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What if our industry had a real discount framer?

Paul Cascio

SGF, Supreme Grumble Framer
To the best of my knowledge, our industry has never had a real discount competitor. I'm talking true discounts, not the phoney ones claimed by the AOSFs (Always On Sale Framer, if you're new here).

But, suppose hypothetically, there was a true discount framing option in the markeplace. It could be successful and have a major impact on the market. Not just the indie market either. In fact, a legitimate discount framer would have a greater impact on the AOSFs, as it would demonstrate the illegitimacy of their pricing.

I'm sure that some will say "discount framing" will never work, etc, etc. I disagree. I believe it could be done with the right business model, and have even considered doing it myself. However, I would like to see if someone could change my opinion. So, what do you think? And, if it ever happens, how would your business respond?
 
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Dermot.

In Corner
I thought that what Warren’s business is ……………..


”Good value always”


Ha.........Cliff was ahead of me
 

Paul Cascio

SGF, Supreme Grumble Framer
Thanks guys. I'll check it out. Anyone know the website?
 

Bob Carter

SPFG, Supreme Picture Framing God
Paul-Let's establish some terms we all can agree on what is a "real discount"

Let's use a real world item, so we can be very clinical

My suggestion is Larson 457904

The base lineal is $3.52
The Chop is $5.69
The box is $2.46

What is the "real" retail price for that item

If we use the MSRP listed in Larson catalog (4.1X)the price should be $14.43 if bought in length, if bought chop the MSRP (2.8X) should be $15.93 and if you took the pricing class by arguably the leading expert in our industry it would be $18.07

So, to establish a "true and real" discount, let's etablish a "true and real" retail

I suspect we see more "It depends" than an oil exec before Congress

Suppose that I wish to "promote" this frame and my POS is set to automatically use the Larson MSRP (many, many framers do) and I buy somewhere between "box" and "base" should I have to change my retail?

So, my POS says that frame is $15.93 and I pay $3.00 (about 82% margin) and I say "If I lower the price, will I sell more (and more mats, more glass, more mounts, more fitting, more Vgrooves al at reg price and reg margins)" may I not say "30% off" and be "real"? And have a margin of about 75%. Am I being deceptive? Supposse I took Jay's great class and used his formula? Still deceptive?

Or how about 50% (for a 62% margin) Still deceptive?

And how about if I buy "box" pricing? Am I not entitled to the POS calculated retail price?

So, tell me , Paul, exactly what is a true retail price for that product

And, can you limit that answer to a numerical response

Others may debate the philosophical side of the argument, but, let's settle on this singular product with a defined "retail" and start from that point

This is not meant to be nasty, but, let's talk in real numbers and real values and see if this argument is valid
 

Dermot.

In Corner
Bob I mean this in the most respectful way…….

Just when I thought this was going to be a nice simple thread on business…..

You pop in and bring up some amazing stuff……….boy can you get a persons mind working……….there is never a dull moment when you are around….



Paul.......I dont think Warren has a website or if he has it's not working at present......he has a domain name but it looks like it is for internal usage by his people.........
 

Cliff Wilson

SGF, Supreme Grumble Framer
Bob, you bring up a good question about discounting in general and what does it mean and how do you convey that to the consumer.

Warren (and I am using my words, but as I recall ) says he sells for the lowest possible price he can and is always trying to find ways to keep his sales price down. Without talking about promotional material or how it is conveyed to the consumer, I HAVE to believe Warren's goals and practices meet the intent of Paul's question.
 

Paul Cascio

SGF, Supreme Grumble Framer
Dermot, thanks. I found Warren website, but it must be broken as it requires a Username and Password. I'm also going to assume from my Google search, that he's a single point business.

Bob, you bring up a valid point, that discount needs to be defned.

So, rather than using LJ or an insider, let's do as you advised earlier on another thread, and take the consumer perception of reality rather than our own. Let's use Michael's prices, since those are the one's that will count when making a comparison. And for the sake of comparison let's define "discount framing" as 25% less than Michael's "50%-off" price, which I think we can agree is their norm, and a fair benchmark for comparison.

Using this criteria, what are your thoughts?
 

Jeff Rodier

SPFG, Supreme Picture Framing God
There are true discount framers around. I advertise up to 70% off everyday. My frame prices start at $2.50 and top out at $6 for 6" wide ornate moulding. I offer abbout 125
in-stock profiles and my material costs run around 15%. We stock 20,000 feet of moulding.

Big boxes are a joke and I CRUSH their prices everyday all day long. The last job in was quoted by M's for my new customer with 50% off at $253 each. I did both pieces for $110 and had an 85% margin.

