How to Price Glowforge Projects

price

#1

I think many of us here purchased the glowforge for reasons which include, hobby, new business or expanding on an existing business. I wanted to open a thread to discuss ideas with pricing your projects. Many times when starting a business this is by far one of the hardest things to do so with an open forum like this figured we can all help each other.

I know there are many larger companies out there at least in my state like “Things Remembered” where many of my friends go during holidays and special occasions and they charge an arm and a leg, or maybe can charge this because they dont’ have much competition, or maybe their pricing is spot on, not sure.

I have noticed this place charges for the product avg being $40-50+ The first word is $10, and each additional word is $3.

I am trying to possibly base my pricing on possibly print time + material cost calculator and design. Haven’t figured this all out yet but just wanted to get your thoughts and start a discussion going on this.

You can give your input on other pricing tiers companies use that you know and your thoughts on how an easy calculation can be done on your projects.


#2

There have been a couple discussions about pricing in the past, so you might want to do a forum search if you’re interested.

Just be prepared to get a lot of answers that aren’t really applicable to your situations. Like, if I make keychains to sell wholesale, I’m pricing very differently than if you’re doing custom, one-off designs for clients. And you’re pricing very differently than someone ‘renting out’ time on their glowforge, just offering a print-on-demand service.

I wouldn’t automatically assume those places near you are overcharging due to a lack of competition. They might be making a killing, or they might not. They have to cover their overhead costs, too. They have to cover the cost of running the machine, but also pay the employee who handled the client, took down their order, babysat the machine, etc. And that’s on top of the cost to actually run the machine (including covering the cost of future maintenance), the material, the rent, a little extra to cover any potential mistakes or losses, and whatever else contributes to it. Not to mention a profit to make the entire thing worth while.

You actually might be surprised by just how much people plan on charging for their services.


#3

It’s an interesting coincidence that 2 posts about the same thing came up right after one another:

I guess it’s a good sign that the forums have lots of new users! :slight_smile:


#4

My current plan for an etsy shop includes roughly:

  • Materials + paying myself for my time + laser time = cost to produce item

  • Cost x 3 to 4 = retail

  • Retail + shipping = list price with “free” shipping

I nixed some sizes/variations from my plans entirely because that final price was just too high for some stuff to sell at a price worth it for me. I recommend a spreadsheet where you can put in information like materials cost, time cost, multipliers, etc. to see how it all shakes out and how much profit you’d make from something.

Good luck!


#5

I’ve just started playing with the numbers and figuring out pricing myself. Here’s what I’ve come up with so far.

  • Cost of Raw Materials
  • $1.67/hr of run time to pay for the machine - This assumes the initial cost of a pro unit w/ filter will be paid off in 5 years with 20 hours of use per week and 48 working weeks per year.
  • $1.00/hr of run time to pay for replacement laser tubes - This assumes the laser tube lasts 500 hours (speculation) and will cost $500 dollars to replace (based on statement from @dan)
  • $0.09/hr of runtime to pay the power company - This assumes the unit consumes 800W (based on user manual) and electricity is $0.11/kwh (based on Minnesota residential rates)
  • $30.00 to 50.00/hr of runtime to pay yourself for watching the laser.
  • $30.00 to 50.00/hr of prep time to pay yourself for getting files prepped and ready.

If your going to make the laser cutting a full time gig you should also factor in healthcare, any state or local licensing fees, and possibly some professional accounting help.


#6

We were just looking up the etsy pricing and they charge a 3.5% fee, this does not apply to shipping though. As much as I love free shipping this will probably deter me from doing an increased list price and free shipping. Plus I think shipping counts as a business expense on your taxes. You could probably still take this deduction if tax is included in list price you would just have to track it seperately. Probably doesn’t apply to everyone, just more things to think about.


#7

That right there! It’s purely psychological. People love free stuff. Just roll the extra fee portion into the price.


#8

Yes, for sure. I think pricing is a very difficult subject that a lot of
people don’t consider. Like the person that does the pens, I get it, people
always tell me they can go and get a t-shirt at Target or Old Navy for a
few dollars. I try and explain to educate the clients, but sometimes it
falls on deaf ears.

Best,

Jim


#9

I have an MBA. I tried to create a spreadsheet that included all this information, design time, design originality, cost, print time, etc. Something I could use as a formula for the future. I didn’t find it that useful.

Ultimately, you have to find the value (retail price v. need/'want/desire) that works for both you and your customer. Do you want to make 100 with a little profit or 10 with more profit? Are your products shippable - reasonable packaging and fees? Are you making something unique, rare, etc? How do your customers spend money (prefer not to at all, only if something is broken and they cannot fix it, or if it elegantly solves the problem they are willing to spend some money…or something else.

You can BET that gf wasn’t just priced on cost. They calculated their costs and knew them (as well as they could at the time) but there was an upcharge. GF determined the retail price for reasons other than simply hard costs and labor.

