Nametags

[Dave Sheldrake]

How can we make this easier?? Is it out of the question to start a thread on what everyone charges for common items?? A "Fair Market Value" list for common products? This list is strictly an assessment of the fair market value of what common products are worth... This is not "Price Fixing" it is simply a guide so that those new to the business has an idea of what common items sell for

Hi David,

I tend to agree, it's hard competing with chop shop ebay lasers sometimes, then again many of those shops aren't paying the due taxes or insurances and likely just vanish when they get problems. "How do I price items" is a question I get asked a lot and my response is pretty much always the same. "Whatever the market value is". Undercutting for the sake of a job doesn't help any of us but then again overcharging for stuff because the machine is slow is also a tad unfair on the customer.A "Guide" prices list could be useful.

For me working out a price consists of "what is the item worth (sellable price)" "Can I make a profit at that price (yes/no)" If I can I do it, if I can't I don't.

All that said, I love my customers! they are fantastic people who give me money to do what I enjoy.

best wishes

Dave

[Scott Shepherd]

Scott,

I agree 100%, however the real problem is finding the "market value" of a product. I am new to the business and I have quoted and lost my fair share of jobs. This is the point at which anybody new to the business is tempted to lower their prices... I believe this is the hardest part of the laser business, not processing photos for granite, wood, or acrylic, it is assessing the price tag at a "market value". It is very frustrating when I lose a job knowing it went to another shop at 1/2 of what I quoted. I am staying firm and digging in trying to establish the "fair price" on my products, it's just not worth doing a job at breaking even or losing!
How can we make this easier?? Is it out of the question to start a thread on what everyone charges for common items?? A "Fair Market Value" list for common products? This list is strictly an assessment of the fair market value of what common products are worth... This is not "Price Fixing" it is simply a guide so that those new to the business has an idea of what common items sell for.

Dave

Hi Dave, I agree with you, it's one of the hardest parts of starting a laser business. Unfortunately, in this area, I'm a slow learner. It took me too long to get my pricing where I think it needs to be. It's a difficult balance between "I don't have any work, so I'll cut my prices" and standing your ground. The bad thing is, if you cut prices because you don't have a lot of work, when those customers return and you do have work, you'll now how to stop working on good paying work to work on jobs that aren't good paying jobs. It's a dangerous place to go. I've heard people say before "Oh, I don't have any overhead, so if I hit start and come back 1 hour later, it's not really cost me much of anything". Well, that may be true. But you've just done the job for $10 per hour because you figured you could watch tv while it ran. What happens when you're busy and have a lot of work that's making you $60 per hour? Will you stop working on the $60 per hour jobs to do the $10 per hour work?

There are many places to get pricing from to compare yourself to. Online isn't one of them for us. I rarely, if ever, check online pricing for specialty places like name tags. I do, however, know what all the sign franchises charge for name tags in my area. If the lowest price for a size and quantity of name tags, in this area, is $6.50 each, then there is zero reason for me to be pricing at $3.50. I'd make some calls to local shops and find out what they charge. I realize not all locations have franchise stores around, so it's not always easy. But even places like printers, office supply places all do it.

If someone wants a $2.00 name tag, they don't want a laser engraved or dye sublimated name tag. They want a cheap, high volume name tag, ran on something like a card printer that spits out 100's of those things per hour, printed on substrates that cost .15 cents or something, with a low end magnet, not covered by any plastic.

Honestly, I don't want everyone as our customer. I want to pick who we work with. It's taken us a long time to get to this point, but we're slowly getting there and more and more, we're turning work down because it's not profitable work.

[Dave Sheldrake]

The bad thing is, if you cut prices because you don't have a lot of work, when those customers return and you do have work,

Not forgetting the item you cut at $10 now has a market value of $10 so try charging a much higher price later...it isn't going to happen.

Last year the UK had a good market for post templates (I never got involved but know quite a few that did)

One chap was making them at £10 each ($15 ish) and making a sensible profit. An ebay price crusher came along who had a cheap $500 laser and started making them for less and selling them on Ebay (and likely not paying tax, buildings cost, insurance or any other requirements that come with a reputable company).
The original guy kept entering in to price wars where the finished item ended up at £3.50 (about $5) on Ebay.
Eventually the $500 laser owner realised he wanted more beer money than he was getting so gave up, the chap with a genuine business to run realised he was actually making them at a loss.

Down side was, the postal template then had a market value of £3.50 so no chance of making them in to a profitable item again.

