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JOANN FABRICS pricing

Discussion in 'Picture Framing Business Issues' started by dfwanna, Mar 11, 2005.

  1. FrameMakers

    FrameMakers PFG, Picture Framing God

    Kevin, unless you have seperate people that frame and others that work the showroom, your labor doesn't make a difference. If a clerk is making 5 sales a day and sitting on her hands the rest of the day your man hours are the same as that of the framer selling 5 jobs a day and framing 5 jobs a day. I don't see the difference in this senario between retail and manufacturing.
     
  2. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    This part of the thread interests me more than the Joanne vs Us feud.

    If this is true then we have a strong allie in our reps, if this is just a rumor then we're left hanging in the wind alone.

    If LJ is cutting their reps out of the commission then the reps may become our allies! If you are feeling threatened by a Joannes in your neighborhood call your LJ rep and tell him/her you are considering dropping LJ for this reason. If your rep sees that they are going to lose their bread and butter so that WarrenB can have steak then the rep will fight for you because s/he will be fighting for him/herself.

    But if the rep is just getting a smaller commision from the Joanne sales then s/he may just be tempted to cut you off and increase the volume of sales at Joanne's.
     
  3. FrameMakers

    FrameMakers PFG, Picture Framing God

    A former LJ rep told me directly that she was to have no dealings with the BB stores. Not to even introduce herself. All was and probably still is handled at the corporate level.

    You are right that the LJ/Jo-Anns deal hurts their reps. Think of all the **** they have had to deal with just from me. [​IMG]
     
  4. dfwanna

    dfwanna Grumbler

    All the Larson juhl reps were sent a memo on how to handle this situation, if it comes up,and how to respond. My rep, told me that it wasn't an issue for his territory at the time, therefore he threw it away months ago.
    I know, our Larson rep has heard from most frame shops from Jacksonville to Daytona, so far, reguarding this (since they all received the Joann's fax ) and he has been absolutely overwhelmed. I haven't heard a real answer or a solution, it seems he just doesn't have a clue as to what was worked out Joanns on the corporate level.
    This is nothing personal against the reps, this is against Larson. Maybe they will be on our side. Maybe they have their hands tied.

    I would be interested in hearing what your Larson reps have said to you.
    Anna
     
  5. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    Isn't it time to start a new thread? This one has been going on repetitively for over a week. Aren't we supposed to have a new LJ bashing thread once a week? Seriously, if you carry LJ and make money with them (as I do) leave your samples on the wall. If you don't make money with them, take their samples down. Pretty simple isn't it?

    Pat [​IMG]
     
  6. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Okay-How about a little reality check?

    Suppose that JoAnne's is really losing their butts on framing and they use that entire section of the store as a "loss leader"(I hate that term).

    How does that affect the way you do business? What will you do differently?

    Or, suppose that LJ gives you the exact same pricing as JoAnne's.

    How does that affect the way you do business? What will you do differently?

    Or, suppose that you do twice the biz with LJ as te frame shop down the street.

    Should that shop get exactly the same service and price as you? And with the advantage you have presently, How does that affect the way you do business? Do you do anything differently?
     
  7. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    I feel better now - I read business issues before going to the main Grumble, where much to my surprise, there was the weekly LJ bash!

    Pat :D
     
  8. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    How many small shop framers actually feel we should stop buying from LJ? LJ is the main supplier to many, and the business relationships may continue to grow by virtue of good sales reps.

    On the other hand, if an increasing number of small shop framers, LJ's "base", decide to reduce their dependence on LJ, what would happen?

    My speculation is that LJ would feel a severe profit pinch. They would have less of our high-profit revenue to offset their low-profit bigbox revenue. Proportionally, their revenue would drift more toward the low-profit customers.

    And if that happens, one of two situations could follow:

    1. LJ commits even more aggressively to the bigbox retailers, and gives up on us, or
    2. LJ returns to us, their "base", and allows the bigbox retailers to go their own way.

    As I see it, one or the other of these scenarios will eventually play out.

    The best for LJ would be for us to embrace their fine products and service, fueling their profits while they grow in strength with huge cash flow gains from the bigboxes.

    The worst for LJ would be for us to stop buying in large numbers, forcing them to live on the thinner margins commmitted to the bigboxes.

