Losing Business to Idiots

[Tim Bateson]

I don’t mind losing business to someone being competitive – that’s the nature of business. However I lost a very large Anodized Tag order to someone doing them for $0.66 each…With FREE shipping!!!! Even buying in bulk + shipping, I’m paying nearly $0.40 each. What kind of idiot is spending their time for only $0.26, which if you think about it isn’t all profit. Prep/Setup Time + Laser Time + Electricity + Laser Upkeep + Packing Time + Billing Time + Shipping Time + Shipping Costs + what-ever I forgot = very near $0 profit.

I have much better things to do with my time than working for nothing. This idiot is more than welcome to take this contract. rotfl :p:p:p:p

[Martin Boekers]

Chance are he is either manufacturing the nametags they may only cost $05ea.
There probably is a limit to what can be engraved, maybe 3 line 26 letters per line etc.
These are the jobs that is tough to make money on unless you have a specific set up for it.
I don't know if you have ever seen a laser designed to engrave pens (see You Tube) it is a
pretty neat conveyer system that you just set the pens on a belt as it runs through the procees
only takes a few seconds a pen and drops them in a box and you already to seal and ship.
Ad Specialty manufacturers have some really cool propiatary set-ups to do quanties on such items.


May here at SMC stay away from small margin jobs and rely on the commercial work for business.

Have you thought of joining ASI and adding these lines of product to your sales? He was buying those retail your
discount would be somewhere around 50% outsource and take the mark up.

[Scott Shepherd]

You could have been competing against a galvo laser, which would have done in them in about 2 seconds each. They probably made good money on them if they had a galvo.

[Tim Bateson]

Martin, these are Chewbarka anodized aluminum tags.
I don't know anything about Galvo lasers - still seems like low profit for such an expensive machine.
The order was for 1,000 pet paw tags - 7 different colors with different text on each color

[Martin Boekers]

On this they probably have a system that auto loads tags and does a mail mrge for this.
Is Chewarka producing the whole job are they just buying tags from them.

[Tim Bateson]

I'm assuming they are Chewbarka tags as the customer stated the other quote was using the same tag I use. Maybe someone does have a larger processing facility & can do these for pennies. They can keep those pennies.

My business model requires a minimum profit of $125-$200/hr to except a job. Even with those standards I've had 2 customers in the past week tell me my price on their item was too low & offered to pay me more. Have I mentioned lately I love this work. :D

[Martin Boekers]

I'm assuming they are Chewbarka tags as the customer stated the other quote was using the same tag I use. Maybe someone does have a larger processing facility & can do these for pennies. They can keep those pennies.

My business model requires a minimum profit of $125-$200/hr to except a job. Even with those standards I've had 2 customers in the past week tell me my price on their item was too low & offered to pay me more. Have I mentioned lately I love this work. :D

Great that is working for you, you definitaly are at an upper end for mark ups! Way to go!
I have my business model too, but then the reality model takes over...:)

There are many companies that sell tags all shapes and sizes, Chewbarka I believe is on the smaller
manufacturing scale. I talked with him about a project I was working on (Coins) and it was difficult because
it required two sides to treat and with out a hole he couldn't hang them.

Like I said there are some custom lasers out there for those that specialize in different items. Check the videos out
they are neat to see. I'm sure these guys are making more than a few pennies. My brother's screen shop does metal
plates for the appliance industry. He may make $.30 on a screened 3x5" plate but, he can do 5000 in a couple hours
so sometimes depending upon your focus there is money to be made.

Keep up the good work and the pricing structure that makes it best for you!

[Hilton Lister]

In tough economic times, 1 cent is better that 0 cents. I find that I often don't make the hourly rate I want. But perhaps that's because the older I get, the slower I become.

[Bill Jermyn]

I agree, it's irksome to have basement operations giving work away, but I try to use them to my advantage. I farm out some work to them, pay them pennies, and sell at my usual price. Meanwhile I can do other work that's more profitable.They can sell all the $5 trophies they like, I don't care to compete in that market.

[Joe Pelonio]

Remember too, that if the person has time they can get anything we do for about 1/8 the price in China. One of my customers was getting 4 color domed pins for $0.50 each and selling them for $4, from China with free shipping. I asked if he got 10,000 and no, it was only 100. We have to beat them with quality I guess.

