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Pricing Mats in Lifesaver

Discussion in 'Software, Computers, CMC's Techie Stuff' started by bruce papier, Oct 19, 2018.

  1. bruce papier

    bruce papier MGF, Master Grumble Framer

    I think we're missing something. We are trying to set up mat prices in Lifesaver. It seems to be set up to use the formula cost of material X markup = price. We use more (material x markup) + labor= price where labor does not increase at the same rate as the amount of material used. For example- if we were cutting a 16 x 20 out of a $10 matboard with a 2.5x markup plus $5 labor we get $11.25 retail. To get that same price using the Lifesaver method (as I understand it) you need a 4.5x markup on the material. Now suppose you have a 32 x 40 mat using the full sheet. Our price would be $25 for the material + $7.50 for labor (because it doesn't take much more labor to cut the larger size)= $32.50. Using their formula, the price is $10 x 4.5 = $45.00. That's nearly 40% higher all because it doesn't take 4x the labor to cut the 32 x 40. The difference becomes more exaggerated as you use more expensive matboard.

    Where are we going wrong? How do you fix this?
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  2. framah

    framah PFG, Picture Framing God

    Charge more. Hint.. your pricing is too low to begin with.

    I also think you are messing it all up trying to add a labor charge to cut the mat.
    AaronF, Joe B and DarthFramer like this.
  3. bruce papier

    bruce papier MGF, Master Grumble Framer

    I think you kinda have to. Otherwise, your small mats are too cheap and your large mats are too expensive. I don't think anyone (and I could be wrong here) charges 16 times as much for a 32 x 40 as they do for an 8 x 10.
  4. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    There is no simple formula for pricing all of the variations for mat pricing in a computer. I use a united inch look up table that decreases as the number gets larger, with a bump up if a 40x60 is triggered. The multiplier is based on the mat type, alpha, rag, fabric, etc. (could be the wholesale if I wanted to bother with tracking). The under/over averages out OK for me.

    (The look up table is a slightly refined version of one published by LJ some tears ago in their price list.)
  5. framah

    framah PFG, Picture Framing God

    My 8x10 would be around $15 and my 32x40 would be around $58.... alot more if the mat cost me more, like a suede would be double at least.
  6. bruce papier

    bruce papier MGF, Master Grumble Framer

    I agree with you Pat. Our problem is (as far as we can tell) Lifesaver has one table for markup on mats. All mats that cost between A and B per sheet are marked up by X, all between C and D are marked up by Y, etc. There is no roll off on the markup according to size.
  7. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    Great question concerning pricing of mats.

    One problem with pricing smaller mats with some POS systems is that you can accidentally sell below your cost. Price out a 5x7 in your pos and see what happens.

    In the example that Pat gave $10 mat cost / $15.00 retail 8x10.....so your COM is 67%. But at least she is selling above her cost, but $5.00 gross profit probably does NOT cover the cost of ordering the mat, the cost of receiving the mat, the cost of matching the mat to the order, the cost of inspecting the mat before cutting, then the cost of cutting the mat, and then putting the unused part back into inventory.

    If all you sold were 8 x 10's and all were different colored mats, and you sold all for $5.00 gross profit, you would be hard pressed to make much money at the end of the day.

    So consider include some minimum size price , eg 13 x 16 or 16 x 20. Most POS systems have a method, but sometimes it is difficult to figure it out.

    The argument is that you make your money when you sell the offcuts [part of the mat you did not use]. Well, I certainly have some offcuts that I haven't reused for 10 years; after 10 years if I did, they would probably be damaged. So I want to make sure I make a better COM on smaller mats realizing I may never sell the offcut.

    Another option is to have a package price for smaller sizes, where you can afford to sell at or below costs because you are assured you will sell the offcuts.
  8. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    Since my POS is an Excel spreadsheet/database custom program and I am a one man shop, I can bias any problem outcome by Xing a different mat type box. or entering a supplemental price in an available box. I know my mat wholesale and keep my mat pricing categories up to date. Glass has a similar conundrum on pricing, but offcuts are a smaller issue. (I have had no problem with my suppliers keeping my moulding price data relatively up to date.)
    Grey Owl likes this.
  9. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    My POS is an Access database program so I know exactly what you are saying. I get my supplier pricing converted to an Excel spreadsheet, then import / link to Access. Not a problem.

    For mats and glass, generally only one change a year, so it is easy to keep up with them!

    Unfortunately, when I have visited different shops, I have found they generally don't understand their POS pricing and I have found several instances where special order mats are priced below cost! POS systems are great, but the framer shop owner still needs to understand what they are doing.
    i-FRAMER likes this.
  10. Smile with Style

    Smile with Style CGF II, Certified Grumble Framer Level 2

    Russ, what you say about smaller sizes is very true. Our software starts with cost x markup + labour with an added Minimum Price which can be a formula of (cost of the mat + a dollar amount) or any multiplier you want. For your "go to" or "stock" white or black mat you do not need to apply the Minimum Price as these scraps will not languish away becoming faded or damaged. But, you do want it added to the blazing orange mat or congo green mat that may never be needed again.
  11. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    Thanks Carol. When I visit other shops I often ask what their POS price for Crescent 2259 [Museum Solid Rag 32x40 antique White] for 10x12; 13x16; 16x20 and 32x40. [This is my go to, but rarely high volume by most other framers, so I always know the costs].

