers. Everything for the most part is ordered in length as needed. Most of our vendors have us set up with discounts on length which is often close to the box price.
     
  8. i-FRAMER

    i-FRAMER MGF, Master Grumble Framer

    In Australia, Chops cost about twice as much per metre then length cost.

    I get many framers tell me that they have to charge more their chops because they cost them more.
    That's not true, and in some cases you will do yourself out of sale.

    Length cost per metre might be half of that as the chop per metre, but the additional costs to consider are
    Wastage, Storage, Machinery to chop, floor space for machinery and stock, maintenance on machinery, electricity for machinery, and labour for cutting, storing and maintenance.

    So if markups on length cost should be more then that of the chop cost. And if you are scaling your markups, then the prices should be at different levels, and remove wastage factors from your chops and labour time to chop. The price difference should not be that much different.

    So the advantage length has over chops, is that it can be a quicker turnaround.

    But as far as business survival this should not make much difference.

    So the next question when is more advantage to buy chops over length (assuming you own all the equipment and have storage space etc)

    Consideration needs to be given of moulding required and wastage, profile or design and also difficulty in cutting i.e wide and/or deep ornate moulding may not cut well on a guillotine.

    For me when we have an expensive moulding i will look at the factors, but mostly the length required. If will have less the 400-500mm wastage out of length/s required then we buy length as we won't keep the off cut. But, if the wastage is more then a metre we would consider chop, so as not to have to store the off cut.
     
  9. dpframing

    dpframing CGF II, Certified Grumble Framer Level 2

    I use a chop service only with metal frames orders since I don't stock metal lengths.
    I stock 10k running feet of wood moulding, but I do not buy metal profiles in length.
    I pass on the additional chop cost to the customer.
    And I don't use polystyrene profiles at all.
    I only buy from suppliers that give me box pricing at 50 feet for their entire line.
    You can't compare length/chop cost. If I can buy 50 ft. for the same cost of a
    15 united feet chop, it's a no-brainer for me.
     
  10. CB Art & Framing

    CB Art & Framing SGF, Supreme Grumble Framer

    For retail chops can work, but for commercial/volume framing most of your profit may come from buying in quantity then cutting and joining.
     
    DVieau2, Dave and Joe B like this.
  11. bruce papier

    bruce papier CGF II, Certified Grumble Framer Level 2

    Another advantage of selling in stock moulding is you know of any changes in the moulding before you sell it. We have gotten way too many unhappy surprises from chopped frames.
     
  12. munnframeworks

    munnframeworks True Grumbler

    A big advantage to selling chops is that you tend not to try to sell what you have in stock,giving the customer a better choice. That will always convert into more and higher sales.
     
    Pat Murphey likes this.
  13. MATTHEW HALE

    MATTHEW HALE CGF, Certified Grumble Framer

    Changes can and do happen, but if it happens frequently enough that it makes you think twice before ordering a chop then it's time to find a new vendor.
     
  14. John Ranes II CPF GCF

    John Ranes II CPF GCF SGF, Supreme Grumble Framer

    There definitely lies a hidden advantage and consideration while making this Chops Vs Length financial comparison. It was one reason we moved in the direction of chops Vs length over the years.

    We were primarily a length only business (1978-1988) then slowly began drifting adding more and more corner samples to our walls that we did not stock. We stocked almost 180-220 profiles in bundle lengths.

    Mostly transition through the 1990's so that today we are 90% chop with about 25-30 profile in stocked length. We have refocused back to length from time to time. And BTW, by "Length" I mean stocking 40-150 feet when ordering, not picking up a rail when a sale is pending. I refer to those folks as "Short Length" buyers and that becomes a different discussion.

    Actually the mark-up on BASE length Vs Chop has been historically 1.65-1.85 x and can vary as profile width/cost increase, and can vary by vendor. Regardless, as i-framer points out there are indeed other costs associated with carrying inventory...which can erode that price difference.