Getting in to price wars never ends well, not only does it devalue your own work (and make you look desperate) it devalues that items marketability at a profitable level so in essence wrecking your chances of making money on said item in future. The flip side is higher than market value prices reduce the chance of getting the jobs, our choice of machine isn't the customers problem, so if an item with a $30 sensible market valuation price takes an hour on a cheap machine, while 30 minutes on a better machine the sad fact is , buy a better machine if you want $60 an hour or make them at $30 an hour until you make enough money to buy the better machine. The fact your machine may be rubbish doesn't confide that the $30 item is worth $60.

My apologies Scott if I came across as meaning the opposite earlier

best wishes

Dave

[Scott Shepherd]

GREAT POST Dave! Spot on! I thought you were on the other side of the discussion at first, but now I see you're speaking my language. I don't claim to be the smartest business person on the planet (or even the block), and I could lose everything tomorrow for all I know, but being in a small business and watching other small business owners for years and years now, I have come to the conclusion that most businesses don't go out of business because of the economy, most go out because people don't have a clue how to run a business. I wish I had a dollar for every time someone with a CNC router told me that their machine running was "free" because they didn't have any work for it. They'd spend 15 hours cutting a 3D piece, then sell it for $250 and think they made easy, fast cash.

Honestly, we just don't play in the bottom of the market much these days. It's not who we are, nor where we want to be. At the first hint we're dealing with one of those customers, we'll pass on the job or refer them to someone else. There's too much work out there to be chasing pennies at the bottom end.

[Martin Boekers]

Just because you can do it faster doesn't me you should charge less.

Take the Auto repair industry, most charge you a "book" hourly job, that is,
if the book says it takes 5 hours then you charge 5 hours, even if the job takes
3 hours to do.

Pricing is difficult. I have found in my personal experience that the low bidder usually
does give the quality of product or service.

If some one have a "huge faster laser" why would they waste time on $2 nametags?
Seems to me they would be going towards more lucrative jobs others can't do.

[Dee Gallo]

Just because you can do it faster doesn't me you should charge less.

I must say here that this is true on several levels. After upteen years of experience, you are bound to be more efficient (can do the job faster) and more likely to get better, reliable results as well. I have never liked the idea of charging by the hour because new, inexperienced, slower workers get paid more than old pros. As you gain speed, does your price go down? Makes no sense!

I charge what the market will bear, so doing research makes a big difference. You must charge a fair price but get a fair profit too. Your customer base, your regional location, the quality of your goods and the availability of similar goods in your area will dictate what you should charge. Then, go ahead and charge whatever you like and see if you stay in business.

[Dave Sheldrake]

If some one have a "huge faster laser" why would they waste time on $2 nametags?

You don't you pass them off to people with smaller shops who may like the work and still keep the customer happy BUT while always keeping in mind that $200 order may be the forerunner of a $20,000 for an XX thousand nametags order that you still want to be considered for later

I have found in my personal experience that the low bidder usually
does give the quality of product or service.

Economics 101 Martin or as my late Father often told me, "Buy cheap, buy twice" or in engineers terms "Quick, Cheap , Accurate, pick any two"

As you gain speed, does your price go down?

Not a hope, faster machine means more profit means even bigger machines hourly rates don't work in our game, it puts smaller machine owners at a disadvantage from the word go. If product A is worth $50, charge $50 (+/- discounts for volume etc) if it takes a little longer just keep doing them until you get the faster machines and make more money.

most go out because people don't have a clue how to run a business.

EXACTLY!! I'm always amazed by some business owners who actually think profit is the difference between materials and sale price then they wonder why the returns at the end of the year don't look so good.

best wishes

Dave

[Glen Monaghan]

[QUOTE=Dave Sheldrake;2128945]Not forgetting the item you cut at $10 now has a market value of $10 so try charging a much higher price later...it isn't going to happen. [\QUOTE]
[QUOTE]Down side was, the postal template then had a market value of £3.50 so no chance of making them in to a profitable item again.[\QUOTE]

Getting in to price wars ... [wrecks] your chances of making money on said item in future.

I've seen this notion repeated numerous times in this and other posts and I don't get it, it goes contrary to every day experience.

A quick example is gasoline, which dropped around here from $3.95/gal to $3.10 in the last couple of weeks. According to your theory, we all know the "true value" of gasoline is now only $3.10, but today the gas stations have signs showing $3.45, so nobody is going to pay that, right?

I don't know what postal templates are, but if nobody is willing to sell them for less than $15 any more yet people really want/need them, then people are either going to start paying the $15 that the (remaining or new) sellers are asking, or they are going to find something else that can substitute.

