Might get to retire early

[Scott Shepherd]

I got an email yesterday from a potential customer looking for some work to be done. They wanted to know my rates because they have been using someone else and wanted to see if our prices were in the same range. They told me they were paying .10 cents a minute. I had to do a double take and get the calculator out because my "in my head math" surely couldn't be correct. For sure, my head was right, they want to pay me a whopping $6.00 per hour to do work for them.

I'm not bothered by the customer part of it, but rather just thinking that somewhere out there, there's someone with a laser that thinks doing things for $6.00 per hour is a good business practice is what bothers me. Well, doesn't really "bother" me because I know the end result will be, or already is, someone not doing any more work for that price.

Really? .10 cents a minute? I hope it's none of you :)

[Jerome Stanek]

And I thought I was charging to little when I bid a job and thought I would make $60.00 an hour and only made $50

[Chris DeGerolamo]

You are taking their information as truth...I'm sure no one need tell you at this point to steer clear. Liars or morons, in either case, I would tell them to hit the road.

[Richard Rumancik]

I would want more info from them before I over-reacted. I don't normally give customers a per-minute rate as there are way too many variables. If you ask them to let you quote on a job or two then you will know if it is really viable or not. They need to compare the prices of the end product, not the shop rate. Perhaps they have been mislead by their current supplier.

[Dave Sheldrake]

there's someone with a laser that thinks doing things for $6.00 per hour is a good business practice is what bothers me

Welcome to the world of $300 ebay lasers and people running a non taxed sideline they have fooled themselves into believing is a *business* !

Had it here a few years back, people expected me to run a $500,000 Machine for the same as it cost to keep it powered up and supplied with gas, needless to say I *declined* the offer and those that did it are no longer in business.

cheers

Dave

[Greg Bednar]

You are taking their information as truth...I'm sure no one need tell you at this point to steer clear. Liars or morons, in either case, I would tell them to hit the road.

What Chris said!!

[Doug Griffith]

Sounds like B.S. to me but they could be making money in other ways such as materials, design, setup, shipping...

[David Somers]

Scott,

You don't know how good you have it at $6/hour! (pre tax I assume?)
Here on the West Coast we have folks standing on street corners holding signs that say "will engrave for food."
You can increase your profit margin with a small generator on your bicycle. Keep that engraver off the grid, improve your health and fitness, and you will be nearby and able to watch it in case of flare ups!!

<grin>

Seriously though. I hope that person was simply trying to game you. I do hope someone is not actually charging that, or was doing it for this one person as an extreme favor. If I end up with a laser in hand someday, even though I am a hobbyist I would not want to undercut the engravers in my area. That is not fair to them and not good for the community over the long term. Good luck with this!

[Scott Shepherd]

Sounds like B.S. to me but they could be making money in other ways such as materials, design, setup, shipping...

Well, you'd think, but they also quoted $10 each per file for making them ready for the laser. After my reply, I don't expect to hear from them again. I wasn't nasty, I politely explained we don't work for $6.00 per hour, explained our rates and told them we'd be happy to help should they need our services.

[Jason Hilton]

I get calls all the time for design work with the same tactic, I think they teach it in BS (business) school. "We are using another guy but we're paying 15$ per hour! Can you believe that!? Anyway, we need to cut some costs and heard you were good..." I've also heard "That's a bit more than we'd like to spend" and "That's a bit outside of our budget". You know what's out of my budget? Working for anyone who doesn't understand the value of the services I provide.

[Keith Outten]

Steve,

You should have told them that their offer was illegal, below the minimum wage. Deducting profit and overhead from their hourly wage offer would put you in a negative income situation. It would be better to ask you to do the engraving for free as you would probably lose less money since the Governor and the President would not get a share :)

No doubt they are accustomed to prices from an individual who has no business license, pays no business insurance, has no business phone or office and doesn't pay social security taxes or medical insurance on their employees. They would also have to be getting free electricity for their laser engraver and exhaust system.

I just sent my check for my annual property taxes for my business equipment and my business license fee for this year. Add to that the fees mentioned above and at 100 bucks per hour it might be April before I get the Government off my back and start making an hourly wage.

[Glen Monaghan]

One of the promotional type of items I sell a lot costs me about $6 from a national distributor. It takes about 1-2 minutes to engrave each, and I sell them for about $24 which may seem like a huge markup but that has to cover handling the order, doing the artwork, getting proof approval, receiving/storing/maintaining inventory, pulling/unpacking/post-engraving cleanup/repacking/shipping, and admin, so it isn't at all extravagant, especially with some customers who drag out the order and approval process. But anyway, a would-be customer asked me to price match another vendor recently. I checked that vendor's online ad and found they were indeed offering the product for $20, but they were out of stock until further notice so I reported that back to the inquirer and declined to match it. In reply, I was asked to match yet another online vendor who was asking only $11. When I went to the referenced site, they had an "about" page saying it was a stay-at-home mom who had been making hand stitched napkins and such, and now was also offering laser engraving. (She apparently was buying the same item from the same distributor.) So I again reported back what I had found, and wished them luck with the "hobby" vendor should they choose to purchase from her, but declined to match because there was no mention of providing a proof or after-sale satisfaction guarantee. After all that, they decided to buy from me anyway. Out of curiosity, I'm going to check back on that site now and again to see how long she is willing to work for so little.

[matthew knott]

Do you know how long the job will take YOU? We work our prices out by hourly rate but that's only for internal calculations, we dont tell the customer how long the job takes.
For example the customer might be have told that a cutting job takes and hour to do, so he gets charged $6. In reality it might only take 1 minute and now you are looking at $360 an hour (happy days)
Also whats involved in getting the laser files ready, maybe they are ready to go DXFs so its a 2 minute job so again $10 would be ok.