I AM NOT ON AND HAVE NEVER BEEN ON THE GF TEAM AND HAVE NO INSIDE INFORMATION REGARDING THEIR PRICING STRATEGY. :slight_smile:


#10

Most people know about, or were taught, pricing methods that were developed at the beginning of the 20th century for factories. I can’t think of any business that is central to a glowforge using that sort of pricing model. You should probably be looking at how small scale artisans price things - in other words your time.

If you’re finding that time in the glowforge is your bottleneck, than buy another laser cutter. If your margins are so thin you can’t afford another laser cutter, find another business. The glowforge isn’t a $300k 3D printer, it shouldn’t be much of a factor in your pricing model.

You mention personalizing things. What are you going to personalize? Is a laser cutter the best tool for doing the engraving? How much personalization will you be offering? If you say here are your fonts, and here are your sizes and it has to fit here, well that can be done. If you let the customer get involved, like supplying a photo that needs to be touched up, or “Can you do this?” you’ll find your time is being sucked up like a black hole eating a star. And then you’ll get a one star review. And remember, it is one thing to personalize a wedding gift aunt Wendy will be giving her niece and a totally different experience personalizing things for the wedding itself.

Back to pricing: there are a lot of companies a quick Google search away that create personalized objects. The question isn’t how do I set my prices, the question is can I meet my competition’s prices. If you cannot, then you have to find a niche, something totally unique, or convince a group of people your premium is somehow worth it - I believe they call them designer items.


#11

I always tell them that’s great and if they find my stuff there would they be so good as to let me know so I can make sure they stop selling knock-offs of my work. All with a pleasant smile :slightly_smiling_face:

If they get it, great. If they don’t, they’re puzzled why I am encouraging them to shop at Walmart. Then I feel bad for the future of humanity :wink:


#12

It was a few years ago, so the information could be totally outdated and not at all relevant any longer, but Etsy used to say sellers spent about half their time crafting/making items and half their time managing their shop, photographing items, writing product descriptions, advertising/promoting, responding to customer inquiries, packaging, etc.

So be sure to factor all of that time into the “paying yourself for your time” category. It’s definitely not an insignificant amount of time.


#13

If someone came to me for a custom shirt, then told me they could get a t-shirt at Target or Old Navy for a few dollars, I’d respond with, “Then why are you coming to me?” I suspect this would help a few people understand the difference, but most would probably feel like I was being a jerk. Maybe I’m not so good at dealing with customers. :smirk:


#14

I think that is a fair question. :slight_smile:


#15

There is a lot about general respect for what you are doing that differs year to year and place to place. In the sixties you could sell anything, ten dollars worth of wax poured into a hole in a bucket of sand with a wick and a few sticks and you could have four $50 candles that would sell quickly and better than the nice ones that were perfect for $5. All because your funky candle was not “commercial”.

Eventually because it cost almost nothing to start, and you could make them in the kitchen, there were far more candles available than people to buy them and you could not give them away.

Initially I could buy the gold for a ring for ten dollars and sell it for a hundred very easily but as the price of gold shot up the price rings would sell for did not change a lot and soon the expected price was below the,price of the gold, and at the same time generally it seemed that the artisan value in a piece of work reached into negative values.

My low point was as part of a collective of potters working in porcelain and stoneware that was selling very nice pieces for ten to thirty dollars while quite literally across the street a similar sized piece mass produced out of weak and fragile talc clay was selling for over a hundred dollars because they were “Pottery Barn” and we were just artists.

Now the pendulum is swinging back the mother way a little bit in part because you can do more precise and complex work much faster than a person with a dremel, and coping saw. But the price of entry is very much higher than the coping saw.

It is said that eventually everyone’s job will be replaced by a robot, but it is human creativity that will not be matched, and the way of the future is to own the robot and provide better ideas.

Well all the folk here own a robot or soon will, and it is our creativity leveraged by that robot that provides real value that at least some of what we are doing will hopefully be around a hundred years from now still bringing joy when we are long gone.

This too should be a consideration in pricing. Even if everyone of us sat down to make a coaster or a carousel there would still be no two of either alike.


#16

True, however their credit card processing fee does apply to shipping as well. Not such a big deal for domestic orders, but it can be a bit of a hit when it comes to international shipping.


#17

Just as a funny note… an old friend who is self employed stated that he made most of his money off of jobs he didn’t want. (He said if a potential customer gave him the feeling they were going to be a “real pain” he would multiply his usual quote by 4… and usually they saw a high price as higher value.) So in his words…win, win. Or at least get paid for his aggravation! Ha!


#18

Very real thing. And as long as people persist in being jerks, we’ve got no trouble charging them for it. :wink:


#19

Yep. My prices escalate in direct proportion to my dislike for either the job or the customer :slight_smile:

Somebody pays me $4K for a day’s consulting and I dislike them even more :grinning: It just shows they’re not bright enough to be entrusted with money and they’re likely wasting someone else’s.


#20

Yup, I learned that trick about 35 years ago fixing VCRs, repair was going to be a pita jack the price up and most of the time the customers will say never mind, when they don’t, you have made it worth my time.