The concept is common in business. Sellers enter a new marketplace and charge what the market will bear. If the market is lucrative enough, new sellers find cheaper (although not necessarily sustainable) approaches and jump into the market. Prices generally come down, with some sellers dropping more to compete on price and others dropping less to compete on other factors such as quality, service, etc. Prices may plateau, some sellers may bail out of the market because they no longer find it worthwhile, perhaps more new sellers enter with even cheaper approaches (for example, some may use more automation or newly available lower-cost equipment, some may forgo local salaried or union or full-time workers and use only hourly temps for local work or outsource labor to foreign markets to cut labor costs, some may reduce material costs by lowering quality or importing cheaper foreign parts, some may "eliminate" overhead by working from home, some may simply lower their profit margin, etc. etc. etc.) and new rounds of price reductions follow. Sooner or later, a bottom may be reached and the market stabilizes at a (possibly barely) sustainable level (as with "commodities"). Or, possibly, the market becomes so depressed that the "ebay hobbiests" who want more beer money and the chaps with genuine businesses who haven't been able to make ends meet all throw in the towel, leaving the market to the bigger and/or more savvy businesses. Those who remain in the market will ratchet prices back up to a more profitable level when they see the competition decline. If there really is a market, then customers will pay the new price or seek an alternative market.

Airlines have gone through this cycle multiple times, with high profitability drawing in startups. New competition and hunger for increased market share drove price reductions end, eventually, market shakeups with mergers, acquisitions, and failures. At some point, prices ratcheted back up, and the cycle started anew, shampoo rinse and repeat.

Or, a devastating bottom may be reached and the market essentially destroyed when a substitute market becomes more attractive than the old one. Film cameras and their films famously followed this path, from a highly profitable market for a few companies, to commodities sold by many, to loss leaders sold in grocery store checkout lanes, to essentially a defunct market, almost entirely replaced by digital cameras and digital storage. Ditto floppy discs, cassette tape, CDs, PDAs, plain and simple cell phones, etc. Prices (or at least profits) typically rebound in the new market, where the same sort of cycle starts anew.

And that brings it around to the notion that it's not really about the prices but the profit, which is the nub of the side discussion about what laser machine architecture is used (gantry vs galvo), laser power and speed. In a sense, it doesn't matter whether you sell products/services for $X or $Y so long as you get profit you want from each for the amount of time/effort you put into it (which leads one into wholesale vs retail pricing). But regardless, prices don't simply ratchet down, they fluctuate in a free marketplace...

[Martin Boekers]

Dave, YIKES!!!!! dang spell check.... It was supposed to read..." I have found in my personal experience that the low bidder usually
doesN'T give the quality of product or service."

I have learned not to chase the "future potential" unless it's with a regular client that is exploring new territory. Others may have
different experiences, but I tend to recommend other suppliers for low bidders. I price very competitively and not ever job
has financial rewards.

[Dave Sheldrake]

A quick example is gasoline, which dropped around here from $3.95/gal to $3.10 in the last couple of weeks. According to your theory, we all know the "true value" of gasoline is now only $3.10, but today the gas stations have signs showing $3.45, so nobody is going to pay that, right?

That model works Glen when everybody is charging the $3.45 for Gas (I wish it was that in the UK, here it's closer to $12.00 a gallon)

Take our own arena, when Lasers were the high end pleasures of huge companies prices were very high for laser cut work (over here they varied around $250 an hour) but now there are so many offerings from China lasers have become something that most people don't need to approach a bank to fund (small K40 ish stuff) so the pool of laser able companies has increased, the market of items that can be cut / engraved with a laser hasn't kept up with the large number of new machines so the pool of available sales hasn't grown at the same rate.

Recently I bought a Nissan GTR, nice car but expensive, a tad under $120,000 here, now if there had been an exact same car with all the exact same components made in say a Russian sweat shop to the same standards but cost $50,000 I likely would have gone for that. Lets imagine Nissan JP don't sue the fictional Russian company into the poor house for the next 3 lifetimes and the Russian sales continue, in reality does anybody believe that anything other than Japanese Made purists would continue to buy the Nissan JP car if they can have a clone of the same available for just over a third the price?
How would it affect second hand GTR's? How would it affect sales of new Nissan JP cars?

In a closer forum to all of us, have a look at the sales figures for new laser sales from companies like Epilog, Universal, Trotech etc, sure many have grown but how many have grown pro rata the number of new laser users? the simple answer is none of them. GSI the UK laser resonator / tube manufacturer is another example, sure there are people that insist on GSI tubes etc but GSI themselves have had a rough time in the last few years given the advent of Chinese made tubes of comparable price/value structures. The end result is the market for GSI has become a lot harder to compete in, their 200 watt tube has a retail of $24,470 here + VAT, I can get a Chinese version that works 80% as well as the GSI for a little under $11,000.