Same story everyday. I advetise for them to compare and they tell me how much they were quoted everytime. I am always 50% below their 50% off sale no matter who we go up against.

mbartandframe.com
 

Paul Cascio

SGF, Supreme Grumble Framer
Jeff, you hit on exactly the point I was trying to make. The AOSF are not discounters. Most of us have prices that are about the same, or in some cases lower.
 

Not your average framer

CGF II, Certified Grumble Framer Level 2
I find it hard to understand the advantage in doing this. I think the U.S. situation must be very different to my own in the U.K.

Customer psychology in the U.K. tends to result in the opinion that the cheaper something is, then the lower the quality. To put it another way the higher the price, the better the quality and therefore the more desirable the product to those in the higher income portion of the population. Of course it has to look worth it too!

In the UK it can be that reducing your prices is bad for business, if you are in a wealthy location. I always try to price up, not down and find it's good for business. I'd be interested to hear the U.S. take on this point of view.
 

Dermot.

In Corner
Paul

How are you going to message out that the proposed model you are suggesting is a discount on the AOSF discount pricing………!!!!!!

I would suspect that without veeeeeeeeeeeeery deep pockets it would be a business model that is doomed to fail even before it gets started…….

Hopefully I can be proved wrong……
 

Bob Carter

SPFG, Supreme Picture Framing God
Sure, Paul, we can continue to create to "monsters" or not. It is way too simplistic to suggest they have illegitimate pricing. Even though I do tend to think it's a tad high, i am pretty confident that there are many retailers that are equally as high

So, for fun and a starting point, let's use a real world, published, we all can relate to price point

What is a fair, real, legitimate price for this Larson product?

My POS price, BTW, is close to what Jay suggests in his classes ($18/ft)

Warren is probably flipping right now, but we sell this product often for closer to his price

Is that unfair or unethical?

I am certain that many will chime in and tell song and verse of how they are cheaper than even the "half off" AOSF. Isn't that actually selling "on price" and wont that customer that relates to "price" be a disloyal one? If it truly is a loyal satisfied client that price is not important, shouldn't we be at least as high (or higher) than them? Isn't that truly a "de facto" discount without the benefit of the "perceived advantage" of a "savings"?

I think we enter a foggy realm when we call the other guys prices into question
 
But, suppose hypothetically, there was a true discount framing option in the markeplace.
OK Paul you brought it up. Your telling me your former store was not a discount operation (as if I didn't know)? With a street name of "A Frame Discount Framing". You did not really give a discount!! I'm shocked, shocked I tell you. You pulled the same #### that you rail about the box stores.


From Bob S a competitor of Paul's till he quit the retail biz.
 

Paul Cascio

SGF, Supreme Grumble Framer
Paul

How are you going to message out that the proposed model you are suggesting is a discount on the AOSF discount pricing………!!!!!!

I would suspect that without veeeeeeeeeeeeery deep pockets it would be a business model that is doomed to fail even before it gets started…….

Hopefully I can be proved wrong……
Dermot, I believe the contrary is true. Comparison advertising offers huge bang for the buck. How many times will someone need to see an ad showing your "Everyday price" vs. Your Competitor's "50%-off price". Answer...probably just once; maybe twice. The numbers speak loud and clear, the message is dramatic and memorable.

If I were trying to compete using half-price sales and weekly promotions, I could never compete with a big chain. This way I can. Heck, most of us have everyday prices that are very close to those being touted as 50%-off by the the AOSFs.
 

Paul Cascio

SGF, Supreme Grumble Framer
Sure, Paul, we can continue to create to "monsters" or not. It is way too simplistic to suggest they have illegitimate pricing. Even though I do tend to think it's a tad high, i am pretty confident that there are many retailers that are equally as high

So, for fun and a starting point, let's use a real world, published, we all can relate to price point

What is a fair, real, legitimate price for this Larson product?

My POS price, BTW, is close to what Jay suggests in his classes ($18/ft)

Warren is probably flipping right now, but we sell this product often for closer to his price

Is that unfair or unethical?

I am certain that many will chime in and tell song and verse of how they are cheaper than even the "half off" AOSF. Isn't that actually selling "on price" and wont that customer that relates to "price" be a disloyal one? If it truly is a loyal satisfied client that price is not important, shouldn't we be at least as high (or higher) than them? Isn't that truly a "de facto" discount without the benefit of the "perceived advantage" of a "savings"?

