Why It’s Not Always The Best Idea To Display Pricing To Customers
This is an excerpt from the new ebook we will be publishing later in the year about starting a screen printing business. If you like this post about using pricing sheets, be on the lookout for more business related posts coming up in the next few months!
There are a couple of different methods currently being used by screen printing shops to answer the question: “How much do you charge for screen printing?” Some shops calculate each job individually as it comes in, specifically calculating each order to maximize profitability. And some shops choose to display pre-set pricing. Usually in the form of a price sheet or pricing guide.
In order to generate a price sheet, first, you’ll have to calculate how much you need to charge per shirt to make a profit. There’s a lot of math that goes into this, and you’ll have to have some numbers handy (overhead cost per month, average shirt orders per month) to come up with an accurate number. But, using this screen printing profit calculator, you can calculate how much you need to charge your customers for each specific job and still make a profit.
Once you figure out that equation, you’ll be much more prepared to answer the question at hand: “How much do you charge for screen printing?” But there’s still the matter of how to advertise and present that answer to your customers.
Do you calculate the price per order, or do you display a price sheet?
There are pros and cons to listing a price sheet. Here are my general thoughts on displaying pricing guides and price sheets in your shop.
Unless you are strict contract printer bidding for the lowest cost, I would highly recommend not using a published pricing list. That doesn’t mean you can’t develop an internal price list, but, publishing that list online, in a catalog, or in your store is an invitation for one of the following:
Falling To The Competition
How easy is it to undercut your prices and win a bid or a customer over on price if your competition knows exactly what your are charging? Easy. Publishing a price sheet sets you up for this.
“Well, XYZ Printing prints a one-color front for 200 shirts for $1 + cost of shirt, we will save your organization 15% and charge only $.85 per print.” – Your competitor.
Don’t be XYZ Printing.
Loss In Profit
Every shop, every job, and every customer is different. Publishing a pricelist or using an industry guide can’t possibly take into consideration all of the variables that a screen printer will face. A six-color job with front and back print does not take the same amount of resources and time as a single color one sized print on a light garment. You’re going to need to charge a lot more for one of those than the other.
Using a profit calculator for each job’s variables will ensure that you aren’t cutting yourself short (or accidentally paying to print the job).
Here are some of the variables that either add profit or take away from the profitability of a screen printing job:
- What kind of equipment you use.
- How fast you can print per hour.
- How many colors you can print.
- How long it takes you to setup a job.
- How long it takes you to pull down a job.
- How you make your screens.
- How long your screens last.
- What type of ink you use.
- What type of shirt you print on.
- What color shirt you print on.
- How hot it is in your shop.
- How many flashes you use between colors.
- How engaged your team is.
- How much you pay for utilities.
- How often your press goes down.
- How many colors in the job.
- How good the art is.
- How easy our customer is to work with.
- How many changes there are.
- How long it takes the customer to proof the job.
- If you are shipping the product, delivering it, or the is customer picking it up.
- How long your lead time is.
And this still just scratches the surface. Because every job and every customer and every shop has different variables affecting it, adopting a pricelist that publicly locks in your pricing may not be the best idea.
Are you too low, or are you too high? If you have a published price list, and you do not know how your customer perceives your pricing, maybe you could have charged more for a job because the customer had a budget of $12 a shirt in mind, but you list it at $4 a shirt. Or, maybe you lost a job because a non-profit that was shopping for a good deal on a limited budget could only afford $3.50. On both jobs, if you didn’t have the price list published you could have made more money on one and won the other one.
Personally, I think a screen printing shop should advertise what your niche is and focus less on what it costs. Want to make sure you stand out? Don’t do it based on price.
On your website: show off all the awesome jobs you’ve printed and the big clients you have printed for.
In your store: go around and get your competitions work and place it side by side in a rack against your work.
Make sure that your customers can see and feel what you do, and identify what makes you different.
Now, this is just my stance on a published price lists. We have a lot of customers who use price lists very effectively and have always grown their business from price lists. They work for some people, and that’s great.
Do you use a price sheet or calculate each job’s cost individually? Let us know in the comments.
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