    I get all kinds of prices, but generally prices for the 10x12 are way below cost and [in my opinion] generally too high for the 32x40. After I get the answers, I almost always ask them to call their POS provider to figure out what they should do to to make sure they don't sell below cost.

    Out of curiosity, when you say FrameReady starts with the cost are you using the allocated cost or the total cost or the total cost less discount?

    For example, to keep the math simple say a 32x40 mat has a price of $20.00. Lets say I theoretically get a discount of 25%, so my actual cost is $15.00.

    A 10x12 is 120 square inches; a 32x40 mat is 1,280 square inches; So a 10x12 mat is 120/1280 is 9.375% of the mat. 9.375% of $20.00 is $1.94. So would you calculate your cost before labor as $1.94 [based on 9.375% times $20] or $1.395 [based on 9.375% times $15] or would the cost be calculated differently? And again, this is before labor is added.

    And as you said, 'Plus an added minimum price' which certainly needs to be considered in mat pricing.

    Again, thanks Carol [and looking forward to seeing you again in Las Vegas!]
  12. Smile with Style

    Smile with Style CGF II, Certified Grumble Framer Level 2

    It will be great to see you in Vegas again!

    You can calculate your cost on either the $20 list price or base it on your discounted price of $15 in FrameReady. My recommendation would be to stay with the list price. The discount you receive is part of your profit for purchasing wisely. Unless, you are a store that promotes itself as the lowest price in town, do not give your discount blindly to the customer.

    You can still sell it for the same retail price in either case; $20 x 5 markup or $15 x 6.67 markup will give you the same retail price. If you want to track your true costs, then I would go with the discounted cost. The default, in FrameReady, is based on the cost of the area used (Eg. $1.94) before labour but you can change it to be based on the discounted cost (Eg. 1.39) before labour.

    Labour is added, after the cost is multiplied by the markup. The minimum price is added after the markup and labour are calculated.
    Grey Owl likes this.
  13. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    Thanks Carol!

    1) I certainly believe in using the front line pricing before discounts. Sometimes one's primary source may be out of stock and you need to go to a backup source that doesn't discount.

    2) Thanks for your detail. I will pass this information on when I talk to other framers and visit their shops.
    Smile with Style likes this.
  14. Tom1234

    Tom1234 Grumbler in Training

    Just a thought as I read this thread. In a former life I sold pharmaceuticals to doctors and pharmacists. Got out of that as fast as I could. Years ago, a lot of pharmacists would recover the cost of a bottle of a given drug on the first Rx they received. The patient's copay plus the reimbursement from insurance for the 30 or 60 pills paid for a bottle of 100. The math is somewhat different for larger bottles, e.g. 1000 pills, but the net effect is still the same. They did this because they may not receive another Rx for that drug till the pills were out of date. Why not charge for the whole mat, even if you just make an 8x10 opening? Obviously mark-up and labor should be included. Just a thought. If I'm way off base, please don't flame me for my naïveté. Thanks.
  15. i-FRAMER

    i-FRAMER MGF, Master Grumble Framer

    Hi Tom,
    I get this all the time. What happens here is that it can become almost impossible to sell the offcuts. Take for example the suede mats and museum glass. Both are expensive items. If you recover the whole cost in small jobs, you are not likely to sell much in small sizes. Which means if you are selling larger sizes, and have off cuts and centres, it will be much harder to sell them. However, if your markups and wastage are reasonable, and you have small off cuts left over from larger jobs, you are more likely to sell those on smaller jobs. On cheaper mats you could set to recover the cost of the rest of the sheet unused, without blowing out the price for customers, but not the expensive sheet items. That's my take on it anyway.
    AaronF likes this.
  16. Tom1234

    Tom1234 Grumbler in Training

    Thanks for the well thought out and great answer! That makes sense. I never thought about the the more expensive suede mats and museum glass. Thanks again.
  17. Grey Owl

    Grey Owl SGF, Supreme Grumble Framer

    I-Framer, great analysis.

    My take is you still want to have a minimum mat charge to at least cover your costs. An analysis done several years ago showed the average size frame jobs for frame shops across the country were 16x20; If so, you need to be making enough gross profit to cover all of your expenses, if all of your orders were 16x20.

    For me, my average size is closer to 13x16 which means I need to cover more on the smaller end [e.g. higher % margin], and I can have a lower % margin on the higher end. For me, my minimum size for ordering a non-stocked mat board is 13x16, and depending on what it is, sometimes 16 x 20; If the customer wants quality for less price, they can go with my package pricing. [I have package pricing for mat packages, as well as complete frame packages]

    For my package pricing, my minimum size is 10x13 and I price these mats below my fully loaded front line cost by 20% [approximately] because I know I will use the offcuts.
    AaronF likes this.
  18. i-FRAMER

    i-FRAMER MGF, Master Grumble Framer

    Grey Owl i really like the idea of a minimum size job before ordering the mat. This could solve some issues with having to recover costs. Although, you could still end up with off cuts that would be suitable for the smaller jobs. So you would have to keep inventory of those mats, so as not to go with something else when an offcuts were actually available to use.
    Grey Owl likes this.
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