Let's Play "What Would You Charge"

[Scott Shepherd]

My head says price it at at least $12 each but I also think someone else is getting the job because they quoted it out at $8.

I'd be right in that area too Ross. At $8, I'd let someone else have it. If I want to make $30,000 a year, I'll get a job working for someone else.

[Keith Winter]

2 minutes to load and unload seems like you must be disabled I cut plexi units and it takes me about 19 seconds to load and unload. I have a jig set up and the cuts are within 1/16 of each edge.

No need to call me disabled Jerome. I would love to hire someone like you if you can load, unload, stack, inspect, reque the job, start it up again, etc. in 19 seconds. No doubt you can, I've just never seen a staff member move that fast every time the laser goes off in a real life scenario.... This was also factoring the slack. Laser stops I doubt you 100% of the time are standing right next to it pouncing on the lid to open it at the second it finishes. My goal here is to be realistic, not best case.

[Keith Winter]

See post of mine right above yours Ross I was factoring on the scenario only.

The other thing to mention is, rate per hour is very rarely consistent. It's very common to have a very profitable job one day and a less profitable job the next. You want it to average out where you're making your goal rate, whatever that may be. Why do the less profitable job? Why not stick to just very profitable work? Well, if the choice is between no money and some money, which is better? That's why I believe this job would bid out at $6-8 a pop. Ignoring the delivery, it's a low burden job that even under worst case scenarios situations is profitable and low risk. My head says price it at at least $12 each but I also think someone else is getting the job because they quoted it out at $8.

[Ernie Balch]

This is a funny thread, some machine owners appear to be stressed out over engraving prices. The overhead of rent, employees and expensive machines must be weighing heavily on business owners.

Some of us older guys have no bills, no employees and have the luxury of only working when we feel like it. Being in a commercial space on an upper floor does not compute for me. Likewise running around town in my van delivering parts is not going to happen.

As for screwing up jobs with my Chinese laser, don't count on it, I have 26 years of laser micromachining experience. As a process engineer I have purchased and set up production on 6 different custom built UV laser galvo machines ranging in price from $500k to $2M each.

Recently I have been thinking about getting a galvo system so I can spend more time fishing.

[Jerome Stanek]

No need to call me disabled Jerome. I would love to hire someone like you if you can load, unload, stack, inspect, reque the job, start it up again, etc. in 19 seconds. No doubt you can, I've just never seen a staff member move that fast every time the laser goes off in a real life scenario.... This was also factoring the slack. Laser stops I doubt you 100% of the time are standing right next to it pouncing on the lid to open it at the second it finishes. My goal here is to be realistic, not best case.

I have a work table right beside my laser it takes 3 minutes to cut one and while that one is being cut I peel the mask off and put the mounting tape on the one that is getting ready to cut and inspect the one that just came off the laser. I also make the blanks on my cnc while this is going on. Cnc is to the side and I am near where I stand and one of the Estops is right there. I worked with a handicapped person that it took about 3 times longer than everyone else but he was steady.

[Steve Clarkson]

Ahhhh......finally........this is the type of discussion I was hoping to promote.

Now, since my facts and assumptions were apparently not detailed enough.......who wants to start a new thread with a different pricing scenario?

[Scott Shepherd]

How about your input on pricing the job Steve, since you started the topic?

[Kev Williams]

You guys must have free labor working for you to be able to do these at $6 or $7 a board, or you're running yourself into the ground working 60-80 hour weeks (which I've been guilty of myself many times to finish a job ). 5 min 20 seconds per board + 2 minutes load machine and reload/stack would be 7.5 minutes per board. That's only 8 boards per hour. Let's say your worker is paid $14 a hour, average us benefits/admin cost per work is 30.7% for the private sector according to bls.gov, this tends to be higher with lower wage earners because the benefits and admin expenses make up a higher percentage of their salary. So let's just call a $14/hr worker true pay with benefits/admin expense factored in $20/hr for simplicity.