I think we enter a foggy realm when we call the other guys prices into question

Bob, let me just say this, Wouldn't it be wiser to try and adapt to what consumers think than attempting to convince them what they say they want with their dollars isn't what they want, after all

The problem for framers is not whether they "promote" or not, but rather if they do it "effectively" or not.


Oh wait a minute Bob, those were your words. Verbatim. So, which is it Bob? Consumer perception of prices is what counts, and the AOSF's who dominate the industry provide the public perception of pricing, not Larson-Juhl.

http://thegrumble.com/showthread.php?t=30762&page=7

I realize you use some of the same tactics as some of the AOSF's. And it's deceptive to say that your POS prices are about like Goltz', yet your "selling" prices are closer to Warren's.

I didn't create a monster. Perhaps you have good reason to be sensitive.
 

Paul Cascio

SGF, Supreme Grumble Framer
You're absolutely wrong Robert. My business model was very different -- I ran loss leaders. A tactic that you also used. My third store was a discount store, but the MO was not as you described, and also not as I wrote about in this thread.

My point is that if your prices are already close to the "50%-off" price, that if you drop them a bit more, you become the price leader and have a very simple and viable method of conveying that message to the public.
 

Silly Putty

Grumbler
The perception of value to framing is a notion of difficulty that most indies face, daily.
Just this morning, customer walks in, "Why is your price for a shadowbox more than one I can buy already made?"
Blah, Blah, bottom line, "The quality is going to be better"
You get what you pay for ~ I don't expect to get the same quality from a ralph lauren shirt as I do from one purchased at Target or K-Mart.

Granted the discount mentality is rampant in this country and has been a very successful business model for those who can purchase large quantities at a good price.
I just don't think it applies to custom picture framing and if it does I would expect to not receive as well made of a product from a discounter.
Expect being the operative word.

And if indies are priced lower or the same as the BB's, doesn't that mean the indies are making less money because they don't have the buying power ?

Also, I do not know of any BB framer that only does framing, it is coupled with crafts, art supplies and fabric.

This industry needs discount framing like a hole in the head, what it does need is a way to provide our customers with quality framing at a"decent" price that isn't preceived as too high end or too low end...and you know I'm still shocked when I see how much our products cost to produce custom picture frames.
Well back in the day,, prices were a lot lower and business was a lot easier to conduct.
The middle man sucks up my profit and my customer pays higher prices.
The market will bear only so much and time will tell as it already has in just how many framers go out of business.
 

Bob Doyle

SPFG, Supreme Picture Framing God
Paul, I have to agree with Bob, if we stick with the numbers then we can compare numbers. Beating each other up is just foolish and feelings will get hurt.

How much would you sell the listed Larson frame for? And if you could buy it from a knockoff manufacturer for 1/2 the LJ price would you recommend passing the discount to the customer or pocketing it?

Charging for moulding used is a good way to price, but what about the moulding that gets wasted? Do I pull a WalMart and demand a discount for the wood I waste from my distributors? Or would they just drop me?

For me to turn into a discount shop I would have to offer fewer moulding styles, so that I could buy boxes and not be sitting on excessive amounts of inventory. Then I would lose the customers I have that come here because I have too many samples. I am known for having choice by my customers. If I pare that down then I'll get day to day framing customers, and the big ticket items will go elsewhere because they will want "something special" for their good stuff. Then I've lost them as they will go to the "new" place for their day to day framing. Isn't that how your client base grows? My does. They come in here with a big item because their "regular framer" doesn't have .... and they were told to come to me by their friends if they wanted "something different".
 

alaskanframer

CGF II, Certified Grumble Framer Level 2
I do think a true discount framer can exist and make a good living.
But there must be various factors at work such as population.
They need to have enough population to justify the large quantities they carry, and the high turn over needed. A small town I believe this would be hard to do.
They need a low overhead, low rent, and low wages.
They will win on price but have to suffer on customer service and quality.
I would venture to say that the designs would be simplistic and average.
The workers you would hire are filling a job until the burger king was hiring.
I suppose this could be a 1-person faculty, or 2 people both with a stake in the store. Long hours low pay when all hours are factored
Strict inventory management would seem like a must.
I really think the stool principle applies.
1st leg quality
2nd leg real customer service (not Wal-Mart service)
3rd leg price
4th leg selection
Which type of stool are you
McDonalds is a good example very successful but focuses on the legs that make is stand
Quality is low to med low. You can find a better burger out there
Customer service med low
Price is very good 1.00 for a burger that’s hard to beat.
Selection med
Let look at say Red Robin
Quality is a lest couple of steps better then McDonalds (There of course is better food out there)
Customer Service Better then McDonalds, They come to your table bring food drinks etc.
Price higher than McDonalds
Selection is a lot better then McDonalds
Now do you think that red Robins could do it for the same price as McDonalds if so one or more legs would have to change?
So I think there is room out there for both in most mid to large markets. I do think that you will attract the customers that you want. If you are in to better quality design and knowledge then the low cost option may not work.
Just my humble opinion
 

Bob Doyle

SPFG, Supreme Picture Framing God
Wasn't it Ron that said "low price, good quality, fast turn-around. Pick any two!"

