How to make Money and Price your Laser Engraving Work
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- เผยแพร่เมื่อ 6 ต.ค. 2022
- Today I share How to make Money and Price your Laser Engraving Work.
Hi, I'm Matt! Along with my wife, Sara and our 4 kids we are fulfilling our dreams of becoming more self-reliant. We support our dream by working from home running our laser engraving business. I have been getting a lot of questions about how to price your laser engraving work and make money so we are sharing our "secret" formula.
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Matt & Sara
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Matt & Sara
PO Box 9
Carver, MN 55315
Send Business Inquiries to: homesteadingyt@gmail.com
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#laserengravingbusiness #laserengraving #laserengravingforbeginners - บันเทิง
Oh i like what they said... "your work means something to someone out there" it's a very very good reminder when i overthink if I am overpricing my handmade products! Thank you guys. now I am a new subscriber!
You covered what I call Time and Materials, you did a GREAT job explaining it.
You did not talk about overhead.
• Rent
• Electricity
• Supplies to clear your machine
• Water
• Trash
• Everything that is not Time or Materials.
I do this for 3d printing too, the printer gets $2 an hour, the power company gets 20 cents an hour, I get $1 a minute, filament gets charged out at twice what it costs me to buy, multiply everything by 20%... Unless I'm printing scraps for 'community things' then it's usually a gold coin.
this is the exact thing i do for 3d printing. which is hard information to come by when starting out so if you come across this remember it!
I've been in involved in a lot of businesses so most of this is pretty familiar to me however laser engraving is a new field. Doesn't hurt to hear the basics. We're looking to get into the custom market rather than mass produced items. The markup in some of the Segments we've identified is incredible. It's crazy what people are willing to pay to have their name etched on… Place name of it here… Especially here in Southern California. You two are an absolutely adorable couple and I'm so happy that you are successful in this business and you are working together with no hint of murder in your eyes.😂
Sunk cost. I believe that’s the phrase you’re looking for. Nice vid. Helpful. Tks!
I know you said that you had a bit of profit in your runtime, but the business needs to make profit for itself. Your laser isn't the only thing you have that may need to be replaced. Also, it doesn't sound like you are making any money on your materials. Technically that means you are loosing money on them as you have ordering time, time looking up products or at least new products, etc. Just a couple of things I have found (not in the laser business) that had helped me stay in business. Thanks for the video. I certainly picked up a few thing from it!
I love your way of thinking. Time is money! Why can't the general public get that into their minds though. People in a salary job especially don't understand the concept. They get paid irrespective of how hard they work. They also get paid if they are sick, on holiday and on public holidays. The money just automatically goes into their bank account each month. Naturally for self employed people it's a different story.
You two are great.
It's just not possible to hold quality at high level when you're not honest about all the costs - and the worth of ALL the work.
You are. That's why you're in business & doing well.
I wish all the best to you.
Thanks 😊
I think you should add 20% for your margin as a "retailer". You're not just a manufacturer. You're a manufacturer AND a retailer. If you were just manufacturing, you'd have the benefit of dropping your products off, in bulk, to a business. Much less work. Instead, you're dealing with individual end consumer, so you're also doing the job of a retailer.. and should make some money for doing so!
I like the break down, it gave me a lot to think of as a hobbyist I do not always charge for stuff, I make gifts and such more than anything. I do however get request every now and then, and do not know what to charge. One of the other comments mention that you did not include space rent, garbage, water, etc... but if you are running as a business out of your house, you can write off a percentage of your house payment, electricity, internet, etc...
Yup
I like this .. open honest and direct, Thank you; glad I stumbled across this
Thanks
Thank you for the explanation. World needs more people like you both. Wanting to help people and build people up, instead of wanting them to fail.
Thanks 😃 glad to help.
Thank you for this information and inspiring video.
Thanks for all the useful information. Most of the time I am so overwhelmed by everything I get nowhere.
Your welcome
I love seeing real people do a video. Y'all do an amazing job. Thank you
Thanks 😃
"Hold your ground and youll be fine" ❤ thank u so much. I was afraid that was pricing to much. My competitors have super low prices.."know ur worth" love u guys.! Watching from philippines.❤
😃
Oh! Thank you guys, engraved your list in my workshop :D now it makes sense even if someone asked, why is that so expensive? well I had laser running for 40 minutes to make your photo on painted white gloss, than black gloss canvas 40x40 :) Thank you guys! you've got a subscriber!
Awesome
Great xplain. Never underestimate the value of your creativity. People come at you with an idea which you then have to "make work" in reality. Not everyone can do that. I read posts on facebook every day from folks that have diode lasers but they don't have the skill to make a thing unless it is a file that they bought from etsy.
