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View Full Version : Pricing of anodized alum. engraving



Dan Hintz
01-20-2009, 2:06 PM
I just received an order from a new client (my second) since getting the ULS up and running, but I'm conflicted as to the rates I should be charging.

The order is for rastering a logo into various anodized aluminum products... no change in the design other than size from one product type to another. The initial order is for two different products, 25 each. They have provided me with .eps format files, so there's little up-front work required on my part other than positioning (I've already engraved a sample for their approval). This will lead to more orders in the future as I have a long-standing relationship with these guys for (somewhat) unrelated stuff.

Laser time varies with resolution and logo (I tried a few different logos they had available), anywhere from :30 to 1:45. I initially thought $2/item in bulk is a good price for the 30-second logo, but then I thought it was too good... $100 to laser 50 items doesn't seem like a useful profit, even if it only takes me an hour to do it. I'm leaning more towards $5/item... am I too far out of line with that kind of a charge, or am I still coming in under what others might charge? I want these guys to come back, but I don't want to be walked on or set a bad precedent of lowball prices.

Mike Null
01-20-2009, 2:10 PM
I generally charge by the square inch. I also have a minimum of $3.00 per piece regardless of time or sq. inches.

Gary Hair
01-20-2009, 2:24 PM
Dan,
One of the best methods for larger quantity jobs is to determine how long it will take you, start to finish, for the entire job, including unpackaging, lasering, re-packaging, etc. Use your hourly rate * the hours it took / number of parts. I always add (or subtract) a "perceived value" charge - if a part calculates out to $0.50 but it *looks* worth $1.50, then I'll charge the $1.50 instead. For single items or small orders it's probably easier to go by a square inch price but for larger orders it is going to work out better if you do it by the job.

Gary

Tim Bateson
01-20-2009, 2:28 PM
Don't give away the farm, but a good solid customer is worth a healthy discount.
My rules - Charge until they squeal, then back off (discounts) until they're happy. You get a good customer & they're happy they got a discount.
Either way always insure your customer knows how much they're saving. My invoice has a space just for total discount in $. That's also not a bad practice to have as your documentation when it comes to tax time.

Just my $.02 or $.00001 when adjusted for inflation.

Joe Pelonio
01-20-2009, 2:51 PM
$100 an hour is not bad, considering that your auto mechanic is charging about $80. I would add into that the overhead, that is, the percentage of laser cost and repair, rent, electricity, advertising and anything else your business uses, and probably be closer to $3 each.

Scott Shepherd
01-20-2009, 3:05 PM
Just be fair and be happy. Trying to figure out how much you left on the table is an exercise in insanity in my opinion. Every once in a while you'll get some feedback, but overall, just figure what you'd be happy with and do it. Don't worry about gathering every single possible penny you can squeeze out of them. They will figure it out sooner or later and then you'll have no customer.

Also, if you bump it to $5 each and someone steps in with a low cost laser and offers it to them for $1.25 each, you'll be in deep trouble. Quote it fair and honest and it'll pay for itself in the long run. That's my opinion.

Tim Bateson
01-20-2009, 3:58 PM
Pricing depend on your market. If you're going for the high end clientele then the sky is the limit. If you're going for the craft show clientele, then your profit margin is squeezed paper thin. I do both.

Sales Fact - An item can be priced for the budget minded and sell very well. That same item can be priced in the ludicrous range and there will still be buyers for it. The market sets the price.

I personally have no problem pricing in the ludicrous range. I donít mind losing few customers to low end engravers. Those types of customers are worth losing. However, you'd be surprised at the number of people who have no problem with high end rates. I do offer discounts if I smell future business.
Does this really work?? - I mentioned in another thread I paid for Christmas with my profits this past year. What I didn't say is I bought the usual Christmas gifts as well as a Caribbean Cruise. Again this is just as a hobbyist. Iíd estimate that 80% of my work is either repeat customers or referrals from current customers.
If you overprice the market will let you know.