[Rodne Gold]

You wont beat em with quality either....you just can't compete.

[Khalid Nazim]

The only advantage to pitch to a North American customer is to offer customized services delivered immediately. Chinese manufacturers cannot deliver stuff immediately here in North America - for now till they develop teleportation :)

So I would market my services to customers who want custom services and need it immediately. If its mass market and the customer has time, their need would always be full filled by Chinese imports.

[Terry Swift]

Tim - we pretty much all share your pain and frustration. I have people calling for quotes on items and I'm like you - I figure at least a $1 minute to set-up, laser, etc. If they have multiple items, then maybe I can cut the cost some; but there are people out there who are just looking for "cheap." I can't imagine they expect quality, consistency, or much else for the tripe they want to pay. I do my best to capture the business that does come my way; but obviously there are others out there who can and will do it cheaper. I do outsource some of my stuff; as doing 100 marble / granite plaques would take me forever and a day to laser them all myself; so I have found those who can afford the Kerns and other large bed lasers / CNC's that can push them out in minutes versus my 1/2 hour or more. I mean, a 120 watt machine will blast something out in no time versus my 30 watt machine.

I've finally decided that I do my best to give a good price to my return customers and even try to do that with new ones; but today's crowd is quite fickle. They expect you to work for pennies; but if told the same for them - they would be offended. If they are looking strictly for cheap; let them go, as they probably would use you one time and find someone else the next time. We also have to educate our customers that it's not simple plug~n~play. There is artwork, setup, laser time, down time, painting, cleaning, electricity, etc. we build into our model. We're not some get rich quick scheme by any stretch of the imagination.

Keep your head high for doing what you do, do it well, and let the chips fall where they may. Tomorrow is another day. :eek::eek::eek:

[David Fairfield]

How about the engravers who do imprecise, crude work and charge MORE than you do? In my case, there are a lot of those around!

Dave

[Liesl Dexheimer]

Unfortunately, it seems that this is becoming quite the pattern. It's ok to have competition but when they are ridiculously low prices, it only hurts the rest of us. I could be wrong but the more laser manufacturers sell to hobbyists and schools the more it will hurt businesses like us. If I loose out to someone that's doing something at an unreasonably low rate, I am now saying to myself: "Let it be their headache."

[matthew knott]

Its not as bad as it sounds, we are engraving 8000 dog tags for a playstation game, we charge $0.28 to engrave each side with a logo, we can engrave a tag every 4 seconds so 900 an hour (per laser) at that rate its a net rate of a about $250 an hour, which i think is pretty good money! Its all about using the right machine for the right job.

[Tim Bateson]

Its not as bad as it sounds, we are engraving 8000 dog tags for a Playstation game, we charge $0.28 to engrave each side it a logo, we can engrave a tag every 4 seconds so 900 an hour (per laser) at that rate its a net rate of a about $250 an hour, which i think is pretty good money! Its all about using the right machine for the right job.

Thanks Matt, That verifies some of the consensus here. I can't compete with your rate of production. I just hope most of my potential customers never find you. :)

[Dan Hintz]

Thanks Matt, That verifies some of the consensus here. I can't compete with your rate of production. I just hope most of my potential customers never find you. :)
He's in the UK, so if they want fast shipping and/or someone local, I think you're safe.

[Steve Clarkson]

Between China and Etsy basement dwellers, you can't be competitive AND profitable in the laser engraving business......which is why I think people are crazy who want to buy a laser and hang a shingle. Tim's right.......who would want to work for $0.29/tag.....do you know how many tags you would have to do in order to make $2,000 per month home mortgage payment? For the mathematically challenged, it's 6,897 tags (at 30 seconds each, that's 57 hours of engraving). Sorry, I don't want to work that hard.

Regardless of what you make (dog tags, plaques, glasses, etc.), there is someone out there that can make it cheaper or better or both.

Going forward, the only people that will make money using a laser are the ones that don't advertise "laser engraving".....people like Dee, David and Doug (or trophy shops)......those who use their laser to make specific products.

