The definitive economic questions

[Darren Null]

I've been making stuff and have covering living expenses (just) for a while based just on lasering (and on a budget of zero, which makes things somewhat more difficult).

Now lasering is an intrinsically expensive process. There are cheaper bulk alternatives for almost anything you can do with a laser, so the obvious answer is to concentrate on short runs and custom work. BUT. People are used to buying (albeit second-hand) cheap crap from China etc. How do we compete?

[David Lavaneri]

I've been making stuff and have covering living expenses (just) for a while based just on lasering (and on a budget of zero, which makes things somewhat more difficult).

Now lasering is an intrinsically expensive process. There are cheaper bulk alternatives for almost anything you can do with a laser, so the obvious answer is to concentrate on short runs and custom work. BUT. People are used to buying (albeit second-hand) cheap crap from China etc. How do we compete?

Darren,

The number one way to compete is through over-the-top service, whether that means pickup and delivery to local customers, or rush service with no (or light) extra charges.

When it comes to volume jobs, why not outsourse to a job shop with Galvo (steered-beam) lasers?

As an example, I once had a project that required lasing 400 wooden sand timers, with a logo on each end. On a CO2 machine, the running time was about 2.5 minutes per side.

This was also during the holiday season when lead times were rapidly shrinking.

I contacted a local job shop, who makes volume their business. I went by to proof the setup and watched a piece being produced. What took minutes on a flying optics system, took seconds on the steered-beam machine and the job was done within a couple of days.

The good news is, I was able to charge enough for the job (based on a flying optics machine) to pay the job shop and still make a handsome profit, while putting my energy into other areas of my business.

David "The Stunt Engraver" Lavaneri

[Scott Shepherd]

Focus on things that are customized. Chinese imported products are all the same, none personalized. Find a market that needs custom work and carve out your niche there. You can't compete with someone who pays their employees pennies a day and the equipment is funded by the government in many cases. If you can't compete with that, find what they can't do (and it's a lot) and do it well.

[Mark Winlund]

As David said, you are selling service, not low price. We deliver (to a major university). The people that order from us don't really care what we charge as long as we give them good service and quality products. You are not competing with china unless you are ordering container loads of product.


Just this week I have been going back and forth with the head basketball coach getting an award just right. About 6 revisions, so far. $600 item. One each. Do you think the Chinese are going to do this?

Mark...

[Joe Pelonio]

One of my wholesale customers orders from China, things like colored metal pins, but also some of the items I make with the laser. The prices even with shipping are way less than I can do, but they can never come close to my lead time. People often prefer to pay more than to wait 8-10 weeks, especially if it's for an event.


BTW some of the items we buy from our suppliers to personalize were probably made in China too.

[Stephen Beckham]

Okay - Darren - here comes a crazy one for you - Honesty up front.

I tell my customers what they can get cheaper from bulk issues - I point out that getting 500 of something is always going to be cheaper than getting the same thing through a custom provider. I sometimes even help them with the information.

It creates a bond between you and your customer of trust. If they know you are looking out for their best interest versus your bottom line - they will eventually need something that requires the custom work. They already know you and trust you - you'll likely be their first stop. If nothing else, for good advice.

Now - don't take it to the extreme and give away the goods. You know what economically done with the laser and what's not. You also have to count on the Pros and Cons involved.

For example - wooden nickels - you can get them for pennies already stamped with a logo from iTuit - but the ink will fade, won't be centered, has limited depth in quality of print etc... When ordered from me, there is going to be a test sample for you to evaluate, a person to point things out and ask if this can be moved here or modified other ways, you don't have to wait 6-10 business days plus shipping hoping it will be right... You don't have to order 500 at a time.

Create the customer through a good sale - don't just focus on the sale. The Customer will purchase what he/she needs and will come back for more as needed. When a single sale is rung up on the register - it's done.

One more buzz line - Sell the service, not the item. Someone (somewhere) got flowers today - they'll be dead in a week. I etched a rose on a piece of acrylic - it's there until it's tossed in a box somewhere or I etch a rose in a piece of crystal for the same guy next anniversary...

[Rodne Gold]

Do industrial work , China can't compete.
At any rate China is going to become expensive , the $ has dropped and thus chinese goods become less competitive and as their workforce becomes more affluent , their expectations will become higher. However , If you arent doing volume production runs , Chinese competition isnt even a factor anyway.
The stuff coming from China is now no longer poor quality and lead times as well as minimum order quantities are dropping. Cheap junk might have been the watchword a few years ago , it's not now.
In terms of cheaper processes to do stuff , you arent just competing against offshore sourcing but local sourcing too, For example marking a stainless pen can be done a LOT cheaper with a pad printer and the correct inks than Cerdec and a laser , that process will be in your back yard , not china.

One way you can make decent tom is to use the laser creatively and manufacture your own products , for example one can go buy awards and just laser them or you can make em from scratch and offer the client something no one has.
We have found that these days , a laser is just not good enough , we need multiple machines and need to combine output. For example we do 1000's of coasters , we laser cut the base material to various shapes , we digitally print the graphic in full colour on vinyl with a print and cut large format digital printer , we use a cold roller type lamination machine to overlaminate the print to protect it , load it back on our printer for die cutting and then apply it to the base. We then use a CnC overhead router to make a wooden case for the coasters and sell em all packed and ready to go.
Or we use our laser to make masters for spin casting various tourist gee gaws (keyrinhgs , pin badges , bottle stoppers , table cloth weights , fridge magnets) and include a rebate in them , we digitally print , cut and dome a tourism oriented graphic to fit the rebate. We use the CnC overhead routers to cut parts for point of sale displays and sell the stuff to tourist shop suppliers.

[Darren Null]

Thanks very much guys. I'm already doing most of that...to my detriment. Problem is, I get interested in the artistic challenge and forget about how much it costs.

Find a template that's a serious seller and hire somebody to do it in thousands, then?