Like Alaskanframer I think if you wanted to be known for cheap framing you'd have to decide how many legs you need to be a stool.

And getting known as a cheap stool isn't a sound way to survive in a tight economy.
 
If we use the MSRP listed in Larson catalog (4.1X)the price should be $14.43 if bought in length, if bought chop the MSRP (2.8X) should be $15.93 and if you took the pricing class by arguably the leading expert in our industry it would be $18.07

I am interested in Bob's scenario. What would Michael's charge for this? Are they perceived to be lowest? What is standard mark-up for matts and glass...3 x's...4x's? Do they buy and stock box? I would imagine, they have their own warehouse/production and ship chops to local stores.
 
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Dermot.

In Corner
Heck, most of us have everyday prices that are very close to those being touted as 50%-off by the the AOSFs.
The question that needs to be answered if that is the case……..is “why aren’t you getting the customers”!!!!

If that question cannot be answered in a meaningful manner ……….you then suggestion that your potential customers are stupid………and I don’t think for the most part people that get things framed are stupid.

If your comparison advertising suggestion is such a sure fire thing why is it not used more..........I cannot imagine you are the first to think of that idea for framing…….

I have a feeling that you think advertising is the answer to what is I believe a marketing issue….

Again ………..if I have it wrong, I’m all ears and would love to learn …..
 

Jeff Rodier

SPFG, Supreme Picture Framing God
Wasn't it Ron that said "low price, good quality, fast turn-around. Pick any two!"

.
Why not all three. My typical turn time is 2 or 3 days. I make money when my saw is running. My moulding profit is between $2 and $5 per foot. I charge $5 cut and join on mouldings 3.5" and under. I get $15 cut and join charge over 3.5".

The only customers through my door for a quote that have not left the work to be framed are my competitors price shopping me. Only 3 times in 6 months.

When my customers come in to pick up they bring more work to be framed. I use about 500' of moulding per week for customer frames.

When my saw runs I make money.
 

Paul Cascio

SGF, Supreme Grumble Framer
I think Alaskan analyzed it pretty well -- it can be done. Woodwork Lover's question, "What would Michael's charge for this?" is what's market-relevant, not what Larson-Juhl prints in their price book.

My intent in starting this thread was to spur discussion,and to encourge people to consider, another business model -- one that's different from the common indie model, which for many of the retailers here is simply not working.

I think we all agree that the AOSF's aren't selling anything cheap. However, the public perception is that they are saving 50% over your prices. Unlike most industries that face competition, indie framers as a group have done little in the way of mounting a response.

Therefore, if your present method of operating is not working for you, why not consider calling the AOSF's bluff and show the public that you can not only beat their quality, but you can, and will, beat their price. And it doesn't have to be 25%. Heck, if you can simply show that your everyday low price on a comparable order is even 10% lower than the AOSF's 50%-off price, that makes the AOSF's "regular" price more than double your regular price. You have a right to say that too.

Customers are going to the AOSF's largely because they believe they are saving lots of money in comparison to your prices. If what you are doing now is not profitable, stand up and fight. Any framer can beat the AOSF's "50%-off price" every day on every order and still make a healthy profit.

Stop getting screwed by fake sales. The true test of a sale price is what happens to that price when the sale is over. We all know what happens...Nothing.

We, as a group, need to stop deluding ourselves and stop ignoring the market, and the perceptions of the public. They ain't buyin' your frames if they think they cost twice as much, because you will never convince them that they are twice as good. And even if you did, you won't convince most people that they need 'twice as good'.

Recognize that you can compete on price. And win. In fact, you already are competing on price everyday. You're just not winning. The AOSFs made it all ab out price and we did nothing about it. So why not win instead of lose? Turn the price competition into your advantage.

Materials costs and your buying power is an excuse and relatively insignificant when the markups are as high as they are in our industry. If marterials costs were such a bbig deal, not one framer would be buying chops. If some of you can choose to buy chops, then surely any advantage Michaels has in materials costs is substantially negated by its many layers of management and the demands of shareholders.