About a year ago, I removed the "laser engraving" tag from my business name and I now get more work and more profitable work. I cut alot of acrylic parts for my biggest customer and charge about $4 for a 2 sq inch piece.......he asked me what I use to cut it, and I just told him that I have a shop full of tools that I use. If he ever finds out that they are laser cut, he will find someone on Etsy to cut them for $0.50 each. When someone knows that a product is "laser cut" or "laser engraved", they simply Google it and find hundreds of people that can do it.......so it's just a matter of getting quotes from as many people as possible until you find the desperate soul who will do it for next to nothing.

I've been searching for my "niche" for four years now.......I've looked at doing everything from pint glasses, to stencils, to rubber stamps, to marble tiles, to rhinestone appliques, to nametags, to plaques, to silicone molds, to jewelry, to marquetry, and on and on and on. Regardless of what I considered, I found out that there were a TON of people that could make it cheaper, faster or better. Go ahead, name something that you make using only a laser, tell me how much you sell it for and what your profit is......it'll take me five minutes to find 10 other people that can make it cheaper or better using a different process (ie. screen printing, pad printing, vinyl, etc.).

The good news is that I think I may have FINALLY found my niche using the laser........but NO WHERE will you see that a laser is used in the process.......and no, I will not even give a hint as to what it is or what it involves.........but even if someone does figure it out, I've spent over a year researching and testing the process......so I'm not too worried that I will have any competition any time soon.

[matthew knott]

its only fast turnaround and services the keeps us in the game, espically the promtional item industry, if you can wait 3 weeks you can get the engraving free in asia. Had an anoying converstaion last week with a guy who wanted 100 wine bottle stoppers engraved in a hurry, we quoted him £0.65 each (1$) and it was a large logo plus they all came packaged in retail packaging, he had the cheek to tell me he could get them done in India for 4 cents, i pointed out you can buy a meal there for less than $1 but that doesnt help me when i want a curry on a friday night and have to pay $25. I suggested he google a few other engravers if he didnt like our price, then call us back when he realsied no one else would do it in his time scales for the price. Took him 15 mins to call back.

[Bill Cunningham]

I usually don't take on jobs that are in the thousands of pieces, so I usually just price em high.. If they come in, I will do them, but I would just as soon not.. I prefer to stick to the short run custom jobs.. I have never had anyone come back and tell me they can get it done for xx pennies less than my price, but if they did, I would just tell em they got a heck of a good price, and gofer it(chances are their bluffing anyway).. I've been in business long enough to be choosey. I'm on a 8-10 day turn around from artwork approval to ship, and the odd time, if I can, I will do a rush for a funeral(mostly their not really 'planned'). But I generally refuse to bump others for a rush job, because of poor planning, or procrastination on a customers part. But if I do, I charge BIG for it...

[Mark Conde]

Steve C. has hit a home run with his post. Laser Engraving is not a business or an industry. It's a process used to create 10,000s of different types of products. I find it completely disingenuous when the laser manufacturers, distributors and suppliers put on training clinics or post on the web prompting new laser owners to push the "laser engraving" service in their advertising. What a bunch of hooey. The customer does not give a rats butt about how the product is made, how long it takes to produce or the accuracy of the machine. They want a good product that meets their quality standards at a price that is within the marketplace norm. The bottom line is this.....to be successful you have to create value; or at least perceived value for the customer.

And I love competition... it pushes me to be better and pushed the fly-by-niters out of business. Is it easy? No. Will I become a millionaire? Most likely not. But I find the work challenging, creative and free form working in the snake pit of corp America.

[Rodne Gold]

The real probem is that lasers are becoming cheap and affordable so just having one is no more a licence to print money like it was 10-15yrs ago. The best thing to do if you are a one man show and cant afford to compete cos "your time is too valuable" is to employ someone cheap...overseeing a laser working or loading/unloading it etc is really a low level job.

[David Fairfield]

Steve is right about advertising "Laser Engraving." Lasers have been around long enough that its lost its novelty and is often associated with cheap junk. Go to eBay and search "laser cut" and you will get an idea of the junk the public tends to associate with laser cutting, and the kind of prices they (rightfully) expect to pay for it. You are totally on your own in establishing your work as anything other than cheap junk, the onus is on you. On the other hand, selling cheap junk is also profitable, if you can make it in quantity.

Dave

[Lee DeRaud]

On the other hand, selling cheap junk is also profitable, if you can make it in quantity.Although it will apparently get you called an "idiot" by people using a different business model.

