How does one go about pricing their products?


#1

I make pens on the lathe so I have a multiplier factor for the pen kit, raw material for the blank, and my base amount that I expect to clear per pen, based on labor involved.

so for my GF, if figure it will be prep time, materials cost, and “LASER” time.

what are some guidelines I should follow to achieve laser production bliss? :slight_smile:

Chris


#2

To throw in a variable there, Laser Time & Laser Power. Your goal is to find out how long the tube will last and factor that into your cost.

Maybe some thoughts about that would be to run the numbers vs average expected life time/usage of the tube and make sure to factor in the labor (even if its YOUR time going into the tube exchange), shipping, and maintenance of the unit itself.

If you want to get REALLY nerdy (which i do at times :nerd_face: ) you could factor in the cloud basis of your internet connection, your time it takes to clean up and restore the work area to baseline… im sure i could figure out other line items.

Happy to see someone incorporating the GF into their business, way to go! :slight_smile:


#3

There is no usage data on the tube outside of glowforge HQ and they aren’t talking. I believe the official estimate is 2 years under regular usage and an estimate of $500 per tube. Of course, you have no idea how much time will be spent per item so…

On the bright side some of the PRU users metered their electric usage and it was minimal so you shouldn’t have to worry about that.


#4

for me, it is a hobby, so Ill price things cheaply as I make them, at my own pace. If it was a business, I think the rule of thumb is that things should be sold at three times what it cost to build. Hopefully there is enough padding in there to pay yourself, pay the rent and bills, order materials, replace the tube down the line when it goes out, downtime for when you need a break, or are replacing the tube…


#5

Don’t forget to add in the costs of designing the object! That isn’t free time, and you should get compensated.


#6

for sale products i’d factor in a laser depreciation tax + time-based use fee for…for now lets assume a tube every 24mos @ $500, a reasonable markup on material cost, design fee if you did it, and then your hourly fee based on processing, etc. that’s the absolute minimum you should charge imo if you want to make a living doing this.

i urge you to avoid doing this. i mean, you can price them as you wish of course, but this really wreaks havoc with setting market expectations for pricing of handmade goods. i suggest you price whatever the market will bear for the quality you produce. don’t ever sell yourself short by subsidizing your hobby with your full time job. instead put that money into a slush fund for hobby purchases if you don’t want to feel like you’re working for a living at it.


#7

4x material cost + time


#8

If I am selling stuff online, I would look at comparable items and price in that range, for sure (I ain’t no dummy). I just meant that I am generally making things as gifts or making things for friends at around cost.


#9

Please don’t do that.

one of the reasons I don’t sell more pens is because I compete with old guys that value their time at ZERO. They could charge more, and still sell pens, but because they don’t it makes anybody else wondering why my pens are 50 bucks and that old guy’s pens are 25. Now part of that is materials cost. I don’t use cheap materials because what is the point? same effort to make a cheap pen as a better quality pen.

A friend of mine that owned a company that supplied wood to wood turners etc. had the same problem. old guys with Time value of zero. they didn’t even realize they were leaving $$ on the table for no good reason. Their wives probably would have strangled them in their sleep had they known.


#10

As a hobbyist, I agree. Part of me is excited that anybody would pay ANYTHING for something I’ve made, but the other part of me knows that things HAVE TO cost more than just covering expenses – not only does it have a negative pricing effect on everybody else, but I think that, psychologically, you’re ripping yourself off. There’s also opportunity costs, which a lot of people just don’t think about. If you’re proud of your work, charge for it. And don’t compete with China on commodity objects.


#11

If I am selling stuff online, I would look at comparable items and price in that range, for sure (I ain’t no dummy). I just meant that I am generally making things as gifts or making things for friends at around cost.


#12

I’m just gonna quote @markevans36301.


#13

I price things at the maximum the market will bear, because you can always put things on sale but can’t realistically just up the price on an in-stock item.

If you make something by hand that is special, time and materials is just a small part of the calculation, IMO. You should not be trying to factor in the cost of your tools and working in some calculation to “pay for it” all.

Instead, I think you need to price something high enough to make the buyer feel they got something special. Make it hurt, just a little, to buy your thing. This may seem counterintuitive, but if you make an awesome pen and sell it for $10, then a person will buy it and not actually treasure it because it’s too close to being disposable. If you take that same pen and make it $40, or $100, then fewer people will buy it but those that do will feel special, and will be more likely to buy something else from you to get that specialness again.

I make decks of cards, and I know exactly what they cost to produce. I once made a deck that was purposefully “cheap” ($6.95) and while it sold well, no one really got excited about it and I still have some in stock after several years. Conversely, I’ve sold decks for $30 a piece and I can sell 1000 of those in a day, because they are perceived as rare, collectible, and special.

Don’t sell yourself short, and don’t be afraid to talk about how special your items are.


#14

These guys have some info on how they price laser jobs, roughly $.15 per inch of cutting on 1/8 acrylic for example.


#15

I’m just going to quote @jbv quoting me to make this totally meta. :smile:
But really, hard lesson for me, never sell yourself short.


#16

I was going to ask the same pricing question so this is perfect timing for me. I’ve had folks wanting to purchase one of my police plaques and I’m struggling on the price. I think I’m like an awful lot of folks who tend to under value their time and skills and I’m really trying to break away from it. What’s hard for me to factor is all my design time :-/


#17

I think about it this way: I’ve put not only money, but time into learning and knowing a tool that I can use to make something for someone they cannot make for themselves. That experience has a premium. Not to forget about all the material waste I had to incur in this learning.

On top of that is material costs. I try to consider what one would pay at hobby lobby for a material of this type, plus shipping, and wastage. That comes out to roughly 4x the cost I actually pay for lost materials. It’s a great starting point.

If I have to do any complicated assembly using multiple materials and build jigs to align things I also charge for my time.

I keep shipping cheap. $3-5 usps makes everyone happy. No one likes double digit shipping.

People understand custom work costs a bit more. This isn’t a factory with efficiencies built in. But you can also add cool little things on the fly. I always try to give people who buy things something extra with their order.


#18

I thought the 499 price came from when they planned to have it shipped both ways for installation, but then decided to sell tubes with an option for installation instead. Or have they come forward with an actual tube price since then?

Would be great to know given the, hopefully, soon shipping.


#19

Perceived value is huge with handmade items or artistic things. I think maybe people don’t trust their ability to judge skill or talent, so they rely quite heavily on price to determine if something is “good” or not.


#20

correct, and i’d be surprised if they come out with a discrete tube price for a few months. i’d also be surprised if the tube price ends up being much less than the ‘shipping-both-ways’ model.