    But what do I know? I'm just a picture framer. [​IMG]
     
  9. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    Pat,

    You're right the decision is simple. I've made it for my shop, but every shop has different critrea, needs and customers. I still have an account with LJ and can still buy from them, just not happy with them and don't have their samples on my wall. (I use their liners, enhancers and old records for customers that want the same moulding as before)

    Jim,

    I don't think LJ would be hurt too severely if Independent framers walked. So I'd bet on your option #1

    I do think the reps would take a beating and they would be the leverage we need to voice our outrage to LJ. But to appease the reps LJ could just cut them in on the Joannes money.
     
  10. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Well, I can compete with JoAnne's on price and if I can, so can anyone else. Maybe I can't compete with them on LJ products but they can't get the same sweet deal with every supplier in the country as they do with LJ so there is plenty of room to compete. Also, the cut, join and distribute system is frought with difficulties that I don't have. If there is a problem with a molding, my frame maker can talk to the person who sold the frame and clear it up. If we're out of the molding (very rare with our in house warehouse program) we know immediately and can tell the customer and get a pretty quick replacement, and in my experience getting a replacement molding isn't hard.

    We can all buy smart (that means weaning ourselves from the sell and order materials model) and compete. JoAne's sells LJ, we can sell Decor, Omega, Bendix, Roma, LaMarche (they still send us length molding) etc.

    The ability to make good returns on any investment is directly proportional to the amount of risk you take. You take very little risk in ordering supplies after the job is sold. We have everything we need to make the jobs we sell in stock 95% of the time because we took the risk of buying them in advance and in quantity. Of course our risk is tempered by what economists call specialized knowledge (a small, independent framer has more of it than JoAnne's central buyer). Either we have a pretty good idea about what will sell in the next 6 months and we succeed or we don't and we fail.

    I think our little nich in the service and retail industry is pretty immune to competition from BB's. We're more nimble, we're on the scene, we're more service oriented and beleive it or not, we can be more efficient and offer lower prices. We have way better specialized knowledge about our our potential customers.

    BTW, there is a large JoAnne's in Wilmington but they don't offer framing. We'd eat their lunch. Remember, they can get a sweet deal from maybe one company by agreeing to buy heavily from them but not from all the companies. My experience is that the "other companies" see deals with BB's just as threatning as we do and are willing to help us compete and by extension help themselves compete. But we have to be willing to take some of the risk: buy in length and in quantity.

    If you think about it, it's not much more efficient to cut and join for a myriad of JoAnne stores than to do the same for small frame shops. If a small shop goes under owing a supplier money, it's a lot easier to handle than if a JoAnne's does and that's a big risk and a smart supplier figures that risk into the price of what he sells.

    I don't have the slightest worry that I can compete with BB's (and I already do) on price, maybe not on promotion and marketing but that's where my specialized knowledge of my market comes in. I have more of it than they do.

    I've chosen to compete on quality, service and price and that's an unbeatable combination. I have more knowledge of my market, I'm more efficient because I have all the materials to complete a job right in the store where it's sold. I also have, becaue I chose to take the risk and nurture it, a fery well trained staff who've been with me for years and will be here for years in the future. BB's don't have that. A customer can walk in The Frame Works and see the same manager they saw 25 years ago, the same designer they saw 15 years ago; it's pretty much same for the Frame Outlet. Customers appreciate continuity and they won't find that in BB's.

    I bet you could examine any enterprise and make a good guess as to how profitable it'll be analyzing the amount of risk it's taking and the specialized knowledge it brings to the market.

    We could sell the original frame job that started this discussion with a good 2" molding for 75 bucks and the customer would be delighted and wonder how on earth she could have considered paying $175.00 for it much less $400 plus. It happens all the time.

    There's no reason any shop can't do what we do exxcept for the unwillingness to take the risk necessary. Anyone can start slow and build into it. BTW, we can buy any LJ molding for 15% off plus another discount for quick pay and we're not "partners" (in fact, Toni threw the LJ district sales manager out of The Frame Works years ago - he still calls and asks if a rep can come by)and so can anyone; just buy a 1,000ft. of molding from them and pay within 10 days. Of coures there is a risk in buying 1,000 ft. of molding on speculation but your specialized knowledge should give you the edge. And believe me, they'll gladly deliver that 1,000 ft. We used to buy Cassesse v nails from LJ but switched to Active Sales for 20% less. Active Sales can't deliver in NC but they ship to us free.

