Pricing question

[Gary Hair]

I have a project that involves engraving on stainless steel discs. They range in size from .380" to .500". I created a fixture to hold them and can apply cermark and engrave 20 at a time. I can add more either on the same line, probably 75 total, or I can just add more rows to the fixture. It takes approximately 150 seconds to engrave 20 pieces and I am sure it won't take much longer to engrave an entire row of 75. It takes just a couple of minutes to put them in the fixture and spray with cermark then a couple more minutes after engraving to wipe off the residue.

The customer wants pricing to do 150 each of 4 different sizes and there is a good possibility that they will need closer to 500 of each size.

Based on $2.00 per minute, the engraving cost is $0.25 each and the setup, prep and cleanup time adds another $0.70 each, for a total of $0.95 each. I have NO idea what the "perceived value" would be for this job so I don't know if I should be charging based on the true "time cost" of $0.95 each or if I should base the charge on some sort of perceived value.

What do you think?

I have tried to get info from the customer to see what his target price or budget is but he is not giving me that info.
thanks for any help/advice!

gary

[Keith Outten]

Don't forget the cost of materials for your jig, Cermark and then a percentage for your profit and overhead.

[Luke Phillips]

Don't forget the cost of materials for your jig, Cermark and then a percentage for your profit and overhead.

Remember to account for any potential "ooopsies" that may occur :( - every mistake comes out of your pocket otherwise!

[Joe Pelonio]

I think we often tend to overlook the value of our ability to do this kind of work, and what it could cost to do if he had them manufactured in such a small quantity. He could have those manufactured in China for about $.10 each but would have to get 10,000 or more, and would have to make the connections to the overseas companies. Let's say he had them manufactured here, and the cost of setting up equipment to run just a few thousand plus material was $5,000. That would be over $3 each.

I think from my experience doing this kind of job I'd go at least $2 each for minimum 150 and would give no further discounts for larger quantities.

[Gary Hair]

Well I got the order. I went with $2.00 each. They ordered 500 of each of the 4 sizes for a total of 2,000 pieces and $4,000 for the job. I am also doing granite plaques for them to use for sales displays, 14 of them at $125 each. Total job = $5,750 - not bad for something I can do in about 3 days time.

Thanks to everyone for the advice!

[Joe Pelonio]

Way to go Gary. Hopefully he becomes a regular customer.

It might be a good time to take some of that money and start your "new tube fund" if you haven't already.

[Gary Hair]

Way to go Gary. Hopefully he becomes a regular customer.

It might be a good time to take some of that money and start your "new tube fund" if you haven't already.

I used to own an airplane - whenever I flew I put a certain amount per hour into an "engine rebuild fund". I'll do the same with the laser - not so much per hour, but maybe a percentage of my receipts until I get a fair amount stashed away. Between a new tube and any other unexpected out of warranty repairs, I would guess that $2,000 - $3,000 should suffice. I can always come up with more if necessary but at least that would soften the blow a bit. At least it's not $18,000 like the airplane engine...

Thanks for the advice - I was going to quote $1.00 to $1.50 until I read your post. I owe you a beer, or twenty, if we ever meet.

Gary