help with pricing

[James Higgon]

I'm trying to come up with a price I should be charging per minute to laser items. I figure my tube is 4500 and could last as little as 800hrs, unsure how much optics are and how long they last, say 500 and 500hrs. So that's 0.11/min. I'm thinking I should charge around £2/min. I'm doing a friend 25 of these for £50, does that seem like a reasonable price? Material was free

http://i8.photobucket.com/albums/a27/baggedE30/20120427_122259.jpg

[Rodne Gold]

With depreciation ,and provision for repairs etc , a GPB10k laser at worst should cost around GPB1500-2000 (2k if a more expensive laser) a year to run. 200 working days a year = 7.50 - 10 quid a day , 8 working hrs a day = 1=1.5 quid per working hour or 2p a minute. This does not include any other direct and indirect expenses like power , rental , your time , loading and unloading , packing ,clean up etc. Thus its not a great strategy to charge by the minute - you really need to charge per piece , not easy to do if you don't have prior experience. You are also competing against alternative technologies , not in the case of the picture you posted , but often in other cases. For Eg , marking a stainless steel pen can be done with a laser and a pad/screen printer, you can compete with the laser and cerdec on small runs , but once things get to volume , you will be totally overpriced compared to the printing process.
At your 2 quid a minute , if those pieces take 5 minutes to do , at 10 quid , thats a VERY expensive keytag... if they take longer , well......

As an eg We charge a maximum of around 75p a minute if we have to price using that model *customer supplies material , useable corel files and its a snap to load/unload..ie no work barring lasering for us* , we got competition pricing at 1/2 or less that.... Lasering is no longer a license to print money...

[Mike Null]

James

Nice looking key ring but I would suggest adding a jump ring between the ring and the wood so that the hole area doesn't take so much pressure.

[James Higgon]

JamesNice looking key ring but I would suggest adding a jump ring between the ring and the wood so that the hole area doesn't take so much pressure.Hi, what is a jump ring?

[Mike Null]

http://www.google.com/products/catalog?q=jump+rings&um=1&ie=UTF-8&tbm=shop&cid=2086143478119106028&sa=X&ei=IPKbT-W9J4es8ASnh9SWDw&ved=0CJYBEPMCMAE

[Michael Hunter]

£120 per hour for watching a machine run - can I come and work for you? I will only charge you £60 per hour!

I did once get £2.05 each for 50 promotional keyrings (I supplied the wood). 6 months later I tried to ring them and they had gone out of business, so I guess their sense of value was a bit off.

There is someone near me who is messing up customer's expectations. As far as I can see he is charging about £6 per hour and must be getting his materials free.
Curses on these cheap Chinese machines! Hopefully he will either get realistic on prices or give up soon.

[Rodne Gold]

Don't street sweepers get more than 6 quid an hour?

[Michael Hunter]

Yes - that is less than minimum wage.

I suspect that he comes over rather unconvincing, but by the time people ring me they have totally unrealistic ideas about what they should pay.

[James Higgon]

£120 per hour for watching a machine run - can I come and work for you? I will only charge you £60 per hour!I did once get £2.05 each for 50 promotional keyrings (I supplied the wood). 6 months later I tried to ring them and they had gone out of business, so I guess their sense of value was a bit off.There is someone near me who is messing up customer's expectations. As far as I can see he is charging about £6 per hour and must be getting his materials free.Curses on these cheap Chinese machines! Hopefully he will either get realistic on prices or give up soon.So youd charge about £1/key ring?

[Ross Moshinsky]

Production pricing vs retail pricing will always vary huge amounts. You also have to realize pricing varies around the world, country, and even county.

We charge retail pricing. If you have a production part, you get a discount of retail price but it's still basically retail price. That's our business. If someone wants production pricing, they need to find a production shop and they better have production quantity.

The fact is, 25 is not production numbers. Retail laser engraving for a custom item is $1-2 a minute typically + setup fee (applicable depending on the file quality and if you need to make a jig) + materials (with markup). Sadly I really don't know cost of living or labor rate in England, especially your specific region, so I couldn't begin to guess if your prices are fair.

[Michael Hunter]

I don't think that there is any "one size fits all" method of pricing.
A few examples -

Pairs of manufacturer's logos on wood supplied by them. 10 minutes engraving time per pair, £10 charged.
£10 extra cost on a £12,000+ boat is neither here nor there and I could probably have got away with charging a bit more.

A nice lady wants wooden tags (similar to key fobs) to enhance the baskets that she sells.
Timing at £1 per minute for engraving both sides plus cheap birch ply puts the price at about £3 each.
£3 extra cost on a basket that sells for £10 to £15 is clearly not realistic.
If she buys sufficient quantity in one go, I will do them for around £0.85 each - but she is still thinking about it as her target is under £0.50.

A young graphics designer wanted a large (20 x 30") MDF panel engraved with one of her patterns.
Engraving time was about 160 minutes.
I have told her that she owes me £50, to be paid once she gets some commissions for her work.

So a target of £1 to £2 per minute is a useful starting point for pricing, but needs to be tempered by the perceived value of the item in the eyes of the customer.
Occasionally you can get much more than target, but rather too often the target price works out as excessive.

[Frank Corker]

Mike is pretty much spot on. I find that sometimes you have to give a little and take a little. A job is quite often priced at the figure the person is willing to accept is a decent price. There is also a difference between someone like me, retired and happy to do stuff for pin money, even just having the enjoyment of doing stuff for friends at a lot less than they would pay elsewhere and say Rodney who has a business to run with wages to pay. Rodney's pricing has to be almost cemented, yes he could charge more for a one off, but he won't often be doing stuff where he is paying for the finished item and giving them money to take it. That would be suicide.

James, dependent on if you are a 'Rodney' or a 'Frank', you could take the bold step and ask your customer what they might consider is a fair price to pay, or you could hit them with a price which you know you can negotiate down to what you'd like to get. Everyone expects to pay more for one off's or small quantities, but the more they have the less they are prepared to pay. If you are going to be a business, then you need to have a business plan which includes your hourly costs/materials or you'll be dead in the water.

[Frank Corker]

Oh Rodney, by the way I paid GBP £3000 to replace my laser tube. Wow that didn't hurt.

[Rodne Gold]

Thats about the same as my Coherent 30w cost me last time I had to send it to be repaired , lasted 6 months after that - now that DID hurt!!!! :)
I actually quote a FOAD price on fussy customer niggly one offs with no possibility of big or follow up orders or jobs I know will be trouble , A price so high that the customer either goes away or accepts the price which now has so much profit in it that I can devote the time and attention I know the job is going to need.
I cross subsidise sometimes , for EG I would charge a quid for a 5 x3 cm 4 line engraved plate on a 25 quid trophy bought at me , the profit in the trophy subsidises the plate. Buy 10 and the engraving is free ...