Monday Morning Blues

[Mike Null]

Last week I quoted two wood engraving jobs.

One for a local supermarket chain to engrave a 15" by 1.5" logo on 100 bread boards. I should have quoted $13 or thereabouts but I quoted 11.50.

The other job was quite substantial involving 3500 pieces of wood to be engraved on 4 sides. Two of the sides would be about 3"x3" and the other two about 1"x3" vertical text. Since I do wood in the 3x3 size fairly often I knew what I should be charging. It should have been in the area of $12. Since there were so many I discounted my quote to $9.50.

I called the supermarket chain this morning and was told they had two bids under $2.00 each.

The other guy won't return my calls so I must assume that he found somebody close to his $4.00 target. I guarantee that this job will take 14 minutes to run. Even with building two jigs it will take 12 minutes.

My guess is that here are examples of people who will soon have their machines up for sale because they don't know or care how much it takes to be in business. They will not have my sympathy.

[Dave Russell Smith]

Its a dog eat dog world at the moment, :(

[Martin Boekers]

Mike when I was photographing commercially I used to run into that
problem quite a bit. More often than not not I would get a call back
shortly before the project was due, and I do mean shortly! Asking
if I could save them as the photographer greatly under-performed
and/or over estimated their capabilities. This may be happening here.

Someone newer to the laser and figured time wrong.

Did they let you know who quoted it? (probably not)

I'm just curious if it was an ad speciality company as sometimes
they have custom built lasers that can bequite a bit faster than ours.

Maybe a Galvo setup? I have seen the videos of the one that does tiles
incredibly fast.

Then again they are quite a bit more expensive and a job should still
be reasonably priced.

Iv'e never researched this but could the be "branded" I'm not sure of the
process for that but I thought I'd through it out there.

There is entirely to much risk and wear and tear to get $8-$10 hr for
your time. If the shops are local maybe you can see one when they
get finished. (highly unlikely they will get finished at that price using
similar equipment that we use.)


Marty

[Joe De Medeiros]

Mike I feel your pain, I have been running into this with my custom glass work, and I find it's the retired/hobbyist that are doing this, they figure any amount is better than nothing.

[Joe Pelonio]

I'd be curious as to the lead time on these jobs. I have discovered that there are sources for "off-shore" laser work now, just like ADA signs and screen printing that are done with so little cost in labor and materials that even with shipping they come in at 15-20% of what we have to charge to make anything. I have done locally installation on some of these and found the work to be low quality but in many cases the price difference makes up for that to the customer.

[Mike Null]

Both of these jobs were local. The 3500 pieces was a year's worth of work at 800 to 900 per quarter.

To pour a little salt in the wound, when I called the lady on the bread board job she acted as if I was a thief. That may be understandable from her point of view since I was nearly 10 times higher.

MARTIN

The galvo set ups I've seen wouldn't handle the bread board due to the size. They generally do small areas very fast.

[Larry Bratton]

Mike,
Your beginning to feel what I get a lot of. I also have a friend close by that does high end CNC 3D work and he has recently been pricing at $60 an hour mind you and getting beat out at $50-55. You should see some of the things he does, like at the moment he is doing a full sized automobile and almost got beat out by a guy carving it in sign foam BY HAND. Unbelievable. Some hungry people out there.

[Viktor Voroncov]

Very often here when laser owner must pay his monthly leasing bill :( They try to catch job at any price which will allowed them to pay.

[David Fairfield]

Not getting the contract sucks. Maybe the competitor is selling laser engraved but delivering silk screen or branding iron. Or outsourcing to India or China. Or maybe he sucks and gets work by doing it cheaply, who knows?

Those kinds of jobs where a laser is really too sophisticated a tool for application, are often at risk of getting taken away by somebody with a better cheaper faster method. Happens to me a lot, but usually on some mind-numbing work, so I don't mind too much.

Maybe it would pay to look into some old school alternative marking systems where you can stamp the thing in a couple of seconds per piece. Might be a really low start up cost, too.

Well anyway, sorry it didn't work out, I know the feeling.

