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Switching from pre-joined to length

Discussion in 'Picture Framing Business Issues' started by KevinAnnala01, Mar 28, 2017.

  1. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    Let me try this another way.

    If shop A buys short length for their non-stock profiles
    shop B buys chop for their non-stock profiles

    then

    at the end of the year shop A will have thousands of dollars to spend to pay someone to do things they're not good at.
    maybe marketing, maybe accounting, maybe buy a new sign, or even refurb their store.
    Cutting moulding takes very little time when you are already joining the frames and the money you save has WAY BETTER Return using it for other things.
     
    FramerCat likes this.
  2. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Cliff no argument on savings, just the math extended

    perhaps if we use yourfigure of $200/hr and my figure of 2 min per frame, then 1/30th of $200 is just under $7 a frame. Now, if you are much faster than the 'sloths' we hired, then your savings are even less, maybe $5 a frame

    Or, we could extend that out by comparing box pricing:)
     
  3. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    I don't think you're having trouble with the math, just our timings.
    It seems you just don't believe it takes closer to 1 minute than 5 minutes to cut a frame.
    I think we'll have to just disagree on that.

    P.S. re: the previous post; you actually save more if you're faster, not less.
     
  4. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Cliff lets just say you are a very good operator and know what works best for you:)
     
    Cliff Wilson likes this.
  5. samcrimm

    samcrimm CGF II, Certified Grumble Framer Level 2

    Maybe I can explain it, If you charge someone say 50 dollars for a chopped and assemble finished frame. For ease of figuring that frame cost you 25.00 to buy and finish. So you make 25.00.
    Now you buy length and chop and join the frame yourself. You figure the retail the same but you save money on materials but not the labor. Unless your a small shop like me. And have time to do the extra work. So your materials you save 5 dollars, the bigger the frame you could save even more. But for this your cost is now 20.00. IF you did say 100 frames a month and saved 5.00 each then you gained 500.00, or 6,000 a year. This is the simple example, and if you had a bigger business and more help and a good work flow or a bad work flow then you have to really do some figuring. So you know i can get my normal size frames joined for 5.95 per, I bought an under pinner for 450.00 I only had to do 76 frames to pay for it and now I (make money) with it. I still buy most of my moulding chopped, saving 5.95 per frame, and a few I buy length, I am in the process of which other moulding I sale a lot of, and will buy that in length too. But if you have to buy and store extra moulding that you may or may not sell in the future, then that is a poor investment. IT takes up space and profit. Being a one person store and when I get busy spells I sometimes get my frame joined, or a moulding that look hard to join. Saves me time, I was so busy the first of February, I could not focus on my assembling for customers coming in. That a good thing. Hope this help someone besides me.
    Sam
     
  6. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    That assumes your labor costs you nothing. Maybe it does. It all depends on how you do business and how you do your accounting.
     
    shayla likes this.
  7. samcrimm

    samcrimm CGF II, Certified Grumble Framer Level 2

    I have only me as labor, I have rent, insurance,power. And any advertising I might do. Which is very little, so you could say when I have a great month I have a great pay check and when I have a terrible month well, the pay check is not so good. I know I should have a profit and a pay check both. But my business is only two years old. I feel it will get there sooner than 5 years.
    Sam
     
  8. Joe B

    Joe B SGF, Supreme Grumble Framer

    Sam, I know what you are saying because I am a 1 man shop too and labor is labor, for a 1 man shop or a shop that has 50 employees. Cost of labor should be charged accordingly when you are figuring you cost of a job. You say you have rent, insurance, utilities, but only you as labor, why should you not include your labor along with the rent, insurance, and utilities? They are all a part of the cost of the project no matter how big or small that project is.
     
    TurnerAssociatesdy likes this.
  9. wpfay

    wpfay Angry Badger

    The cost of chop vs. buying length isn't just the bill from the supplier vs. the cost of length moulding and the time it takes to chop a frame.

    The "cost" of the chop includes the supplier owning and maintaining some seriously expensive equipment (they don't use DeWalts and Phaedras), the cost of the property on which this machinery sits, and the property where the moulding is stored, plus labor, and that ugly profit we usually shun. There's probably something else I forgot other than death and taxes.

    If you buy any length (stick, bundle, or box) you are assuming all that overhead (maybe on a smaller scale, but that moulding ain't gonna cut itself) and need to factor that into your calculations.

