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Thomas Hempleman
05-26-2005, 2:17 PM
:confused: OK, folks, I know this question has been asked thousands of times before. But I've never seen an answer that really works. I've had my own laser engraving business for almost a year now and I still don't know how to estimate the selling price for my work.

1. One method is to use the cost of the blank item to be engraved and multiply by 5 or 6. On a pre-made gift or award item that I can order from a catalog, this may work OK. But what happens if the customer furnishes the item? Or the item is cheap to begin with? One of my regular customers runs a scrapbook store and has me laser cut paper letters and designs. She furnishes the card stock paper which is probably only 10 or 15 cents a sheet. I get requests to cut letters for signs out of wood and acrylic. My cost depends on how big and intricate the letters are, not just the cost of the materials.

2. Another method I've tried is pricing by the square inch. I've called other shops and, posing as a customer, asked them for a price to do a job. In our area, small plastic engraved signs, desk plates, tags, etc. retail for about 45 cents per square inch. But what if the customer wants the item in another material like glass, wood, etc? Other shops start getting suspicious when you keep calling them, pretending to be a customer and asking them to give you their price to do a similar job. And they usually choose rotary or drag engraving over laser. If I ask about lasering, the cost goes up. I have to compete against these guys. I can't very well match their quote for lasering because the customer will just go to another shop and get it rotary engraved for less money. Or worse, go to Office Max and get it dirt cheap.

3. The third method I've tried is kind of a combination of the first two methods. I take the cost of the materials or blank item that I furnish and add to that the cost of laser time, based on 1 dollar per laser minute. If the customer furnishes the material, the cost is just for laser time. In theory, this method looks good. In practice, it's a crap shoot. Estimating laser times is the problem.

a. Raster engraving time depends on the material, engraving speed setting, DPI setting, size of the engraved area and layout of the engraved area. I've discovered that narrow areas take a lot longer to engrave than wide areas of the same size in square inches.
b. Vector cutting time is really tough to estimate. Are the cuts simple and straight or curvy? Is it a bunch of complicated little cuts? Cutting a simple square block letter that is 1 inch by one inch in size is a lot faster than cutting a fancy script letter of the same size. And how thick is the material to be cut? What DPI/PPI settings need to be used? All of these factors make it impossible to estimate laser time to vector cut an item.
I won't even get into estimating time and cost for special processes like painting, designing, layout, etc. Or factoring in costs like utilities, insurance, and paying myself a decent salary. The bottom line is a customer will ask me how much I would charge to do a project for him. And it seems like every project is different from any other I've done previously. I need a reasonably accurate way to give the customer a price quote that won't drive him away and won't send me to the poor house. Anybody got any ideas? I'm sure I'm not the only one with this problem.

Tom

Chuck Burke
05-27-2005, 2:50 PM
Tom,
If you go to the following link, you will find two articles by Don Bellerby that were previously published in A&E Magazine that will give you some idea about how to price your work. They are in Adobe PDF format.


http://www.jorlink.com/page.aspx?page_id=46

I hope this helps.

Chuck Burke
American Pacific Awards.

Thomas Hempleman
06-01-2005, 2:32 AM
Thanks, Chuck. I hadn't got to those issues of A&E yet. I'm a little behind on my reading. It looks like these articles answer a lot of my questions, but I'm still stumped on pricing vector cut stuff. Everything depends on how complex the cuts are and I'm just not good at estimating the time needed to cut any particular project. Maybe I'll get better with practice.

Chuck Burke
06-01-2005, 3:11 AM
Thomas,
Sometimes there is just no way around learning it as you go. The first time you bid something, you may underprice it, THEN when you do the job, you will KNOW how long it actually takes.... so the NEXT time you WILL know how much to charge.
Alternatively, if you overpriced it, and you find you got the job done sooner or with less expense, you will KNOW what the market will bear. At least you didn't loose. I am coming to find that pricing is in fact a "learning" experience. It is for me.....I have had diminished profits on several of the jobs I have done, because I did not take "this" or "that" into account...but the NEXT time, I most certainly will.
You are doing fine, and will continue to grow....good luck....

chuck

Laura Zaruba
06-01-2005, 9:42 AM
Thomas,

I am also relatively new and trying to determine the best way to price. When I first got started friends and family kept telling me I was way too cheap even though (I thought) I was making a fair profit. As I continued I realized for the time I put into a piece, they were right! I have a lot invested in this business and it's not just a hobby so I raised my prices and have a couple pricing models I use regularly to determine what to charge.

Basically what I do is take 3x the price of the piece + (engraving minutes x $ per minute price, typically no less than $1 per minute) + setup (about $1 per minute, 15 minutes minimum). Then I adjust from there if necessary.

It doesn't work all the time, but most of the time it gets me in the ballpark. Hope it helps!

Laura

Aleta Allen
06-01-2005, 10:01 AM
Laura,

I am with you all, pricing is the hardest part of learning this business. On larger items, not as hard, as it usually seems you have more room to move. But on the smaller, cheaper items, then it is hard to mark up the regular amount, as then the item is too high. You know, those litle items that cost you about $2 and people want them engraved for less then $4 ! :confused:

Good luck, I am still fighting this and it has been about 2 years!

aleta

Al Curatolo
06-02-2005, 2:37 PM
Man, you guys are really underselling yourselves. I'm currently charging $100/square ft, minimum 1 sq ft. Materials are extra and I sell them at cost +10%. Granted our stuff is more in the "fine art" category right now but even for trinkets that price should work. If someone is ordering more than 100 pieces I'll reduce my price significantly but $100/sq ft should be a good starting point.

Al Curatolo

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

Chuck Burke
06-02-2005, 3:53 PM
Hi Al,
After taking a look at your site, ( very impressive work by the way ) I realize that you probably should charge by the foot, because most of your work is along the lines of murals. However, most engraving businesses doing name, tags, plaques trophy's etc, charge by the sq. inch, ( with a minimum charge of course, and a set up charge of a minimum of $15.00 )
If you take your rate of $100 per square foot, it comes out to .70 cents a square inch, which depending on location and market is about right in line.
I think your post presents a good guideline starting point for those of us that are still struggling with pricing.

Chuck

Kevin Huffman
06-02-2005, 5:22 PM
I am an avid forum watcher, I recently stumbed upon www.signs101.com (http://www.signs101.com/) it is more for the vinyl cutter/large format printer market. But there was this guy on there, who says try his pricing method. He said it works better than he could ever imagine.

When they ask how much, you tell them the highest price you think of and actually say without laughing. If they don't faint, then say plus install.

I know you probably can't use this in the real world but I thought it was a funny pricing method.