    We had a good 15 year relationship with first Juel Pacific and Larson and then with Larson Juel before my wife (Toni, the boss) got fed up with them, maybe 8 years ago. We still buy about $4,000 from them a year out of close to $85,000 of molding we bought in '04 and we haven't missed them a bit. We buy "legacy" patterns that old customers still want.

    I think LJ is responsible for establishing a lot of chop buying shops dependant on them for supplies; these are the same shops that LJ now threatens with their deals with BB's. Maybe they've decided to take a few risks with BB's rather than a lot with small shops because they figure the BB's will price more aggressively and move more product. They could be right. Warren
     
  11. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    I know it's not exactly the same, but how different is this scenario than the frame shop that has decided they want both the one $1000 job and the ten $100 jobs? Maybe LJ has the right mission but they just don't know how to go about it. Maybe they've made a mistake because they don't truly understand their customers. Maybe they're in complete control and happy with the results.
     
  12. puttyboy

    puttyboy CGF II, Certified Grumble Framer Level 2

    My hats off to you Warren. Obviously you know your market well.

    That said, there are 100 shop owners to every 1 Frame Works that are perfectly happy being small, 1-2 person operations. It is just a matter of taking risks to grow larger, but at a cost they may not be comfortable with.

    Does LJ (and any other supplier for that matter) have the right to treat them differently than they treat a Joanns? Of course they can if they're moving product by the truckload for Joanns. Its no different than us treating the customer with the deepest pockets bringing 10 pieces in at a time. They have clout when they ask for a discount.

    LJ pays attention to Joanns because they have to!
    But with preferential treatment to one customer they will surely start losing customers that are feed up with being treated differently.

    LJ did it to the basement and garage framers, alienating them forever. Those framers figured a way to get supplies and product without LJ and many of them have thrived. I know of 3 hugely successful garage framers whose numbers would make your head spin in the volume they do.

    So, back to the small shop owners. If you aren't happy with the treatment you get from LJ be it poor service,bad or damaged product,exorbitant prices,unjust business practices(perceived or otherwise), indifferent treatment, then change who you buy from. Its really that simple.
    I would have to believe LJ would sit up and take notice once the bottom line is affected.

    BTW- Didn't Michaels go their own way after sleeping with LJ? So maybe Joanns...
     
  13. BUDDY

    BUDDY PFG, Picture Framing God

    I had that talk with my rep ( althouh it was only by phone thus far)I cna now say that I doubt some of the numbers i was wondering about,and that I think the reps in general are not too thrilled about the Joann's account either.

    I couldn't get any hard numbers beacuse the JoAnn accounts are COMPANY acconts and are hands off to any rep.

    I also learned that what LJ ( as well as most reps) are looking for is TOTAL loyalty. which is a very though thing to come by. I also think that all your eggs in one basket marketing can be a ticket to disater. But If LJ didn't sell to JA wouldn't some one else and I think i mentioned another example that cost my rep Major dollars.
    BUDDY
     
  14. FrameMakers

    FrameMakers PFG, Picture Framing God

    This has to be a two way street. Right now I fell like I'm going down the wrong way on a one way street, and the Larson truck about to make me into roadkill. [​IMG]
     
  15. hfn

    hfn Grumbler in Training

    Before I got into framing I worked for a gentleman who built his furniture company into a $200 million a year business. Yes, he did discount selling 40-50% off of retail. However time and time again he said his success was not how he sells it but, how he buys it. He would constantly hammer vendors for deep discounts. He made more money on a item at 50% off retail than many at full price. I guarantee that LJ is giving Joannes such a discount that are heads would spin.
     
  16. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I'm not sure that's a good analogy. LJ has some economies of scale in their JoAnne deal, but they have an awful lot of labor to apply in the process.

    Perhaps the labor component in the bigbox segment of their business is at least equal to the labor component in the small-shop segment of their business. In other words, they're doing more, but not necessarily saving much -- if any -- on the labor side of the equation.

    Shipping may be another issue. LJ delivers a terrific number of $100-$300 orders to small shops daily. When the truck backs up to a JoAnne dock, I'd bet the revenue of that one delivery is similar to a full day's worth of small shop orders; maybe more.
     