    If you have invested in cutting machinery, you have the option of ordering either chops or length. I have about $10K in cutting machinery and support tooling (I would guess that some suppliers have 10X that in one saw), with a real expense of a few hundred dollars annually in parts and sharpening services, and a "saved" expense of all the hours I spend tweaking and cleaning and repairing these tools. Every so often I treat myself to a new set of blades at about $300/set. I also have a second building dedicated to "dirty" work and all my cutting tools and moulding inventory are in that building. I would guesstimate that about 300 sf of space is taken up with those items. With rents in this area going for about $30/sf that's $9K annually. I also have an employee who does the lion's share of the cutting, and as much as he loves his job, he insists on getting paid.

    So, redo the experiment factoring in real costs divided by number of frames annually and balance that against the savings. Also factor in real waste. Material management is a bit more than opening a wrapped stick of moulding and putting the leftovers in a bin, and if I am anywhere close to the norm there is an actual forest of shorts somewhere that will eventually be rounded up and thrown in the garbage. I would guess the average waste/stick is about 15-20% for non-box orders. My experience with box orders show waste is lower for the bread and butter stuff, and higher for specialty moulding.
     
  10. samcrimm

    samcrimm CGF II, Certified Grumble Framer Level 2

    Your Right Joe,

    So for now my pay check is based on how much work I do. I charge for labor in my jobs. And yes it is part of over head, Say I think I should take 300.00 a week in pay? what if I didn't make 300.00 in labor that week? I pay the bills and the rent etc first or I won't stay in business long.
    Then I use the money left over for my pay. I am hoping that maybe by the end of this year I can get a consistent pay check and pay the bills and have a profit on top of that. They said it takes 5 years to make a profit.
     
  11. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Wally's post is the absolute best description/analysis available so far. Bottom line: one size does not fit all. I am a firm believer in a hybrid arrangement.
    that begs who 'they' are? Reality is many in the trade are best described as 'self employed framers' doing it because they love their job and love not working for anyone. I think if you can't pay yourself the second year what you can earn in wages and benefits running, say, a BB framing dept, you need to consider what your goals are

    I have no quarrel with anbody's goals, but, let's not confuse it with a business

    May I suggest you may benefit greatly in finding a mentor? Preferably outside the trade; definitely finacially successful

    good luck
     
    TurnerAssociatesdy likes this.
  12. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    So, you're saying because the supplier has invested all this money we should give them some of ours? (I know, what you are doing is justifying their prices. I have no argument with their prices, just whether we should be subsidizing them, or not.)

    One thing I said way up front, was that a decision on WHETHER to have cutting equipment and space requires different analysis, once you have it, you have it. IT NO LONGER factors into the decision. you can't "give the space back," the landlord does n't give you a rebate on what you don't use.

    "there is an actual forest of shorts somewhere" so, because you made a bad financial decision to save all this junk (I told you to throw it away, or make a save decision based on it's value to you (like Photo frames maybe). you are going to make another bad decision to avoid the first one?

    All that other "stuff" is distracting noise. You need to think about it, you need to make decisions involving it, but not this decision. This is pretty clean and shouldn't by muddled.

    You have made an investment (good or bad, you did it. ) You have the cutting equipment and the space. It is either a sunk cost (paid for), or an ongoing overhead expense. You are paying it (rent) no matter what. It doesn't count in this calculation and shouldn't muddle the chop vs length equation.

    If storing shorts is a problem, don't do it. Again, a different decision, it shouldn't muddle the chop vs length equation.

    The only thing you said that could be factored in is the cost of sharpening and equipment maintenance. This of course various with the number of frames you cut and how diligent you are at your maintenance, but in the scheme of things (For me in my calculations for sure) it won't material impact the equation.

    I think what you are doing is rationalizing instead of trying to get to the meat of the problem. Don't try to over think it.
     
    TurnerAssociatesdy likes this.
  13. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    this is said with tongue firmly in cheek:D:D

    this comment from a guy that has calculated the 'savings/earnings' down to the minute?:D

    Wally and Cliff are both well respected and good friends of the industry with differing 'rationalizations' of the differing solutions.

    So many factors, so much discussion.

