This article is an introduction to how to set up your pricing for moulding.
To get a really good overview of pricing for the picture framing industry watch this video.
It is totally your choice whether you price by length, chop or join. What many people fail to understand is that the goal of the frame pricing formula is to achieve a Retail Price Per Foot/Metre, regardless of whether you purchase moulding in length, or as a chop frame, the Retail Price Per Foot/Metre should remain the same. People think that because they purchase their frame as a chop it should have a different retail price per foot than if they purchased it as a join, or even as a length of moulding. It should NOT. The customer does not care if you buy a length of moulding or a chop/join frame.
This is how the retail price of a frame is derived:
Retail Frame Price = required footage x price per foot + set price
- required footage = (UI + (moulding width x 4)) ÷ 6
- price per foot = a formula that can be as simple as the price you want to charge or as complex as a formula that includes a cost (length, chop, or join), a markup and an amount per foot (several examples are given in this section)
- set price = optional dollar amount added to the calculated price
The absolutely simplest, but not recommended, way to price moulding is enter a Retail Price Per Foot/Metre. However, this is not recommended because this field will remain unchanged when you perform a vendor pricing update and you will end up losing money! One of the compelling reasons people buy FrameReady is for the ease of keeping up-to-date with their vendor pricing.
Therefore we recommend using a formula, such as, chop*3+3.
The FrameReady default formula adds another layer of complexity and uses a sliding scale formula instead: the greater the cost, the lower the markup.
This is how to understanding the pricing structure for moulding:
- Formula that uses a cost per foot/metre (length, chop, or join cost), multiples it by a markup and adds a set price.
- Formula that uses a price per united inch/united centimetre and multiples it by a markup.
- The retail price is based on a code provided by a vendor which corresponds to a price matrix.
There are three basic choices for setting up your moulding pricing in FrameReady:
- Use FrameReady’s program defaults.
Given the vast number of options in terms of formulas and how they can be applied, you may want to keep it simple! See this video. If you are a new FrameReady user or just starting out in the industry, then it is recommended that you use these default formulas as a starting point. As time goes by you will discover where you need to add or to modify the formulas and make them your own. DISCLAIMER: The pre-installed formulas and code tables in FrameReady are included as a beginning point to help you get started. In no way does Adatasol, Inc. suggest that these should be your formulas or that they represent an industry standard. That being said, the pre-installed formulas and code tables have been well thought-through and you may feel confident using them. Clients who are new to the industry can count on FrameReady giving them a good starting point.
- Create your own formulas and custom defaults.
If the FrameReady default formula is too high or too low then the markup component may be modified. See this video.
If you wish to price by Chop instead of Length(cost) then see this article. Or by Join see this article.
- Select a Vendor Price Matrix (Canada only). See this video.
Steps to follow:
- Decide if you wish to use the program defaults. If so, all you have to do is start using the program.
If you have played around with the pricing and aren’t sure what’s going on then just go to Price Codes file > Moulding group > Frame Pricing blue tab > Install Program Defaults button. Click All Moulding. This reinstates the FrameReady default formula. This formula is based on length(cost). If the vendor has not supplied length then FrameReady will use chop.
If you have decided not to use this program default, proceed to Step 2.
- Decide what formula you wish to install and use the steps in this article.