Back Library Contents
Profitable Sublimating
Sublimation is so versatile it is a profitable stand-alone business, a business within a business and certainly a profitable addition to the smallest of new companies or the largest of well-established companies.
While many factors contribute to over-all profitability, two factors contribute very heavily in detirmining how much your profit will be. We call these factors "dollar dumping" and "dollar swapping."
These twin killers of profit occur when the business person becomes excited about what their new process can do, technically (in terms of speed, artistic layout, presentation, etc.) and forgets what it is suppose to do: make them more profit!
This month's article deals with "dollar dumping."
Dollar Dumping
"Dollar dumping," occurs when the entrepreneur mistakenly charges a much lower price than what their products and services are worth, simply because sublimation is so fast and inexpensive. This is especially true with single color laser printer sublimation on metal.
Even seasoned professionals sometimes fall into this profit-killing trap. The thinking is that because laser printer sublimation is at least 20 times faster than engraving they should sell sublimated products much cheaper. Why?
Nothing else has changed. The product price and freight, remains the same. Even if you rotate your stock, your base inventory costs are about 18% a year. If you have a storefront, rent, utilities, telephone, insurance and taxes didn't decrease. The equipment you spent your hard-earned money on wasn't free either.
Your skills also didn't decrease. In fact, you probably spent a considerable amount of time in learning the skills to produce attractive and desirable products.
Perhaps the worst area pro's and novices undervalue themselves in, is in pricing their skills and artistry. You don't sell blank metal. Your equipment does nothing without you. Only after you have used your imagination, skills and time in creating and printing a layout, is the product desirable. What are YOU worth?
If you base your prices solely on how fast you can produce things, then you are doing factory piecework. If you are doing that, then you will need a lot of "piecework," to make a decent living.
Many part-time, low-overhead entrepreneurs also cheat themselves with the "piecework" mentality. One of the silliest statements that can be uttered is, "I have low prices because it doesn't cost me anything, except my free time." Good grief!
If you have been guilty of thinking the above statement, think about this: The time you spent to earn the money to buy your equipment; the time you spent in learning your skills and the time you spend in getting your orders.
Now factor in your cost of goods, your time in producing the orders (and maybe delivering) as well as your other costs (there're there).
Past 40 hours on your regular job you would be earning time and a half, or even double time. If you are not making at least that, and a little more, to improve yourself, then your time really is "free."
All of you, from novice to seasoned veteran, are professionals. You are worth at least as much (and we think more) as the products you sell, regardless of how fast you can produce them. Professionals should always include their skills in their pricing. Fruit peddlers just have products they sell by the pound.
We will close this article with a successful pricing/selling strategy story.
An awards company, offering only engraving, decided to also offer laser printer sublimation. Their product prices included engraving, but the prices had been adjusted, to allow for that. The owner wanted to make extra profit, not just offer an additional lettering process.
In sixteen years he had raised plaque prices (to reflect material cost increases), but had never made any adjustment on the included engraving. He decided on a three-pronged pricing strategy, to make engraving and sublimation more profitable.
While the company spent several weeks in preparation, all the showroom and web site changes and additions were make in one weekend.
During those weeks, the company re-engraved a plate for every engraved plaque, desk item and everything else that was going to stay in the showroom. This also got rid of plates with old dates and engraved brass that had dulled, with oxidation. Most of the plates were also engraved with new messages.
They then sublimated two different 6-plaque displays. One display had just bold, straight-line text messages, with a few "designs" thrown in. The display looked great, but not spectacular. A wall sign was sublimated for this display and titled, "GraphicPrint Awards."
On the second display they used every bit of talent and imagination they could muster, to create more of an artistic looking award. This was done by adding thin double line borders, more designs and not using the "Times Roman" font look, used on the other plaques.
Stylized "logo" looks, for plaque titles added to the artistic image. Usual single straight-line plaque titles, like "Outstanding Service", very artistic and exciting two-line headers, were designed, with the use of graphic options. This second sublimation display was titled "GraphicArt Recognition."
The mechanics of change included: 1. Waxing and polishing every walnut plaque. 2. Discarding every board that didn't look "fresh." 3. Raising all engraved product prices about 12%. 4. Pricing the "GraphicPrint" plaques the same as the old engraved plaque prices. 5. Making the base price of the "GraphicArt" plaques the same as the "GraphicPrint" plaques, but adding a $15 art charge, per original layout. 6. The location of almost everything in the showroom was switched.
The owner reported that the first customer in his showroom, the following Monday, exclaimed, "Wow, you've got a whole new showroom, don't you?"
He also reports similar comments from old and new customers. This has translated into about a 19% profit increase, in the last eight months. That's a lot of profit.
In Conclusion
The overall objective of this article was to encourage you to not "dump dollars" because you are tempted to price in terms of production speed and product. Be fair to yourself and include investment and especially skills.
The awards/gift industry is a value-added industry. If you creatively think "outside the box," show the value you are adding and offer excellent customer service: you are a professional. You can successfully charge accordingly.