    Bottom line: know your own numbers and make them fit your needs. One missing component may easily be if you are at/near capacity or not
     
    TurnerAssociatesdy and Joe B like this.
  14. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    We don't have the "luxury" of deciding to sell Length or Chop - our customers do that for us (though we do sometimes try and guide them).

    However, more similar is our "other" business - wide plank flooring.

    We have the equipment to make the "blanks" (material which has been rough-planed relatively flat, and ripped to width and ready to run through the machine that makes a board into a piece of flooring). However, there are two common situations where we may decide to buy blanks from our vendors rather than doing it ourselves.
    • Specific widths are required, and the normal "random width" material will not provide decent yields without buying way more than needed for the job.
    • We are so busy that we don't have time to do the blanking ourselves.
     
    TurnerAssociatesdy likes this.
  15. tedh

    tedh PFG, Picture Framing God

    There's the gist. How many of us are at or near capacity? I'm not.
     
    Bob Carter likes this.
  16. TurnerAssociatesdy

    TurnerAssociatesdy CGF II, Certified Grumble Framer Level 2

    What "most shops do" is a mixture of length and chop. Many have that occasional moulding that they buy join or have a deadline that forces a decision. Some mouldings force you to make a choice, since your equipment can not handle it; odd profile, too big, too wide, etc.

    If you use a moulding very often and you don't stock it, that is a huge loss. Box or special pricing is a very smart way to purchase if you are set up for it.

    If you buy a box of moulding you've never cut a few frames of...that is silly. If a rep doesn't understand this...they're silly. Would you buy a car without test driving it? Why put yourself in that position?

    Sometimes if there is a shop with only one person, the joined frame might not be a bad option. You can think of the vendor as another employee. Also remember, that vendor deals with their moulding much more than you would. Therefore, they should know how to join them pretty well (we hope).

    I felt many times, new shops felt like they should do things X way. They worked in a shop that did X, so now they did that. You never know till you start moving which direction shall be best for you.

    On the other hand, a shop that has been set in their ways, they tend to stay the direction. Which is not wise either. Being awake at the wheel is a must.

    So with this...I was a rep for years. I never felt comfortable telling a shop to do X. Unless I knew them, knew their numbers, we really talked over an extended period. Business, your personal business should never be a straight line, nor your choices. If you see that you have done the same thing over and over again, be it a success or a failure, change. If you expect it to work every time, it won't. Some of the best ideas failed many times, a small tweak or new eyes can see things differently.

    Dr. Seuss, took about 27 tries to get his first book published. Fail, but keep trying.
     
    shayla, Joe B and Bob Carter like this.
  17. FramerCat

    FramerCat SGF, Supreme Grumble Framer

    You are making the big assumption that any of us have the qualifications, apptitude and opportunity to run a BB framing department. Do you know any BBs that are hiring managers that have been self employed for the last 2 to 3 decades and whose previous employers are all out of business? Lack of references on top of age make for limited possibilities. I know you are talking about start ups and not established businesses, but I thought I'd just take the opportunity to point out that not everyone is an entrepreneur because of their savvy, wisdom or financial position. Some of us just can't do anything else.

    Ed
     
    nettie ott and neilframer like this.
  18. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    ouch! I would never say that. I've met a ton of frameshop owners and found many to be 'refugees' (that's a light-hearted comment) from many other industries. I was, know a commercial airline captain, knew a retired COL., tons of bright people. A current mgr at HL owned her own shop and was a frequent poster here for years

    I used a BB framing dept mgr as an option, could have used many others, too

    my point was starting a biz expecting not to turn a profit for five years just seemed a little unsettling and think if that same period was being employed, drawing steady income, solid benefits and contributions to retirement is a path worth discussing. If the creative side of framing is the magnet, may I offer this re-statement: instead of a BB, many shops would gladly hire skillful framers like the above mentioned scenario

    My observation: not every person is an entrpreneur and many fail. Picture framing is not exempt. It just appears the financial reward is a little more elusive than other trades

    to many, doing what they love is reward enough. Perhaps that is the 'goal' I mentioned...
     
    Last edited: Mar 5, 2019
    shayla likes this.
  19. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    Are you suggesting that running your own frame shop requires less skills than running a BB framing department? Bear in mind that the marketing (in large part) is done by corporate, and marketing is one of the toughest things for an indie owner to do well, based on my observation. Then there are a bunch of other things they don't need to do, for instance:
    • Smart purchasing.
    • HR. Even if you are doing the hiring/firing there are lots of other aspects that will be handled by corporate, such as payroll.
    • Pricing.
    • Creating a visual appeal, and one that is consistent with the company - from parking lot to design table
    • Finance - Bookkeeping/accounting/tax strategy.
    I'm sure there are lots more, but that's a quick list and they are all shortcomings of many frame shop owners.
     
