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View Full Version : Trotec/Eplilogue desktop laser resale values.



Dan Kozakewycz
02-11-2014, 5:16 AM
Been having more of a think into buying my own desktop laser machine to create my products, and it is looking more and more likely that it is really the only option as I am meeting resistance at the retail price I need to sell at in order to make a good margin whilst outsourcing the lasering.

Now, technically I am in a good position at the moment, I've got about £6k sat in the bank, maybe another £1500 if I scratch around under the sofa, drivers seat of the car etc. I think I should be able to negotiate a deal on something like the Rayjet 50 or Epilogue Mini at a trade show with that kind of budget. Maybe. Just.

Anyway, the problem is, that money is mine and my wifes savings towards a house deposit. She's not going to like the idea of me spending it all on an elaborate gamble, even though I am convinced I can make a return on it in good time. Basically, I need to know what sort of price I could expect to see back on say, a 6 - 12 month old machine, should the business idea not fly and I need to cash out.

I need to know my maximum exposure to risk here. If I could negotiate a deal for say £7k, and could get back say £5k on resale after 12 months, then that's doable, I can convince her with those sorts of numbers. I think anyway. I'm hoping here that buying a quality product is going to pay dividends over a cheaper chinese import!

This is basically my only real opportunity to buy one and start the business, after we have bought a house there isn't a cat in hell's chance of me being able to save that money up, and the margins on outsourcing my products is likely to see me pack it in or have it snatched by someone with lower overheads that can do them cheaper. I could perhaps get a homeowner loan after the house purchase, but I'd rather own it outright if at all possible.

So, are these machines desirable on the second hand market, and what would I be likely to get should I need to bail out?

Dan Hintz
02-11-2014, 5:58 AM
I think your depreciation is reasonable, though I can't say if your purchase price is, too (don't know pricing across the pond, but it seems a little low... could be wrong). The problem is finding a buyer... just because your sell price is reasonable doesn't mean there's a buyer waiting for it. If that perfect house comes along, and you can't get it because your down payment is tied up in a machine you can't find a buyer for, imagine how much the missus is going to be pushing you out to the doghouse.

Dan Kozakewycz
02-11-2014, 6:08 AM
Well going on what others here have suggested you can get discounted from list price at the trade shows, I think it should just about be possible.

We're still probably 6 months away from having the deposit we need anyway, so I figure I've got 6 months to make it work. If it's making a decent return by then, but not necessarily paid back the investment, then I'm sure we can postpone the house purchase for a while in order to set ourselves up for the future. If I've made no profit, I figure we lost maybe £2k and that'll put us back 2 months before we can look at houses.

Seems reasonable in my head. Getting it to sound the same in hers? Pass the brave pills...

Dave Sheldrake
02-11-2014, 7:23 AM
Dan K,

Are you in the UK?

cheers

Dave

Mike Null
02-11-2014, 7:32 AM
I'll rain on your parade. If you don't have a business generating income to finance the machine I doubt that you'll be able to make it work on your time table. Many have come up with "million" dollar ideas only to find that people won't break loose any cash to buy them. That could be the number one reason for so many used lasers being for sale here in the US.

Engraving is primarily a service. Those who can make and market a unique product are rare.

Remember this--if the wife ain't happy--ain't nobody happy.

Jiten Patel
02-11-2014, 9:38 AM
I agree with Mike. Having a machine is just a small piece in the puzzle. Have you got a route to market? Do you know your costs/outlays to develop your product and have you done sufficient market research to know it may sell? Having friends and family saying it's amazing doesn't count.

Having a great unique idea can work - it worked for me. Ask yourself, are you happy to loose that money...if the answer is no, then don't do it. If you are, and are confident in your product - go for it. Work hard and get that house!

Rodne Gold
02-11-2014, 10:09 AM
IMO a seriously bad gamble - forced sale a year down the line is 1/2 of what you paid - and the above mentioned advice is spot on.
Leave it alone ,buy a property , enjoy living there ...

Dave Sheldrake
02-11-2014, 12:35 PM
I'd echo what my countryman Jit has said as well as Mike and Rod, over here it's a funny game to be in, unless you have copyrights tied up (and very good lawyers) then even unique products are hard to protect against being copied. There are a LOT of other costs involved in starting up a laser company here, if you aren't working in industrial premises then just the planning can be a minefield, chuck in potential CE paperwork, product liability, 3rd party liability, consumables etc etc and start up can easily end up being 5x the cost of buying a machine.