Dan Hintz
01-20-2009, 7:08 PM
Well, I just ran the logo at the larger size they requested, bringing lasing time to around 1:40. Rounding up to 2 minutes each @ $2 minute says $4/pc. Unless someone thinks I'm out of my gourd for doing so, I think I'll charge $5/pc on the invoice, but list a 20% discount, bringing it down to $4/pc. If I decide sometime in the future it's not worth it in small batches (say I'm working on larger orders), I'll get rid of the discount, essentially adding in a nuisance fee.

Tim Bateson
01-20-2009, 8:33 PM
A "nuisance fee"! I like it!

Barb Macdonald
01-21-2009, 2:38 PM
"The market sets the price."
I was asked to price 10,000 beer glasses. The customer wanted to pay no more than 0.25 each, the price he got from overseas, Indonesia I think.
I don't know how to compete with that kind of price. So I didn't.
Every new customer is price driven, in our own personal experience.

It makes it tough to compete, to say the least.

have a great day

Angus Hines
01-21-2009, 2:47 PM
Wonder what he paid to then get them shipped ? He probably didnt think about that cost.


"The market sets the price."
I was asked to price 10,000 beer glasses. The customer wanted to pay no more than 0.25 each, the price he got from overseas, Indonesia I think.
I don't know how to compete with that kind of price. So I didn't.
Every new customer is price driven, in our own personal experience.

It makes it tough to compete, to say the least.

have a great day

Tim Bateson
01-21-2009, 3:08 PM
Barb,

We're not always going to be able to compete with sweatshops where they work for $1 an hour or $10 a week. I don't consider these low class engraving shops to be my competition and the folks buying those cheap beer glasses are not the type of customer I would want anyway.
Some customers still care about quality. Those are the customers I'm interested in. Those should be the only customers you should want to do business with.

Dan Hintz
01-21-2009, 3:39 PM
Barb,

If that kind of an order came in, I would immediately be leery of anything useful coming out of it, mostly due to what Tim says. If I get in an order for 1k of product 'X' I'd be happy to take it on if the price is fair, but it will always come down to what's convenient and less expensive for the client. Sure, that guy could get 10k glasses from Indonesia for $0.25/each, but what about the guy who wants 500 to start up his restaurant? The restauranteer can't get that kind of a price from Indonesia, so he needs to look more locally... this is the type of customer I'm looking for (as I'm sure most of us here are).

I suppose I wouldn't cringe as much at a single job that pays "only" $100 for an hour's worth of work if I had a number of them lined up for weeks in advance, but at the moment I'm looking at it as "I only have one job this week, I need to get as much out of it as possible"... that's a viewpoint I definitely need to crush if I intend to get repeat business. I want customers to feel like they can bring me a box of 50 items one weekend and expect them in their hands the next, done right, and at a fair price. I've successfully run my LED lighting business that way for over 6 years, and so far the only complaint I've ever had was from a guy who didn't heed my website's warnings (he tried to ship to a PO Box, causing it to hang for a week in the online ecart).

That guy probably paid a couple grand for the shipping container, putting his per-glass cost at around $0.50each... double his requested cost from you, but still way too low to make it worthwhile doing it domestically.

Mike Burroughs
01-22-2009, 3:29 AM
I try to live by 2 motto's...

'Charge what your worth'
and
'Work smarter, not harder'

I've found that being confident in your pricing helps also. Don't let the customer even think that maybe your unsure of what your charging, that usually triggers the bartering side of some customers.

I have turned down small sign jobs for realtors and small shops that want the 6" x 18" signs (the ones you usually see nailed to a light pole or stuck on a stick at an intersection). Can't stand the internet shoppers that come in and tell me they can buy them off the 'net' for 2-3 bucks each. I'm thinking to myself 'then why are you calling me?'. I try to educate them on my product and the quality and tell them to compare it the 'net' competitor. Ask them if they figured in shipping cost, how long it will take for them to process the order, etc.

mike..

Barb Macdonald
01-22-2009, 8:51 AM
Yeah, no kidding, guys. I was just a little disappointed, cause my Abigail has been a bit bored lately.
We're getting undercut on almost all new jobs we quote.
Thank goodness for the long time loyal customers.

Abigail = Epilog Legend EXT 60 watt. She's a gooood machine:)
I'm firing 'er up now.