  20. FramerCat

    FramerCat SGF, Supreme Grumble Framer

    No, I'm not saying it is harder. I'm saying it is different. I have had discussions with the hiring managers at big boxes and long term frame shop owners are often thought to be set in their ways. Big boxes need people who will do the work the way they want it done and don't need to fight an established framer to get the job done the company way. Also there are not necessarily very many big box framing manager positions available so it is not all that likely that one of us is going to simply walk into a big box and walk out with a job. As for Bob's assertion that there are jobs available for framers among the independent shops, there are an awful lot of great framers that cannot find work in the industry.

    I'm just saying finding a better job is a little more challenging than the simplicity that it was being depicted as. But I know that wasn't Bob's point I was just going off on a tangent.

    Ed
     
    Joe B and Bob Carter like this.
  21. wpfay

    wpfay Angry Badger

    Peace Cliff.
    I still believe that those "sunk costs" need to be amortized over the reasonable lifespan of the machinery.

    Yes, the square feet are paid for anyway, but they could be put to better , more productive and profitable use.

    I think that during the 4th quarter of 2018 I was running pretty close to capacity. The thing is, that capacity could easily be increased, but it would come at a cost.

    I think looking at whatever data is there is where we are able to judge its relevancy to any experiment. Culling should be based on that relevancy or you can risk skewing the results toward or away from your hypothesis. Since there is no monolithic business model, and certainly no consistency in the qualifications of the business owners, I think most of these exercises don't provide significant data for any kind of industry standard. Talking about it is great, but there are no right or wrong ways to do things, just ways that either work or don't.

    I think FramerCat's comment bears some truth, but it applies to many small business owners in general, not just framers.
    I've had many conversations with people much more knowing about this and the general feeling is that small business owner, to some degree, just don't fit into the normal work a day world. Call it left brain/right brain or whatever, they don't mesh and end up being their own bosses by design or default, regardless of qualification.
     
  22. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    isn't that the essence of being s small biz owner. However, there ought to be an easy distinction between 'not wanting to' and 'not able to'

    we have all known many people that have transitioned from frameshop ownership to successful employees
     
  23. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    I have s small little internet biz and Ihave an ex-employee make frames for me out of her house. I buy 8 profiles and offer 5 sizes only. Every week I give her list of frames to be cut/joined along with her other clients project. I never cut frames, only watched a few in passing. So, I asked her today how long it took stating that others here did it in less than two minutes.

    She said in my situation a couple of minutes per frame was reasonable; all mldg is unwrapped, she set stops two, maybe three times. But, for single orders from short bundles, no way. She said it took a minute or two to locate that bundle and unwrap it. Another minute to throw trash away and give quickover looking for flaws, etc. Then a couple of minutes to set stops, cut legs, put end cuts away and go to next chop.

    what is she doing wrong?
     
  24. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    Probably not doing anything wrong.

    First, is she guessing, or did she time it? I asked my employees how long different things took and they were ALWAYS off by double or more (sometimes a factor of 4) when we actually timed it. A minute is a lot longer than you think. A minute to "locate the bundle and unwrap it?" Time yourself looking for something in a room you think it is? Then, remember, we are talking length vs chop, so the locating and unwrapping and inspecting applies to the chop as well. (I actually take longer to inspect a chop, because I can inspect the stick as I'm cutting if there aren't Major flaws.)

    A minute to throw away the wrap and inspect? Again, I think she doesn't realize how long a minute is. If you're really clumsy, it might take 3 seconds to throw something away; it's already in your hand, you just unwrapped it. Grab the stick, run your hand the length and look as you're running your hand down; 5 seconds maybe?

    I did more timing checks this week trying to take my time and poke. Odd frames all. never got to a minute and a half. unwrapping the stick, stops adjusting, marking the work ticket, keeping track of each cut on my "Time to sharpen blade board" all included.
     
  25. wpfay

    wpfay Angry Badger

    Again, it's not a one size fits all theory. It's probably some of each and some of both. Ability and desire aren't mutually ex or in-clusive.