Dave

[Steve Clarkson]

In my 2+ year search for a niche, this is exactly what I have found.......almost anything you can think of can be done better, faster or cheaper than with a laser.....and most people (especially for high volume jobs) are looking for the lowest cost regardless of quality. Therefore, even if there is a job that only a laser can do, there are either so many people starving for work that they will do it for pennies or it can be made offshore for a fraction of what we would charge.

[Mitchell Andrus]

I get quotes for work and shake my head at the ineptitude.

A fellow quoted $1,200.00 to do what took me 5 days and $502.00 to do the restoration on my deck. (See recent thread in OT). When I asked him if he knew there would be between 10 and 15 gallons of paint and stain at $25.00 per involved, he got pretty quiet and adjusted his price up $100.00.

Yikes. I like a good deal but I'll be damned if I'm going to listen to a sob story half way through the job.

When the other engraver needs to replace his tube, he'll stop working for peanuts.
.

[Mitchell Andrus]

.... or it can be made offshore for a fraction of what we would charge.

Maybe it's not too late to re-examine NAFTA and import taxes.
.

[George Beck]

Mike

I learned the hard way on this sort of thing but a valuable lesson. I had a local organization (Cheepskates Inc.) that wanted 100 1.5" x 10" wood strips, beveled, finished and engraved with 2 lines a name and a title like past chairman. I figured wood, cutting, milling and engraving time and carefully quoted $10. They had more like $2.50 in mind. I was new at this and hungry so we settled at $3.00 ea. I spent about 40 hours of time and materials cost me $2.00 each. So I worked all week for about $2.5 an hour. But that is not what it cost me and here is my point. I stay pretty busy with my little box and gift business where I make about $25 hour, not what a painter gets but ok for year 1. Every hour spent on these low ball jobs is an hour I am not making something else. These low price guys will figure this out eventually. Pretty soon you are trapped in a web of increasing volume at a dropping rate. Now I keep this in mind. It reminded me of the the two guys who decided to sell watermelon for $1.00 each. They bought a truckload of watermelon which they paid $1.00 each. At the end of the day they sold all of the watermelon but realized they made no money. The one guy turned to the other and said " We need to get a bigger truck!"

Just my 2 cents

George

[Mike Null]

Just for what it's worth, both these jobs were laser only jobs. It wasn't an issue of a better or cheaper process---just somebody who doesn't know how to price their work.

[David Fairfield]

I've seen stuff for sale that says "laser engraved" that was definitely not laser engraved. One product looked so bad, I'm certain it was made by firing a blow torch through a metal stencil. For some people, its good 'nuff!

[Tim Bateson]

Very often here when laser owner must pay his monthly leasing bill :( They try to catch job at any price which will allowed them to pay.

Not everyone has a monthly lease. Machines are getting less expensive and there are a lot of very affordable gently used machines available at a very discounted price.


Just for what it's worth, both these jobs were laser only jobs. It wasn't an issue of a better or cheaper process---just somebody who doesn't know how to price their work.

Mike, Keep tabs on this customer. They may find their "bargain" deal isn't such a deal and start looking for a Quality engraver.

[Martin Boekers]

Not everyone has a monthly lease. Machines are getting less expensive and there are a lot of very affordable gently used machines available at a very discounted price.



Mike, Keep tabs on this customer. They may find their "bargain" deal isn't such a deal and start looking for a Quality engraver.

I'm with Tim, on this as I said with my photo experiences, they may be looking
for you to bail them out if it doesn't happen are the quality isn't there.

Mike, I know how frustrating this can be esp. with a lowballing client.
consider engraving a piece and send it to them as an example of
a professionally done, high quality piece. If nothing else the "lucky bidder;)"
may all of the sudden be finding he cannot match the quality at
the pricing and time frame he gave:D.

Sometimes the jobs that you don't get are best that way!

Marty

[John Noell]

Over here where I am, the price competition for some of the things we do is truly incredible. One place out of Indonesia is selling pearl shell necklaces, NICE ones with braided cords and more, for 65 cents each. Yes, 65 cents. The people making them must get 5 cents an hour (or less). I am depresed thinking about the poor people doing this and depressed thinking how I cannot sell beautifully crafted pieces at a price that would net me $5 an hour because they are being compared to the cheap Indonesian stuff.