    Definitely a good reason to stock at least a few mouldings if you have the space, equipment, etc. If you do elect to add some length to compliment chop, don't just look at the price. You also want to make sure that the moulding you select is easy to cut, has a minimal amount of flaws, warpage and defects in general.

    Keep in mind that many vendors who deliver will save you on the freight costs. In addition many vendors will run promotions on discontinued inventory, or grant full box pricing on less than box quantities.

    John
     
    FM Framer likes this.
  15. Keith L Hewitt

    Keith L Hewitt MGF, Master Grumble Framer

    I know a distributor in Holland who sales to framers are 10% lengths and 90% chops.
    Shows how the biz in Holland has changed over the years.
     
  16. Michael A Slavin

    Michael A Slavin CGF, Certified Grumble Framer

    Thanks everyone for your thoughts it was very educational. The old story about trying to teach an old dog…… I am the old dog but I will be investegating chops next week!
     
  17. John Ranes II CPF GCF

    John Ranes II CPF GCF SGF, Supreme Grumble Framer

    Michael,

    One key consideration with this discussion as it sounds like you will be adding chops for the first time is POS systems and mark-ups.

    We happen to use SpecialtySoft FramePro, but I'm sure the other top POS vendors function in a similar fashion, where we can elect to price a vendor based on Length, Chop or Joined pricing as all are supplied by the vendors to the POS folks.

    This allows us to keep some vendors as Length only with whatever mark-ups you create including factoring in percentages for freight, wastage and labor. The same applies to "Chop Vendors"... However, we tend to keep all vendors retail pricing based on Chop prices and mark-ups regardless if we bring in length from that supplier. (This helps keep things consistent.)

    John
     
    shayla likes this.
  18. Gilder

    Gilder MGF, Master Grumble Framer

    Surviving on chops would be boring. I buy length, chops, join or make frames myself. Depends on a situation.
    I have a molder and making today a frame that is out of stock until October.
     
    FM Framer likes this.
  19. Michael A Slavin

    Michael A Slavin CGF, Certified Grumble Framer

    John thanks for the great info- something I had not yet thought of.
     
  20. Bob Carter

    Bob Carter PFG, Picture Framing God

    John offers sound advice in establishing an 'everyday price'. From whom you purchase is irrelevant to consumer. If a frame that you would sell to consumer that you bought 'chop' for $100, why should you charge same consumer $80 if you used 'length'. If consumer accepts $100 as acceptable than sell it

    These discussions always come up and may I suggest the most successful shops I have seen use a blend of chop, length and chop/join while I have known many volumleshops use length exclusively

    The 'chop v length' argument is as old as any Grumbler. It's a boxer v brief thing
     
  21. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    Like the others, I believe there are advantages to selling chops: Greatly expands the variety of profiles and finishes you can offer, no need for cutting equipment, no sawdust mess, less need for inventory space.

    It is notable that increasing numbers of shops are selling only joined frames, which takes the chop concept to the final step: No inventory, no cutting or joining equipment, no applied labor.

    Supplier's labor probably costs more than a frame shop's labor per-hour, but the suppliers' economies of scale might reduce the time required for directly-applied labor, setup, and cleanup. So, the difference in real total cost could be smaller than one might guess.

    As John said, your retail pricing should be able to accommodate the total acquisition cost, regardless of whether you buy length, chop, or joined frames. And as Bob said, offering a blend of length mouldings, chops, and joined frames allows the greatest versatility.

    In my limited experience, applying more labor in the shop enables greater control over the quality of framing offered, while eliminating the need to demand exchange of chops or joined frames that are not very good - or even acceptable. Let's face it; perfection is elusive in any case, but some suppliers' quality will sink to whatever minimum the customer will accept.
     
  22. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    I did an experiment last year. Had 4 other framers do the same experiment. We ordered short length, but checked the price if we were to order chop instead. Pretend to throw away the excess length. (We didn't, but pretend. This eliminates the spurious "cost of storage" distraction.). Now, time how long it takes you to unwrap and cut your chop. Take the difference in price (chop is always more, except very small frames with very expensive profile.). Then, decide the cost defference by the time. Our experiments showed an Earned Time value of $200 - $265 per hour! No brainer for me.

    p.s. My retail price is independent of how I buy, so the more I save, the more I make.
     
