Each year, over $50 million of parking signs are sold. Who buys so many signs? How do they purchase their parking signs?
Few of us take the opportunity to truly understand the different markets and the drivers for each. In fact, the parking sign business is incredibly diverse.
In this study, we examine each market and describe the channels used to purchase their parking signs.
Retail Parking Signs
Retail parking signs are sold by “big box” stores, such Home Depot. Menards or Lowes as well as countless local hardware store franchises, such as Ace or True Value. Prices range from $3.00 to $8.00 each and the typical applications are for garages and private driveways, gates and residential properties. Signs are made from thin (under 0.020” thick) polystyrene or vinyl. Over 2 million retail parking signs are sold annually.
Here are two of our favorites:
Governments & Public Agencies
Customers here include counties, cities, townships, states and other public authorities such as transit systems, national parks, military bases or, even, your local post office.
Historically, many local governments have operated their own sign shops. The trend, however, has been to disband these government run and owned sign factories and rely, instead, upon third party bids. Many citizen groups have attacked the efficiency of government sign shops and have cited, with some justification, that these shops have been saddled with “patronage” jobs and great waste.
As a result the trend has been to submit RFP’s to qualified bidders that cover an annual estimate usage for their parking and traffic signs together. Although many of these bids are directed towards parking sign manufacturers themselves, more often the “bid package” includes installation and a requirement that local contractors be used. Unfortunately, the taint of corruption has still followed the market and many complain that these local installers have their own ways of winning and financially benefiting from what should be a transparent process. As a result, the desired savings after cutting out in-house sign shops and installers has not been achieved.
For parking sign only bids, typically there are only two to three responders (the larger parking sign manufacturers).
For both types of bids (sign only or sign + installation), the quantities are significant. A typical large city will order over 1,000 parking signs each year.
An important consideration for any of these governmental or agency parking sign purchases is aluminum cost. Aluminum pricing is volatile. Yet, most public parking sign contracts carry a fixed price. As a result, the parking sign manufacturers must hedge the price by buying futures for an equal amount of aluminum.
Typical parking sign bids, interestingly, typically include sign costs that are only 20% of the finished installation cost. Huge unknowns for the parking sign contractors entail the risk over quality control of the installation. A building or road inspector may force the contractor to go back and to make minor corrections on how each sign is installed. This adds enormously to the cost and is the source of much frustration for these contractors. In the end, the relationship between the contractor and the city or state inspector drives the economics of each year’s bidding.
Novelty Parking Signs
Primarily purchased as a gift item, these parking signs can be found at hobby shops, toy stores and a wide range of online. Novelty parking signs have a per sign price of $8-$20. The most successful of the novelty parking sign designs have a message “hook” – a punch line that brings a smile to the gift giver and gift recipient alike.
Some of our favorites are shown below:
Novelty parking signs are generally made from vinyl or polystyrene (for cheaper signs) as well as metal (for more expensive signs).
It is no surprise that a most of the inexpensive novelty signs are made now in China, shipped in bulk via containers to wholesalers and jobbers. In some cases the signs parking signs carry a logo from a sports team such as a college or professional football team. Or they can use a silhouette of a favorite animal or mascot.
Property Owners and Schools
Over 80% of all parking lots are privately owned property. These 40,000+ parking lots need parking signs! While not bought using the same bid structure and local contractor organizations, property owners (apartment complexes, schools, hospitals, health clubs, county clubs, Home owner associations and churches) prefer to use parking signs that are equivalent to those purchase by municipalities. Their parking signs need to be both official and durable. Given that these laws now dictate that any street or parking facility that is “accessible to the public” must follow US DOT and MUTCD rules, the parking signs bought by property owners must be equivalent to those bought by city government. As such, they need to be reflective installed in the same manner that other traffic signs are installed on city-owned streets.
In this market, parking signs prices vary from a retail of $12 to $25 each, depending upon the size and degree of reflectivity required.
One important driver for parking lot signs for privately owned property is the scarcity. Retailers want to lure new customers to visit and reserve their most convenient spaces for customers. A hospital wants to insure specialist doctors rushing to the ER do not waste time hiking in from the last spot on the lot. Parking spots are becoming increasingly valuable real estate investments. The implications for signs – when the demand for parking is greater than the supply – is that signs become ever more detailed and forceful. Tow away signs, detailed time-limit parking signs and permit parking signs are increasingly common.
Parking Garage Signs
Insiders distinguish between parking facilities that allow you to park for free versus parking facilities that charge for the right to park. These pay-to-park garage parking signs have a dual function: advertise the location of the parking garage as well as to show parking rules.
Other common types include parking directional signs and signs surrounding the entrance and exit gate booms.
There are over 100 million metered parking spaces in the US with many more spaces that Pay-to-park. Key sign types here are those that control gate access or warn about one-way spikes.
Towing Company Parking Signs
Many parking facilities contract out their enforcement activities to a third party with some teeth: a towing company. By creating a financial incentive – for the towing company – to keep the parking lot free of scofflaws, parking lot owners have found far greater degrees of compliance. Although a tiny fraction of US parking lots are covered under a third party tow away agreement, this market is very sign-intensive. The laws vary by state and, as a result, there is a thicket of rules defining the parking sign size, specific text that must be included and positioning. For example, Tow Company parking signs must be positioned in places that unsuspecting (or “deliberately unsuspecting”) drivers will inevitably see. The purpose of these parking signs is to give drivers fair warning that it is illegal to park in a particular area.
A typical tow away parking sign will advertise the tow company’s name and then give a warning that violators will be subject to a hefty fine (which often escalates daily as the tow company adds additional daily parking fees to the initial fine).