With all due respect to Jim Miller and others, raising prices to make up for lost customers is a short term solution to a long term problem. Yes, you made extra profit today, but how do you know that the sale you made today wasn't the last you'll ever make to that customer? Price matters to almost everyone, even most rich people. And value matters even more. No one want to learn that they paid more than their neighbor for a comparable item. That's why people always lie downward about how much they paid for their car.

Simply attaching a multiplier to your wholesale cost is foolhardy, and it sure doesn't require a seminar to provide obtain such enlightenment. If you lose your customer base and don't replenish it -- as imany ndie framers have done in the last 10 years -- eventually, you can't make up for it by using the X-key on your calculator. Eventually, you have to start going after the customers you've lost to the AOSFs.
 

gemini

CGF, Certified Grumble Framer
Paul, sometimes a business is a business. What works for one isn't going to work for another. If Jim is going after less jobs at a higher price, he'll be sucessful at it because he provides an excellent product and great customer service. Those are the 2 categories that drive sales for him. Your assertion that its temporary is short-sighted because you don't take into account that the customer is willing to pay the price that Jim asks for his services and more importantly, they come back because they trust him.
Assuming price is "king" will kill a business if they aren't set up that way.
 

Bob Carter

SPFG, Supreme Picture Framing God
Hey Paul-I really was serious. What would you charge for that mldg and how much would you discount it in your "other" model?

If it can be done, I would love to know what qualifies as a legitimate price and a legitimate discount. I am certain that a lot of indies could prosper from your shared wisdom with some real numbers

I'm not poking you in the nose, but really would love to see the difference
 

Paul Cascio

SGF, Supreme Grumble Framer
How much would I charge? Slightly less (say 10%) than my local AOSF competitors were charging. They are the ones who set the market and create the public's perception of what a fair price is for framing. It's simple economics and it's the same in virtually every industry.

We need to stop conceding customers to chain stores. We also need to stop being afraid to compete with them on price. It would be different if they were truly using their clout to lower prices to the consumer, but they aren't. They're pricing as we are, but misleading the consumer into believing they are discounted. This strategy pulls the rug from under them.

My feeling is that most indies have prices that are already at or near the AOSF "50%-off prices. Why charge just slightly more than the AOSFs and let customers think your prices are 50% higher, when by dropping your prices just a bit more, you can truthfully declare they are lower everyday than the AOSF's 50%-off sale price. You don't need to be a saavy copyrighter to turn that into a successful advertising campaign.

I am merely suggesting that indie framers ask themself, is what I am doing working? If it is, fine. If not, consider another strategy.
 

Kirstie

PFG, Picture Framing God
Bob, I just read back in the thread and see what you are asking for. No big deal: My price on that particular moulding would be $14. My discount would be for whatever this month's coupon special offers. That discount varies. But let's say it's 20%. So the price, to those who had the coupon would be $11.20

Simple. True discount, no inflation.

But what did I buy it for? That depends upon the quantity. My discount would be off list unless it was in the value line. But at $2.46 box it sure wouldn't be there.

$18 on that moulding would be out of the question, but I rely on volume and lower prices than some. And yes, I took the Goltz class.


BTW, retail on this site is $13.90 with 40% off offered, but then there is probably no labor involved, or very little.
http://www.thegallery.us/price/larson/index.htm
 

John@BEF

Grumbler in Training
Most of us I would venture to say are not in market positions to become true discounters. By that I mean there are not enough people living around us who will purchase custom framing to sustain a low margin, high volume, narrow assortment (frames, mats) business and be profitable. The discount business model works best when demand is broad based and the market perceives that the good or service offered is a commodity (quality is identical or very similar) and can be easily purchased at a variety of sources. That we're in the custom business negates a lot of what is required to sustain a successful discount operation, as well as the fact that there just isn't the broad market demand for our service (7% of households custom frame according to the last PPFA survey). Having said all that, it certainly makes sense within our individual shops to offer a "value line" or something "off-price" to satisfy that portion of your customer base looking for it. But as all this relates to Paul's original question, I don't think that true discounting (15%+ below general market pricing) is a viable model for the vast majority of small independants.
 

Bob Doyle

SPFG, Supreme Picture Framing God
How much would I charge? Slightly less (say 10%) than my local AOSF competitors were charging. They are the ones who set the market and create the public's perception of what a fair price is for framing. It's simple economics and it's the same in virtually every industry.
.

Paul that is skirting the issue. And isn't really an answer. It's also not a business decision so much as a reaction to their prices.

