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View Full Version : General Questions about set up for cutting & engraving and pricing



Jacqui Marlin
08-05-2007, 5:17 PM
Now that I have the machine (Rabbit HX3040) set up and have kind of figured how to use the program I have a few questions. Engraving seems to be pretty straightforward - set the distance between the head and the work to 45mm (or less for deeper cut?) and tell the machine to start. Adjust the power until a nice line is observed. But I also would like to cut thin wood to make dollhouse furniture kits. To cut, would I set the beam focus to the bottom of the wood? And is it better to start the cut speed at fast or slow? I assume I would adjust from there, but a good starting point would help.

If anyone has had experience with cutting and with engraving on this 40W machine I would appreciate hearing from you.

And the BIG question is - how do you folks calculate a price for work? I am thinking that time for one piece plus some wear and tear? But since this is a mechanical operation I wouldn't think time cost would be the same as what I charge when I am doing hand work. I also factor in my design time, but the machine use factor is the thing I most need to calculate.

Joe Pelonio
08-05-2007, 8:07 PM
The distance from the work is strictly a focus of the beam. In order to cut or engrave deeper you would use more power/less speed.

Many of use use $1/minute as a guideline for laser time. I now charge $75/hour for any setup time, artwork manipulation, experimenting with new material etc.

For materials it's common to double the cost.

Some price issues are geographic. For example I would expect higher prices in you area, CA, NY etc. than here in Seattle area, but we would still be higher than smaller towns. It's a matter of what the market will bear, cost of living in your area, availability of competition etc.

Dan Starr
08-05-2007, 9:15 PM
Joe,
I've seen this $1/min baseline posted a lot on here and quite frankly I think it's absurd. Every laser out there depending on brand and wattage has a different per minute capability. Based on this per minute thinking a $10,000 chinese laser would earn you the same $60/hour as my $100,000 machine. Even though my machine would produce 10x more finished product in that 1 hour. Using $1/minute would mean that a 5x7 marble picture that I sell for $50 would only sell for $8 (5 for material and 3 minutes on machine). Would not a per sq in or sq ft price make a lot more since. Think about it, if I were to sell at $1/min then everybody with a smaller, slower laser would suddenly become very overpriced.

Mike Null
08-05-2007, 10:38 PM
I don't agree with the $1.00 per minute price either. I usually price out straight engraving at $2.00 or more. I also price my materials higher than what I am seeing here. But many here are not trying to make a living with their lasers.

Generally for like work you need to have like prices regardless of the equipment if you're going to be competitive.

But I don't think your statement that your machine is 10 times faster than others is accurate. You may save some time due to the large bed size and yours rasters at 175 ips but that does not make it ten times more productive than other machines. Twice or three times maybe.

Joe Pelonio
08-05-2007, 11:36 PM
If your laser is 2-3 times faster it probably cost 2-3 times as much so you need to charge more to recover the price of the machine. If I charge $1/minute it's based on my 45 watt machine and the time it takes to do a typical job. Still it's a rule of thumb only. I'll charge more than that per minute for cutting anything over 1/4", for example, even though it already takes longer. You have to add into the overhead for things like wasted material and cleaning (material and the machine).

Again I will also emphasize the competition factor. Here there are many people doing engraving, laser and rotary. Also, there are people with regular big jobs that if the price becomes too much will find it cost-effective to buy their own laser, especially with the Chinese laser sales growing. Having been in the sign business 14 years now I have learned that you don't want to have the highest prices nor the lowest. When there are 8 shops within 2 miles you need to be in the middle of the range but have a reputation for quality and service that sets you apart. Some people may still be the only game in town for laser work but it's only a matter of time before that changes, here it's taken only 3 years to go from 1 to 6 laser shops that I know of.

Garry McKinney
08-06-2007, 8:38 AM
I really enjoy talking about pricing. I really find it amazing that pricing is an after thought to purchasing a machine. When really it should be the first basic.