    Jim Miller likes this.
  23. Bob Carter

    Bob Carter PFG, Picture Framing God

    may I offer one last post?

    We had one supplier well known for more costly profiles. We ordered short bundles. We would order 12ft for example and always got 16-17ft. Ordered 16ft; got 22ft. Consistently. Spoke to rep; answer was 'wanted to make sure we had enough.' 5-6ft at $4-5 is significant considering we had 5-6ft we knew was not going to be used. Raising cost about 35% more reduced GP to unacceptable level. Chop definety was smarter choice but we dropped them because of their 'add on' policy. Imagine charging your client for 16ft but using 12ft

    Also, we would use chop/join on more difficult or delicate finishes. Also during Holidays we would buy a lot of chop/join when our time was limited but sales huge. Tip: talk to your local supplier about discounted rate. We negotiated their 'full price' on length plus $4 fee regardless of size. Key: Ask

    Bottom line: review invoices for excessive overages. Helps in determining how you buy, or in our case, from whom you buy

    Find a good balance by reviewing what you should anyway: invoices
     
    Jim Miller likes this.
  24. Keith L Hewitt

    Keith L Hewitt MGF, Master Grumble Framer

    Short bundle ? Bob please explain something to me. I always thought in USA your mdgs are usually in 10 foot lengths. so if you order 12 ft you are ordering 1 stick plus 2 foot of a second stick. And you received 16 - 17 ft which sound like 2 short sticks each 8 ft long.
     
  25. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    Sticks vary from 8 - 12 feet depending on where they are manufactured. Some vendors will sometimes send a short stick, but usually, when ordering length, you get some multiple of full sticks.
     
  26. shayla

    shayla WOW Framer

    At least one supplier on the other side of the country will make two cuts in length to save us shipping. This has come in handy for fillets we usually use in less than 4' lengths.
     
    FM Framer likes this.
  27. IFGL

    IFGL SGF, Supreme Grumble Framer

    I would suggest where space is a premium price, chop is going to be cheaper in the long run, if you are volume you are going to need space and chop would not be an option, both business models are viable as is a mix of the two!
     
  28. Bob Carter

    Bob Carter PFG, Picture Framing God

    Hi Keith the only bundles in uniform sizes were Framerica, poly and metal. Milled wood bundles were usually two sticks at absolutey varying size. From absolute experience, your wholesaler may have 20 bundles of a sku at various lengths. Typically 'better' vendor would have pickers look for closest sized bundle to your needs. The seller in question selected bundles exceeding requested as policy. 1 or 2ft is reasonable; 4-5ft really is not. Sometimes it works that way, but not as a practice.

    I'll share an actual experience.

    Major dustributor participating in charity event and needed local framer to frame several pieces of art; they provided matertials; we donated labor. Each piece that required 12ft, we received 12-13ft. Point was when it was their dime, they looked for bundle very close to required

    Bottom line: review invoces to determine if overages were random or consistent. 4-6ft of virtually unuseable mldg is a huge profit drain
     
    Gilder, Jim Miller and shayla like this.
  29. alacrity8

    alacrity8 CGF II, Certified Grumble Framer Level 2

    I know a few chop only shops in the area.
    They save money by not paying for storage space and equipment space.

    I prefer to order length, mostly from vendors that deliver to my door, and vendors that I order in bulk by freight.
    I do maybe 5% in chops from vendors I use irregularly.
    I save money on materials and shipping.

    I'm not sure I understand the concept of a shop that is mostly a chop shop, but pays the rent on the equipment space needed for length.

    There are times when ordering a chop is more cost effective.
    Under 6 ft, and between 10 and 12 ft seem to be the times to think of cost.
    I still tend to order length in those cases, as I find my cuts more reliable.
    Chops sometimes come out of multiple sticks, and maybe out of different batches, leading to bad joins.
     
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