Besides as you already stated many of us are already below their 50% prices. So if I read between the lines, and play devil's advocate, you are implying that I should double my prices and lop off 10%! Then I can claim to be a discounter. That's the kind of discounting I want to promote!

But seriously, I don't have the backing, the multiple other stores that M's has so I can't afford to lose money in one town in order to be seen as cheaper than the other guy. A loss leader for me would be a real money loser.

I keep harping on the fact that I had a competitor that based his pricing on being lower than me. He had two stores, so he could lose money in my town as the other town was bigger and allowed him to justify losing money here. He doesn't do framing in my town anymore. When his building lease ran out he left town. He stated that he lost too much money at framing. But then again he also used 4 year old pricing charts. That probably hurt him more than trying to undercut me! And definitely hurt him in Portland as well!
 

Warren Tucker

MGF, Master Grumble Framer
This thread is just amazing. For starters I can’t believe how Jeff Rodier is being ignored. I guess most of you don’t want to hear what he has to say, and if I were most of you, I probably wouldn’t either. Jeff blew out of the water that stupid aphorism, and it is stupid, about a customer having to pick any “any two” . How can the notion that customers have to sacrifice one of either cost, quality or speed be accepted as easily as it has been here when Jeff clearly says it doesn’t and offers his business to demonstrate the point. Mine, too.
Get this, most picture framing retail outlets are inefficient and their prices reflect this inefficiency. The moulding that Bob mentioned at $2.46/ft. box price should be sold for, at most, $9.00/ ft. The box price is the lowest wholesale price, and that’s the price an efficient operator would pay. BTW, we, and I assume Jeff although I don’t know him, will never pay more than the $2.50/ft price for that moulding if we stocked it. Jay, whoever he is, (I see Bob thinks he’s and industry leader, heaven help the industry, then, and it does look like it could use some help) teaches in his class that the moulding needs to sell for $18 must be kidding himself or his students. Pay close attention to this, It’s worth, at most $9.00/ft (I’d be willing to sell it for $8)retail. How is retail worth determined? Simple, it’s the lowest cost an efficient retailer can sell a product for and still make enough to run his business profitably, and that’s $9.00. Bob wants to sell this moulding for $15/ft. Maybe that’s why he’s currently disenchanted with the direction of his business. I sure as heck would if I tried that.
The only reason shops can get away with selling this moulding for more than $9.00/ft is there is no efficient competitor on the scene. Paul really should have asked what would happen if a large efficient competitor entered the market. Fortunately for most, framing is such a small segment of the economy that efficient marketers are concentrating elsewhere. But, even more important, how many people do you all think can afford , or perhaps, would, $18/ ft moulding. I have very few customers who could and it’s hard to make a good living on a few.
We’ve never advertised ourselves as “discount framers” and I doubt if our customers think of the Frame Works that way, maybe, the Frame Outlet because of its name. We have always wanted to offer our customers the best prices and the only way to that has been to buy efficiently and pass the savings.
That our web site isn’t working, and I didn’t even know it, should say something about our marketing capabilities. We really don’t make any effort. And we’re still doing very well. That’s because we offer *real* value, not perceived. Customers aren’t stupid. They act rationally on the whole.
I suspect there are a lot of Jeffs out there, just not on the Grumble which suggests that being a Warren isn’t all that hard or that Warrens are not unique. Jeff says he sells 500ft. of moulding a week and that doesn’t rate a comment here. He's only about 60 miles south of me, btw.
Let me repeat again my understanding of what determines a realistic retail price: it’s what an efficient retailer can sell something for and make a profit. That assumes, of course, an efficient market, and what we’re seeing today is an ineluctable trend to more and more efficient markets. Think of how Ebay has made markets efficient. If you want to know the market price of say, a used Rolex Oyster Perpetual Day Date watch, you can find it on Ebay. The internet is making markets for just about all consumer goods. And by “making markets”, I mean establishing what an efficient seller can sell for. Eventually, framing is going to become more efficient as more efficient players enter and I want to be one of them. The notion that we can sell a product whose wholesale price is $2.50 for $18 is not sustainable and only exists where markets have been distorted and distortions don’t last forever.
The great thing about framing, if I understand the market, is that big box retailers can’t be any more efficient than small operators as the Jeffs and Warrens are. The big box model of a central location supplying satellite retail outlets is very similar to the way chops are sold today and isn’t efficient which might explain why their prices are high.

End of rant.
 