  17. wpfay

    wpfay Angry Badger

    Does anyone have any projected numbers about this deal?
    I've heard some, but who knows how close to reality it is? 450 Joanne's etc. doing $1/2 million/year/each vs. smalltown framer doing an average of $10K (or 20K for "partners" though I think the 10K is probably closed to the average). How many of us are there left? maybe 12,000. Lj would be narrowing their focus to fewer service points per region, eliminating a lot of duplication of effort, and eliminating reps sallaries &/or commissions. They would be increasing their gross revenue by about 2x while realizing a bunch of savings.

    I gotta go...first happy hour, then stupid hour, then who knows what. This whole thing hurts my head.
     
  18. Emibub

    Emibub PFG, Picture Framing God

    Pat, Normally I would agree with you. I have been a big supporter of LJ. I wasn't too terribly concerned when the first people started on about the Joann's thing. I assumed it would be another BB with inflated prices, which apparently isn't the case. I also wasn't prepared for how I would feel when I saw their line up in one of their brand new concept stores. It gave me something to think about. I don't think this thread has been your typical bashing.

    I for one would be deeply saddened to take LJ off my wall, I have dealt with them for 20 years, with hardly a complaint. But, as we all are becoming aware, the industry is changing right underneath our feet and one of our biggest allies appears to have sold out to the other side. I have those same feelings of loyalty that everybody feels towards LJ, but this is hard to stomach.

    If LJ had developed an exclusive line for Joann's I could live with it. But the stuff we all have in our shops for years is the exclusive supplier for the other side. It really cheapens it in my eyes. Even if they sold to me for the same price as Joann's I think as an independent shop it would behoove me to have a different selection than a discount chain has.

    I don't think LJ has done anything wrong, they are out to make a dollar just like us. I do think they cultivated our loyalty and miscalculated how we would react. A year ago we were all so loyal to them that a thread like this was attacked by most of us, including myself. As it unfolds it is harder to ignore.

    If any of you have the new concept Joann's Etc. in your area pay them a visit and see how you feel about seeing LJ up on their walls.
     
  19. Kevin Colbert

    Kevin Colbert CGF, Certified Grumble Framer

    Dave,

    "I don't see the difference in this scenario between retail and manufacturing."

    I think this discussion started with you wondering in a post if “we” “are too greedy”. I am enjoying this conversation, so I hope you are taking it in the spirit offered, because I don’t want to seem like a know-it-all or something, I just like the thought challenge. [​IMG]

    One of the great things about our industry is that it is truly a throw back to the kind of business that existed before the age of mass production. In this day in age, there are few businesses that are both (because of the efficiencies of mass production). So, perhaps it is difficult to see; but there is a profound difference between manufacturing and retail.

    Manufacturing is when you take raw materials and process them into a new product. Strict retail is when you buy an item and do not change it but simply change the location of the item (distribution) and sell it. The final seller is not restricted from being a manufacturer just because he happens to be the retailer.

    It takes more labor to manufacture than to simply resell. You are using a straw man argument that there are only two possibilities. You cannot separate the 5 hours sitting from the 5 hours working. They are all part of labor.

    “If a clerk is making 5 sales a day and sitting on her hands the rest of the day your man hours are the same as that of the framer selling 5 jobs a day and framing 5 jobs a day.”

    The only possibility I see is efficient selling with efficient manufacturing. No business will survive with the typical “clerk” “sitting on her hands” for 1/2 her paid hours. Maybe this is the real trouble many framers are having. They sit on their hands ½ the hours they work. If that is the case it is time for another reality check.

    This is why I understand my business is a manufacturing business that deserves higher margins than a strict retail business.
     
  20. FrameMakers

    FrameMakers PFG, Picture Framing God

    Spirit of thoughtful debate is my desire as well. No offense meant or taken.

    My thought was based on a designer only shop with fitting done at a second location VS a shop where the design & framing are done under one roof. If it takes 8 man hours per day to run this operation what difference dose it make weather or not the its manufactured of just retailed. This only is talking about labor and there is so much more involved. [​IMG]
     
  21. BUDDY

    BUDDY PFG, Picture Framing God

    Maybe I should keep my OPINIONS to myself ( but that's never stopped me before). But In my ONE Man Retail Needlework and Framing shop there are some definet differances as to which task I am doing and how it affects the rest of the shops requirements. Granted I get the same pay( nothing) when I do retail or construct Frames. However If I am in the back room assembling a frame or even by my CMC, WATCHING it cut a mat ,I can't be at the counter or adviseing some nice lady as to which Cross Stitching booklet best suits her needs,nor can I spend HOURS helping some confused consumer decide which shade of blue matting best goes with her couch.