At $7 a board x 8 boards an hour you're only making $56 an hour. Subtract $20/hr for the employee running the machine $5 for all your electrical/lights/blower/ac etc so now you're down to potential profit of $31/hr. Subtract your machine rate. I think we'd all like to make a minimum $20/hr on the machine itself (I'd rather make triple or four times that per hour), which means on a $10k machine you'd have to run it 500 hours with no downtime or parts needing replaced, or 2000 hrs on a $40k machine just to pay it off and break even (and we all know you cannot run a machine and jobs 100% perfect all a time so this is optimistic). Factoring that in and your potential profit is now $31/hr - $20/hr = $11/hr for you. Congratulations you've just made $687.50 if everything goes perfect over the course of 1.5 weeks (62.5 hours to complete). Add in setup time, mistakes, defects, and any other things that might make the job take longer or cost more and you're probably at more like $587.50. At $587.50 every 1.5 weeks your annual profit for that machine for the entire year at this rate is $20,366 assuming everything goes perfect on every single job, and nothing ever breaks (very unlikely). If you are a sole shop that $20/hr for the worker goes to you, but we're also not even factoring all the other expenses that go into running a business, or other things that come up and take your time, so you cannot work and earn that extra $20/hr all the time.

My point is a $20,366 expected return if your machine and 1 worker is kept busy 100% of the time, no downtime, is really low for all the risks you take. It's never going to run 100% of the time, maybe 90% of the time in a really efficient shop, plus the wear and tear on the machine. Factor in all the real world stuff that happens and you're even lower, maybe making 2/3rd of that potential profit number. Just my two cents for what they are worth.

Glad I'm just a basement business, that's WAY too much to think about. To echo what Ross said a bit... What worker(s)? I have a BIL who works 6 hours a day, all else is up to me (and sometimes the wife). I would do this job myself. And-- in between the 5 minutes 20 seconds each board runs I would likely be keeping other machines busy, or getting jobs set up for the other machines. My bid was $8 per 5:20 strictly machine time, plus $2 'incidental' time between parts.

My math works out like this: 60 minutes / 5.33 minutes each = 11.25 parts per hour, X $8 each = $90 per hour machine time. And I added in $2 for an estimated minute and a half in/out time (probably less) so regardless, I'm still making $90 an hour on this job. Courier is break-even. That's how I arrived at my quote. If it were for Joes car & fish shack, I might be closer to $75 an hour. It all depends my opinion of Joe's net worth.

[Steve Clarkson]

Good point Steve!

I would look at this with three components.....engraving, carrying and shipping. I normally try to get $2 per minute (40 hrs/wk = $250K), however, for a GOOD commercial customer I have no problem dropping that down to $1/minute since I believe you need to be competitive to keep a large commercial account. If not, they will be pressured by their stakeholders to put it out to bid (they will always be able to find someone cheaper) or even worse, simply buy their own laser with petty cash. I would also think that swapping one board in for another and pushing the button would only take 10 seconds....so 5 min 30 sec would be $5.50 for engraving (100 boards = $550/10hrs = $55/hr). For carrying, I'm too old and fat to carry 500lbs up and down a flight of stairs......so I would hire a high school kid (I happen to own two of them) to do it for $0.25/board/trip.......so $0.50 per board (100 boards = $50 for ten minutes of work). Lastly, for delivery I would definitely do it myself rather than hiring someone because it would give me crucial face-to-face time with an important customer. They would also be happy about this because they could never ship it inexpensively if they are paying union wages. I would charge the standard mileage rate times two (call it $1.00 per mile) plus my hourly profit for time away from the shop (call it $60/hr).....so 80 minutes round trip (80 miles * $1 = $80 + $60/hr * 1.5 hours = $90) would be $170. So all in, for 100 boards, I would be at $7.70 per board ($550 + $50 + $170 = $770) or $3,850 for 500 boards.

