Agreed, those thing need to be made time for, I also only put an 8 hour day in that example when in fact we all know its every waking hour when you are first starting out. It was a very lose example though. As the $100 a day was also just a fudged number for math simplicity sake as well. Thanks for the reply !
Hey, thanks for the reply. I am not an expert, this is what I am using. You are correct on the margins, the retail price should be at a higher point , like 4X instead of 3X perhaps.
I doubt many of us are The wholesale thing was just my observation from having stuff in the retail space for a while.
Floor space is money for retailers since they have to carry the inventory, and that floor space has a value that they want to maximize. If you have a product that’s literally flying off of the shelves, they make look at smaller margins - but that’s just an indicator that your prices need to be higher.
Personally, I didn’t set out with any formulas in pricing. I went to market looking for what the market would support. A lot of people thought I was dead nuts looking for $20-30 for a chipboard puzzle, depending on size, but the market supports the product.
I knew my base cost to manufacture going in, and knew margins weren’t as good as they could be but I also knew that over time I could decrease material costs, decrease production costs, and also would become more proficient at making them. So I’ve become more profitable just by purchasing equipment that makes the job easier (and cheaper) and by getting better at what I’m doing. The beauty of CNC is that I can expand my revenue potential with just the addition of a second machine. Though a second machine would be pretty tight in here
You and @GregK both make an important point. You have to look at the time your product takes once you’ve gotten the process down, which is hard to know early on. It’s definitely more of an art than a science.
I don’t sell handmade items yet, despite having been making things for years, because I haven’t figured out a way to come close to what I make as a freelance writer (which I also enjoy). But this year I’ve decided to try just making what I want (and am good at!) and selling that and seeing where that takes me.
I’d stress that machine time is not hands on time necessarily. Without adding employees, I only have so much direct hands-on time available. I can increase my machine time/capacity with the addition of another machine, but only to a point - since the machine throughput will eventually exceed my capacity to keep up when considering my hands on finishing time, necessitating the need for an additional set of hands. But, this is how we grow.
This may not apply to everything being made with the Glowforge, but it’s applicable in my situation.
Yeah, I can’t imagine many things that require NO hand time. Even if you use PG materials and have no prep, assembly, or finishing, you need to remove masking.
well thank God I’m not relying on the GF for making a living. I basically bought it because I love toys (have you seen my post about the wazer waterjet I don’t need?). my hobby is learning new things and creating stuff. once I make/create/build something that I’m proud of, I usually like to move on to the next skill/hobby.
But I’d like to actually use these skills and toys to make some money, if for no other reason than to better justify the amount of effort and time I put into it. although I think my wife would also appreciate if my garage-full of tools and toys would not be a money sinkhole
My initial reaction whenever I see someone selling a product or a skill for a fraction of what I would charge is not just the “missed business” so to speak: it’s the realization that what I though was a major achievment in production or unique skill is actually not that valuable or special.
At this point I would just like to have positive cash flow, or even partial as the collection of goods is piling up faster than going out the door. I have been thinking that finished goods is at least some future cash or at least future presents, but unless sold they just pile up. I don’t know if Florida is just a cultural desert or the times are worse generally or both, but even looking around for gift shops there are way fewer than I would have thought , and that does not bode well either.
We run a retail florist so we are using it to sell items in our store. We have a formula for the time in the forge and for the cost of supplies we put in there. It’s not going to work for everyone but we are hoping it works for us.
We want our glowforge time to be 20 an hour. So we set our charge for forge time at .33 a minute. We take our wood and figure out how much per square inch we will charge. We figure our plywood cost at the most expensive one and use that for all boards. It comes out to .01 per square inch so we charge .05 we are hoping this covers lost board area (when we don’t get it moved over as far as we could) and of course mistakes. So say we make a magnet that takes 5 Minutes to cut and measures 3x3 - 1.65 forge time + .45 wood cost + .10 for the magnet strip = $2.20 we like to mark things up x2.5 so that would make it $5.5 we are retailing our magnets at $5 or 2 for $8. So our profit is built in there just fine. Now some of our larger signs we engrave might take a bit longer in the forge so we may loose a little bit of money there but we can make it up somewhere else =) It will all even out in the end we are hoping. We also want to get into save the dates for our local brides. We think we might need to take the mark up down a bit but for us that would be one large cut that we can “set it and forget it” meaning we duplicate the design a lot and set it on the board. One of us can do other things in the office while it runs like payroll or updating the website. We are new to this but not new to the retail side of business. We are hoping we can learn as we go and improve techniques to create more profit for our business. Hope this helps someone =)
Do you include your time in the laser time? Design, assembly, setup, etc?
Part of this makes me think that people are so involved in putting together spreadsheets trying to determine what they should charge, that they have no time to make
Right now everything I have made I already had designed. We have had an SVG shop on Etsy for a few years so I have about 900 designs to choose from! When we take something custom we are talking about charging extra, we already do that for the wood signs we sell. We have been making vinyl stencils and painting on wood signs for a while now. We typically charge a $5 design fee. If it’s something I can turn around and put in our SVG shop I don’t charge for that because it will end up making me money in the future.
That doesn’t seem like an issue here! Lots of creativity.
I have no spreadsheets, either… I write to pay the bills because I can’t figure out how people live on what they are charging. I think I’m finally accepting that it makes more sense to write a couple of hours a day and make things for fun with whatever free time is left. We’re just north of Boston with two kids and it’s very expensive so I guess my perspective on what someone needs to live on is skewed.
People may very well NOT be making a living.
I have seen where people tend to value their time at ZERO. the old guy at the craft fair with turned wooden pens for 15 dollars. when I turn a pen. I ADD 15+ dollars to the cost of the materials etc.
I know people that were competing with the guy killing time to make a few bucks off his hobby. The problem is that the one guy leaves money on the table so that the guy needing to make a living cannot.
My buddy left that business and shut that company down.
So very true.
So I do a bit of 3D printing as a side business and I currently have a spreadsheet that I use to calculate what I’m going to charge for a given print.
The sheet factors in the cost of the machine, depreciation, repair costs, material costs, failures, finishing work, even electricity. Also with some silly remarks about paying oneself. It really helped me breakdown the actual costs of doing stuff and I’m adding new details as I find new components to my work. As I don’t have a yet (ugh), it hasn’t been adapted to the laser cutter, but it wouldn’t be much to change the Object and Filament sections to account for flat material.
If any wants to grab a copy I have it loaded on my Google Drive.
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