    So if all those assembly task were done for me before they reached my shop I might just have more time to spend with the retail consummers who frequent my operation or at least have more time to suggest a slightly different shade of Blue.

    I agree that all these jobs require all my time it's just that some witdraw me from the front of the shop to the noisey, Clutered back room where I don't want any customer to enter . So does it make a differance if the bulk of the ASSEMBLY work of framing is pre-done ? Maybe not in what a man hour cost but the number of hours required to do booth can definetly be affected.If you have both retail and Framing ,"I Garronteeee",and the last time I looked at Joann's or any other franchise craft chain they had an awfull lot of retail materials that need watching and directing as well as a few cash registers. However when I was in the Joanns in Jacksonville Fl. and I snooped around the FRAMING counter I couldn't find a soul.However it did look like a well stocked LJ warehouse.I don't know but maybe it was the later hours of the day when I was snooping and some of the hired help had gone home or maybe they can do their quick fitting in just a few hours earlier in the day,but it sure looked like that store felt their man hours could be better spent in the retail aisles.I guess if you really wanted to get something framed they could send over any counter person to take your order and then when the already assembled frame and pre-cut mat arrived the same person could do the finishing work earlier in the day and devote the rest of their time to the retail aisles. But then I'm just speculateing by assuming they operate the same as I do haveing both FRAMING and RETAIL SALES, only they have a lot more available manpower to use as they see fit and they don't even need to spend time with a sales rep either.

    Come to think about it isn't that a very similar concept to why haveing a CMC is so cost efficent? Less employees and less time spent cutting mats.Now if they just had a machine that did all the Framing work ,Oh that's right there is .It's the two legged kind that are located at LJ 's other warehouses.LOL
    BUDDY
     
  22. Baer Charlton

    Baer Charlton SPFG, Supreme Picture Framing God

    We just had our LJ rep come in (showing some new dogs and ponies.... well more dogs than anything)

    I had aske that he run our numbers for last year and this year to date....

    I've now asked for 2-4 years ago.... as I'm also asking my other major suppliers....

    Here's what I'm asking for:
    Calander years by year, last 3-5 years.

    Broken down by moulding, mats, glass, supplies.

    The LJ rep did me one better, he gave me a list of my top 80 sellers by footage ordered...
    Now that is going to help me a whole bunch. (seriously)

    He is also going to regenerate every sample we have recieved, and how much we have ever sold of that moulding.
    WOW! They can do that? Yup.

    So if you want to see your trends: ask.
    If you want to see what you should keep on the wall because it sells: ask.
    If you want to know what has been on your walls for the past 11 years and never sold.... ask.

    Think of all the new room you will be making.

    What a tool! I think this is one that even Bob Carter can agree on. Shoot! Bob has probably been getting quarterly reports like this for years...

    hi Bob.
     
  23. Mike Labbe

    Mike Labbe Member, Former moderator team volunteer

    Most POS systems will give you much of this info too.

    Mike
     
  24. AWG

    AWG SGF, Supreme Grumble Framer

    JUST ASK (better yet, they should volunteer) for that info.... We look at our mldg sales each quarter - it keeps us from buying the dogs that sometimes get offered at "great" prices.

    Yes, POS will give me all that info - by mldg, vendor, footage, dollars, etc. But getting regional info from the rep is mighty helpful, too. Small shops or long-established ones will KNOW what's worthy, but POS helps.

    That's what RETAILERS do - find the gems, toss the trash. Once you find the gems, buy as much as you can at the best prices you can - and sell them. Promote the ones you can afford to. Some of the non-sellers are the necessary "eye candy" we all show, but the focus on buying and promoting should be on those that sell AND are profitable.
    We even adjust our sample wall occasionally to reflect these sales / buying trends.

    Oh, wait - maybe the "big boys" already do that sort of thing - and we don't want to do the same things they do, right?