17 companies over here started out the same time as me in this game, there are 3 of us left.

Just a humble opinion but don't go down the secured loan route unless you know for a *fact* your design is going to give returns, the risk is just too high, I've seen more than one happy family ripped apart by a single bad decision in business :(

My advice would be find a better cutting company to do your work, there are a fair few over here so still plenty of options.

best wishes

Dave

Jiten Patel
02-11-2014, 12:48 PM
And just to add to what Dave said, find a company that cuts and trial the products. You may not make much if any profit, but at least you know it is working and you are not stuck with a machine that you paid top "dollar" for.

I would be happy to help you if this is something you would want to explore. Where are you based?

Mike Null
02-11-2014, 1:49 PM
Just to emphasize what Jit and Dave are saying. There is not a single thing in the engraving business or virtually any other sales operation more important than marketing. If you don't have a handle on that, and I'm guessing that you might not based on your pricing comments, then investing in a machine is pure folly.

matthew knott
02-11-2014, 3:22 PM
Dan, if you really want to go down this route maybe look out for a good used machine, one of our customers recently relocated back to the USA and we do his engraving in the UK, he had recently purchased an Epilog Zing and hardly used it, i know he was struggling to sell it, think its gone now but a biggish hit was needed to shift it. Also unless your just going to go down the offering laser engraving route i would say dont need a laser of your own to start, If your margins are that tight that you have to laser yourself then you dont have your margins right. As an example we engrave a small andosied part, each one has a custom design thats emailed to us, we do about 60 a week, all different and charge £1 each, the guy we do them for pays £0.90 for the item (then £1 of engraving), but then sells them at £24 each. He could get his own laser and save £60 a week but why bother.
My advise , get started first, test the market, dont invest money you cant afford to lose and see how in pans out.
Also dont forget they expect houses to go up in value 12% this year , £100'000 house = £12'000 a year (although i expect this will all end in tears again)

David Somers
02-11-2014, 4:05 PM
Dan,

I don't know if this would be an option in your neck of the woods, but in the US most modestly sized cities and towns have something generically called maker shops. They are places where someone has gathered a bunch of tools; woodworking, engraving, cnc, sewing, electronics, you name it. You can usually pay for their use by the hour or minute and get assistance if you need it. Many of them offer a membership where you either get a certain number of hours free, or a reduced rate on their use. You can walk in or schedule your times. They are great for folks who are learning, or who are not yet at the point where they can justify owning their own gear, or who just don't have the space to do stuff themselves. In your case, if you went in there with your files and materials ready to rumble you should end up paying less for the work since you aren't paying for someones time AND the amortization on their equipment. That might help you get to the point where you have the customers lined up to know if the risk is reasonable, and not drain your house fund.

Another thought..... is there someone near enough to you with a good hobby laser who might be willing to rent you time on it? That would likely cut your costs, and let you do enough with the project to see if this really will fly? Jit's offer also seems like a nice approach for the trial balloon phase without risking your house fund.



Dave

Dave Sheldrake
02-11-2014, 9:00 PM
Same here Dan, if you are stuck and just want to have a go I have quite a bit of free machine space you are welcome to play with to get some idea of times and work involved. Won't cost you anything as the last thing I want to see is a good guy start out and fall over like so many have.

My terms? if you ever get to a position to help somebody else who is in the same position as you are now, you do it for free as well.

cheers

Dave

Dan Kozakewycz
02-12-2014, 6:50 AM
Great advice guys, thank you.

For those of you that asked, I am in the UK. Not only that, but I live on a small island in the UK, and nobody here owns one of these machines for me to use.

I currently have a company in London that cuts my products, but with their margins on the materials, time on the machine, delivery and taxes, it makes the cost too high for me to offer it as a viable product. Currently, it costs me £70 to deliver one of these products to the customer, and the feedback seems to be that people want to pay £100. That leaves me with £30 to do all the design work for each bespoke item. It's just not feasible. With my own machine, running it from home, I can deliver them for about £35.

I agree, using my savings is too risky. Someone mentioned the Kickstarter method, which is what I am going to do, I've already written up my project. I've got a couple of magazines, blogs etc interested in running a feature on my products, and will time those to be published when the Kickstarter project launches to get maximum exposure.

I'd need about 150 backers for the project at around £100 each, and that will serve a double purpose to both judge the market reaction to it, as well as getting the funding. Seems like the perfect solution!

