SGF, Supreme Grumble Framer
Anyone who can spend even an hour per day, reading and posting here, should NEVER allow a prospective customer to get away even if you have to match a price. Right now you are making zip, zilch, nada. You have too much free time and not enough customers. Otherwise, you wouldn't be here.Rob, that was my EXACT point. If you don't know your cost basis, you can't possibly "match" someone's retail price and show a profit. If you simply "match" price - and it's a loser - there's no way any amount of "volume" makes up for it.
AND, here we have someone who understands cost basis. So, JWB is satisfied with his markup as it seems to bring the income necessary for his level of living. No discounts and allowing the "wal-mart" crowd to walk.
I actually send some people to wal-mart. They are not interested in spending $200.00 on a poster they bought at the ball game for the kid's room. No need in wasting time with them. Instead, I tell them to keep me in mind for that special memory they might need framed.
Cost basis is the necessary formula no matter what business you're in. Loss leaders are used in stores with a variety of products where they can make up the loss of one product for the sale of others where the profit margin makes up for the deficit.
In most cases, frame shops do not have that type of extensive product line for loss leader sales or "match" pricing.
While Paul Walters gave a detailed analysis that considered many variables, I'll simplify it by stating that if your butt is on the Grumble, you're only cost to make that sale is materials. Your other expenses remain as they were. IT IS NOT A LOSS LEADER, YOU ARE NOT LOSING MONEY. It is additional profit that will go in your checkbook. You're working for a slightly lower hourly wage than you would like, but it's still paying better than being here.