[Martin Boekers]

Service , quality and consistancy! If we all had the same business model we would all be in trouble! :0

I do quantities from time to time mostly when a regular customer needs something for an event.
Still the moneys not bad, but it does take laser time and I want to make sure it doesn't interfer
with the workflow.

Steve, $2000 a month mortgage, That's probaby more than most make here alone! And that is in 60hrs
I would take that any day and do it all year! That would be over $60,000 a year! Yes I would work
that hard. I work that hard now and don't make that!

For almost everything out there, yes, someone can make it quicker & cheaper. Better? now that is more
about perception and what is "good enough" Do you really want to compete at the lower end?
You have to believe why your price is more and have to educate you clients as to why.
Some still will go the cheap route that's life in the business world, you can't win them all.

Owning a laser doesn't make you any more a talented craftsman, than owning a violin makes you a talented musician!

[Ken Shea]

When I was in the retail gun store business the way to survive the big outfits purchasing power was to purchase from a group buying plan out fit.
They purchased in quantity as a single entity, then distributed those products to their paid membership, not unlike Sams Club in operation. There were membership dues and yearly purchase volume requirements.

Nothing like that in this trade that I have seen.

[Rodne Gold]

Ken, What exactly would be group purchased?
PS My operation is one of those "idiot" operations , due to my infrastructure , using multiple paid off machines and having the staff , we can do those volume jobs at low prices and make a good profit on em.

[Martin Boekers]

It's difficult to get that organized. I believe some did here with a polishing torch a while back.
A few answers here have shown some find ways to make money on certain jobs others won't touch.
Case in point Fairs, Some do well others say "your nuts" I can't make money doing that.
I guess the real survivors and money makers find what people want and are willing to pay
in their local (or online) and figure a way to do. It's hard to to sell people something they don't want or
are willing to pay for. Find a need and fill it.

[Ken Shea]

Rodne,
The buying group, lets call it Laser Emporium :)
They sell memberships to other like minded business's, these businesses then purchase their laserable items from Laser Emporium who buys in quantities/prices that their membership cannot, they then distributes those products to their members at lower wholesale cost then the membership would be able to purchase from their normal supply.

If ones purchasing capitol is large enough and yours seems to be, this purchasing method would be of no interest and of course every business has it's own needs so it is not at all a one shoe fits all solution to lowering product/material cost.








Ken, What exactly would be group purchased?
PS My operation is one of those "idiot" operations , due to my infrastructure , using multiple paid off machines and having the staff , we can do those volume jobs at low prices and make a good profit on em.

[Rodne Gold]

What I meant is that is there actually a sort of "core" (apart from engraving lams) of items laser engravers would buy or is economical to use a buying service for?

[Ken Shea]

Rodne,
OK, not sure I follow you now.
Likely I am not the one, being totally new to this field to answer that even if I understood exactly what you were asking, would not laserable items be the core product :confused:

[Rodne Gold]

Well, if you could narrow down the buying services product range to 30-50 items most engraver/laser engravers buy a reasonable qty of , you might save , but to carry a huge range of laserable stuff (just about everything is laserable) and keeping the correct stocks and despatching and packing small qtys would not be a workable model. I might be wrond?
My question is what would make up those core items that it would be worth carrying?? Ie what are the top 20-50 items most engravers buy most often most of.

[Ken Shea]

If after narrowing down the core items and all one could come up with is 30-50 items, one would be well advised to invest in another venture beside a buying group.
Imagine Wal-Mart with 30-50 items.

I do know from shipping many thousands of orders that picking product to ship is not the time consumer, it is all the rest, a sufficient minimum order would be essential. Buying groups are not get one of this and 4 of that they are bulk purchases.

My statement was simply thrown out for thought or avenue for help in being competitive.

[Lee DeRaud]

I do know from shipping many thousands of orders that picking product to ship is not the time consumer, it is all the rest, a sufficient minimum order would be essential. Buying groups are not get one of this and 4 of that they are bulk purchases.That kind of defeats the purpose: the whole point of the buying group is so the group can get the bulk discount and the members can then buy from the group in more practical (i.e. smaller) quantities at less than the normal small-lot pricing. Somebody who is already buying in large quantities doesn't need the group.

