Profitable Wraps

By: Charity Jackson

Thursday, December 1, 2011

How to make money selling wraps

Pricing vehicle wraps is generally broken down by the cost of the graphics, installation and design. There may be a number of different ways that you arrived at your pricing model, but when is the last time that you checked to see if you actually are making any money?

 

JUST TO OPEN THE DOORS

To know if you’re making money selling vehicle wraps, or any signs for that matter, you must also know what your shop overhead is. This is an important step you cannot afford to skip. If you determined your overhead a few years ago, it’s probably time to do it again. 

 

This is often easier said than done and to fully explain the process would be an article all unto itself. I suggest doing a little research to see what resources (checklists, forms, etc.) are already available. 

 

Figure out your business expenses and production hours to determine your hourly labor rate.

There are also a number of computer programs developed specifically for the sign industry. These programs will often walk you through a step-by-step process to help you determine your costs.

 

In a nutshell, you need to determine how much your rent, utilities, employees, insurance, advertising and other expenses cost you. You also need to know your costs on materials and production supplies. Then you need to figure out how many actual production hours your shop actually works. Not just the time you open the doors, but the time that is actually spent creating a product that is making you money. The hours worked, coupled with expenses, will help you determine where to set your hourly rate to be profitable.

 

GRAPHICS

Wraps are time consuming. Even when you get really good at them, they will typically take longer to produce, from start to finish, than most printed signs. You can make money at them, but you need to know your costs at each stage of the pricing structure. Figuring out your overhead helps you determine your hourly labor rate. Next, you need to look at material costs.

 

Take the time to compare material costs among reliable suppliers to be sure you are paying the best possible price. Take time at the front counter to review the customer’s budget and expectations, and walk the vehicle, pointing out obstacles and artwork placement.

Most sign companies I’ve talked to charge for the graphics on a wrap by the square foot or square meter. Determining what your price per square foot or meter needs to be cannot be solely based upon what the competition is charging. 

 

Take the example of cheating off your schoolmate’s test; how do you know that they are right? Your competition may be undercutting both the industry and themselves and will be out of business in six months, do you want to join them?

 

Make a chart of all the vinyls and laminates you use on vehicle wraps—cast materials, calendared materials, perforated window film and optically clear laminate. What is your cost per square foot on these materials? If it’s 54" material, do you realistically print the full 54" or do you average 48"? Take that into consideration.

 

Once you have your list, check with at least two of your suppliers and find out what they charge for the materials. Are the materials generally in stock? Does the company have a delivery truck or will you have to pay shipping? Many suppliers are willing to offer a price cut on a material to be competitive—often you just need to ask. 

 

Be aware of your competition and what they are charging, but base your wrap pricing on your shop overhead as well as current market pricing.

Here’s where the competition can come into play; do a little detective work to see what a handful of the local competitors are charging per square foot. Toss out the obvious under-cutters and use the information to see if you are charging enough or too much. This should be strictly used as a checks-and-balance for your company.

 

Once you have your costs, you will know what you need to charge to make a profit. Once you know what the competition is charging, you know what you need to charge to be competitive. 

 

Make sure you don’t price yourself out of the ballpark, but more importantly don’t undercut the competition for the sake of trying to get every job. You’ll end up doing more work for less money and will miss out on the true profits. Not to mention, you’ll annoy the competition and likely put yourself out of business.

 

INSTALLATION

There are many factors that come into play when quoting the installation of graphics. This is one reason we don’t quote wraps over the phone. 

 

It’s important for customers to understand the level of skill that is necessary to do a high-quality job wrapping their vehicle. Educating the customer on the process of wrapping a vehicle, and physically walking around the vehicle with them, is an effective way to explain your skill and expertise and to develop a working relationship.

 

Selling a vehicle wrap goes beyond just the costs of materials. You are also selling your experience. With this experience comes quality and durability.

 

As you walk around the vehicle, point out obstacles to the customer and let them know how you typically tackle them. Will emblems be removed? Can you remove mirrors, lights or other obstacles to get a better install? Point out rubber window seals and moldings and explain how graphics are typically trimmed around them.

 

Some companies I have talked to price their installations by the square foot, while others price a flat fee. Typically both approaches also take into account vehicle obstacles, concave and convex areas and other time-consuming factors.

 

We’ve wrapped enough vehicles that I can generally estimate the number of hours it will take to do a wrap based upon the vehicle type and amount of coverage. This takes into account the obstacles, so we charge a flat rate based on the total number of hours.

 

To determine the cost-effectiveness of offering wraps, you need to also ask yourself a few questions. Does my company do enough wraps to be efficient installers? In the amount of time we spent wrapping a vehicle, could we have made more money doing other jobs? Do we foresee the wraps portion of our business growing, which eventually will make us more efficient and profitable? Would further educating our installers in a wraps course be justified?

 

Your design pricing should be based on how much artwork is provided, how much you will need to create custom as well as the complexity of the vehicle.

Box trucks are relatively easy to design and install and are a great type of wrap to pursue as you build up your wrap installation skills.

DESIGN

The amount of time spent designing vehicle wraps can vary. How much artwork is the customer providing that is useable? How much has to be recreated or purchased? Does the customer have a clear idea of the design direction or are they completely “open”? 

 

Some sign companies choose to include design as “part” of the wrap without breaking it out. Other companies, like ours, have a flat starting rate to create and fit artwork to the customer’s vehicle.

 

However you determine your pricing, you need to make sure you’re taking into consideration your hourly shop rate and you are accurately charging for design. Customers need to pay for your expertise. 

 

Be sure you quote a rate and explain how many revisions that includes. If you go beyond the included revisions, be sure the customer is clear on how much the extra design time will cost. 

 

Like installation, this is a good time to show the customer why design costs extra. Provide samples of your work, including other wraps. Explain to them the basics to effective design and specifically how you plan to make their design effective.

 

The design process is also a great time to build a relationship with the customer. People love to talk about themselves and business owners love to talk about their companies. Get your customer talking.

 

Building a relationship is often more important than price. If the customer trusts you and realizes that you understand their budget and goals, then they are more likely to pay more for your services.

 

Cost-cutting strategies can help your business be profitable with wraps and all types of signs. If you offer wraps, be sure you’re making money doing them. Don’t offer them just because everyone else is. 

 

Look for ways to be better, faster and more efficient with your labor. Couple this with competitive material costs and you are well on your way to being a profitable wrapper.