Here is a story that happened to a gentleman that worked for me. He wanted to go into business for himself. I wished him well as he was a good carpenter.He had been doing odd jobs of re-finishing drywall and making out pretty good at 30.00 an hour. (a few years ago)
So he started a business doing refinishing , bought a license, and started taking on jobs. 5 months later he came back to ask me for a job. His business was falling apart. He had work , more than he could do , bit he was losing his shirt. Working 12 hours a day and not covering cost. He was getting material , and 50.00 ah hour. Then he filed his taxes, work comp, and quarterly's, un employment had hit him for 4000.00. He had hired a helper at 10.00 an hour and thought he coud make it.

I asked to see how he quoted a job. He quoted on estimated time, rate per hour , labor of the helper and materials. I told him one simple thing he had left out, overhead. He said he didn't have any and the I explained, when he sent his helper to get the materials , did he pay him for his time. Sure he said thats only fair. I agreeed , but I ask who's paying you for the time to pick up the materials? You quoted the job on direct estimated labor working to finish it. You have to include coverage of all costs which includes going for materials. I help him work out his cost which ended up being 150% of his direct labor.

Today he is one of the most sucessful contractors in the area, with 22 employees.

Now if you paid $30,000.00 for your machine, and the life of the tube is 3 years. You have a replacement cost of $10000.00 a year they is normally 220 working days a year excluding weekends and holidays whihc means you have to aquire 45.50 dollars a day for replacement of your laser.
on an 8 hour day this is 5.70 cents an hour for the machine without turning it on.

So if you work out your cost that figure has to be maintained, because the laser does not have a never ending life and you will have to replace it at some point.

Dan Starr
08-06-2007, 8:41 AM
Your missing the point. Let's say instead of taking the charge 2-3 times more aproach I take the aproach of selling 2-3 times as much. Now based on a $1/min charge my prices are 2-3 times cheaper than yours. Could you afford to cut your prices to .33/min to stay competative. This is why it is important to push the idea of sq ft prices, as they do in every other industry, so that everybody big or small can remain competative.

Joe Pelonio
08-06-2007, 10:53 AM
Your missing the point. Let's say instead of taking the charge 2-3 times more aproach I take the aproach of selling 2-3 times as much. Now based on a $1/min charge my prices are 2-3 times cheaper than yours. Could you afford to cut your prices to .33/min to stay competative. This is why it is important to push the idea of sq ft prices, as they do in every other industry, so that everybody big or small can remain competative.
A square foot charge just doesn't work, any more than it does in vinyl lettering pricing, and for the same reason. Someone asks for a 12"x12" sign that says "No Smoking", another the same size but lists 14 rules for members of a homeowner's association swimming pool. One may take 5 minutes on the laser, the other 45. Same square footage. Some of my competition, especially those doing rotary, charge by the letter.

BTW I will do one $7 name badge for a regular customer but normally will have a minimum charge of $10 even if a job takes 20 seconds.

Mike Null
08-06-2007, 11:25 AM
This is an issue that the market will ultimately decide, which is why it's important to check what your competition is doing and spend a good bit of time on the internet as well to get a feel for pricing.

I do like the per square inch scale for estimating labels but even there I have a minimum that's not square inch related.

I think the area which most professionals seem to understand better than newcomers is set up and art fees. Too many people are giving this away when it is, in fact, a legitimate charge in additon to the engaving fee.

Marc Myer
08-06-2007, 12:55 PM
This is better than learning in school, because I'm actually paying attention!

I'm having a serious issue trying to price my unique items. I make custom automobile emblems, laser cut and coated with chrome. Names, logos, images, etc.
You all know the process for art setup and vector cutting of acrylic, and I do two passes on each piece.
But the chrome coatings are a significant issue. The coating chemistry cost is roughly $2.00 per emblem, but it takes a 4-hour block of time to coat a batch, consisting of 20-40 emblems. Spoilage is an issue, as the coatings are very sensitive until completed. I expect this to improve with time and experience.

I've been charging $100 per two emblems, with quantity pricing going down from there. But I suspect I may not be charging enough. This also with the fact that I have no competition yet. I found a sort-of competitor who is making Porsche-only font emblems for $400.

Any suggestions would be very well received.