I would much rather have one $4,000 job rather than forty $100 jobs (and I highly doubt that you are going to get many $100 jobs that only take 5 min 30 sec to engrave).

However, if this was a new customer or Joe's Bait and Tackle, I would definitely be at $2/min or $13.20 per board ($1100 + $50 + $170 = $1,320).

Like I said at the very beginning......if you charge too little, you will go out of business and if you charge too much, you will go out of business. So we all need to find our sweet spot.

[Bert Kemp]

You and Kev think opposite on Big Guy Little guy and I find out that even tho I know nothing about business and pricing jobs I'm still in the ball park with my bid .

Good point Steve!

I would look at this with three components.....engraving, carrying and shipping. I normally try to get $2 per minute (40 hrs/wk = $250K), however, for a GOOD commercial customer I have no problem dropping that down to $1/minute since I believe you need to be competitive to keep a large commercial account. If not, they will be pressured by their stakeholders to put it out to bid (they will always be able to find someone cheaper) or even worse, simply buy their own laser with petty cash. I would also think that swapping one board in for another and pushing the button would only take 10 seconds....so 5 min 30 sec would be $5.50 for engraving (100 boards = $550/10hrs = $55/hr). For carrying, I'm too old and fat to carry 500lbs up and down a flight of stairs......so I would hire a high school kid (I happen to own two of them) to do it for $0.25/board/trip.......so $0.50 per board (100 boards = $50 for ten minutes of work). Lastly, for delivery I would definitely do it myself rather than hiring someone because it would give me crucial face-to-face time with an important customer. They would also be happy about this because they could never ship it inexpensively if they are paying union wages. I would charge the standard mileage rate times two (call it $1.00 per mile) plus my hourly profit for time away from the shop (call it $60/hr).....so 80 minutes round trip (80 miles * $1 = $80 + $60/hr * 1.5 hours = $90) would be $170. So all in, for 100 boards, I would be at $7.70 per board ($550 + $50 + $170 = $770) or $3,850 for 500 boards.

I would much rather have one $4,000 job rather than forty $100 jobs (and I highly doubt that you are going to get many $100 jobs that only take 5 min 30 sec to engrave).

However, if this was a new customer or Joe's Bait and Tackle, I would definitely be at $2/min or $13.20 per board ($1100 + $50 + $170 = $1,320).

Like I said at the very beginning......if you charge too little, you will go out of business and if you charge too much, you will go out of business. So we all need to find our sweet spot.

[Kev Williams]

I would much rather have one $4,000 job rather than forty $100 jobs (and I highly doubt that you are going to get many $100 jobs that only take 5 min 30 sec to engrave)

Whenever you get 100 $40 jobs or 40 $100 jobs and you don't want 'em, call me! And in trade I'll send you any $4000 jobs I get. Personally, I can't stand big jobs. They take days to finish, they get in the way of the $100 and $200 jobs (many of which I can do in a few minutes), and I get bored stupid before they're complete...emphasis on 'stupid'. I'm nearing the end of a $3000 or so job right now, and this is when stupid mistakes get made- like forgetting to press the 'next job' button just ONCE, and there goes a $35 part. I ALMOST did that but caught the pause button in time!

Differn't strokes...

[Scott Shepherd]

However, if this was a new customer or Joe's Bait and Tackle, I would definitely be at $2/min or $13.20 per board ($1100 + $50 + $170 = $1,320).

Why is your price different for the same work, different customer? When someone calls, do you ask them 20 questions to determine which quote they get? If someone calls us for a quote, we don't ask questions about their business structure or if they have shareholders. The price is the price, big or small. I can't imagine having to change my pricing and remember who I'm supposed to charge what rate every time the phone rings. Big companies often don't like to pay for 30-60 days, so that's something to be aware of as well. It's all great to do $4,000 worth of work, but if they won't pay for 60 days, then you've become their bank and loaned them $4,000 for 2 months for free.