All speculation on my part as i cant see the info from this thread, if it does work out to $6 an hour then frankly he is 'taking the (insert expletive here!)' Hobby Lasers are kind of ruining it for everyone but i remember paying $.15 for photocopying and paying a small fortune for Polaroid film, when i started a decent YAG laser was $90'000 now a better machine can be had $20'000, the $90'000 machine is now almost worthless second hand, that's progress for you.

[Walt Langhans]

And this is why I don't do any engraving. Wow... just wow...

[Kev Williams]

All speculation on my part as i cant see the info from this thread, if it does work out to $6 an hour then frankly he is 'taking the (insert expletive here!)' Hobby Lasers are kind of ruining it for everyone
Anyone making $6 an hour with their 'hobby' laser won't be ruining anything for long. I picked up several new customers last year who are [usually] glad to pay what I charge to get decent- and timely- work done vs what they were putting up with... In fact just yesterday a guy called me all frantic about needing 175 5x7 wood plaques engraved by tomorrow. He'd been quoted a price by a laser shop, including material. The shop has been MIA ever since. One of his friends is another customer of mine, who referred him to me. I told him I couldn't supply the wood, but if HE could I'd be sure to get his work done in time. Took him all day to find what he needed, one of his employees dropped off the wood last night about 5pm. I finished them up at 3:30 today, my new Triumph blazed thru them quite quickly, and they look fantastic. I made over $1000 on that job, my cost plus what he paid for wood is only 19 cents per part higher than his first bid, and he'll have an extra 10 hours to do his work on them. He's already talking about titanium and stainless parts next...

Under-pricers and slackers in this business don't scare me at all. They just make me look all that much better when their customers find me. :)

[Mark Smith61]

The good news is that $6 per hour is tax free money because nobody is making a profit at that price so the business is reporting a negative amount at the end of the year!

[Joe Pelonio]

Hobby or not, if it's true someone is losing money, just on the laser wear/tear and electricity. I suspect a scam but who knows, someone might be that dumb. You should have told him you charge $60.00/minute. :D

[matthew knott]

Maybe its an elaborate 'Brewsters Millions' type situation

[Lee Reep]

I think I'd reply that you were notifying them that their email going out to 3rd world potential suppliers was accidentally sent to you.

[Scott Shepherd]

I got a reply today, thanking me for replying to their request. They said that they understood completely and realized that the previous supplier was doing them a favor because of the cause it was related to (I don't know the cause, I read it, but it wasn't anything like "we're selling them to pay for a puppy to have an important operation"). They said they would talk to us soon about some work.

[Mike Lysov]

I have had a similar situation today. I sell small 50mm tall 3mm thick MDF letters on eBay. The price is $1/letter. More than they really cost to do and I would list them cheaper but I can't do it because eBay does not allow BIN items to be listed for less than $1. Instead I have had to setup a low cost for shipping each letter. Today one guy has emailed me and asked me to give him a quote for 26 letters. As it's listed it would cost him at least $26 plus shipping.
26 letter order with such cheap letters is not a huge amount so I told him I can do them for $0.65/letter plus shipping. And he asked me for a better price after that. It seems that 35% for just $17 in total worth order is not enough for some customers.

Surprisingly most of my eBay buyers buy even more of these letters without asking me for a discount at all. And that's in spite of the fact that I mention in their item description that I am happy to give some discount for orders over 20+ letters.

If anyone contacts me and tells me some strange rates from "other supplier" I usually just tell them it is unbelievable low and they are all lucky to find this supplier and I recommend them to buy from that place. There is nothing to match really it is just not worth doing at all.
And these "bargain hunters" are not trying to make something 10-20% cheaper, they are pushing me a few times cheaper. I just know that nobody can do it locally for that "better price".

[Kev Williams]

Memory drawer just opened up.. ;)

Any ever get this customer? This was awhile back, before I ever had a laser--- guy calls me and says he just bought 5000 [small] frying pans from China. Only they forgot to put "made in China" on them. I ask if diamond-etching is ok. YEAH, they just have to say "made in China" on them somewhere! Ok- bottom seems to be the best place, I'll have to unwrap each one, the handles made matrixing out of the question so they're a one-at-a-time deal, then repack them... Did a little math, and gave him a quote of a $1.00 each.

Poor guy about had a cow over a buck... "My gawd, I only paid 25 cents each for the pans! Can't you engrave them for less???!!"

No, but I'll bet someone in China can...

[Doug Novic]

Well, at least they were courteous enough to reply. Being in the D.C. hustle and bustle I get pushed all of the time to do it cheaper. I never do and still end up getting most of the work. Generally I ask the potential account to ask this "low price place" for a certificate of insurance and also if the would fill out a W9 for them if I am being solicited by a business. I say it nicely and thank them for the opportunity. Usually get most of the work they initially inquired about. Not all but enough to let me know my strategy is on the right path.

[Dave Sheldrake]

Well, at least they were courteous enough to reply. Being in the D.C. hustle and bustle I get pushed all of the time to do it cheaper. I never do and still end up getting most of the work. Generally I ask the potential account to ask this "low price place" for a certificate of insurance and also if the would fill out a W9 for them if I am being solicited by a business. I say it nicely and thank them for the opportunity. Usually get most of the work they initially inquired about. Not all but enough to let me know my strategy is on the right path.


Great points Doug, it's surprising how many "businesses" think they are exempt from those things like Tax, Insurance, Liability ,product marking etc :)

cheers

Dave