David Lavaneri
08-06-2007, 1:22 PM
But I suspect I may not be charging enough. This also with the fact that I have no competition yet. I found a sort-of competitor who is making Porsche-only font emblems for $400.


Marc,

Whenever a person suspects they're not charging enough, it's usually true.

David "The Stunt Engraver" Lavaneri

Mike Null
08-06-2007, 1:41 PM
Marc

You make a very good point about spoilage.

I know I never paid myself for it but had considerable with dye sublimation.

Jacqui Marlin
08-06-2007, 2:30 PM
Looks like I hit a valuable question here! I am very interested in what all of you have to say because not just in laser work, but in any craft pricing is the most difficult part of the equation. One other factor I might throw out here is that sometimes you will find that your actual price for an item is above what the market might bear, but there are other items that can sell for higher prices than your cost. In other words, dollar cost averaging will help even out the cost difference for you.

Keep up the comments. This is very useful. Hope I will soon get to the point where I can use it!

Mike Hood
08-06-2007, 9:15 PM
I charge $2.50 / min for cutting time, and $65/hr setup with a minimum 1/2 hour for design & layup time. I don't do as much engraving, but with the stuff I have done, I compute the per/min times so they never fall below $90.00/hr ($1.50 per minute). I still cost them out on a per piece basis though.

I'm a Systems Engineer in the "real world" and can't see paying myself less at home than they pay me at work. Heck... for that, I'd stay at work... :)

Stephen Beckham
08-06-2007, 11:03 PM
Mike - I like your pricing method, but I'd say the opposite on paying myself. After 20 years of working in the military, pulling 18-22 hour shifts and not getting a penny in overtime or comp time, I now enjoy the lower pay I'm getting than that in which was offered to come back as a contractor or GS employee. It's simple, it's fun, it pays the bills - I live a comfortable life. If I wanted the six figure payments - I'd stay there. I now chase a dream, not a check - with that attitude....

I set the bell curve on the low end - sorry....

I charge a minimum $5 to turn my laser on for you - no matter what you put in there. In most cases - I do a rough estimate on time in which I give a flat $1 per minute estimate.

Starting out as a crafter - I learned an old crafter's guild trick - If it's something you have to manually do to reproduce many of, charge a higher amount to cause you less labor. If it's something that can be reproduced easily through less work on your part - lower the price and let the shear volume make your money.

That's not cut n dry as it sounds - I still price crazy request according to how much time I put in it and how much laser I expect to use. One more rule of thumb that I was recently taught - price everything in terms of dollars not cents. If you're going to mark No 2 Pencils with a name for 10 cents a piece - the American shopper would rather hear that you'll do 10 Pencils for a Dollar not a dime each. Unless you get a catchy phrase like Subway (2-sixty-nine) keep things so customers don't have to guess "how many can I get for $10 at that rate?" Give them a even estimate that gets them close to dollar bill amount ($1, $5, $10, $20) obviously giving the second part expected by the American Shopper - what kind of reduced rate can I get for doing more?

When I got my shot glass job, I estimated a flat $200 for her guess of 180-220 shot glasses. If I would have played with $1 per minute or reduced rates for numbers - she would have had to break out a calculator. It turned out to be 212 and they took less than 30 seconds each. Not a killing, but she's been back twice in a couple weeks to get more things for her wedding. I like return happy customers....

Bob Keyes
08-07-2007, 11:52 AM
Most business analists recommend a 35% gross margin of profit minimum. If you calculate ALL your costs and them apply the 35% margin rule, you should be just OK. However, I have some items that I can garner a nice 65% to 125% gross margin. This takes out the sq. in. or time factor calculation except for figuring cost. I have a handy little calculator on my Palm that calculates the selling price from the cost and margin entered. It is indespenseable for me when pricing.

Tom Buzz Bernard
08-07-2007, 12:16 PM
Starting out as a crafter - I learned an old crafter's guild trick - If it's something you have to manually do to reproduce many of, charge a higher amount to cause you less labor. If it's something that can be reproduced easily through less work on your part - lower the price and let the shear volume make your money.

Steve,
I like the way you approach the pricing. I am impressed by all you said!