    Tony
     
  25. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Hey Baer-I do get that report and yes, it is available to everyone.

    It is fun because the visit is always positioned around how they can improve their sales in areas where they see deficiencies or are pushing product (Don't blame them), where I see it as a measuring tool to do comparatives.

    As Mike states most POS will give you some sales data, but ours (Fullcalc) is very limited and offers no date to date comparison.

    I am glad LJ does that.

    Tony has the correct approach and everybody ought to have some vehicle to determine which new samples go up and which old come down.

    We go a little further and track all vendors and I can assure you that new sample placement on my wall (a finite commodity)has some considerations greater than "It look good and it's new".

    Shelf space (or wall) is a very precious commodity and we tend to "give it away" to the next vendor with a rack of new corner samples. Your wall space has value-there should be a quid pro quo
     
  26. Mike@LoDo Art

    Mike@LoDo Art Grumbler in Training

    Some of what we’re seeing here is Merchandising, not nitty-gritty pricing. I ran the job through FrameReady with standard markups and it came out to around $275. I don’t know what was in the frame. Depending on the art, that may account for the $436 list price. If it was an L/E or small original, maybe. But the frame is only worth about $300 at a 28% COGS. Because I take a lower margin on higher-priced moulding, I come up with the slightly lower retail price.
    Now if I took my normal retail price, marked it up 60% to $435, marked that down 60% to $175 and sold it to a bargain-hunter, I’d make 250% of my COGS and be selling it for what amounts to a true 36% discount.
    To do that I’d have to a) lie about what it was worth in the first place; b) imply that my prices were too high to begin with; and c) put myself in the same boat with discounters, attracting people who shop price first.
    But other than lying about its original worth, I could justify moving a sample at 2.5x or putting together a promotional price to pique interest in my other products. We need to have at least a few promotional items for sale to entice shoppers to stop and look, don’t we?
    If Joanne’s out-merchandising me, shame on me. If she’s basing it on lies, though, shame on her. If LJ is encouraging that behavior, a pox on their warehouse (maybe a wood beetle infestation).
     
  27. dfwanna

    dfwanna Grumbler

    Mike,
    I believe the price of this frame job of $436 was LJ recommended pricing. It may have been based on "join price" (which they are doing for them), I'm not sure.
    It was a prematted photo, with frame, conservation glass and standard fit only.
    Is your pricing based on length mark up? My normal retail comes to about $350.00 on this job. My priced are based on chop mark up.
    Anna
     
  28. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    This has become a fun thread and it shows some of the real problems we do face. It's just that I see no villains, when most are looking for the very same.

    Now, I know that I won't change his opinion or anyone else's but I hate to see the "regular" retail price issue again. He states, and he is not alone, that to get to the $435 retail price, he would have a) lie about what it was worth, b) imply that his prices were too high, or c) attract people on price, like the discounters.

    Then, Anna states that LJ suggests that the price should be $436. And, her prices would be different based on how she bought, chop vs length.

    Now, I will bet that many shops will and do use the LJ model and that the $435 price will be found in their marketplace, and I'll bet some will be higher. And those higher will defend that price to the death.

    These are pretty much common positions and we see them often.

    But,put yourself in the shoes of the consumer:

    Does the consumer care how you buy and consider that if you are $100 higher than the guy down the street,that it will be acceptable because you bought chop or not?

    And does the consumer think that if everyone else sells the item for $435 that you have lied about what it is worth or that you have prices that are too high? Not unless the guy down the street sells it for $335. Then, the consumer will definitely think that the A and B options are true and they have instantly invoked the C option.

    We need to never forget that the consumer gets the final vote and when we ignore that basic factor, the consumers tend to ignore us.

    Pricing is such a dynamic function-many factors enter into the equation and our costs are just one slice of the pie.

    I think Mike is correct when he indicates that you ought to have some promotional items to "pique" the consumer's interest. But, I do disagree that it needs to be a lower margin.

    In fact, our promotional products usually have the best margins in the house. I don't want to get into a Buying Well to Sell Well diatribe. But, if you read our good friend Warren's posts, you will get a good sense.

    If you are going to give up a few points of dollars/unit to get additional sales, you need to get some extra points of margin or a few extra points of units.

    And, if you are really good, you get both.
     