[Jiten Patel]

The galvo set ups I've seen wouldn't handle the bread board due to the size. They generally do small areas very fast.

Mike, thats not entirely true. The galvo I just bought can mark and area of 290mmx290mm (which still may not be enough) but with the right lens and marking head (3 axis scan head) they can go up to 1.5m x 1.5m.

[Dan Hintz]

In the vein of Tim's reply... I would suggest making one board and taking it to them for holding. Tell them to compare it to whatever they receive from the cheap guy. If the quality is not the same, they can choose to come back at your quoted price.

[Mike Null]

Dan

Just not interested in pursuing the bread board job. I have called on the other but have received no response. (not to re-bid but to find out what the best price was--my quote was my best shot)


Jiten

Sorry for the mis-information. Hadn't seen anything here that would do 400 mm.

[Jiten Patel]

Jiten

Sorry for the mis-information. Hadn't seen anything here that would do 400 mm.

Thats all good mate, no need for apologies. The one I'm getting would probably do what you need in around 20-30 seconds each and thats over shooting the time. Only issue is the spot size. The galvo has speed but the bigger the area, the bigger the spot size which means the galvo doesnt even come close to the detail you guys can do with your engravers (not jealous at all! :D)

[Rodne Gold]

The only reason the price or mainstream generated lasering is so expensive is cos the capital cost is so high. If you had an 80w $4k engraver you could do the job much cheaper..you can buy 5 of em for the price of one mainstream..
Add to that low overheads (out of a garage) and it's still profitable at cheap prices.

This issue is going to become more prevalent as cheaper machines flood the market ...the solution is if you can't stand the heat , get out the kitchen...IE its US that have to adjust in terms of going after whats most profitable and to know when to say Uncle.

I have seen the output of the chinese machines and it's perfectly acceptable - the quality difference isnt huge. What we have to do is play on our strengths and mainly these are material experience and creativity/design sense..forget the rats and mice and cut throat pricing segment and go for the rest.
The whole laser industry is maturing , with many many more machines out there - having a laser is no longer an exclusive club..the problem is that we arent changing our business models to suit conditions.

Working for the trade is stressful , your customers are only loyal as long as your pricing is the lowest , rightly so as it is their duty to minimise costs at an acceptable quality level.

Whats acceptable to an experienced laserist is most likely anally too critical to the end user .. I could drop my dpi to half and still have my customers go wow...

It's time for a new strategy , I think...
IMHO the best way to go is add more processes and machinery , so you become a one stop shop and you can really go to town with products if for example you can laser , cnc and digitally print , you can make just about anything

[Scott Challoner]

Whats acceptable to an experienced laserist is most likely anally too critical to the end user .. I could drop my dpi to half and still have my customers go wow...


Along the same lines... Don't automatically assume that higher dpi = higher quality. I was engraving pizza peels for a guy at 500 dpi because that's what I thought I should do. Then I tried one at 300 dpi. I actually like the look of the 300 dpi mark better and it takes a little more than half the time. You can see raster lines with a jewlers loop, but what customer is going to look that closely.

[Mike Null]

Rodney

You're right about more processes but for a one man shop such as I have there are expenses that still must be met. One of which is me and I'm not working for minimum wage.

[Liesl Dexheimer]

I agree with Steve, seems like quality just doesn't matter to some people any more. They would rather pay far less and get something that looks "ok" to them. Also, if it's any consolation...I have quoted more jobs this year that have fallen through than in years past...it's a sad sign of the times here.

[Tim Bateson]

I agree with Steve, seems like quality just doesn't matter to some people any more. They would rather pay far less and get something that looks "ok" to them. Also, if it's any consolation...I have quoted more jobs this year that have fallen through than in years past...it's a sad sign of the times here.

I think that's a VERY good point. I have found that customers are far less discriminating than I am of my own work. Sometimes I'm not given much to work with & the final results are marginal - to me. However the customers where bowled over and very happy with the results. I've not had 1 customer that wasn't thrilled with the final product. If you don't count the 1 customer that had a typo in the provided text.