Dan Kozakewycz
02-12-2014, 6:53 AM
Same here Dan, if you are stuck and just want to have a go I have quite a bit of free machine space you are welcome to play with to get some idea of times and work involved. Won't cost you anything as the last thing I want to see is a good guy start out and fall over like so many have.

My terms? if you ever get to a position to help somebody else who is in the same position as you are now, you do it for free as well.

cheers

Dave

Sorry I didn't see your reply, it was tucked away at the bottom!

That is a lovely offer and one I would be happy to reciprocate. Where are you based?

Dave Sheldrake
02-12-2014, 8:27 AM
Salisbury ,Wiltshire and Carmarthen in Wales. Which of our islands are you on? I know a few guys on the UK islands with lasers as well. If you want to drop me an email direct I'd happily go through your idea with you and advise of any problems you are likely to face in manufacture as well as let you have details for material suppliers and material prices (from them not me).

Kickstarters can be good, but sometimes the hidden costs that get missed can make projects over-run or fall leaving the idea so damaged it's unlikely to be accepted in the future.

I'm quite happy to send you an NDA to protect your project if you want one before you mention what it is.

best wishes

Dave

Dan Kozakewycz
02-14-2014, 9:44 AM
What is going on with the reply structure on this board, it hides new messages and puts them in the wrong order!?

Dave, I'm on the Isle of Wight. I've asked around here and no-one can recommend anyone with a laser.

I've accounted for most of the 'hidden costs' of Kickstarter I think.

I started with a target figure, subtracted the Kickstarter and payment processing fees, taxes.
From that, I subtracted the cost of buying the machine at list price and getting it delivered.
That left me with an amount to create rewards. I divided the that by the average reward level of £100 to get the required number of backers, then totted up the cost of manufacturing, packing and shipping that many rewards and subtracted that from the remaining.

I came up with a figure of £16k. That would get the machine delivered at the list price + VAT, and make/ship 150 rewards over the course of the next 6-8 months.

In the making/shipping costs I have accounted for the cost of material bought in bulk and cut down to size (already got quotes for that), the packaging and courier costs. Shipping outside of the UK will be subject to an additional charge. I have not accounted for the cost of running the machine as I don't know what they are. Do they consume a considerable amount of power when running?

I'd not be looking to pay list price of course, I would instead aim to purchase from one of the shows at a decent discount, which should leave me an additional buffer.

Dave Sheldrake
02-14-2014, 11:01 AM
Do they consume a considerable amount of power when running?

Hi Dan,

Not really, bank on 1,000 watts input power for a 40 to 60 watt DC and around the same for an RF machine. The thing to watch for is stuff like a tube suddenly going ping or popping a lens or so, lens's and optics aren't expensive but can put the machine down until replacements are available. The tube on the other hand is going to cost £200 ish for a 40 watt DC unit and few if any of the UK main dealers will ship them by post (they get smashed too easily and cannot be insured)

Something else to consider is the CE requirements, that will depend on what the item is, what the intended market is, what the potential market could be and a few other considerations. Some items MUST be CE marked, some can be self certified but some have to be regulatory body certified.

You may also need / be required to have product liability insurance, this can be dirt cheap for stuff like picture frames but very expensive for anything electrical depending on the inherent danger in use (inherent danger is perceived danger and not actual for the case of insurance)

If the purpose is to make money, ie: sell for financial return and profit you may also need change of use for your premises depending what they are.The Town and Country Planning (Use Classes) Order 1987 confides A1,B1,B2 and B8 are not unusual requirements if the place of manufacture is a dwelling place.

You will also be liable for Business Rates on the premises where the items are made even if this amounts to a spare room or garden shed for example.

Also consider the expelled gasses from your machine, if you are in a built up area the Clean Air Act 1993 may apply depending on the materials being processed and the level of toxicity of any exhausted fumes.

Class 2 National Insurance will also be payable if you are a sole trader with a slightly different set of rules if you intend to trade as a company.(if a company then you need to register for corporate tax within 16 weeks of starting out)

VAT registration may also be worth considering if your product is likely to sell in volume, once you get to £79,000 in a 12 month period for turnover.

hope that helps

cheers

Dave

David Somers
02-14-2014, 11:38 AM
Dave!

Yeeeeeeeeks! And I thought we were bad! Holy cow! <teasing grin>

One question though. For those of us across the pond.....what is the CE requirement you mentioned? Didnt find that in a fast search of abbreviations. Just curious.