Bob Doyle

SPFG, Supreme Picture Framing God
Warren good point, but I'm not actually ducking Jeff's comments. They are valid, but my business model, I think, is different than his. I'm a one person shop and have no where near the volume he has. So if I were to make his weekly profit I have to charge more than he does. As it is I am sure I charge more than he does, and I am sure that I am not making what he makes! If I dropped my prices to increase volume I fear that I may saturate my market and be back in the same boat that I am in now.
 

Jerry Ervin

PFG, Picture Framing God
I always enjoy hearing the views of other business people. It seems like to many, either you gross a Million per year and have 10 employees or you are a failure.

Once upon a time, I had two stores and 5 employees. I way more than doubled the gross figure I do today. Funny thing is, I put more money in my pocket now than I did then.

There is no one answer.

If you want to see a real discount operation go to Hobby Lobby. They sell Crescent paper matboard for $3.75 a sheet to anybody that walks in.
 

DTWDSM

SGF, Supreme Grumble Framer
Warren,

You make some good points but I hope you realize that your business model would work for very few here. Quite frankly, and I mean no offese to anyone here, most do not have the money and or knowledge to do what you do. From what I understand, you run one heck of an impressive operation and I would love to see it some day. You also knwo that it would take a lot of money for anyone to change from what they are doing to stocking 100+ mouldings by the box and most would never recoop that investment even with the increased profit.

As for pricing moulding, I think that what you pay for it should have some input as to the retail price but the customer's perceived value and the actual market should play more into the retail price. I know that I am an exception to the norm but I also sell over 500ft a week and yet my pricing is higher than Jeff's and I would bet I have just as good or better pricing for some of the same vendors.

I think that we all can learn from what you say and I agree that we are not as efficient as we can be. You have got the efficientcy down to an art and I am sure you are still striving to become even better. The fact of the matter here is that a majority of the people in our industry just do not have the resources that would be needed to do what you do.
 

Paul Cascio

SGF, Supreme Grumble Framer
Paul that is skirting the issue. And isn't really an answer. It's also not a business decision so much as a reaction to their prices.

Besides as you already stated many of us are already below their 50% prices. So if I read between the lines, and play devil's advocate, you are implying that I should double my prices and lop off 10%! Then I can claim to be a discounter. That's the kind of discounting I want to promote!

..
I realize it would seem hat I skirted the question, but really Bob, how much I would charge for a particular moulding is a totally useless piece of info. Maybe I price my frames low but charge a labor charge, or high prices for mounting and glass. Better to compare a complete framing order than simply one piece of it.

However, what I was really saying is that I would use more than a calculator -- even if it was a Casio :) -- to determine the price I would charge.
 

Jeff Rodier

SPFG, Supreme Picture Framing God
You don't have to buy full boxes to get the deals. Deals are everywhere.

Example: Sales rep comes in for me to order five boxes of black (250' to 600' per box) which totaled $1200 including freight 2000' total. Because I buy decent quatities he offered some items that others pay as much as $10/ft. It took some negotiations but I recieved that order of 3500' and including freight it cost $972.

I've only been open here for 6 months and am a one man shop plus my fiance who has no experience. My opening order was 11,000' for less than $6000. I order quantities of as little as 80' per profile. Only bought about 10 full boxes and the rest in smaller quantities.

As far as those who say my town is too small I say go to dept. store, BB, Wally World and count how many frames they have and think about selling everyone of those out of your moulding at $2-$5 a foot profit plus a cut and join charge.

Now start asking your customers where they buy their cheap frames. Every one of your customers buy that junk. Now imagine being able to custom frame those pieces inexpensively (16X20 for $35) and multiply that by the thousands of frames your customers buy elsewhere.

I advertise NO PLASTIC!!!!! NO JUNK!!!! AND MY CUSTOMERS LOVE HOW BOLD THAT STATEMENT IS.

Now imagine I come to your town and do the same thing in the building next to you.
 

Jeff Rodier

SPFG, Supreme Picture Framing God
Also for those who say space is an issue, I beg to differ with that statement. My store is 600 square feet. My warehouse is 600 square feet. I also print 100% my photos on my Epson 9800 and 4800. Just like printing money.

When the saw is running I make money.
 

Warren Tucker

MGF, Master Grumble Framer
Tim, you may be charging more for the same mouilding that Jeff is but that's only possible (assuming rational customers) because your market is far from perfect: either there are no Jeffs competing with you or your customers aren't aware of them. That could be a temporary distortion. Historically, when distorations like that occure someone will enter the market because it's attractive and then competition will drive prices to competive levels or drive inefficient operators out of business. That, alone, is a good reason to try to be as efficient as possible. So far that hasn't been necessary accross the board but that situation may be changing and will change as soon as someone figures out how to deliver custom framing over the internet. Just a few more advances, consistent color being one, and we'll be there. Also, the changing job market may make being a very small business owner attractive to a lot more people who will adopt competitive practices.

