There is a range of new budget priced glass trophies coming on to
the market which represent very good value. But be warned they can
also reduce your bottom line big time.
Using Henkmart as an example, Martin has a range now that is very
cheap and represents an excellent opportunity to make a good profit.
We'll use the TR1358 10mm Jade Glass Trophy as an example. It cost’s
just $11.75 add $2.00 for the resist = $13.75. A Sydney Retailer has
this product listed for $38.50 which generates $24.75 profit (approx
170% m/u) Pretty good profit you might think. But lets look a little
closer.
* This price includes engraving. * Lets estimate how much time was
spent on the job. Sales = 10min, Art = 10min, Etching process = 15min,
Clean up and invoice = 7min, give to customer 5 mins = 47 minutes
(you know thats conservative) . Divide this by the gross profit =
$31.50 per hour charge. * You should be making a mark up profit and
an engraving profit! * No overheads were taken into consideration
at all. As a business person with overheads you should be making at
least double the $31.50 per hour. Ask your accountant to tell you
how much per hour your business costs to run and add the profit you
would like to make to that and stick to it.
You should be marking up these budget pieces up by at least 200% plus
adding $20.00 at least for engraving for your efforts. Of course if
you have a sports club that you want to impress, then sure make them
real cheap for them, but why offer totally bargain prices to Corporates
who have a much larger budget. Sell smart and reap the rewards of
dollar value profit.
Another big issue is that if your customers have been buying Acrylic
Trophies in the past for say $60.00 and they see Glass for $38.50
they are going to go for that for sure. Your dollar profit value will
take a dive. Why not be brave and go for the perceived value way of
costing and offer this new range of glass trophies for just a little
more than Acrylic and make really good profits out of them. They will
still sell well and will be far cheaper than the normal thicker glass
and you won’t be trashing your back pocket. You should be making
at least the same dollar value (forget percentage here) as you do
on Acrylic or you are just going backwards.
Now some will be saying “oh yeah but I want to be competitive”
The bloke down the road will be cheaper. Forget the bloke down the
road. Concentrate on your business and your healthy profit and your
customers. Our trophy company gave up on competing years ago and the
profits and sales have never been better. Those who are too scared
to make a decent buck are those that work really long hours and never
seem to be able to get to the high profit yields a hard working small
business operator should reap. None of this is ripping the customer
off. It’s just earning the right kind of profit for the commitment
of being in business
Same goes with the Curved Glass products. Work out how long it takes
to make one then add your overheads, product mark up and price accordingly.
