Thoughts on pricing (again!)

[Gregg Vaughn]

I have my first chance at a job involving, potentially, a lot of pieces. The job is for a monogram to be placed on a wood bottle jar lid. The laser time per lid is about 20 seconds and I can get 180 of the lids on a jig on my Helix table. I have not ran the entire jig yet for a complete run time.

This would be a nice job to get since this company does business througout the US.

How do you figure a job like this?

[Joe Pelonio]

I'd figure your hourly rate for the setup and jig making (I'm at $75/hour)
plus jig materials at 2x your cost. Then run time including the loading and unloading of the jig. I'd suggest that to be at least $2/minute. But, don't go by me, I'm usually low compared to many others. :confused:

[Gregg Vaughn]

Let me clear that up .... what I meant was a wood lid for a jar. I just got off the phone with the customer and his initial run is 10,000. That number sounded initially like too deep of water for my 18 x 24 Helix, but some quick figuring shows 108 per jig for 92.5 runs. I do not know the total time yet for each run.

This is a local business that started from a basement and did very well (now from a factory) and they want to support small businesses. This is just way out of what I have given thought to ....

[Gregg Vaughn]

Also, the customer supplies the lids. The lids are a clear wood. light colored and have a semi-gloss finish on them. I do not know what kind of wood they are made of, but they are a solid wood.

[Phyllis Meyer]

Hi Gregg,

Just a few thoughts...get a few samples, and give them pricing on smaller amounts also! A previous post explains how folks will call and say, "we need 1,000, or in your case 10,000", and then in the end they want you to laser 50. Cover yourself with pricing on the different amounts! Sounds like a great opportunity, but I agree with the rest on your shop time with creating the jig, and all other costs involved...best of luck!

Sincerely,
Phyllis:)

[Mike Null]

I can run a full sheet (12x24) of name tags in my machine in 27 minutes. That includes cutting them out.

At worst you shouldn't be more than 45 minutes to run a load.

Don't forget loading, unloading and packaging.

If this is ongoing I would make two trays/jigs so you can be loading/unloading one while the other runs.

This sounds like a sweet job.

[Dan Hintz]

To expand on Phyllis' comments...

Also consider adding a listing for smaller runs specifically because you can customize... gives them more than one reason to go with you. Push it as being perfect for seasonal runs. They could do a small, customized run for gifts, Christmas, etc. in addition to their standard 10k piece runs.

[Craig Hogarth]

On large production runs (anything over 10 hours laser time) I charge $45 an hour for laser time only with a time commitment of 2 hours daily. Rush orders are defined at a time commitment over 2 hours daily and I charge $75 per hour. Any daily time commitment requiring over 5 hours is charged $75 and hour for the first 5 hours and $120 for any hour beyond 5. I always work over the time commitments and it's only purpose is to work out a straightforward price plan based upon required turnaround time.

I prefer this method as it allows me to know how much to charge based upon their required deadline. Most people choose the $45 route, which is fine with me since it allows me to complete the job during downtime.

I don't normally charge for setup, loading/unloading unless it's extremely time consuming (defined as 10 min for every 60 min engraving).

[Stephen Beckham]

I dunno Gregg... I feel like I'm watching that commercial about how to order a coffee where everybody has super long names and the fella comes up and says "I just want a coffee!"

First - your jig fits 108? Price them at a minimum of 108 per order and they have to order in lots of 108 - don't throw out there "you have to order 1000 to get this price" give them the benefit of coming back as they need them.

Second - they're giving these things away? Coming up with a Greggorian Formula of your own will hurt your head more than it's worth! Figure how many can you do in one hour - likely to be the 108 because like Mike - I'll give you an estimate of 45 minutes or less to do one full jig load. Count your load/unload times ad another 15 minutes. So an hour per jig load.

What do you want to make an hour? I personally like $45-$50. You don't have any product costs or other incidentals except electricity and wear & tear on the laser. $10 an hour is what I figure for that.

If there really is potential for this guy to come back - give him a flat rate of $60 per 108. You won't be tied to the laser for two weeks straight with 10000 of them - he won't have to pay so much up front - he'll have the opportunity to change logo mid-stream - he'll feel like he wants to come back to you versus being under a cellphone contract - your system won't be tied down so that you can't accept any more work till complete.

Just because it's a big contract - don't skew the profit margin upwards to make more money. Let him feel a bit of relief encouraging him to stick with you. 92 jig loads times your $60 charge will still earn you $5K plus. If you finish in two weeks - that's pretty nice chunk of change. If you finish in five weeks - still a nice chunk of change and you don't have to figure out the per hour rate if it's the second Tuesday of the week with your fingers crossed behind your back.

Flat rate $60 per load of 108! At less than $.60 each and netting you $5K... How much more do you want???

Okay - now everybody jump on and tell me I'm too cheap - I'll throw it back at you that in the current economic times - I'm not cheap, I'm economical or even affordable - and I'm still paying the bills:p!

[Gregg Vaughn]

Thanks for the input everyone!

I met with the customer, he has 10,000 jar lids in-hand and was agreeable to my quote of $1.25 per minute for laser time and a $75 set-up fee for constructing the jigs. My test run shows the time per piece at 17 seconds which = $0.354 each for a $3,536 job total.

I'm a little imtimidated by the stack of boxes full of jar lids ...

The parts are needed by July 1, so I have a reasonable amount of time to do the job.

Thanks again!

[Scott Shepherd]

Good job Gregg, sounds like a nice job and you'll make a solid rate while doing it. I think you nailed it in your thinking.

[Stephen Beckham]

I agree with Steve - good job... I felt a little high on my above message, but was scared I'd get chastised for saying that low...

I think the important thing is that $.35 each for him is something he can give away easier than $.60 each.

How much total time/days do you estimate you'll be making 'lids' ?

Steve

[Gregg Vaughn]

I am planning on 14 days at 4 hours per day & 100 pieces per run.