Rodne Gold
08-07-2007, 12:38 PM
We have a fairly easy formula , 5x the cost of materials if we manufacture from scratch and $1 a minute for laser time at a minimum. IE even if the cycle time is 15 secs , we charge a $.
We double up on that for rotary attachment lasering.
I don't charge for artwork generally as I have full time designers on board. The only time we do is if we are doing limited runs and even then its at a maximum of $25. I would rather amortise artwork into the price of the run than explicitly charge for it , as customers generally seem to object.
We also price shop at our competition , as they do to us to get a feel of what was being charged and We also ask customers coming from elsewhere what they paid previously for the same job and if we can , we come in below that, if we can't we tell em and offer em the chance to go back to the old supplier.
The object is to charge as much as the market can bear.
The golden rule with ANY job , is that you have to be able to run it again and STILL make a profit.
At the end of it all , it doesnt matter what your overheads are etc as unless you are the only man in town , you have to follow the herd re pricing.
The pricing structure for one offs vs production are 2 different kettles of fish , if you are mainly doing ones and 2's then you can command much higher prices and charge plenty for design , craftsmanship and so forth.
This might sound mercenary , but I am not in this for the glory , yes I want to put out a stunning product , but the motivation for doing so is money.
I dont consider myself an artist but merely someone providing a service and thus price accordingly.
One 30w laser , imho , can really only possibly make real profits of about $100-200 a day , if you are lucky. If you are netting 4 grand a month from a one man show with only a single laser , I recon thats good.
Big problem right now with pricing laser work is that the barriers to entry are dropping and thus more and more folk will enter the field and prices will be under pressure. You will face an even bigger problem if you fail to respond to that and have a head in the sand attitude that "this is the price I charge , take it or leave it"

Mike Hood
08-07-2007, 2:04 PM
Mike - I like your pricing method, but I'd say the opposite on paying myself. After 20 years of working in the military, pulling 18-22 hour shifts and not getting a penny in overtime or comp time, I now enjoy the lower pay I'm getting than that in which was offered to come back as a contractor or GS employee.

I hear ya... I'm retired navy myself (23 years). I now work as a systems engineer at Boeing and the laser gig is a business I'm growing for when I retire for good.

I make great money at work and to support the growth of the laser and dye sub business, I purposely keep myself from accepting "bread & butter" jobs. I can understand their value, and I do UAV work for a local designer where at times he needs longer runs that I'll cut him some slack on. Mainly I do that when I want to buy a new toy for the business though. I try to keep a positive cashflow... but I don't try too hard. Any profits are thrown directly back to the business as capital purchases and inventory gains.

Some day I'll fall back on those for income. The equipment is like money in the bank to me.

Jacqui Marlin
08-07-2007, 2:48 PM
So far I have only done test pieces using a logo I designed for a friend that had nice simple black and white lines. I tried it on koa wood (local Hawaiian), acrylic and glass. The engraving takes just over 7 minutes and the program tells you the time it takes so I know in advance. I must say this little machine did a gorgeous job on these pieces and I am really stoked. I would charge more for the koa just because it is like gold here (even though I get it free!) and I believe I can also get scrap glass and acrylic for the kinds of things I do. I am not doing large commercial jobs but one never knows! I think fair prices for these items might be $10 to $15 so the $1/minute engraving time seems right if I then add in my overhead (guesstimated at this point)

I will be doing miniature items so they shouldn't take too much machine time, but there will be set up and design time and I will have to learn to keep track of those things now that I want it to be a business.

Lots of great ideas and thoughts here and It has been most valuable for me as a newbie. Aside from noise (I may try making a soundproof box to fit over it) the machine so far seems to be a great value! I am now hoping that it will turn out to be a great investment for a small part time business that can potentially earn me gasoline money and travel funds now that I am retired and can have fun! Loving it!

Mike Hood
08-07-2007, 4:25 PM
Any pics yet?

Curious what the laser looks like setup, and what the product turns out like. I've really not seen much of the Rabbits other than what's on the web. Anything you'd share would be interesting. Thanks.