[amayausers] Re: Input on pricing needed
- From: "Rod or Sharon" <springer37@xxxxxxxxxxxx>
- To: <amayausers@xxxxxxxxxxxxx>
- Date: Mon, 6 Feb 2006 13:03:15 -0700
LuAnn,
Here is a copy and paste from "Mike" on the Eline group that may shed some
light on your question.
Rod
**************************************************
As a MOE, Husband, Father (of Twins), Uncle, Boss-- and lots of other names
I usually lurk on this list-- and don't post much. The aspect of pricing
and profitability is very important.
It frustrates me that there are people on this list that consider it good if
they make $10.00 to $15.00 an hour because it's more than they would make at
Wal-Mart as a cashier. Embroidery is slowly becoming a commodity product and
customers are looking at price and not realizing the quality aspect that is
necessary. The only people we can blame is ourselves.
I started off as a screen printer and had a local lady who worked out of her
house doing our personalization embroidery. We eventually purchased our own
machine and we have added machines ever since. We now have five SWF machines
and one old Meistergram we hardly use. All along we have had to look at the
profitability of all aspects of our embroidery operations. While we have
paid cash for all of the machines, we still factor in on our books a
replacement cost equal to what a lease payment might be to assist in
calculating our overhead and hourly cost. We pay our head embroidery
operator $15.00 an hour, plus our full benefits package, vacation and bonus.
We track our hourly shop cost and our production. There are some jobs that
we take in and actually when we calculate everything, just break even. The
next time we make a note to increase the prices we charge.
We offer first name personalization on the garments we sell for $6.00 for
the first word, and $3.00 for the second word. If we need to re hoop, we
charge again. Every time we hoop, it's a minimum of $6.00. We are checking
our logs and will increase this to $7.50 at the end of the spring semester
(we work with a lot of schools and school related groups).
When you look at your prices, you need to not be afraid to raise prices as a
way of balancing your production. You might loose a few price shoppers, but
they are never the profitable customers. They are the ones that bring in
their wal-mart shirts and want Nordstrom's (or Bloomingdales if you're east
coast) quality. They take more time to decide what they want and if I am
paying an employee to listen to the hues of blue, we want to recover some of
that in the cash register. If you bring in an outside garment, it's an extra
$4.99. Some people balk, but they are usually the unprofitable customers
anyway.
I don't think it really matters if your shirt buttons left or right (men vs.
women <grin) It matters that you consider the costs and charge accordingly.
Some men don't charge enough either!
I have 38 employees ranging from full to part time and in November and
December our embroidery operators logged an average of 20 hours a week in
overtime. (Voluntarily) We were busy. With challenges in our production
there were some jobs that just did not make money. I can't tell you if
everything we processes was profitable, when you factor in everything. Some
jobs were hand over fist profitable. The key is knowing what your costs are
and pricing in line. We also had our standard 7 day delivery time. If a
customer wanted a rush, it was $5.00/$10.00 or $15.00 extra. The retail
girls had flexibility with this charge, but it covered the additional
overtime we had to spend to rush the orders.
Wow, this was a long post. Watch your pennies and they will turn into
dollars. Keeping track of your costs will let you justify your price
increases to yourself. If not, sell your machine and work at wal-mart and do
us all a favor. If we all keep our costs in line with profitability, we will
see other companies who take our price list and drop off a percentage,
slowly going up in price.... to everyone's benefit!
Oh, if you're really serious about embroidery and have a store front,
consider joining Monograms America. It's a trade group that really has done
wonders for our business. www.MonogramsAmerica.com
Mike
----- Original Message -----
From: image embriodery
To: amayausers@xxxxxxxxxxxxx
Sent: Monday, February 06, 2006 12:36 PM
Subject: [amayausers] Input on pricing needed
Hello all,
Quick question. What do you charge to add a name to a customer provided item.
(flats)
Nothing fancy, just left chest/right chest, standard size?
Lately customers are giving me the impression I prices are too high. I am
competetive with this area.
Just curious what others are charging.
Thank you in advance for your time!
LuAnn @ Image Embroidery
Because Your "Image" Matters
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