  29. Jay H

    Jay H PFG, Picture Framing God

    I don't know what this has to do with this discussion BUT I've taken a class that suggested that LJ's pricing guide was a joke. But did suggest that if we were going to use it, that we should use that guide for MINIMUM pricing.

    Anybody who takes that advice would be higher, and rightfully so. Right? ;)

    It was late went I took that class and my mind was a bit scrambled but I don't think it took the information out of context. If so sorry!
     
  30. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Well, Jay, let's take a look. Mike says his price would be around $275, while Anna suggest about $350.

    Your class indicated the LJ price should be a minimum, so therefore more than the $435 as listed by Anna.

    The point being pricing is all over the board,as it should be.

    So, if someone did sell it for $435 (and I have to be honest, I can't remember what the project was)than that might be a "market based" price.

    Either Mike is leaving some serious money on the table or someone is geting rich at $435.

    I'll bet neither are very true
     
  31. Mike@LoDo Art

    Mike@LoDo Art Grumbler in Training

    By my calcs the cost for materials is about $75 for the job:
    8' of moulding @ 8.71/ft (yes, length price)= 69.68
    AF Foam @ 1.60
    CC Glass @ about 4.00
    and a little for hardware, tape, paper, etc.
    At $275 retail, my COGS is 27%.
    Am I overlooking something, 'cause I sure don't want to leave money on the table or anywhere else I can't get my mitts on it? ;)
    I don't have any special mounting or matting figured in, but a single mat would only add about 15 bucks retail unless it had a fillet or was fabric or something.
     
  32. Emibub

    Emibub PFG, Picture Framing God

    Hey, Mike was at our first PPFA meeting! Welcome to the Grumble Mike.

    I usually order length but I mark up by chop prices. I usually do the math to see which is to my advantage, sometimes I order chop, but usually length. Except in Mike's case I would round up the moulding to 10 feet which is a likely event. So, if you add another couple feet to your COG change to $92.70 which would make your COG on a $275 sale closer to 33%. Since I charge chop prices but order length my COG is still $92.70 but since my price is $334 I get 28% COG for my scenario. I realize sometimes you order 8 feet and get 8 feet so if you order length your COG can fluctuate.

    If you get chops I would assume you would have to sell for considerably higher price to keep your COG's in line. Or make a deal with the devil to chop and join them at a significantly reduced price so you can sell it for $164. Which is where this thread began..........
     
  33. Jay H

    Jay H PFG, Picture Framing God

    I just figured some chop vs. length prices for a few vendors.

    Some may be disappointed to know that LJ came in the lowest. They came in under 60% for the most part. Some were slightly above that mark but most were under it.

    Vendor number two was in the mid-high 60%.

    Vendor number three was all over 70% and as high as 75%.

    Ohh and vendor number four charges a flat fee.

    Pricing from chop sounds a bit unpredictable. When companies have overlaps in product I find the length price is really consistent.

    Carry on.
     
  34. Baer Charlton

    Baer Charlton SPFG, Supreme Picture Framing God

    Jay, with your 60%? Are you meaning that the length price is 60% of the Chop price?
    Or a 60%premium above the length price?

    If the former and the chop is $10/ft, then the length per foot is $6.

    If the latter: and the length is $6/ft and the chop is 60% premium then the chop price is $9.60.

    Which is basically a company who wants to sell footage, but if forced to sell chop whats to make money that will cover cost and garner a premium profit...especially since they are only paying $.73/ft @10,000' anyway. (1,315% markup)

    Hmmmmmm, maybe THAT is what Warren is talking about? [​IMG]
     
  35. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Hey Baer-You're not talking about Turning a Buying Advantage into a Selling Advantage are you?

    Sounds like a heck of a concept
     
  36. FramerDave

    FramerDave PFG, Picture Framing God

    Just a couple thoughts here, although they may have been hashed out already. I admit I haven't read every single post on this thread.

    As Bob has pointed out before, it's often easier and more comfortable to blame our problems on some outside force rather than to look in the mirror and take a cold hard look at what we do. And as usual, Larson Juhl is an easy target. But let's not forget that Larson is not doing anything for JoAnn's that they would not do for any of us. They'll chop and join frames for anyone, and may cut mats as well. How much they charge depends of course on how much volume you do with them. If you have 100+ stores like JoAnn's or a franchise, and especially if you use Larson as an exclusive supplier, of course they're going to give you better pricing. It's just good business.