For every "buyer" that says they can buy it cheaper in whatever store there is another customer that will recognise your skill/work and be willing to pay for it.
Thanks
😂that was amazing 👏🏿
Thank you for this video. I am working to start a business like yours and you are both so inspiring and helpful. Thank you
You guys are awesome! Thank you so much for all the sharing of knowledge and info!!!!
Thanks 😊 and No problem 😉
You guys are awesome for sharing this knowledge with us who are starting out! Thanks again.
Thanks
Thank you. I appreciate all of your time and effort put into these videos.
Thanks 😃
I loved this video, thank you so much for making it!
Thanks
Thanks for the info guys my 40 Fiber will be here Friday and this was my biggest question on how to run a laser business. Thanks so much!
Thank you guys for sharing.
No problem 😉 thanks for watching.
Thank you for all of this advice! I love how transparent you are about what works, and more importantly, what doesn't!
Thanks
Profit first is AMAZING!!!
Matt and Sarah, you guys are awesome!! I was and still am a subscriber to your channel on an old TH-cam account, but this new account will be my new companies brand name. I am now subscribed on this channel as I will use it instead of the old one. I have purchased a Thunder Nova 51 and it is being built in China currently. I hope to have it installed end of August/beginning of September.
It is great to watch all your other videos Matt, as settings and trial and error that you have done will be most helpful to me for my Thunder machine.
Very good and clear explanation of how you cost your work. Keep up the great work!
Thanks very much for sharing. 😁
Derek, from Ireland.
Thanks so much! Oh my you two look like sister and brother! True union!
Great video.
Awesome information, you guys rock.
😃
I loved this video. Thank you so much! The breakdown was sooooo helpful. "Find out what market you want to be and tailor it to them" is the advice I had been getting. And I'm like...well yeah....but this is like gold star advice
Thanks
I've seen a couple of videos of you in the last weeks, and Man I love your (both) open and whole hearted approach of sharing your information and processes. Theres so much content out there where they lure you in but then dont give you the important 10%. I learned already alot from you guys specially though how start up a business and still keep a good mindset
Thanks 😃
100% agree with this comment.
Great information.. I had been trying to figure out how to charge for my laser. Since I have a diode laser, now I have a great idea about charging,
Thank you very much... Keep up the great work!
Appreciate your videos.. just got a 10w laser. Learning curve, your videos help ty
Thanks 😃
This was great! Subscribed! Can't wait to get our first laser. Love that you guys do this together. Thats the plan with my wife and I.
Thanks. That’s awesome it definitely helps working together.
Can’t thank you guys enough for all you share with your followers. I started in May and have learned more from watching your channel.
Thanks and glade to help.
This is great info. I just go an xTool P2 CO2 laser, and I'm looking to be able to sell my own designs eventually. Thanks for sharing your experience!
Good work
Greetings, in Mexico it is quoted approximately $0.36 dollars per minute of cnc laser/router in materials between 3 and 6 mm thick, plus the material, usually in Mexico mdf is used a lot, (a sheet of mdf of 122x244 cm, costs 180 pesos, date November 2022) and the cost of cutting plus material is proportional to the size of the sheet, almost always the client sends their designs, and that is how it is quoted, if you need to make the design, that already has a cost per hour, depending on the person, but it is almost always large amounts so it is buffered and not charged, regards.
Loving your videos. Is it possible to do a video on how much a person should be making before they can even think about leaving their job? A person has to think about taxes, insurance, ect ect. Keep up the good work.
Absolutely
Great Video.
Thanks
Thank you both for another great video. If I may another way to price it is using total costs of everything Elec. Shipping time Material etc. etc.etc.. and then making a percentage. Example lets say you have an item that the total cost of everything is 1.00 and you want to make 30% there are 2 ways Add on percent or true 30% add on would be 1.00 x 30% = 1.30 True 30% would be divided by the reciprocal 1.00/70% = 1.42.
Thanks
Great video! I am just starting out and I know I will have to make adjustments because I don’t know what I don’t know. I am sure I will forget to include something. However, this gives me a great place to start. I really appreciate your transparency. 😊
Thanks.
Thank yous guys
👍😃
Thank you
Profit First! Great book
Thanks
Great video. I was thinking of Profit First as I listened to you. I am a Profit First Professional based in Australia. And then you mentioned it. Great to hear. I am sending your video to my son and daughter who have an apparel and an embroidery business respectively. Loving your series. Did I miss one where you made the choice about which gal o laser to get?
Thanks. I talked to Kyle from laser everything and he recommended some. Now I would like to get the co2 galvo and the UV galvo.
You two are awesome. Thanks so much. We have farm animals too, hoping to start a family and a laser business. If all goes well, you are future versions of me and my wife.
