Acrylic Awards....

[Mike Hood]

I try never to fall below $120/hr for shop time, and if I can accomplish that through margin and labor, I'll go that far. I hate to use raw material costs as a benchmark, because my cheapest raw material (1/8" birch ply) pays the highest profits. I get $2.50/min for airplane parts and can sit there for hours doing it. (each shipset will feed 450-500 minutes of labor time)

[Stephen Beckham]

Steve

I don't know where your studies are from but the only people I know of, and I speak from experience, who can work on 1/3 mark up are supermarkets and appliance dealers.

What you are not taking into account is operating costs. Even if you did nothing to the acrylic award but turned it over to your customer it's not likely that you could break even at 1/3 margin.

Even if you do nothing you have the cost of the facility, your labor, packing and shipping costs.

Mike - got all that and I'm not talking markup, I'm talking Profit Margin which to my understanding is sale price minus all costs and overhead. A 60% margin is roughly a X 2.8 on cost. Putting the $27 item in the $70 range. No question if it is worth that much. In my small town America - I would have those sit on the shelf a long time at that price. People here want big city item as small city price. I keep it about the 50% margin.

I just realized I never said what I would charge - I would have sold them for $53-$54 or about a 49% to 50% Margin (not markup). Another interesting part was the customer - a casino - they would probably be one of those that would pay the higher price for the same item. But next time they would shop around. With Carol's price, she made money and I'd bet the casino's will come back to her without looking for the price comparisions.

The difference is the definition of Markup Vs Profit Margin. Trust me, I tried to figure it out - but after I was told to get the financial calculator that has a Margin Function key right on it - I'll never know the difference, but I'll let my little buddy give me a consistant price.

Thanks for the feedback Mike, I hope I made since....

[bruce cain]

Did I mis-read Carols post or did she not do $120. in one hour?

[James Stokes]

No in actuality she did not do $120 per hr. She had customer time, Time e-mailing proofs set-up time and the time to order, recieve the goods, unpack, Repack, Deliver and billing. That all needs to be figured in to the time.

[Ed Maloney]

James - You bring up a situation that I was thinking of the other day. I was brushing on some finish on 25 12x24 plywood pieces (both sides) for a sales presentation I'm putting together. Obviously it took some time. Then there was the waxing, actual lasering and gluing/assembling the samples. Now if I include all the prep and assembly time in the pricing I'm thinking no one would want to pay the resulting price. I do figure in 2.5x material costs into my pricing.

So my pricing right now is based on shipping costs of the materials (to me), the materials, and laser time.

Anyone figuring in the time being spent on the whole process?

[Mike Null]

Ed

I try to account for that. Like some others I price my laser time at $120 Hr.

Using material cost as a pricing guide is sure to bankrupt you in a hurry. For example I take great delight in fishing a piece of wood our of my wood bin to make a sign. It's probably been there for years. Cost? Negligible.

But suppose i had to go get the wood or order it. I work from my home but I still have utility costs, web site, telephone, equipment maintenance, replacement costs, packing and other materials and I haven't mentioned my own labor.

[Bill Stein]

Ed,

What is your time worth? -- to you?

At the end of the day, there is one question to be answered.

Would I resent doing this job again for the same amount of money? If I feel that I am adquately compensated for my work, the answer is no. But if I feel that I am being "underpaid" for the project, the answer is usually yes.

Answering that question doesn't tell me how to price. But it sure provides a gut check on if I am happy with the price I quoted and did the project for. And that helps my decisions when pricing the next job.

Bill

[Ed Maloney]

Mike - So you charge $2/minute laser time to account for the extra time you are spending on ordering, prep, etc? Not the actual clock time to do the prep and assembly time? If that's the case, sounds like a good model.

[James Stokes]

I do not generally do my jobs by laser time. I do them by the job. The acrylic awards above I would have charged $81. This would have paid for the incedental time. If I have to go to the lumber yard, get material, Then go prep I would like to get about $35 per hr for that time. Therefor I try to figure total time on a job and charge accordingly. If they will not pay that then they can go else where. I do not believe in working for free.

I have a couple customers I work for by the hr. I charge them a straight $35 per hr while I am working on their jobs. From the time they walk in the door to the time they walk out.

[Frank Corker]

At this point, having made it perfectly clear in my earlier point about the quality of the work and the pricing, there is another thing that needs to be considered.

About 4 months ago I was asked to commission acrylic awards for a local company, the design I created I even made one to satisfy myself that it was up to my own high standards. So the day arrived when one of the company called and was bringing with him their last year's award to show me. I was shaken to my feet, solid glass on a bevelled glass plinth and about 2" taller than my creation and half inch narrower. Very nice, very heavy and looked expensive except for the engraving, which was crap. Chinese glass, probably bought in huge bulk, but the price was just under half of my creation. They loved my design but they wanted to pay the price the other company were still offering. No sale.

That's what I mean by another factor that needs to be considered. There are so many imports available to those who can buy in bulk that it is far too easy to outprice yourself out of a job. Another reason why Carol's price was right. We all agree that it's bespoke and people love bespoke but if it's more than half the price of 'one over the counter' it can be bespoke as much as you want, they won't pay it.

[Ron Thompson]

Carol,

Please give us the web address for PDU.

And I think you did great.

Ron Thompson
San Jose, CA

[Mike Null]

Ed

Realistically, every job is different. I have a fixed price for name tags for example. My engraving rate for name tags is actually over $400 per hour. My lowest priced name tag, a 1x3" takes 27 minutes to do a sheet of 77, engraved and cut. My wholesale price for these is 2.85. That's 219.45 or $8.12 per minute. My material (plastic and pins) cost is under $20 including freight. My customers re-sell these at $5.00. There is about 30 minutes of assembly and packaging also and maybe 15-30 minutes of set up time.

It's only fair to say that these are my highest margin items. Plaques and other awards are not nearly as profitable. But marking customers materials is close.

One of my hidden pluses is that I have virtually no customer contact as almost everything is done by email. Customer contact, especially at retail is a time hog.

I should mention this as well. Retail customers seem to want everything yesterday. You've heard of rush charges. A few weeks ago on another forum an old hand at the business shared his rush charge strategy which I adopted.

He eliminated the term "rush" which he felt had a negative connotation and substituted "Express" for next day service and "Priority" for same day service. He set two different prices accordingly and says he rarely meets with customer resistance.

[Jeanette Brewer]

Please give us the web address for PDU.

PDU's website is www.pdu.com

[Carol VanArnam]

It's going to take me all night to read the answers. Thanks guys for the help. This was my first acrylic award job and I had no idea what to charge. I appreciate your answers because you all have learned and know the tricks. There is only one other place in town to get awards and trophies so my competition is limited.

My rule is the first customer always gets a great deal because he is the customer I learned from.... the rest of the customers BEWARE!

THANKS AGAIN FOR ALL OF THE REMARKS
I FEEL SMARTER ALREADY.....

[Carol VanArnam]

PDU ACRYLIC AWARDS AND TROPHIES-
http://www.pdu.com/2007CorpCatalog/IndexCorpCatalog.htm

what I like about them is I get their product from my local trophy dealer. It takes only 1 day to get anything you see at the PDU web page. My dealer ships same day so poof the next day I'm lasering away.

PDU has a tab on their web page for laser engravers. They post eps files of their stuff so we can use it for layout and rastering. They also will ship you a CD with pdf pictures of all of their products. The CD is free so posting the files on your web page is great. Emailing the pictures to the customer is also easy. It's just they have a lot of support and a great product.

Frank- this award is 3/4 inch thick