As to the expense associated with a highly efficient business, Jeff seems to have found a way to swing it.

Bob, you'll have to limit your offerings to mouoldings and frames that can't be easily purchased efficiently, ie, by the box or at box prices. These tend to be expensive and very high end but that's a very limited market. There's a lot more chance of success in the middle to low end of the market. Unless every sale is an expensive one, I just can't see how a one man shop is going to generate enough revenue to make the effort worthwhile. What happens when two or more customers come in at once?That happens here all the time. In fact, it's rare to only have one customer in our stores at a time. You certainly wouldn't be able to spend much time with each one, the amount of time high end customers might demand.

I think Jeff is proof that my model isn't particularly difficult to emulate.

We've already cut 200 ft. of moulding today and that's so far. The demand is out there as Jeff and I and others have found with competitive prices.
 

Bob Carter

SPFG, Supreme Picture Framing God
I love this thread

There are two "ineluctable" (great word, Warren) points

First, it points out the tremendous inefficiencies in our industry. If you cannot buy well, you cannot sell well

Second, we are all a little lazy and allow our POS (or calculator) establish our prices. Even Warren is guilty of that, too

But, what this does, I hope is point out that there are many ways to run a biz; any biz. The word "discount" is bantered around to the point that it has lost any meaning.

Paul, I think you really do need to establish a retailprice for the mldg. For no other reason to point out how silly it is to determine if the other guys price is "illegitimate"; as if it is a reason to build a crutch for why we are doing as well as we wish. Suppose we take the highest posted price of $20 and the lowest, $8.

Which is "real" and why can't I say that the retail price is $20? And that I will sell it for $8

I really want to know what is a "real" discount and what is an "illegitimate" price

I am sure to every wholesale framer in the country, Warren's prices are "inflated"
 

Jeff Rodier

SPFG, Supreme Picture Framing God
Now I have to run over to the warehouse to cut 94' of moulding for orders dropped off yesterday. Be back in 2 or 3 hours to pop the art into the frames.

Listen to the $ound of my $aw
 

Paul Cascio

SGF, Supreme Grumble Framer
I disagree that if you cannot buy well, you cannot sell well. Not when your cost of materials is only 20% - 25%. Buying well is something. Selling well is everything.

I would rephrase that to say that if you can't sell well, it matters little how much you pay for your materials, you'll still fail.

In reality, if you are good at selling, you've probably already sold your supplier on the idea of selling to you at a good price. And, you're parobably able to your bills on time, thus making you even more attractive to your supplier.

Bob, I would have a retail price, but my marketing strategy would be to directly compete with the AOSF. My pricing would be an important element in that so it would require a lot of market research. I do know this, I can beat every AOSF sale price by a substantial margin (if I need to) and still make profit. My strength is advertising and marketing. Others have different strengths that they would tend to rely on.
 

Bob Carter

SPFG, Supreme Picture Framing God
Hey Paul-You love to parse the individual word while missing the entire sentence. I am not talking about bad salesmanship, but creating a selling advantage from a buying advantage.

I've been preaching it for years; even used to do it.

Warren might be the best example of it

I do not doubt for one minute that you could sell anything to anyone better than I. But if I have a better proposition, then perhaps, I can level the field with that advantage.

I have been chasing the wrong tail on the wrong dog

I always felt the evil empire was that BB across the street (well, I still do) but the easier competitor to beat might easily be Sally down the street. No offense, Sally
 

Paul Cascio

SGF, Supreme Grumble Framer
Nothing personal Bob, I simply disagree with your small-minded theories that you can win based on supply-side strategies and beating little Sally. These things result in little net gain. It's this type of thinking that has helped put independent retailers in straits.

Little Sally is not taking the food off your table. Beating her distant and wealthy cousins, Jo-Ann and Mikey is the only way to expand your sales base and capture first time customers.

Our industry has been getting years of bad advice from people like Goltz, while ignoring the real problem -- large competitors. You can't solve these problems simply by raising prices, negotiating with suppliers, and chanting, "They're only bottom fishing. Their customers will come to us when they have something nice to frame."

Our trade magazines and the PPFA has failed our industry by burying their heads in the sand.

It's disingenuous to be telling people who are trusting you that they should "raise prices" and "buy better" if at the same time you've got a sign in your doorway, and in your advertising that reads "Half-Price Sale."
 
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