Thanks 😃 and hope the best for you guys. Goals
Wow, I finally need to use this formula. So, if you don't mind letting me know if I understand correctly. It's $1/minute for labor, $1/minute for work on an $80,000 machine, and then materials cost. Fortunately, I don't need shipping and no fees. My machine is $5,000, so 16 cents/minute for me.
I would still charge 1.00 a minute. If it is a c02 laser because of the speed
@@laserengravingwithmatt7833 , thanks so much. Yes, 100 watt Co2 laser. I am guessing the labor for the scan gap settings I made for this job, is just standard machine maintenance. Probably not part of product pricing.
Really enjoy your videos! Approximately where are you in MN? I'm in MN too. 👍
1 hour from the city
@@laserengravingwithmatt7833 Cool we're about an hour and a half west.
That was quite interesting. I think you covered the basics of running a business. However, PROFIT was not mentioned. I am sure you are entitled to a profit to sustain your life style.
A person can use whatever pricing model he or she can dream up. However, a pricing model that fails to recover costs (and with capital equipment, this is based on annual depreciation and not on its direct price) or that is too inflated (by arbitrary pricing) will result in the business being unsustainable. The best price for a product is one at the lowest point possible, based on costs, while still allowing you to pay yourself a reasonable hourly wage and to make the planned profit.
As for choice of equipment, only invest in expensive machinery if it can perform functions that no other equipment can. If an $80,000 piece of equipment can only output products at the same rate as a machine costing $10,000, then you are better off purchasing the less expensive equipment. As you need to add production capacity, it is necessary to evaluate features, functions, and speed of the less expensive options. If the cheapest equipment has all of the features and functions needed but is only 25% as fast and
Cool ty
I love Profit First.
I am enjoy this video. I do not own a laser yet I may purchase one at some point soon I would think your laser one time cost might be closer to 1.67, to go account for maintenance wear and tear insurance and electricity.
You two are definitely an inspiration! Thank you!
Thanks
You need to add cost of utilities and maybe cost of shop.
Is there a particular software you use for inventory and pricing?
Thanks for the formula!
How did you come up with $1 per minute for your machine? Is it a ratio of machine cost and expected life of machine?
Insurance time electric wear and tear.
Hey guys, this was really insightful - thank you for sharing. Does this mean for custom work, you invoice after the job I done and you have calculated the times etc?
For the tm jobs we bill them after yes.
I know I am quite late watching and commenting on this, but I have a question about your formula: What about TAXES? I am located in Germany and we pay product taxes, so for each product I sell I have to declare it and pay 19% taxes per item. For things I bought taxes are included in the price as well and I can get those 19% reimbursed (e.g. I bye wood for my laser or other things I need). I like your concept of paying yourself and paying the machine!
I can’t say anything about taxes because everyone is different. Just add it in the price
@@laserengravingwithmatt7833 Thank you =)
Thank you for the invaluable information! Would you mindsharing your laser setup? Types (CO2, Fiber etc) how many, what poweretc. Thanks.
I could do that 😃
This model should help anyone trying to figure out pricing. It pretty much covers the bases. I'm quite anal and go into more detail but I end up near where you guys are. Well done!
Thanks
Does marketing budget factor into the calculation, or do you factor advertising, lead generation activity, etc. as part of runtime?
Yes! Regardless of where you factor it in just be sure you do!
So not even a beginner yet, still researching and just started that. So when you say fees what's that suppose to be covering? Listing fees?
Yes the fees are for whatever platform you are selling on.
Not sure if you included making up the custom files for the work for a client in time (hours) and minimum fee etc. I.E. if a customer wants a custom logo say a local volunteer fire brigade logo for a coaster or something. Do you still charge $60 /hr for that, included in the "handling fee"?
Yes how ever long it takes. You don’t go to your 9 to 5 for free.
I looked at my competitor's price and i was like hell no i don't give a F i am selling for what i want to sell it for. I am not ordering importing from abroad to cut my price i do because i want to be able to work with bigger margin. Plus i am creating the website for my product so it's easier for the customers to customize the stuff how they want.
Hi Thank you for the video! The link for the xTool does not apply the promo code mentioned. Can I get the discount code please? Thank You!!
I will send them a email
@@laserengravingwithmatt7833 thank you very much! Please advise me which one do you recommended the xTool M1 10W Deluxe or the xTool D1 Pro 20W? Your input is much appreciated!
I would go with the 20watt
How would this apply to a larger item like a 4'x8' sign? having to cut and place letters and scrolls.
Same.
Got my first customer and I told her COD would be good. Should I get the money up front for the future? I figure they won't back out if they pay in advance. But then I don't want to make the wrong decision.