    Wrong? Nothing. Speed is second to accuracy, and if that is her comfort zone, just leave it alone.
     
  26. FramerCat

    FramerCat SGF, Supreme Grumble Framer

    I don't think she is doing anything wrong. I think what Cliff was asking was the difference in time between ordering length and chopping it and ordering chop. All of the "extras" that she is talking about are not actually extras. She would have to locate the chop, unwrap it, and check for flaws... nevermind I see Cliff already answered.

    Ed
     
  27. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    "Peace?" your think I'm upset? This is fun! ;)

    "I still believe that those "sunk costs" need to be amortized over the reasonable lifespan of the machinery."
    ABSOLUTELY! But that is a different problem. Definitely a capital investment analysis, Probably needs to be accounted for in PRICING, not buying.
    This discussion is Length versus Chop; a buying decision.

    Let me use an example ... Walmart does some research and believes a new location is PERFECT for a Sam's Club. Then spend (just a number) 10 Million buying land, clearing, and building. ten years later, the building hasn't been nearly amortized or paid for, but they realize that the revenue isn't what they expected and the profit not as good. Do they wring their hands and say "but we put 10 Million into it!" NO, they close it and move on. Sunk Costs should never figure into future decisions.
     
  28. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    hey Wally, she worked for almost 20 yrs. we had a solid 'if it ain't broke...' attitude
    stop watch? we don't need no stinkn' stopwatches' Guessing time? Ask them how quickly they could frame a picture?:p

    back to topic; i'mwith TurnerLady on blend
     
  29. wpfay

    wpfay Angry Badger

    OK Cliff, but I know your volume goes up when you're having fun...

    But if you are Buying chops, the sunk costs of tooling up, overhead, etc, are figured into the cost of the chop by the supplier, like it or not. Calling it subsidizing the supplier doesn't change anything. You, as their customer, are paying for that.

    Why should those costs not be included when figuring the actual cost of cutting your own? In order to work the model has to use the same components on both sides of the equation. The differences in costs between chops and length include increases in some if not all of labor, waste, overhead, maintenance, and markup.

    Just to be clear, I do know there is a great economic advantage to length vs. chop. My last quarter of 2018 attests to that. But, if the savings you report were in any way accurate, I would now be able to retire comfortably.
     
  30. Cliff Wilson

    Cliff Wilson SGF, Supreme Grumble Framer

    Well, the supplier is using their sunk costs in calculating their sales price. A reasonable thing to do. We/you should too.
    But, you don't us it in making a buying decision.

    The savings I report are accurate. What keeps you from retiring on it is ... even though your savings normalizes to over $200 an hour, the actually time you spent is minutes a week.
    In other words, you have to sell a lot more to impact your bottom line enough to retire. ;(
     
    JWB9999999 likes this.
  31. JWB9999999

    JWB9999999 SGF, Supreme Grumble Framer

    Let's take an example. We'll say that someone operates a very busy shop, and spends a grand total of 10 hours per week cutting chops from length. At 6 minutes to chop a frame (average for me) that is 100 frames chopped. So 10 hours x $200/hr is $2000 in savings that week. But, you say, "where is that money, I don't see it in my wallet." Sure you do; it is probably already sitting there if you were paid in advance for the work.

    Here's a simple formula: Revenue - Expenses = Profit. So there are 2 ways to increase your profit. Either increase revenue, or decrease expenses. You seem to be wanting to add it to the revenue, but it's actually a $200/hr reduction in your expenses.

    Let's say that customers have paid you $15,000 this week for those 100 frames you just chopped. That's $150/frame average. If you'd bought the moulding as a chop from Vendor Z, you would have had to pay $XX/foot for the moulding. But if you buy that same moulding, including the extra bits, waste, bad spots, etc., by length/box, with the intention to cut it yourself, you only have to pay $X/foot. The difference between $XX and $X equates to $200 per hour of your labor that you did not have to pay to the moulding Vendor Z. You got the money from the customer, but were able to keep it in your bank account (or wallet) and don't have to send it to your vendor.

    So, looking again in your wallet, you should see $2000 there that wouldn't be there if you bought chops. If you cut 100 chops yourself in a week, you are keeping $2000 in your pocket that you would otherwise be obligated to send to your moulding vendor.

    John
     
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