[Kay Bengtson]

In the R/C Model Airplane business, we have to compete with cheap Chinese ready built models selling below the cost of our kits. This makes it very difficult to have a decent profit margin. We manage because our kits are very high quality and the selection is such that none are high volume enough to justify volume production by an Asian knock off company. Still, when I was farming out the laser cutting, only one fellow would charge me a rate that allowed me to be in business. All the others ended up estimating the cost to be at or higher than my list prices.

After a few years, he began to raise rates after I placed the order because he knew he had me in a bind. I had to pay the higher price even though the PO set the price lower or not get the kits. Finally, he instituted a policy that if he left out some parts of a kit, I had to pay him again for the replacement parts as he insisted that he never made such mistakes.

In the end, I was so angered by his practices that when I got the opportunity to buy a used laser, I jumped at it. It has been four months and I have already paid for half of my investment to buy the laser.

That said, I still realize that if I had a lease payment, I could not make a profit. With rising balsa wood prices and the trend that modelers are now building from their stashes of kits, business is slow so I have to be creative by offering new cheap small kits that they can't resist. I can cut them fast and they take less wood giving me a higher profit margin. The key word here is ADAPT. We have to learn how to adapt to a changing business climate. Who knows when or if it will ever return to pre recession levels.

Kay

[David Fairfield]

Unless we get some government protection, I think we're just facing an eventual state of economic equalibrium with third world.

Most of the barriers that protected US manufacturers are all gone, no language no communication no legal barriers. Now the "perception of made in USA quality" barrier is coming down. The Chinese make some very good stuff, plus many Americans are just quality blind, and will get blinder as their buying power dries up.

Maybe someday school kids will read about how the US blew its wealth on cheapo Chinese imports, the same way kids today read about the Indians selling Manhattan to the Dutch for a bunch of beads.

[Michael Kowalczyk]

Cheaper isn't always better for the customer. I have one guy that travels 40+ miles to drop off pens for me to engrave, yet he has another laser guy around 5 blocks from him. He had one pen done by the other guy and said he will never go back and does not mind the drive because he knows what he is getting. Quality at a fair price.

There are always the ones who shop by price only and they will always be looking for the cheaper price, so it is hard to retain them as customers. I prefer to maintain good quality at a fair price. (Wholesale still goes for $60.00 an hour plus.) Those are the customers I like to keep.

When you have given your best price and they still want it cheaper then say "NO" and work on harvesting the customers you want to keep happy with quality.

[Rodne Gold]

Im really annoyed with the drop in so called USA made quality in the car part business - I import and use a ton of V8 parts , both personally and in my pimp your ride business , not only that , we share premises with one of the biggest muscle car parts importers.
I paid a WHACK for real AC Delco relays for my vette - close to $90 for 2 - open the box and they are cheap generic labeled made in china junk - I didnt have to wait 2 weeks to get that...
Boxed parts from Comp Cams , Milodon , MSD, Rchmond gear, Holley etc are all coming with bits missing , wrong parts included , incomplete installation kits and so forth - it's becoming a nightmare as cars are standing for weeks on end cos of bad parts...
We have spoken to a few mnfgrs about this , ALL of the co's that have these issues have their goods packed or made offshore...
Made in the USA might be on the box , but its not inside and it's no longer a guarantee of quality in this market segment.

[Andrea Weissenseel]

In times like these most people simply cannot afford being choosy, and it's like this not only in the US over here in Europe it's the same story (at least in Germany) so they only choose the cheapest "quality". Like others already said, Lasers are getting more affordable and some people rather charge a little rather than the machine standing still - especially if they don't have to make their living off the income with the machine. You just can't make your price, that you have to charge, plausible to customers, when you are in competition to an retiree firing a china cracker for $4-$5k

Mike wrote, that a lot of people simply don't know how to calculate their jobs correctly, I think that's a good point too. Naturally if you don't have to pay a lease for your machinery you don't have to charge that share to pay the lease - that's what they probably think. I faced competing offers calling up prices, that I couldn't even get the material for.

But if you stick to your own choosen standards, I think you'll convince most customer in the long run, that you are the best choice for them. Self-Marketing is the key to it all


I have found that customers are far less discriminating than I am of my own work. Sometimes I'm not given much to work with & the final results are marginal - to me. However the customers where bowled over and very happy with the results. I've not had 1 customer that wasn't thrilled with the final product.