That is a hard one. We don’t because other businesses don’t do that. If it was a big order then we might ask for half down
What about setup time? Is income tax estimated in your dollar per minute? Nice vid.
Add in the setup time to your Handling time and income tax does come out of our dollar per minutes. Thanks
8:09 mark: Does that 20% Etsy fee number include Etsy ads and their mandatory 12% off-site ad fees? If not including off-site ads, how do you recoup those fees when someone clicks on your ad and buys something from your store? How can you predict the amount of sales you'll get from those ads so that you can adjust your pricing?
14:10 mark: On your paper you have N/A for shipping when you previously said we need to account for that. I'm assuming the N/A is for when people pay their own shipping. But what if the customer orders multiples of the same item (different personalization) and goes over the $35 limit? From what I understand, customers will frequently buy more stuff to get free shipping. How can you justify not including that in the initial cost projection per item when it's quite possible (but not guaranteed) that someone will buy more to get free shipping?
Say you're selling a pendant for $12. Half your customers buy only one but the other half buy 3 of them to get free shipping. You can't turn around and tell the latter group that the cost per pendant is $14 each to cover a $6 shipping fee. Are you just eating the shipping cost of the order when it does go over $35? How can you predict what your customers are going to do?
Would it ultimately be easier to just do the free shipping down the line and add it into every item's cost structure, and then offer a discount on shipping for additional items?
Thank you very much for your video. I bought an xTool F1 and have been struggling with figuring out how to set prices. 🤦♀
You can't predict them. We took off our free shipping. You just need to make the price that works for you and when you get your first sale on that item then make the desicon on if you want to go up or down with the price. don't over think it.
@@laserengravingwithmatt7833 Okay, thank you!
wow. first comment. siiiiick
😂
How does your formula change when doing a bulk order for a local business?
Yes
8:57 Why did you write Stripping on the paper...LOL thats how I read your "H"
It can not be like what you had stated, it will nt apply to us in Asia...most of the time, we are only making 20-40% from product cost, and at good time, you can make 100%(very rare)....it all depend on the market and not the profit formula...some people are willing to go below that pricing because of competition...is competition not fierce in America? We are happy that you enjoy good fruit from your hard work
Competition is tough here, but I won’t raise the bottom. I stand my ground and hold my prices.
@@laserengravingwithmatt7833 Here you can not survive without being flexible..we are both in 2 different world...keep those good work and enjoy...there is so much creative things that is possible with lasering, there will also come a time when you need other machine beside the laser machine to stay afloat in this competitive market...
does the run cost of the laser come out of the laser per minute ?
Yes
@@laserengravingwithmatt7833 thanks love the videos
Thanks
Profit is not a dirty word
Absolutely not
How would I be able to colab with you?
Email me
You're formula forgot profit. That is all just paying your costs.. Funny you mentioned a book about profit, but it's not in your formula. But glad to see you've lasted.. The amount of people on etsy doing the same thing is staggering.. Has kept me from even trying.
Because all it's about is the next laser! Lol
Loss leader is what your looking for.
Yes!!
We all live in a world of the FEE and HOME of the SLAVE.
$60 per hour for run time is double what most everyone else charges. $60 per hour for labor is also high. I have seen most makers charge a flat $30 per hour from start to finish plus material and shipping/handling costs. You didn't mention sales tax? Are you not collecting sales tax? You are a retailer in Minnesota and may be required to pay the over 6.5% sales tax at least for sales made in Minnesota. Your video could result in you being audited by Minnesota tax authorities. I do not know as I do not live in Minnesota.
I don’t think it’s high when we are getting lots of work. But you charge half the price and work 2 times as hard as me 😃. As far as sales tax yes we charge but every state is different.
You forgot electricity.
Low price leader...
My problem with the handling time What Are you doing walking around With a stopwatch and you hit it when you pick up the item and then stop it when done with it an you do that at every step No Not Likely most likely you're just guestimating and throwing a number out there that you wanna up charge the customer If you're gonna charge for that it needs to be a Reasonable flat fee or it's unethical And can easily be Taken Advantage of and miss used In my Opinion It's like getting hit with a punch of hidden fees In your electric bill or phone bill A lot of times it feels like they're just making up fees and stuff you know I would never buy from someone that charges me a dollar a minute just to handle the item every step along the way and I'm supposed to just take your word for the amount of time you "handled it"
I understand what you’re saying for custom orders. If I’m coming out with a new product yes, I basically see how long everything takes and come up with a price based on that so the customer sees it before buying. Even my custom orders I give a price before the work is done so my customer can decide for themselves if the price is a good fit for their need. Thanks for the feedback.
7:59 people who pay fees for customers are too kind, surely to get into heaven but not likely to end up on forbes, you guys are definitely going places
Thanks