Dave

Michael Hunter
02-14-2014, 11:56 AM
Further to the good advice from Dave :

Tell the tax man what you are up to!!!!!

You only get a very short period to inform the tax man that you have started a business : if they find out later, then they can start fining you and generally making life difficult.
Very different from the business rates thing, where the council will just be happy that you have volunteered to pay up, regardless of how late you tell them.

Have you asked the council about start-up grants?
I got £500 from Test Valley Borough Council - half straight away and the other half after a year (to make sure that I had made a go of it).
I think that it has gone up to £1,000 now.
The Isle of Wight is always desperate for jobs, so perhaps they run a similar scheme.

I've had a number of emails from Trotec over the last few weeks - they have been selling off their demonstrator machines.
Might be worth a ring to see if they have a suitable machine left over, or a dealer refurbed trade-in.


David :
CE is a marking system in the European Union ("Common Market"), showing that an item meets certain minimum standards.
A CE mark is essential for anything electrical, electronic or TOYS.
Almost everything else seems to be getting CE marks too as time goes by.

The most important bit about the CE mark is the safety side, which is by far the most expensive to have assessed.

David Somers
02-14-2014, 12:43 PM
Thanks Michael!

Almost sounds like a UL or Underwriters Laboratory certification over here. Though that is not as comprehensive.

Thanks! The difference between us is fascinating to me. Some good, some bad, some so so. Appreciate the explanation.

Dave

Michael Hunter
02-15-2014, 6:27 AM
Yes - for electrical/electronic things, CE is a bit like UL and FCC combined.
It takes it further though, in that the thing must work properly and be fit for purpose.

The most interesting part of CE for laserists will be toys.

(I'm no expert on this, but have taken an interest since I acquired grandchildren last year).
The requirements cover materials and finishes used (obviously must not be toxic) and safety things like minimum radius for corners (eye protection), with some allowance for the age range at which the toy is aimed.

Perhaps most important is that if something looks like a toy or is obviously very attractive to children, then the authorities will treat it as such.
This means that you can't get round the requirements by saying that the item is "a model for adult collectors only".

All this means that making toys for anyone other than immediate family means -
a) Studying the relevant British/EN standards
b) Getting good product insurance!

Dave Sheldrake
02-15-2014, 10:08 AM
Perhaps most important is that if something looks like a toy or is obviously very attractive to children, then the authorities will treat it as such.
This means that you can't get round the requirements by saying that the item is "a model for adult collectors only".

My daily nightmare Michael, I have just under 1,000 pages of tech files and conformance statements for just 3 simple products. Even then the list of warnings that have to be put on the packaging!! then on to the packaging itself!! the number of holes and their size in the bags the items are shipped in (air holes) the mouth opening on the bag, thickness of the bag materials, staples being changed for glue to affix tab top onto bags, choking hazard, suffocation hazard, toxicology reports on the materials, structural integrity reports on the materials, storage and potential for covalent contamination, fire safety reports......the list is almost endless.

That's for the 3 years to 14 years age group, the 0 - 3 years age group I just won't go near.

Dave, each infringement is treated as a separate problem, £5,000 per infringement and up to 6 months in jail, they routinely demand every similar product you have made is recalled (even if that goes back 10 years+) no court orders, no chance of appeal, they can just shut you down in a heartbeat and both seize and destroy any infringing items.

My legal and conformance invoicing for the last year has been a tad over £100,000 ($160,000) just to keep on top of all the legal requirements.

These days I make very good use of Trading Standards Authorities, if I want to develop a new product, I'll call TS and just ask, "This is what I want to do, what would you like to see incorporated" and they will let me have a list of what they would be looking for if the item is produced for market. So not only are they there to enforce the rules, if you ask them they will also advise and help you meet the requirements.

cheers

Dave

Dan Kozakewycz
02-19-2014, 8:11 AM
A hell of a lot to consider for sure.

My product is wall mounted artwork, hopefully there isn't too many requirements for that (similar to the picture frames you mentioned). I will however look into the liability insurance.

I'll be running the machine and business from home. I've been advised that lasering AA does not produce any significant fumes so hopefully extraction should be fairly straight forward.

I will be registering as a sole trader and paying the associated C2NI. I doubt I'll need VAT registration any time soon.

Dave Sheldrake
02-19-2014, 8:48 AM
I'll be running the machine and business from home.

You will very likely need change of use and a change to your household insurance Dan,


I've been advised that lasering AA does not produce any significant fumes

True but enough fumes in a residential area to require clean air act conformance (BOFA filter maybe?)

