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The Grand Economic Theory of Drugstore Photograph Restoration Pricing :-)

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  #1  
Old 12-01-2004, 11:50 AM
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painperdu painperdu is offline
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The Grand Economic Theory of Drugstore Photograph Restoration Pricing :-)

I've got it!

Here is how those chainstore drug/photo stores are able to charge one flat fee for different levels of repair.

Let's say I set my desired wage at $100 per hour. i can accomplish this by taking on 10 low level restore jobs at $10 a piece or I can do 1 major restore job at $100.

But wait, there's more!

Let's say that I charge $40 for any job, large or small, that crosses my color palette. How can I do this you ask?

Simple. The cost is spread amongst the various levels of restore jobs. Some may fall below my hourly wage while others may go above. That is, if I recieve 2.5 low level work orders at $40 each then I've already covered my desired hourly wage of $100 per hour and yet still have 7.5 low level slots left to my hour.

This means that I've made $100 when I should have made $25. I still owe $75 worth of restoration to obey my $100 per hour wage desire. This allows me to work on the tougher job and only charge the customer $40 for it. See where I'm going with this?

My wage desire of $100 is spread communistically amongst the different levels of restore work.

Any comments?
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Old 12-01-2004, 12:12 PM
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Doug Nelson Doug Nelson is offline
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This is known as a "loss leader". Your grocery store may sell something at a loss to attract your business, hoping you'll buy something else while you're there to make up for the loss.

Unfortunately, there's not much return business for restoration work (at least not in my experience).

And there's the quality of life to take into consideration. Do you really want to do 2.5 restorations per hour, all day long? As much as I enjoy restorations, that sounds like hell to me.

You can't compete on price alone, ever, in any field. Attempting to do so is simply destructive in the long run, and you're just making it easier for the next person who's willing to work even cheaper to take your business.

Rather, try turning your efforts towards methods to communicate why your work is worth $100/hour. Do you really want to have "my work is as good as Walgreens" (since it IS the work at Walgreens or wherever) as your marketing plan?
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Old 12-01-2004, 10:56 PM
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painperdu painperdu is offline
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Doug, I think you almost got my point.

If you set your hourly wage at $100 per hour and only search for clients that need one hour jobs then you'll miss those easy jobs that require less time of work and may only pay $25 for fifteen minutes of work.

Now, if you can line up four jobs that pay $25 for fifteen minutes of work each your effective hourly wage is $100.

So, you will make your $100 per hour by doing one big job per hour or four small jobs per hour.

Now consider two hours of your time:

Two big jobs at $100 each = $200 = $100/hr
Four small jobs at $25 each + one big job at $100 = $200 = $100/hr

O.k., let's work it another way for two hours of work. . .

Seven small jobs at $25 + one big job at $25 = $200 = $100/hr
(o.k., so my math isn't exact but I think you'll get the point)

This is the same concept that the drugstores use when they say they will do any restoration for a fixed price. They know that their effective price will equal out in the long run by spreading the cost amongst its customers -they charge a certain percentage of customers higher than normal fees and then charge another smaller percentage of customers lower fees. I'm sure they have statistics on the ratio of hard jobs to easy jobs that walk through the door.

Look at it this way. A few drugstore customers are paying too little for high level restoration but there are plenty more, the majority, are over paying for low level restoration!

I'm not that good at writing and expressing ideas so I hope didn't confuse the subject more than I should have.

I have a few more things to say about this topic but I have to take a break right now :-)

Last edited by painperdu; 12-01-2004 at 11:01 PM.
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Old 12-02-2004, 12:17 AM
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Doug Nelson Doug Nelson is offline
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Reminds me of the old joke about losing money on every sale, but making it up on volume

I guess we have different philosophies. I've never spent only 15 minutes on a job, never would. I spend 15 minutes just packing it up to ship back. And I don't think restoration is worth $100/hour, not even really good restoration.

But more power to you if you can get it! Keep us posted.
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Old 12-02-2004, 01:40 AM
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painperdu painperdu is offline
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I'm not suggesting that this is the best way to market services. I'm only pointing out that this may be the way these coporations are doing it. Also, a business would require a lot of customers for it to work.

There are downfalls, however, that I believe the smaller restoration firms/individuals could exploit.

If the work these drugstore restore services produce is at a high enough quality then why not outsource your tough jobs to them and you only work on the smaller jobs. If a customer needs a simple color correction, for instance, that may only take a few minute's work and you are willing to do it for, say, $25 and the drugstore charges $39.99 for the same work then it shouldn't be too hard to win that customer. Also, I'm almost certain that if these coporations start getting too many orders for tough jobs then their fees will rise because their scale of economy will be tilted the other way.

If, on the other hand, their work is crappy then you could make the case that your work is worth the fees you've set.

Either way, I think the smaller restorer is more agile and better positioned to use creative methods to market their services.

The corporations can't afford to offer assesments and price quotes for restoration work; all control of their operations are at coporate headquarters. The clerks at these outlets can only act as robots, automatically doing what was pre-programmed by coporate accountants and marketing executives.

Well, I think I'm writing myself sleepy here.

Nice header graphic, btw. I like the one with the cap on the last 'O'.
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Old 12-02-2004, 02:29 AM
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Doug Nelson Doug Nelson is offline
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Ah, Ok. I guess I misunderstood the entire point (not a first for me, I'm afraid). The mass restorers I'm familiar with can charge low prices because they FTP the files to Peru and India where they pay 50 cents an hour or some rediculous sum. So they can actually charge less than you or I, work longer at restoring the image, yet still make more net profit.

I get email literally every day from all over the world asking if they can do my restoration work for me for peanuts (perhaps literally in some cases). I count them as spam (maybe they'd work for spam?).

Glad you like the holiday headers. They were submitted by members, there's a thread about it here.
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Old 01-24-2005, 01:25 AM
Dean Jones Dean Jones is offline
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Unhappy

i work for a large photo restoration company and we get work from the US market. man did our bosses get sucked into a raw deal. with all said and done, we are getting 6$US per image and are asked to come up with 15 jobs per 8 hour shift! we motor through work, only wishing that we got paid a little more!
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Old 01-24-2005, 12:13 PM
tomyz tomyz is offline
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Bad prices!

I am of Peru but she surprises the price to me of 5 cents by photo when in Peru is received per Hour of work in a mean level 40,00$ or 50,00$ depending on retoucher
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