    I recently went into a pretty new-looking JoAnn's Etc to have a look at their framing department. I have to admit I was impressed. Nice looking counter, some good framed models. What struck me was a display of an Ansel Adams print in a good-better-best model. The best was done in a double frame, two or three mats and a fillet. I commented on it and the lady said that yes, it was lovely, but pretty expensive. I'm sure she'll sell a lot of high-end design that way.

    As I snuck around more taking pictures with my phone, I got the impression that it could be a pretty nice store, but it was trashed by a typical big-box drone attitude. I'm talking about empty frames hanging on hooks with a hand-written sign reading something like "OOPS frames $5.00 each" and piles of scrap matboard being sold as "boarders" for your art, this time with a sign printed off the computer.

    Before we get on our high horse and laugh at them for this, let's take a look at our own house and make sure we're not doing the same. I would bet that most Grumbler's stores look pretty good, since we seem to take our businesses seriously and are always looking for ways to improve. But I've been in some businesses outside the big boxes that look no better.

    Will appearance alone be enough to make or break it? Probably not, but take care of that piece of the puzzle.
     
  37. dfwanna

    dfwanna Grumbler

    Dave,
    Actually this whole thread started just because I wanted to make the point that Larson was supplying this BB with mouldings that we all carry.(900 samples) Some frame shops carry 80% or more of Larsons frames. Then, this BB (Joanns)sells Larson frames at wholesale prices.(Michaels doesn't do that. Garden Ridge doesn't do that. They are right up there with us on their pricing, and they don't even have "Larson" quality frames)
    It was to make everyone start thinking about how much they are supplying Larson, since Larson is helping this BB to compete with us in a big way. All of the framed models and framed samples definitely look like Larsons work to me. Who know's they probably train these people too.
    Luckily, I only carry about 20% Larson an my walls, but for those who really rely on Larson....I'm sorry.
    Anna
     
  38. FramerRandy

    FramerRandy CGF II, Certified Grumble Framer Level 2

    Anna,
    Thanks for starting this thread. It has been quite interesting. It did cause me to visit a Joann's in another city, since we don't have one around here (yet) that does framing. I was quite taken back at the sight of a LJ-exclusive wall. All of the latest LJ profiles were on the wall along with well-signed information about framing & some LJ models that some of us may also have.
    The clerk, (yes I said clerk), hollered to me that she would drop the stocking she was doing to help me, if I wanted. I declined. While the LJ-stocked wall looked nice, the clutter around the framing area was a real turn off. I couldn't continue in business that way. LJ had better train those folks to sell their product or they will be very disappointed in the results.
    I was left with a sad feeling, not angry. It does reinforce the need to not be dependant on any one vendor. I will continue to do business with LJ as long as they want my business. So far they give great service & good prices. [​IMG]
     
  39. Less

    Less SGF, Supreme Grumble Framer

    Bottom line is Larson is hurting their bread and butter. They are selling joins to Joann's for what has to be length price.

    We will have to buy box and use their chop markup or Less to compete on price.

    All of their Partners are getting killed when buying chops or joins.

    I have to seriously consider dumping their entire line.
     
  40. danny boy

    danny boy PFG, Picture Framing God

    Wow.... six pages, and more to go! There have been some good points brought up, and it has been interesting to see how many are following this one.
    We all need to keep our eyes open and make good decisions, the right ones for our frame shop. I do not feel that one pat answer is the key, and who knows what next week will bring; another four pages? If that is what it takes to educate the masses and build our own business than it has been well worth the research and soul searching each of us are going through...
     
  41. dfwanna

    dfwanna Grumbler

    I will probably never dump Larson completely (unless they dump me for starting this thread). I have however, limited the supplies I order from them and carry many other lines that are just as nice as Larson's. I carry Engelson, Max, Nurre, European, Roma, AMPF and many others. I will always carry different from the BB's so I can compete. I'm always going to shows to see what's new, and what's different.
    I will always outsell any BB with my experience. Hopefully, if I have to compete in price, I can steer them to a different moulding. Most of my supplier's, (with just a phone call), are willing to help me compete on any order.
    I think that Larson, will start questioning their business relationships, if their numbers drop all over the nation. (even if only in supplies)
    We all add up together.
     
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