[Thomas Bank]

Going forward, the only people that will make money using a laser are the ones that don't advertise "laser engraving"

In a way, it is analogous to hanging out a shingle saying that you have a table saw. It sounds ridiculous, but you're basically saying that you have a tool and nothing about the end product or the skill you have to produce that end product.

As an architect, I'm constantly approached by people and contractors who feel I should be charging in line with the fees of the mailorder plan houses. My response is similar to Bill's - if that is what you want, I'm sure that you can find a mailorder plan that suits your needs. Then the response is that they cannot find something that exactly suits their needs or that the mailorder plans don't have the proper details or don't meet the local codes or whatever else...

AH-HA! So you want me to go above and beyond what the mailorder plans offer but for the same price? Sorry, can't have your cake and eat it too... A phrase I have to admit that I've never fully understood... :)

In this economy, it can be difficult to turn away work. But it does really come down to working with people who understand the value that you add - whether in architectural design or laser engraving - and value that over what can be mass produced.

[Ken Shea]

As I mentioned, a buying group is not a shoe fit for everyone, several buying groups I tried to purchase from required a yearly $250k purchase, those were not for me, but others were. What is large quantities is very individual. One has to determine their own involvement whether it would be of benefit or not.



That kind of defeats the purpose: the whole point of the buying group is so the group can get the bulk discount and the members can then buy from the group in more practical (i.e. smaller) quantities at less than the normal small-lot pricing. Somebody who is already buying in large quantities doesn't need the group.

[Martin Boekers]

Actually I am fairly happy with the prices I am paying for most products.
I do take advantage of companies like JDS that if you order $5000 or
more a year you get last case cost on eveything if you buy a case. This
is a GREAT deal. If you work it out and place orders stratigically and order $1000
they throw in free shipping too! Marcos and PDU have similar plans. Does this take
research, work and consolidating? Yes it does. Is it worth it by all means! A few products
such as glass clocks I feel are entirely overpriced so I don't carry them. Laminated plastic
has gone up as well as magnets. Those would be maybe the 2 things I would be interested in.
right now. Problem is how are you going to distribute these products? Who is going to get paid
and how much cheaper will it be to tempt me a way from companies like JDS who I have a great
relationship with and know I can get quality products in 1-2 days?

[Ken Shea]

Forgot too mention, one buying group I inquired from required a yearly purchase of $1million, you start talking that kind of money and prices change pretty rapidly. There were two stores close to me that did buy from them, needless to say, I bowed out :D

[andrew zen]

$200/hr PROFIT?????? Wow, I need to scratch my chin a little more....

[matthew knott]

If you price a job right with large orders you can easily make $200 an hour, but get it wrong and you can make very little, job takes 4 seconds and you make $200, job takes 10 seconds because of something you didnt account for (like the parts need to be cleaned by hand and take ages) and your profit nose dives. Im guessing lots of people with lasers on here are a smallish life style type business, maybe with only one employee, who has to run the whole business, in that way its going to be harder to get the higher volume work. To get to the level we are at we have gradualy built up, buying more lasers and employing more people, it comes with more headaches but allows you to make more money. As Rodney points out, taking things in and out of a laser is a pretty low level job, setting it up just right is very skilled, if your not spending the day using your skill your not at your full potential ......ll but do you want the hastle and risk of running a larger operation, we have 10 lasers, all paid for, that were all (except 1) purchased second hand, found another one today at a bargin price so i snapped it up! $200 an hour jobs are out there, ive seen people make much more from lasers!

[Martin Boekers]

$200 an hour is very difficult to achieve with any consitancy. I am sure we've all had the "The Perfect Storm" jobs and made quite a bit of money in little
time. Making $1600 a day, day in and day out just ain't easy with one laser.

You are right though if you have the business to support it and grow. You have ten lasers if you make even $15 an hour per laser profit after expenses that's $1200 a day
so yes there are ways to make money. You seem to have taken a bit more specialized route from the looks of your equipment. So chances are you are also competing
more specialized markets which lead to better mark ups.

So..... where have you been hiding only 22 posts...jump right in and share some of your knowledge!

Oh, on single jobs, it don't take much to ruin a $75 piece of crystal, I can vouch for that... You can tell right after you hit the start button ;-)

[Bruce Boone]

I make several times that per hour. Of course, the challenge is to do that consistently. Machine time is not my critical path item. Selling product that fast is.