I agree fully with that - but I think everybody is experiencing this

just my 2c

Andrea

[Scott Shepherd]

One job doesn't make a trend. Mistakes happen, people misquote, people work for cheap. Nothing new here. It's been happening for 100 years or more in manufacturing. Let's face it, that's the business we are in, manufacturing. We're not in the "engraving" business, we're in manufacturing. In my time in machinery manufacturing, I've gone up against all of this before. I've seen people quote jobs for less than the material cost and I've seen us misquote jobs as well. It's part of the beast. You can't quote 1000's and 1000's of jobs and not make a mistake here and there. Also, you can't compete against people that are willing to work for $6 per hour out of their home.

In all my years in manufacturing, I've not seen this type of thing ever be a threat. It all works itself out. If it's a misquote, the people that quoted it will quickly figure it out and make that call back to the supplier, at which point, you'll look like the quality supplier, and next time they will call you instead of someone that they can't trust the quote, and if it's someone working for $6 per hour out of their home, they'll either get flooded with so much work they can't keep up, and then their delivery will fall to pieces, or they will get tired of working 18 hour days for $6 per hour and not being able to cover expenses like new tubes for their laser.

It's nothing to worry about, it's nothing new, it's not the end of the world, it's just a purchasing agent that doesn't have a clue and they think they are doing the right thing. They will learn.

Don't sweat it.

[Martin Boekers]

Im really annoyed with the drop in so called USA made quality in the car part business Made in the USA might be on the box , but its not inside and it's no longer a guarantee of quality in this market segment.


Rodne,

I know what you mean, it is hard to distinguise just what made in USA means. Maybe different levels;

100% made in USA
Assembled in USA
Materials made in USA


each has a different conotation.

As you said The quality level has change world wide.
As many toys that come from China that reach our shores
you think that by now there would be an understanding
that lead paint and "swallowable" small parts are a no-no.
Yet they still come here and get recalled. I didn't mean
just to single out China, but it does happen.

The problem lies when the manufacturer decieves us by
not giving the total picture ethically, yes maybe ok
legally but not ethically.

It is explained away by saying it was made in USA when actually
assembled from castings made from other origins.

I actually have a wood frame that says Hand made in Thailand
from American Alder Wood. It's amazing it's cheaper to process
the wood states side, ship it overseas and back, than it is to
produce it here.

I'm competative with local shops as far as pricing goes,
where I shine is the service end. I give them more than they
expect so that makes the difference here.

I do get a few that leave for pricing (I think we all do at sometime)
None of us will get 100% of the work so yes, some test waters elsewhere.

I do have a few clients come in and question pricing, I usually have
alternative selections for them. Maybe a scrape booking shop that sells
nice metallic card stock that can be laser printed, if they have wood
making talents, we do have a fully appointed wood shop and frame
shop that they can rent for just a couple $$ an hour. Then I do
recommend another local shop to check out.

More often than not the don't want to do the card route, they don't have time
to fabricate a piece and after they check out the local shops they find
out we were cheaper, faster and closer! Then they come back.
It amazes me that some will drive an hour or more to save $2.

Give them the best you can produce!
Don't cut quality for low end pricing, unless that's what you want
to be noted for.


Marty

[Mike Lassiter]

One think I would like to say here is that if you don't think you are worth but so much that is very likely all you will get. I don't recall every getting more than we ask for anything we've done. I place a high value on quality. It is what I want people to remember about us. We have people come back after several years even though we know there are others selling cheaper than us. I have heard it said before "they know what their stuff is worth."

Embroidery is one area that people go into Wal Mart and see a shirt embroidered all the way around for $20 or you can buy the same shirt without embroidery for $15. Look in the tags and see where these items come from. There was a show I watched on TV (can't recall the name now) that had some young people go to other countries and actually work in some of the places that garments are made and sent to the USA. It was so sad. I think in one show the people had to make quota, and some even slept on the floor at the factory for $2.40 a week in pay. :eek:

There simply is no way for us to compete with that. I bought material made in a factory in Wisconsin, and embroider it with a machine made in Denver Co, and cut it out with a Universal Laser that we ordered and had to wait for it to be made in Scottsdale AZ. I wanted to try to keep my money as a consumer keeping my fellow countrymen and woman working.

