What is your markup?

[helpinghand 1]

I know what my costs are but I have no clue on what standard markup is. Can you give me what you use so I have an idea of what is going on in the industry? Is it 3 times cost, 5 times or? Any help is greatly appreciated. I'm also going to make a couple calls today to the other local vinyl places to try to get a feel for what they're charging but not sure that'll give me much since I can't just come out and say "what are you charging for mark up?" lol

[tlzimmerman 11]

Personally I do not markup based on materials, I quote my jobs based on time.  The key is to know what your materials cost, then know roughly how long its going to take you,figure out your hourly that you wanna make (I try to shoot for 20-30 depending on the job, sometimes I make 10, sometimes I make 50). 

[helpinghand 1]

well I'm really stumped as I don't have know how on how long it will take me since I'm pretty new in the vinyl industry. Any starting tips?

[midwaste 4]

Download a trial copy of Esti-mate.  Put in the prices that you pay for vinyl and estimate the time it takes to do certain things (this all happens in esti-mate setup).  What I do is then call a few local places and adjust the Market Level slider in Esti-mate to match their prices.  Then I dial it back down to somewhere below that.

Markup for supplies is typically 100-200%.  The markup is the easy part, figuring out the labor, estimating how long it will take, and then deciding how much you want to charge for an hourly shop rate is the tough part.  Assuming you are working in your house/garage, you don't have to factor in as much overhead, but the proper way to do it is to add all that up (electricity, depreciation of equipment, etc) and then add the labor rate to get a standard shop hourly rate.  You can then add whatever profit margin you feel after that.  I shoot for $50/hour profit/labor.

[helpinghand 1]

ok so what i'm getting here is I need to figure out a $$ per hr I want to make for my work. Whenever I talk to someone looking for a quote I have to figure in my head roughly how long it will take to cut and weed and tape (for the RTA vinyl stuff) and throw them a price for it. You don't even figure in your cost?

  Here's what's going on. I had a fella call me to get a quote on some RTA vinyl 2 colors 5" high by 40" long. would be qty of 6, I have no clue on how to figure this for him.

  By what you guys say, it should only take me a couple min apiece(guessing here) So say if I figured 5 min each times 6 would be 1/2 hr. If I set my hrly rate at $45 that would make it so I should charge $22.50?? I know he said he got another quote for about $40.00. So mine would be wayyy cheaper. Can anyone figure out what I'm looking at wrong here?

[tlzimmerman 11]

Materials for that job is under $10 by my calculations, so while they are important to figure time is more important to me.  You will learn what takes you awhile, and what is easy.  Its perceived value for the customer as well, you can get more for larger decals in most instances because they feel like they should pay more, but in reality many times the larger decals take almost the same amount of time as the small ones.  This is why I base things mostly of of hourly, but because of customer perception my hourly rate on larger decals is always greater than on smaller decals.

For that set I would shoot for $17 a decal, figure $2 in materials per decal (its actually far less than that, but I always overshoot) that leaves $15 dollars in profit for each decal, and I figured an hour and a half to do all of them.  I am much higher than you or your competitor I guess, but thats kinda the going rate around here.

[midwaste 4]

I markup all materials 100%, sometimes 150-200% based on the perceived value tlzimmerman mentioned (specialty vinyls, etc).  Then add in your time/profit.

Locally, the decals you mentioned would probably be about $20-22.  I would probably do them for around 17, same as tlz.

[tlzimmerman 11]

I guess to me there are 2 ways you can do pricing, you can either do a formula or program based pricing, where you input parameters and it spits out a price, or you can do like me and be flexible and estimate.  I think it works better with different people....me I have no problem with making a decision and sticking with it, so it goes well with my personality being able to look at a job, see the size, estimate what it will take me in time, and shoot out a price that will make me money and most of the time come in just under my competitors.  Others who don't like that process or decision making or stress over what to charge all the time may be better with the more rigid solutions. 

Pricing like I do has a knack to it I guess, but the longer I do it the closer I am getting to pretty much knowing exactly how long it will take me to produce the decals, and the closer I am to that all the time, the more competitive I can be.  It also allows me the flexibility if I am slow of bidding a bigger job lower to get some business going.  I know working for $5 or $10 an hour if I have to is alot better than sitting there twittling my thumbs.  The core of what I really like about estimating my pricing is the idea that my work is only worth what someone is willing to pay for it, so its nice just to be able to figure it on the fly and adjust as needed.

[HeroShirtShcak 0]

I was once in the same boat so I bought a sign quote spread sheet. It really helped. There are pricing guides available as well. But the best tool that I have found is research. What is the competition charging for the same thing. Don't compare your prices to someone else who is just geting started.

If the competition isnt making enough money to pay the rent then they will be gone soon enough. I have a competitiors who are not paying their bills. Right now they have alot of the business it wont last.