Sign & Digital Graphics

October '19

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30 • October 2019 • S I G N & D I G I T A L G R A P H I C S RUNNING THE BUSINESS inflation, the sign phenomenon contin- ued to roar through the '70s and '80s. Do you recall the Five Man Electric Band with its 1971 hit "Signs"? Sign, sign, everywhere a sign Blocking out the scenery, Breaking my mind Do this, don't do that Can't you read the signs? In those years, most signs were made of wood, steel, neon glass and paint. Most, if not all, were created by hand— one at a time. Turnaround times were long, but the end result was a work of art that would seemingly last a life- time. In the late 1980s, technological advances challenged many sign makers' livelihoods. Computers and automation systems exploded onto the scene in the form of digital plotters, vinyl cutters and large- and grand-format printers. Banners and posters didn't have to last forever, and their quality did not need to be the greatest. They just had to serve their purpose through the course of the event and then be discarded. What scared the sign-making veteran was not the instant turnaround time or the marginal quality of the signs of the day. It was the price. Technology was spitting out hamburgers instead of the filet mignon of old, and the seasoned, gourmet sign maker panicked. People in the graphics industry had to make some tough decisions. Should I embrace the technology revolution and learn a new way to produce graphics? Should I stick to what I know and reduce my prices to stem the customer exodus? Will it even be possible to make a decent profit in this business? Err on the High Side The one mistake I believe today's new- fangled sign makers make is to launch new products at lower-than-necessary prices. When any business introduces a new product, it runs the risk of pric- ing it too high, too low or just right to balance supply and demand. More times than not, when the price of a new item is "just right," it's not street smarts—it's dumb luck. If you have no clue how to price a new offering, err on the high side. You will always have the option of reducing the price if sales are short of expecta- tions. However, if you price it too low initially—in hopes of getting off to a fast start and crushing the competition— you will have a bear of a time trying to raise the price when the product was so recently introduced. I have to chuckle when "the low introductory price" of a new product becomes "the regular price" shortly thereafter. Over the lifespan of most products, prices tend to deteriorate rather than escalate. Cut Prices With Sound Reasoning There are precious few reasons to consider cutting the selling price of a product. Here they are, as I see them: • If you can cut the cost of producing the product without sacrificing quality, gain a competitive edge and pass some of the savings on to the customer, reduc- ing the price of that product is a wise decision. • If the cost of maintaining sluggish inventory—that is, finished product that sits on your shelf far longer than nor- mal—outweighs its value; then having a liquidation or clearance sale on those items would make smart business sense. • If cutting the sales price of one item to the bare minimum necessary to cover costs would stimulate the sale of another, very profitable product—that is, a loss- leader promotion—that strategy may have some merit. But an effort to steal a sale away from a competitor or to appease an insistent price buyer in hopes he won't return are not good reasons to drop your price. In fact, they create more problems for you than they solve. In the first case, when all of your good customers catch wind of the sweet deal you gave someone else—and they will—you will be forced to offer that price to them for quite a while. In the lat- ter situation, price buyers are relentless. They simply do not go away. My advice is run, don't walk, away from price buyers. Good luck. SDG Make it Your Business CONTINUED www.orafol.com /////// Photo courtesy of #201Wrap ORACAL ® 970ra Premium Color Change Film #959 Tangerine Dream

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