I hate that so much is imported back to our country for us to buy it, and to think the people that are making most of it could never afford to buy what they make for a living in the under developed countries it comes here from. Of course I guess we can say that about some things that are made in this country as well; depending on where you live.

[David Fairfield]

Interesting post. The more you think about it, the more complex the problem becomes. So I try to focus on the domestic issues. I buy American when I can, but damn its tough and like Rodne said, sometimes there's just no point.

Fair competition is a great thing, its part of the evolutionary process of Capitalism. Keeps us all thinking up new and better stuff and methods.
But something needs fixing, when good jobs that keep people employed and productive are threatened and extinguished by competition with sweatshop, slave and child labor. People need jobs, not hand outs.

Dave





One think I would like to say here is that if you don't think you are worth but so much that is very likely all you will get. I don't recall every getting more than we ask for anything we've done. I place a high value on quality. It is what I want people to remember about us. We have people come back after several years even though we know there are others selling cheaper than us. I have heard it said before "they know what their stuff is worth."

Embroidery is one area that people go into Wal Mart and see a shirt embroidered all the way around for $20 or you can buy the same shirt without embroidery for $15. Look in the tags and see where these items come from. There was a show I watched on TV (can't recall the name now) that had some young people go to other countries and actually work in some of the places that garments are made and sent to the USA. It was so sad. I think in one show the people had to make quota, and some even slept on the floor at the factory for $2.40 a week in pay. :eek:

There simply is no way for us to compete with that. I bought material made in a factory in Wisconsin, and embroider it with a machine made in Denver Co, and cut it out with a Universal Laser that we ordered and had to wait for it to be made in Scottsdale AZ. I wanted to try to keep my money as a consumer keeping my fellow countrymen and woman working.

I hate that so much is imported back to our country for us to buy it, and to think the people that are making most of it could never afford to buy what they make for a living in the under developed countries it comes here from. Of course I guess we can say that about some things that are made in this country as well; depending on where you live.

[Michael Hunter]

Worse than the competition from peanuts labour is that the Chinese are controlling a big proportion of the supply of raw materials - so much so that western countries may soon be unable to make things even if they wanted to.

Examples -

Now that the mine in California has closed, the Chinese have the only supply of the stuff needed to make rare-earth magnets - and they have stopped exporting it, saying that it is needed for their home market.

They have bought up forests and wood stocks around the world (e.g. all the greenheart and exotic hardwood from the Caribean). Even the price of softwood fence posts in the UK has gone up because of this.

The Chinese have influence or ownership over a large percentage of the mining and mineral operations in Africa. Copper ore, you name it!


It is history repeating itself - the British and other Europeans did similar things in the 18th and 19th centuries. That does not alter the fact that the scale of the Chinese operation now is truly worrying.

[David Fairfield]

Just some food for thought here, regarding skilled labor jobs. Some people are just mentally wired for manual or creative work, and they just rot away in a white collar job, like I did!

http://www.aolnews.com/opinion/article/opinion-we-need-more-skilled-workers/19618719 (http://www.aolnews.com/opinion/article/opinion-we-need-more-skilled-workers/19618719)

http://www.matthewbcrawford.com/ (http://www.matthewbcrawford.com/)

Dave

[Andy Joe]

could it be that the person that can do it for 4.00$ a peice be able to run faster, or more at once? They wouldnt be doing project for a loss then. I charge a dollar an hour. ussually with a min. But a 3x3 would take me less then 3 min on a surface engraving. How deep you going?

[Martin Boekers]

I believe Mike was doing 3 sides so that would be about 9 min
roughly, so I think that's the same territory you are in at 3min a side

Mike I think runs a Trotec Speedy one of the faster machines on the
market.


Marty

[Niklas Bjornestal]

I charge a dollar an hour.
You should get alot of work for that price :D

[Viktor Voroncov]

Andy, is it joke?? I have customer in Pakistan, even he charge $20 per hour :D

[Mark Winlund]

Andy, is it joke?? I have customer in Pakistan, even he charge $20 per hour :D


Maybe he means he makes a dollar an hour. Thats about what I make on a good day......

Mark