It's not that GSI tubes aren't worth the money, they are (my 200 is a fantastic item) but when it dies I won't be going to GSI to replace it when I can have two Chinese tubes that will produce very similar results. It's not always down to product quality being lower but Chinese manufacturing costs are a LOT lower than the UK so the market for 200 watt tubes has been effectively "devalued", in the Gas analogy, if everybody sold 200 watt tubes at $24,000 then that is the price we would all have to pay and would likely not know any different whether they cost $10 to manufacture or $10,000 (and would all likely expound how wonderful 200 watt tubes are for *only* $24K)

The manufacturing market is much like the Futures market, we all roll the dice on price structures of future sales, all I'm alluding to is that each time a Mickey Mouse illegal company starts up and drops all the prices on a range of products the rest of us (You guys and Me) are looking at effective decreases in profits. (prices staying the same are still reductions as costs still rise) simply because some of the price killers don't have the business savvy to realise they are running at a loss.

low bidder usually
doesN'T give

Yup, Cheap, Fast, Accurate...pick any two

best wishes

Dave

[Anthony Scira]

Here is where I came up with my 1.75. They wanted 2.95 complete. With no setup feeSince they are supplying artwork ready to laser Corel files, the backs and applying them on their own it did not seem like a bad deal. I think I am going to revise my estimate up to 2.75 to account for extra laser time and material (2 x 3 instead of 1 x 3).

wwwdotnametagcountry

[Dave Sheldrake]

ok that was weird!

Can I point out that there is nothing Illegal about the Name or Character "Mickey Mouse" the name and likeness are the sole property of the Disney Corporation . The name is used in the UK to suggest a joke or inherently flawed idea.

best wishes

Dave

[Mike Null]

In my experience the "market" is not a national market as many are describing, but more a regional market. My prospective customers are more likely to say they'd like to do business locally than with an unknown internet supplier. I do not get into the $2.50 name tag wars but rather choose to supply at what I believe is fair market value. My prices range from about $4.00 to $12.00. This market is a relatively low priced market compared to the west coast or even the east coast.

My customers generally stay with me and they generally follow up a large order with just a piece or two for new hires or lost tags. My one price for all (1 or 200) after they are on my customer list seems to go over well with them. My average is in the $7-$8 range. About 30% or more are not engraved.

Whether you can make them fast or slow is of no concern to anybody but you.

[Tim Bateson]

I disagree with some of the skewed premise being presented here. When I was getting started.... well even now for a few select customers, I've given a great deal on the price (still some profit built-in). For future orders - higher (market) prices** has not been an issue with 99% of my customers who continue to come back.

They may have came to me for the price, but stay for quality and quick turn-around.

Having stated this.... Anthony, I do agree that anything less than $4.00 for these tags is a waste of your time. Personally my best price "might" be $5.00... maybe more. Sometimes you have to tell a customer "NO... and have a nice day".


**Note... This isn't a bait & switch.. It's salesmanship and good customer relations. Also a few other sales secrets (techniques) I've learned over the years... so don't ask, because they are staying my secret.

[Ross Moshinsky]

In my experience the "market" is not a national market as many are describing, but more a regional market. My prospective customers are more likely to say they'd like to do business locally than with an unknown internet supplier. I do not get into the $2.50 name tag wars but rather choose to supply at what I believe is fair market value. My prices range from about $4.00 to $12.00. This market is a relatively low priced market compared to the west coast or even the east coast.

My customers generally stay with me and they generally follow up a large order with just a piece or two for new hires or lost tags. My one price for all (1 or 200) after they are on my customer list seems to go over well with them. My average is in the $7-$8 range. About 30% or more are not engraved.

Whether you can make them fast or slow is of no concern to anybody but you.

You're right with the national vs local pricing. What I don't agree with is how it applies to this product. Certain things there are major benefits of buying locally because you need the help from the vendor and because of other issues (shipping and time constraints being two of the most typical ones). Name tags do not fall into this category. There is no real benefit of shopping local or buying them online. A $10 USPS flat rate box covers the shipping. It's typically faster/more efficient to send the order online than have to deal with someone at the counter. Also expertise really doesn't play a huge role in this type of purchase. The reality is, simple name tags are going to be the thing local engraving shops lose first. The benefits of buying locally just aren't there on this product.

Now the one thing I will admit is region does play a role on buying mentality. Some people are just raised to buy from local shops but I'd say that's becoming less and less popular. Amazon Prime is a heck of a service once you get used to it and once you get used to it, it's hard to want to buy any other way.