My official answer is we would charge what the market would stand. First questions I'd ask them would be "What's your budget" and "Is this something new, or have you had them done before?" to start getting important information about the project.

We aren't, and don't want to be, known for being the cheapest guy in town.

[Ross Moshinsky]

Why is your price different for the same work, different customer? When someone calls, do you ask them 20 questions to determine which quote they get? If someone calls us for a quote, we don't ask questions about their business structure or if they have shareholders. The price is the price, big or small. I can't imagine having to change my pricing and remember who I'm supposed to charge what rate every time the phone rings. Big companies often don't like to pay for 30-60 days, so that's something to be aware of as well. It's all great to do $4,000 worth of work, but if they won't pay for 60 days, then you've become their bank and loaned them $4,000 for 2 months for free.

My official answer is we would charge what the market would stand. First questions I'd ask them would be "What's your budget" and "Is this something new, or have you had them done before?" to start getting important information about the project.

We aren't, and don't want to be, known for being the cheapest guy in town.

We literally ask this question all day long.

[Scott Shepherd]

We recently stopped working for a customer because they changed their company policy to pay in 90 days. They'll get nothing from us until that changes. We're a sign company, not a bank.

[Keith Winter]

Call me when you get that $4000 job. Unless it's engraving boards at $8 a board . Seriously though if the job is big and you don't have the man power IM me, we'll work something out.

Steve and Ross we always ask those same questions you too, that's a good practice. Typically our rate changes based on volume, but we aren't the cheapest guy you're going to find, but the job is going to get done right and on time. Learned a long time go that people who just want the cheapest deal are the worst to work with. Larger orders, or customers who order multiples and we think will repeat over and over, we will give a better price, that's just good business in my book. Guy who comes in and wants his logo on 1 cutting board I'm going to turn him away, what I'd have to charge him would not make it worth either of our time. Typically you've got to get into 12-24 pieces depending on the item or more if you want a custom design or artwork and me to bid the job. If you want just text then I would lower that bar, that's pretty easy to do. The lady who has the 1 cutting board her grandma gave her and wants a special design on it inevitably is the same person who is going to be standing over my shoulder critiquing everything I do, blowing up my phone, and 50% of the time no matter how good you do it she's A) either going to think it cost too much or B) be unhappy because they thought the design they drew up would look different on wood. Those are always the hardest customers to please I've found.

As to the scenario, I think the lack of starting data is a large part of the issue in the varying prices. Some guys are looking at it like hey it's summer and I'm slow right now and I have my machine only running part of a day, so I'd bid it low right now. Ask the same group who bid it low in a peak season when it's still just them running the shop and the laser is already maxed out and I bet they'd bid it higher. The shop owners on the other hand have a lot more expenses to figure out including labor. However I would think most of the shop owners on here would have a more consistent price. Myself at least, I'm looking at it NOT like hey my laser isn't busy this week. I'm more looking at it like here are all my expenses, my building, my staff, my laser, etc, and no matter if we are running at 90% or 50% this is how I would bid it. I wouldn't cut my rate just because I'm not busy this month, because enviably that customer is going to pop back up during a busy time and say "hey I'm ready now" and I will have shot myself in the foot. At that point I will have to run his job at next to nothing, and likely have to turn down better paying work.

Whenever you get 100 $40 jobs or 40 $100 jobs and you don't want 'em, call me! And in trade I'll send you any $4000 jobs I get. Personally, I can't stand big jobs. They take days to finish, they get in the way of the $100 and $200 jobs (many of which I can do in a few minutes), and I get bored stupid before they're complete...emphasis on 'stupid'. I'm nearing the end of a $3000 or so job right now, and this is when stupid mistakes get made- like forgetting to press the 'next job' button just ONCE, and there goes a $35 part. I ALMOST did that but caught the pause button in time!

Differn't strokes...