Due to the scattered radiation hazard you will need to use / store / install the laser in a locked room that has no access to under 21 year olds and possibly the Class II - IV hazard warning signs. (also check the noise pollution requirements for peak sound levels)

"Mounted artwork" doesn't *appear* to have any CE requirements but an advisor will be able to confirm this (there are considerations for weight and hanging strength loads for the method use to fix it to the wall) I *think* it's harder if you provide the hanging equipment (hooks etc) as they are likely to need compliance, however if they are not provided that *may* avoid this.

cheers

Dave

Rodne Gold
02-19-2014, 9:08 AM
So many rules and regulations, its real scary....one would have to get 7 approvals before hammering a nail into wood. :)

Dan Kozakewycz
02-19-2014, 9:13 AM
Actually for nails and wood, it's ten approvals. :p

Dan Kozakewycz
02-19-2014, 9:17 AM
You will very likely need change of use and a change to your household insurance Dan,



True but enough fumes in a residential area to require clean air act conformance (BOFA filter maybe?)

Due to the scattered radiation hazard you will need to use / store / install the laser in a locked room that has no access to under 21 year olds and possibly the Class II - IV hazard warning signs. (also check the noise pollution requirements for peak sound levels)


"Mounted artwork" doesn't *appear* to have any CE requirements but an advisor will be able to confirm this (there are considerations for weight and hanging strength loads for the method use to fix it to the wall) I *think* it's harder if you provide the hanging equipment (hooks etc) as they are likely to need compliance, however if they are not provided that *may* avoid this.

cheers

Dave

All a rather worrying amount of bureaucracy but to be expected these days I guess. Points noted though and thankyou for highlighting these things.

Dave Sheldrake
02-19-2014, 11:19 AM
So many rules and regulations, its real scary....one would have to get 7 approvals before hammering a nail into wood. :)

Not far off to be honest Rod, the papertrail over here to do just about anything is a nightmare!

When you have more than 5 staff it gets worse still, you mentioned the wood/hammer jokingly....in the factory that would require I have safety glasses available (£5,000 fine for me AND the staff member if I don't provide them and he doesn't us or ask for them) A risk assessment for RSI potential due to multiple impact work (if it was a lot of nails), First Aid & Safety equipment appropriate for the work environment, protective footware if the impact device / tool is above a proscribed weight and could be dropped, measured sound pressure levels to ensure ear defenders are available if the noise exceeds an average of above 80Db (A weighted) for an extended period, etc ad-infenitum!

It's a miracle we get any work done in between all the files that have to be kept and filled out! God forbid you try making anything toy related...then it gets really difficult!

cheers

Dave

David Somers
02-19-2014, 12:37 PM
I always thought we were ornery with regulations Mr Sheldrake. But you guys sound wayyyyyy worse! Pack up that factory and come on out to Seattle!! I know lots of folks from Wales here and they seem to love it. We only get about 900mm of rain a year here in Seattle so we are downright dry compared to you guys! Our main block to getting work done is gorgeous weather in the summer and fall.

See you soon?

<grin> Dave

Dave Sheldrake
02-19-2014, 2:46 PM
It really can be a pain here Dave, in some ways it does stop a lot of EbayLaser chancers who don't want to do what's right but it also makes it very hard for new businesses to get going. Given my time over again I'd think twice about the industry I'm in that's for sure.

cheers

Dave

Dan Kozakewycz
02-20-2014, 4:46 AM
Wait, how can the US be more relaxed? Didn't the we inherit this litigious culture from you guys in the first place? :p

David Somers
02-20-2014, 10:06 AM
Dan,

From the descriptions of our UK members I would say we are pikers in this field compared with them. Perhaps we threw a good chunk of that part of the culture into Boston Harbor with all that tea? <grin>

Dave Sheldrake....just FYI. Since those bad ol tea tossing days Boston Harbor has gotten much cleaner and is no longer the color of Lipton with the odor of effluent. Though the National Park Service now manages what amounts to a refuse based recreational island in the middle of the harbor that is made largely of all the garbage from the bay. Here is the web address if you want to check out an unusual addition to the National Park Service. http://www.nps.gov/boha It is actually pretty cool if anyone manages to get over there. And don't forget to check out Boston National Historical Park. http://www.nps.gov/bost it is scattered all over the city. Exploring it is a great way to spend a day or two and see the city. As they say back east...."cool beans!"

Dave