Sign Pricing Series- Commercial Screen Print Pricing
SignIndustry.com - The Online Magazine for the Sign Trade.
Home | Site Map | Buyer's Guide Search  
Event Calendar Article Archive Message Boards Classifieds Product Showcases News Advertise Search Join Now

CATEGORIES
  3-D Signs
  ADA
  Architectural
  Awnings &
  Flexible Face
  Banners
  Business Development
  CNC Routing
  Computer Technology
  Digital Imaging
  Dynamic Digital
  Electric
  Estimating
  Finishing & Lams 
  Flatbed UV
  Garment Decoration
  Installation
  LED Displays
  LED Lighting
  Neon & LED
  Channel Letter
  Outdoor
  Painted Signs
  Screen Printing
   Articles
   Product
   Showcase
   Message Board
   Tips & Tricks
  Sublimation
  Vinyl Signs
  Hot Shots
  Press Releases
  Tips & Tricks
  Industry Resources
  Books
  Event Calendar
  Associations
  Business Center
  Retail Sign Shops
  Advertising Info

Supply 55 BannerPRO, EcoPRO continuous ink supply system, guardian laminators, quickmount


Sign Pricing Series - Commercial Screen Print Pricing

In the last article, I touched on the two common approaches towards digital pricing: area based and machine based. The approach used depended primarily on the size of the company and the cost of the equipment.

By Scott St.Cyr

This article will focus on the pricing methods commonly used by commercial screen printers. Like their digital brethren, commercial screen printers typically use two fundamental approaches to pricing depending on their size. The two methods are pricing tables and time-and-materials.

Clarke Systems Architectural Signage Systems Wayfinding ADA

Check It Out!

  • Screen Printing Articles
  • Industry Alert
  • Hot Shots Photo Gallery
  • Message Boards

    Visit Our Advertisers:

  • 3M Commercial Graphics
  • CADlink Technology
  • Clarke Systems
  • Estimate Software
  • International Sign Assoc.
  • JetUSA
  • Matrix Payment Systems
  • SGIA Specialty Graphics Imaging Assoc
  • Supply 55, Inc.


  • Note: For brevity, from this point on I will use the term "screen printer" to refer to commercial screen printers. Textile screen printers normally use a different approach than we will cover in this article.


    Question: What is the most common pricing technique used in commercial screen print pricing?

    Answer: The most common technique for screen printers, especially smaller printers, is to generate a table of prices (price sheet) for customers and prospects. Everyone is familiar with these, but let's look carefully at a typical price sheet.

    The standard pricing table is very efficient to use for standard sizes and the default options. It also clearly conveys to the person what the additional costs are associated with different options (like additional colors).


    At times, however, the advantages of the pricing table are also disadvantages. If the user needs a different quantity, it isn't clear what the price should be. Normally stores will charge the next lower size price, so a customer ordering 75 12"x18" would pay $3.95 each, the price for 50. However, an astute customer (or salesperson) will notice that total price of ordering 100 is actually less than ordering 75, so you'll get a larger order but make less money on it. These pricing curve distortions are a result of having artificial breakpoints in the pricing. Good software can help you smooth this out (by calculating the values between these numbers), but most people using pricing tables simply decide to accept this limitation and move on.

    Adding charges for additional colors, additional sides, and similar options is conceptually easy with table pricing. Unfortunately it does require some manual calculation or, as many people do, you need to provide lots of versions of price sheets with different numbers of colors, sides, etc.

    Another advantage of table pricing is how easily it adjusts for market fluctuations. If you find your pricing is too high on one size or quantity, it is easy to change that one price. By gathering the price sheets of all your competitors once a year [strongly recommended], it is easy to see where you are competitive and where you are not. Then, once you have decided where you want to be competitive, you can adjust your pricing up or down. A warning however: Because the pricing is not tied to your costs in anyway, there is no direct way for you to know that you are making money at any particular price and quantity. This is the main reason that most printers move away from strict table pricing as orders get larger and mistakes more expensive.

    ----> Continued Below ---

    Clarke Systems Architectural Signage Systems Wayfinding ADA

    Question: What is the most common pricing technique used by larger commercial screen printers?

    Answer: The majority of larger screen printers price using time-and-materials. The level of detail of the costs varies with the size of the order and sophistication of the printer. Typical components included in the pricing calculation are:

    The difference in these approaches are more in the level of detail than the fundamental approach. In the simple model, pricing is dependent on the materials and printing time. Other charges, such as the make-ready (a.k.a. setup) for screens, have to be covered in the Multiplier. Correspondingly, the simply model will use the highest multiplier of all the methods, between three and six times the costs.

    The detailed model attempts to capture all of the variables and breaks them down into make-ready (setup) and run-rates. To accomplish this usually requires good software, or very good Excel skills. Either of these two can make this process manageable, once you have spent the time to get the data. (How fast does that specific machine actually run?) Because most of the costs are identified, a lower multiplier in the range of 1.5 - 2.5 is normally used. In practice, different multipliers are often used for materials, labor, and equipment, but that is beyond the scope of this article.

    Obviously these models are just three points on a continuous spectrum which asks, "How detailed do you want to be?" Most printers operate somewhere between these two extremes because of the challenges of quickly and accurately getting to the price. Correspondingly, the average printer usually operates with a multiplier in the range of two to five and works with a detail level between those extremes.

    The advantage of the time-and-materials approach is that it provides much greater assuredness that you are going to make money, or at least not loose your shirt, on a particular job. This single fact is of great comfort to most owners and managers I know. But unless you are running a fully automated pricing system, there are some disadvantages as well. First and foremost, time. It takes time (and therefore costs money) to price each job. Second, it takes skill. The person estimating needs to know what the values to use are. (How much make-ready is there for a screen?) Third, you can't mail your pricing to your customers. This alone may mean you have to develop some pricing tables, even if you use time-and-materials to fill in the prices.


    Question: What about Overhead?

    Answer: Overhead is most commonly built into the multiplier(s), but can also be factored in afterwards (usually as a percentage Multiplier on the whole job). It may be added to labor multipliers, equipment multipliers, material multipliers, or some combination of the three. How to apply your overhead is both a philosophical and mathematical challenge. To calculate overhead you have to assume certain sales volumes, hours of operation, etc. However, winning or loosing jobs can affect these very assumptions that go into overhead. My last article in this series will touch more on overhead.


    Question: What's next?

    Answer: In the next article, we'll cover some of the basic approaches we encounter in Electric Sign pricing. If you have a question before then you can contact me at pricingquestions@cyrious.net.

    About the Author: Scott St.Cyr is the C.E.O. of Cyrious Software, Inc., a software company that specializes in pricing and business management software for the sign and graphics industries. He formerly owned 5 sign companies with Vinyl, Electric, Screen Printing, and Digital Printing departments. He holds a BS in Electrical Engineering from the University of Louisiana and an MBA from Harvard University.

    Company
    Home
    Advertising Info
    About Us
    Contact Us
    Privacy Policy
    Site Map
    Resources
    Industry Resources
    Associations
    Retail Sign Shops
    Books
    Product Showcase
    Event Calendar
    Tips & Tricks
    Message Boards
    Classifieds
    Buyer's Guide Listings
    Search
    Add My Company
    Edit My Company

     

    Copyright 1999-2017, All Rights Reserved.